Proactiveinvestors United Kingdom Kogi Iron Ltd https://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom Kogi Iron Ltd RSS feed en Fri, 19 Jul 2019 20:01:05 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[Media files - Kogi Iron confident of Nigerian steel potential ]]> https://www.proactiveinvestors.co.uk/companies/stocktube/11016/kogi-iron-confident-of-nigerian-steel-potential-11016.html Mon, 29 Oct 2018 08:11:00 +0000 https://www.proactiveinvestors.co.uk/companies/stocktube/11016/kogi-iron-confident-of-nigerian-steel-potential-11016.html <![CDATA[Media files - Kogi Iron looks set to shake up the Nigerian steel market ]]> https://www.proactiveinvestors.co.uk/companies/stocktube/10411/kogi-iron-looks-set-to-shake-up-the-nigerian-steel-market-10411.html Mon, 10 Sep 2018 08:06:00 +0100 https://www.proactiveinvestors.co.uk/companies/stocktube/10411/kogi-iron-looks-set-to-shake-up-the-nigerian-steel-market-10411.html <![CDATA[News - Kogi Iron plans to become Nigeria’s first domestically-sourced producing steel company and could generate billions of dollars’ worth of business ]]> https://www.proactiveinvestors.co.uk/companies/news/204324/kogi-iron-plans-to-become-nigerias-first-domestically-sourced-producing-steel-company-and-could-generate-billions-of-dollars-worth-of-business-204324.html The Nigerians pay around US$650 per tonne for delivered steel scrap. That’s the salient fact to bear in mind when it comes to reckoning up the opportunity offered by Kogi Iron Ltd (ASX:KFE).

The Nigerians have no primary steel production of their own, and can only serve around a third of the estimated US$6.8bn of domestic demand from in-country recycling. The rest of the supply is made up by Chinese imports of scrap steel, with the corresponding drawback that end users tie up their working capital for around three months.

But it won’t be long before there is an alternative, one that could turn the Nigerian steel market on its head, or at the very least give it a radical shake up.

That at least is the aspiration of Kogi Iron, and its new chief executive Martin Wood.

Kogi plans to build an integrated cast steel plant in the neighbourhood of its Agbaja iron ore deposit in south central Nigeria, owned directly through the company’s subsidiary KCM Nigeria.

It will be the first of its kind in Nigeria, and as such is likely to attract a lot of support both from those who want the immediate benefits of employment and regional economic stimulus and from those who see the strategic and international economic benefits.

It’s a compelling vision, given that for some years Agbaja was regarded merely as just one more iron ore asset stranded a little too far away from the coast.

Now, all thoughts of stranded assets are banished, as too are thoughts that Kogi itself is still leveraged to the iron ore price.

Instead, it’s all about steel and cutting a nice slice of that US$6.8bn demand for the company.

In some respects, it’s early days - precise details of potential capital and operating costs will have to wait for the results of a definitive feasibility study, which is underway.

Nevertheless, recent testwork undertaken by mining and metallurgical consultant Tenova has confirmed that the Agbaja ore is amenable to the production of a beneficiated iron ore concentrate suitable for the production of pig iron, as well as a refined metal suitable for the production of billet.

It’s enough to set Kogi firmly on the road to becoming a steel producer.

“This is the key proof of the whole project,” says Martin Wood. “It indicates that the iron ore that we own can be economically turned into a cast steel product that can be sold for more than it costs to make. Our internal numbers show this is a very valuable project.”

Metal Bulletin have now been commissioned to assess the precise size of the market which the Agbaja product will be able to address, and although it will be some time before those numbers are in, it’s likely to be substantial.

After all, there are a dozen or so rolling mills in the country, all to a greater or lesser extent having to settle for that US$650 per tonne price commanded by the Chinese imports. They will likely scramble for new sources that can supply for less.

“We think the definitive feasibility will show we can produce steel for around US$300 per tonne,” says Wood.

And plenty of it too.

