Arrow has been repositioning itself over recent months, with a new team taking charge in February and a move to 100% of the project.
Flanagan was aware he risked “sounding like a used car salesman”, but he said as far as he was concerned, the sky was the limit at Simandou North.
He told investors at a recent Euroz Hartleys event that “apart from about a year and a half when it was rubbish”, iron ore’s performance had been “stellar” for the past 20 years.
In his view, Arrow not only had the right commodity, but the right location.
Simandou North is at the northern end of the Simandou Range, host to the largest undeveloped high-grade iron deposits in the world, including Rio Tinto’s 2.8 billion tonnes at 65.8% Simfer JV and the Winning Consortium’s 1.8Bt at 65% Simandou project.
The groups are investing a combined US$26 billion in open infrastructure, including ports and rail lines Arrow expects to access if it can get into development.
Arrow has launched a five-rig drilling program, and Flanagan has some big expectations because the Simandou formation is “pretty simple” and runs into Arrow’s leases.
“The geology that hosts some of the world’s biggest deposits runs into our ground. That’s proven beyond any doubt,” he said.
With assays from limited earlier drilling such as 12m at 60% from 2m at the Dalabatini prospect, Flanagan noted the grades on offer were higher than Arrow’s Pilbara peers, with Rio using a 58% cut-off.
“If they were to drop the cut-off, there would be substantially more,” he said.
Flanagan, who started Atlas Iron at the start of the last iron ore boom and helped crack open the Pilbara duopoly of BHP and Rio with smaller, higher grade mines, sees Guinea offering exactly the same dig, truck and export opportunity.
The country has experience with bauxite and is looking to diversify.
With iron ore still trading above US$100/t, Flanagan is confident he can develop a viable business.
Step one is to define a resource, and with 40km of strike dotted with outcropping targets where sampling is regularly between 55-65%, it has a large search space.
“It’s screaming out for drilling,” he said.
The company plans to test every decent surface target along the strike.
“We’ll give it everything we’ve got, and then we’ll come back and infill,” he said.
“If we convert just 1km into something meaty we will be off to the races.”
The early results confirmed three styles of mineralisation in the first holes.
The company plans to drill 10,000m this quarter.
Arrow started the quarter with A$8.5 million cash remaining from a recent $13 million capital raising as part of its recapitalisation that saw Flanagan and another Atlas alumni, Jeff Dowling, join the company.
