Executive director of the company, Richard Shemesian continues to up the stakes at Kango with this latest move following a project funding investment.
The company had last month entered into a non-binding MoU to farm out a 50.1% interest in the project to a strategic partner that will provide US$4 million for drilling and delineation of high grade DSO and beneficiable iron ore.
The 12.5% project interest to be acquired is free carried to bankable feasibility.
Kango North is a potential near term, low cost development project and importantly is located in close proximity to key infrastructure in an emerging West African iron ore precinct
"The acquisition increases Apollo's stake in the Project to 82.5% and at the same time consolidates the ownership structure, making it easier to attract investor finance," executive director Richard Shemesian said.
"Apollo shareholders have exposure to a high quality asset with a significant Exploration Target, close to major existing infrastructure connected to a deep water port which has straightforward metallurgy and the potential to produce a premium 69% iron ore product."
The acquisition of the free carried interest follows extensive discussions with several parties who have shown an interest in investing and financing the Kango North Project and has resulted in the exploration funding MoU.
Providing a potential path to market, Kango North is around 70 kilometres from coastal export infrastructure and 20 kilometres from existing rail and power networks.
The project has the potential to host significant DSO grade mineralisation, with preliminary metallurgical test work indicating the potential to produce very high quality iron ore concentrates at relatively high mass yields.
It has an Exploration Target of 2 billion to 3.5 billion tonnes at 30% to 40% iron, including 75 million to 150 million tonnes at 45% to 60% iron.
Modelling in the southeast has identified a series of parallel northeast trending mineralised iron bodies which have been substantiated through review of historical Government data, and an Apollo surface rock chip sampling program conducted in 2012.
Apollo's surface samples average 42% iron and range between 36% and 49% iron on a dry basis, with DTR results indicating high mass recoveries averaging 49%, and capable of producing premium grade iron concentrates of 69.7% iron, at a grind size of P80 at 75μm.
Apollo continues to progress key elements of the project, with a stage one mine development concept study currently being finalised, and follow up field mapping and sampling are also underway.
The company has also entered in a selection process to engage a group to prepare the Environmental Impact Assessment associated with the drilling and development phases of the project, and a decision on this is expected shortly.
The MoU is with a major publically listed, diversified international company, which has agreed to provide up to US$4 million for drilling and delineation of high grade DSO and beneficiable iron ore in return for a 50.1% interest in Kango North.
Detailed review and due diligence is underway and subject to agreeing formal documentation, a binding definitive agreement is expected before the end of the March quarter 2014.
Apollo entered the MoU after discussions with various interested parties.
The company said that its principal terms are currently non-binding however, it is expected that, subject to agreeing formal documentation, a binding definitive agreement will be entered into before the end of the March quarter 2014.
During this exclusivity period, Apollo has agreed not to commence or continue discussions with other parties interested in investing, or buying an interest in the project.
The acquisition of a further 12.5% interest in Kango North takes Apollo Mineral's stake in the project to 82.5% (32.4% following completion of the farm-out), simplifying the ownership structure and making it easier to attract investor finance.
It follows on the MoU that while still at a non-binding stage, that should deliver newsflow and exploration and increase momentum at Kango North.
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