“The entire market for scrap is around 2.5mln tonnes, and we have hundreds of years’ worth of ore.”

That’s assuming that the company mines at around one million tonnes a year, of course. It could go much higher, and rapidly too, since current Nigerian demand is unlikely to remain static. Nigeria is, after all, the largest economy in Africa.

So, it will be interesting to see the results of the definitive feasibility study when it comes out, in six to twelve months’ time, to see just exactly the size of the opportunity that Kogi is addressing.

Purely on a back-of-the-envelope basis, Wood reckons that to construct the cast steel plant won’t cost any more than US$500mln. It’s still quite an ask for a company that’s worth only around 20% of that, but when the final figure is delivered, Wood, an experienced banker with contacts right across the City of London, reckons he’ll be able to lay hands on the cash.

A significant portion will be equity, of course, and that’s likely to be raised in conjunction with a listing on the London exchange. But lenders too will be found, and it’s all thanks to the recent sampling work undertaken by Tenova.

“This bulk sample has changed us as a company,” says Wood.

“We’ve gone from being a company that was really only attractive to retail to opening ourselves up to a whole new universe of investors.”

For the proof of this, it’s only necessary to glance at the Kogi share price graph. There have been no significant re-ratings, true, but what there’s been instead has been a series of incremental gains as the company has gradually de-risked the project and highlighted to investors just exactly what its plans are.

Expect those incremental gains to accelerate significantly from here on in, though, as the numbers involved begin to become apparent, and the wider market begins to wake up to the opportunity that Kogi offers.

 

 

 

 

 

 

 

 

 

]]>
Thu, 06 Sep 2018 09:09:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/204324/kogi-iron-plans-to-become-nigerias-first-domestically-sourced-producing-steel-company-and-could-generate-billions-of-dollars-worth-of-business-204324.html
<![CDATA[News - Kogi Iron Ltd gets ready to raise ]]> https://www.proactiveinvestors.co.uk/companies/news/154400/kogi-iron-ltd-gets-ready-to-raise-68445.html Kogi Iron Ltd (ASX:KFE) is heading to market with a capital raising, and the ASX has granted the company a trading halt to prepare.

The halt will remain in place until the opening of trade on Monday 9th May 2016, or earlier if an announcement is made to the market.

 

Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

]]>
Thu, 05 May 2016 11:30:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/154400/kogi-iron-ltd-gets-ready-to-raise-68445.html
<![CDATA[News - Kogi Iron in discussions with parties to realise value from Agbaja project ]]> https://www.proactiveinvestors.co.uk/companies/news/63859/kogi-iron-in-discussions-with-parties-to-realise-value-from-agbaja-project-74621.html Kogi Iron's (ASX:KFE) chairman Ian Burston has revealed the company is in serious discussions with a number of parties to sell the Agbaja Iron Ore Project in Nigeria outright.

Other options being evaluated include investment of equity in the company or to access sales opportunities through a commodities trader.

The project has a JORC Mineral Resource of 586.3 million tonnes of iron ore. A Preliminary Feasibility Study was completed on the project.

The lower iron ore price and tighter capital raising environment has in turn seen the Company pursue value realisation of the project for shareholders.

A capital raising was completed, enabling work to progress.

Geological work has been focussed on finalising approvals for the grant of the Northern Lease, which will enable completion of an Exploration Target for the Agbaja Plateau.

Bench top studies have been undertaken to review extraction and process functions aimed at enhancing product quality to service both local and international markets.

Burston said cash is being managed carefully, and is planned to carry the Company through the 2015 financial year.

