Kogi Iron (ASX:KFE) has now completed the 1:5 entitlement offer at $0.03 which raised $1.921 million before costs and the set-off of director loans to the company.
With $1.1 million in cash and no debt, the way is set for Kogi to un-lock value from the wholly-owned Agbaja project through a joint venture or sell down.
Agbaja is located in Kogi State, Republic of Nigeria.
The monetisation could involve a joint development with a strategic partner, or a partial sell down of Kogi’s interest in the Agbaja Project, or acquisition by a counterparty of all the issued capital in Kogi Iron.
The project has an Ore Reserve of 205 million tonnes at 45.7% iron, which is enough to support a minimum 21 year mine plan under its Pre-Feasibility Study (PFS), as well as general working capital purposes.
The PFS had established Agbaja as an economically robust and technically viable project with average operating costs of US$42.98 per tonne concentrate FOB, estimated pre-tax NPV of US$420 million (at a 12% discount), an IRR of 23.7% and CAPEX estimate of US$497 million.
The company has completed a Preliminary Feasibility study to underpin discussions in relation to realising value from the project.
Kogi engages industrial groups
Kogi has engaged with several diversified and vertically integrated Nigerian industrial groups that have all expressed an interest in possible involvement in the project.
The company said that following the approaches, initial meetings have been held in London and Dubai with the respective groups, and confidentiality deeds executed to facilitate the exchange of more detailed information about the company and the Agbaja Project.
Kogi added that the groups are at an early stage, commercial-in-confidence and incomplete, the board is encouraged by the early progress, and depth of understanding of the project and the company that the groups have demonstrated to date.
Further meetings with the groups in coming months are planned to progress discussions.
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