Apollo Resources: Iron Quadrangle

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Minas Gerais

Our subsidiary Apollo Resources is focused on iron projects in Brazil. Apollo Resources currently owns 57,665 acres of mineral rights for iron distributed in six projects, five of which are in early stage while its Iron Quadrangle Project is being advanced towards an iron mine, expected to begin operations in 2024. As its name indicates, this project is located within the well-known Iron Quadrangle mining district, one of the premier iron producing regions in the world.

Apollo Resources acquired from a third-party in 2020 for the equivalent the 641-acre mineral right where its Iron Quadrangle Project is now located. This mineral right sits immediately adjacent to a producing iron mine from a global iron producing company.

During the first and second quarters of 2021, detailed drilling and trenching under the supervision of iron geologists was carried out in approximately 10% of the mineral right area encompassing the Iron Quadrangle Project. In December 2021, BNA Mining Solutions, an independent technical consulting firm with iron experts that meet the “Qualified Persons” criteria under Regulation S-K 1300, released its independent technical report on the project under the NI 43-101 industry format. This report presents BNA’s estimate of 7.85 million tons of iron ore in inferred resources for the 10% of the Iron Quadrangle Project area which was studied.

In 2021, SGS-Geosol, an independent analytical laboratory and technical advisory firm, conducted initial studies on the processing route for a representative sample of iron ore collected from deeper layers during drilling at the Iron Quadrangle Project. The initial results, obtained by a combination of crushing and dry magnetic separation, with no water involvement, has been concentration to 64.4% iron. Such level of iron on a commercial product would constitute what is known in the industry as a “premium” product.

During 2021, Geoline, an independent engineering and environmental licensing consultancy, worked on detailed technical studies, both in “dry” and “wet” climate seasons of the year, needed to file Apollo Resources’ standard petition to the applicable local regulatory body for an operation license for an open pit iron mire at its Iron Quadrangle Project.

According to the independent technical report, the primary mineable iron ore at the Iron Quadrangle Project exists on a continual basis, and almost without interruptions, from the surface down to a level of approximately 150 feet. Apollo Resources’ technical team believes ore retrieval should be a straightforward process though standard open pit excavation. While selling raw iron ore is the easiest pathway to cash flows, Apollo Resources is also considering verticalization of its business, and processing of its iron ore to a higher concentration product prior to sale at possibly substantially higher margins. As indicated by the initial result of 64.4% iron obtained by SGS-Geosol from project samples, there is a possibility of production of a “premium” iron product.