The Ebola crisis affecting West Africa is not having any effect on Kogi's Nigerian activities the company said. Upcoming elections in Nigeria in February 2015 are not expected to have a negative impact on the project.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Fri, 21 Nov 2014 11:00:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/63859/kogi-iron-in-discussions-with-parties-to-realise-value-from-agbaja-project-74621.html
<![CDATA[News - Kogi Iron raises fund, looks to monetise Agbaja project ]]> https://www.proactiveinvestors.co.uk/companies/news/61284/kogi-iron-raises-fund-looks-to-monetise-agbaja-project-71746.html 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.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Fri, 29 Aug 2014 11:30:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/61284/kogi-iron-raises-fund-looks-to-monetise-agbaja-project-71746.html
<![CDATA[News - Kogi Iron completes placement of shortfall shares ]]> https://www.proactiveinvestors.co.uk/companies/news/60715/kogi-iron-completes-placement-of-shortfall-shares-71141.html Kogi Iron’s (ASX:KFE) entitlement offer is now fully subscribed with $1.921 million raised after completing the placement of shortfall shares.

The company had placed the remaining 14.7 million shares priced at $0.03 each, or $0.44 million.

Along with the $1.2 million placement, the funds will be used to progress a range of alternatives to realise value from its wholly-owned Agbaja iron ore project in Nigeria.

This will also meet the holding cost of the project, which has an Ore Reserve of 205 million tonnes at 45.7% iron, enough to support a minimum 21 year mine plan under its Pre-Feasibility Study, as well as general working capital purposes.

The partially underwritten one for five entitlement offer had included one free option exercisable at $0.08 expiring on 31 May 2017 for every share subscribed.

Its 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.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Fri, 08 Aug 2014 14:00:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/60715/kogi-iron-completes-placement-of-shortfall-shares-71141.html
<![CDATA[News - Kogi Iron increases entitlement offer take up to 77% ]]> https://www.proactiveinvestors.co.uk/companies/news/154399/kogi-iron-increases-entitlement-offer-take-up-to-77-56574.html Kogi Iron (ASX:KFE) has allotted a further 8,997,117 shares at $0.03 each from its partially underwritten one for five entitlement offer, bringing the total take up to 77%, an excellent result in the current capital raising environment.

This brings the total subscribed up to 39,997,114 shares, or about $1.2 million.

Shortfall shares will also be allotted today with the company previously noting that firm commitments have been received for 9,376,159 shortfall shares.

Together with the $1.2 million placement, the funds will be used to progress a range of alternatives to realise value from its wholly-owned Agbaja iron ore project in Nigeria.

This will also meet the holding cost of the project, which has an Ore Reserve of 205 million tonnes at 45.7% iron, enough to support a minimum 21 year mine plan under its Pre-Feasibility Study, as well as general working capital purposes.

Kogi had offered 64,039,713 shares priced at $0.03 each to raise up to $1.92 million. This includes one free option exercisable at $0.08 expiring on 31 May 2017 for every share subscribed.

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.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Tue, 29 Jul 2014 15:30:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/154399/kogi-iron-increases-entitlement-offer-take-up-to-77-56574.html
<![CDATA[News - Kogi Iron receives notice of initial substantial shareholding ]]> https://www.proactiveinvestors.co.uk/companies/news/60293/kogi-iron-receives-notice-of-initial-substantial-shareholding-70690.html Kogi Iron (ASX:KFE) non-executive chairman Dr Ian Burston has become a substantial shareholder of the company with a 6.93% stake.

Burston had subscribed for 9,166,667 shares priced at $0.03 each, or a total of $275,000, under the company’s partially underwritten one for five entitlement offer.

This increased his total shareholding up to 27,779,022.

He also holds 9,166,667 options exercisable at $0.08 and expiring on 31 May 2017.

The entitlement offer had raised $0.9 million, representing a credible takeup rate of 63%.

Together with the $1.2 million placement, the funds will be used to progress a range of alternatives to realise value from its wholly-owned Agbaja iron ore project in Nigeria.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Thu, 24 Jul 2014 16:30:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/60293/kogi-iron-receives-notice-of-initial-substantial-shareholding-70690.html
<![CDATA[News - Kogi Iron raises $0.9M from entitlement offer ]]> https://www.proactiveinvestors.co.uk/companies/news/154398/kogi-iron-raises-09m-from-entitlement-offer-56428.html Kogi Iron (ASX:KFE) has raised a total of $0.9 million from its partially underwritten one for five entitlement offer, representing a very credible 63% take up.

