Apollo Minerals Limited (AON), an Australian resources company, rose by as much as 29% today after it announced that it had acquired an 80% stake in a new iron ore project in the Pilbara region of Western Australia.
The newly listed company has entered into an option agreement with Fox Resources to acquire the project which covers an area of approximately 212 square km over two tenements.
Under the terms of the agreement Apollo has paid a non-refundable option fee of $50,000 and has been given 45 days to complete due diligence on the tenements.
Once these steps have been taken, Apollo may elect to enter into a Joint Venture Agreement (JVA), upon which it will pay up to $450,000 in cash and shares. A further $500,000 will be paid upon the granting of the tenements.
Fox said the highly magnetic prospect straddles both the Fox Resources tenement and the Apollo Iron Project Area.
Fox Resources discovered the Mt Oscar iron ore project in July, and then advised the ASX in August that rock chip sampling had confirmed surface iron ore enrichment in excess of 40% iron.
In October, Fox said of its initial assessment of exploration results:
"These early exceptionally high magnetic results confirm the potential for a significant magnetic iron ore unit to exist."
"The acquisition strategically places Apollo in the middle of a significant iron ore discovery at Mount Oscar in the Pilbara where other explorers such as Cape Lambert and Fox Resources presently are actively engaged in the development of similar types of deposits," said Apollo Chairman, Sevag Chalabian.
"We at Apollo are excited by this new opportunity."
Upon the JVA being entered into, Apollo said it would immediately commence exploration on the two new tenements.
Meanwhile, Apollo said it is continuing to progress its exploration program for its portfolio of 1,793 square km of mineral tenements in South Australia and is also continuing to seek new projects at home and abroad.
Almost 3 million Apollo shares changed hands today, more than six times its average daily volume.
The stock rose by 8 cents to close at the day's high of 36 cents.