The company had received commitments for $580,603.08 worth of new shares, or 19,353,436 shares priced at $0.03 each.
       
A further 11,646,561 shares worth $349,396.83 will issued to the Underwriter and sub-underwriters.

This leaves a shortfall of 33,039,716 shares of which firm commitments have been received for 9,376,159 shortfall shares.

Together with the $1.2 million placement, the funds will be used to progress a range of alternatives to realise value from its wholly-owned Agbaja iron ore project in Nigeria.

This will also meet the holding cost of the project, which has an Ore Reserve of 205 million tonnes at 45.7% iron enough to support a minimum 21 year mine plan under its Pre-Feasibility Study, as well as general working capital purposes.

Kogi had offered 64,039,713 shares priced at $0.03 each to raise up to $1.92 million. This includes one free option exercisable at $0.08 expiring on 31 May 2017 for every share subscribed.

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.



Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Tue, 22 Jul 2014 18:00:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/154398/kogi-iron-raises-09m-from-entitlement-offer-56428.html
<![CDATA[News - Kogi Iron extends entitlement offer ]]> https://www.proactiveinvestors.co.uk/companies/news/59665/kogi-iron-extends-entitlement-offer-70037.html Kogi Iron (ASX:KFE) is taking more time to complete its partially underwritten one for five entitlement offer of 64,039,713 shares priced at $0.03 each to raise up to $1.92 million.

The closing date of the offer has been extended to 15 July from 8 July.

Kogi’s Entitlement Offer of 64,039,713 shares is partially underwritten to $655,726 by Terrain Capital Markets.

Its directors also intend to take up their full entitlements totalling $274,274 and have agreed to sub-underwrite the issue for $320,726.

Proceeds from the entitlement offer and a placement of 40,333,333 shares priced at $0.03 to raise $1.2 million will be used to realise value from its wholly-owned Agbaja iron ore project in Nigeria.

Funds will also meet the holding cost of the project, which has an Ore Reserve of 205 million tonnes at 45.7% iron enough to support a minimum 21 year mine plan under its Pre-Feasibility Study, 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.



Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Wed, 02 Jul 2014 01:54:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/59665/kogi-iron-extends-entitlement-offer-70037.html
<![CDATA[News - Kogi Iron to raise up to $3.12M for Agbaja iron ore project ]]> https://www.proactiveinvestors.co.uk/companies/news/59240/kogi-iron-to-raise-up-to-312m-for-agbaja-iron-ore-project-69589.html Kogi Iron (ASX:KFE) is raising up to $3.12 million to progress a range of alternatives to realise value from its wholly-owned Agbaja iron ore project in Nigeria.
    
This consists of a placement of 40,333,333 shares priced at $0.03 to raise $1.2 million and a partially underwritten one for five entitlement offer of 64,039,713 shares to raise up to $1.92 million.
    
Proceeds will also be used to meet the holding cost of the project, which has an Ore Reserve of 205 million tonnes at 45.7% iron enough to support a minimum 21 year mine plan under its Pre-Feasibility Study, 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.

Lanstead Capital Equity Swap Agreement

The bulk of the placement was to Lanstead Capital, which has subscribed for 33,333,333 new shares along with 33,333,333 options that will be made in 18 monthly settlement tranches under an Equity Swap Agreement. 

The options are priced at $0.08 and expired on 31 May 2017.

This agreement allows for Kogi to receive more than the monthly settlement due if the measured share price for that month is above the benchmark price of $0.04 per shares. 

There is no upper limit placed on the additional proceeds received as part of the monthly settlements.

In contrast, it will receive a smaller settlement on a pro rata basis if the share price is below the benchmark.

Notably, a decline in the company's share price will not result in any increase in the number of ordinary shares received by Lanstead.

Kogi will issue Lanstead an additional 1,666,667 shares as consideration for the agreement.

Of the subscription proceeds of $1,000,00, the company will use $150,000 for working capital and $850,000 for investment in the Equity Swap under the Agreement as described above. 

A decline in the company's share price will not result in any increase in the number of ordinary shares received by Lanstead or any other advantage accruing to Lanstead.

Kogi will also issue 1,666,667 shares to Lanstead in consideration for the Equity Swap Agreement.

This is designed to provide the company with flexibility in continuing to advance its Agbaja Project as well as maintaining a constant source of funds covering a substantial part of its longer term cash flow requirements. 

Remaining Placement

The remaining 5,333,333 shares and 5,333,333 options to raise $160,000 under the placement will be placed with a variety of professional and sophisticated investors who are all currently shareholders.

Entitlement Offer

The non-renounceable Entitlement Offer of 64,039,713 shares priced at $0.03 each to raise up to $1,921,191 before expenses is partially underwritten to $655,726 by Terrain Capital Markets.

All of the non-executive directors of Kogi intend to take up 100% of their individual entitlements under the offer totalling $274,274.

The directors have also agreed to sub-underwrite the issue for $320,726 taking total non-executive director participation in the Entitlement Offer to a maximum of $595,000 of which $300,000 will be set-off against loans owing by Kogi to several non-executive directors.

Non-Essential Costs

Kogi is in the process of relocating to smaller office premises and reviewing its Agbaja Project holding costs in line with its near term focus of eliminating non-essential costs.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Wed, 18 Jun 2014 01:35:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/59240/kogi-iron-to-raise-up-to-312m-for-agbaja-iron-ore-project-69589.html
<![CDATA[News - Kogi Iron granted additional time for capital raising ]]> https://www.proactiveinvestors.co.uk/companies/news/59068/kogi-iron-granted-additional-time-for-capital-raising-69410.html Kogi Iron (ASX:KFE) has been granted additional time to finalise a capital raising, following a voluntary suspension.

Kogi said that is expected the voluntary suspension will be lifted on or before Wednesday 18 June 2014.

The company is developing the Agbaja Iron Ore project in Nigeria which has defined an ore reserve and a completed Pre-Feasibility Study under its belt.

This established Agbaja in Nigeria as an economically robust and technically viable project with average operating costs of US$42.98 per tonne concentrate FOB.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Fri, 13 Jun 2014 06:19:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/59068/kogi-iron-granted-additional-time-for-capital-raising-69410.html
<![CDATA[News - Kogi Iron heads to market ]]> https://www.proactiveinvestors.co.uk/companies/news/59025/kogi-iron-heads-to-market-69366.html Kogi Iron’s (ASX:KFE) shares have been placed in pre-open after it was granted an ASX trading halt in relation to a capital raising.

The halt will last until the earlier of the announcement being made or the commencement of normal trading on Friday, 13 June 2014.

Kogi is developing the Agbaja Iron Ore project in Nigeria which has defined an ore reserve and a completed Pre-Feasibility Study under its belt.

This established Agbaja in Nigeria as an economically robust and technically viable project with average operating costs of US$42.98 per tonne concentrate FOB.

Other key takeaways include 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 project has an Ore Reserve of 205 million tonnes at 45.7% iron, enough mineable ore to support a minimum 21 year mine plan.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Wed, 11 Jun 2014 00:17:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/59025/kogi-iron-heads-to-market-69366.html
<![CDATA[News - Kogi Iron's chairman Ian Burston to take larger strategic role ]]> https://www.proactiveinvestors.co.uk/companies/news/58001/kogi-irons-chairman-ian-burston-to-take-larger-strategic-role-68264.html Kogi Iron (ASX: KFE) is carrying out plans to reorganise activities to minimise costs amidst continued weakness in capital markets which will see chairman Dr Ian Burston become more involved.

Kogi is developing the Agbaja Iron Ore project in Nigeria which has a defined an ore reserve and a completed Pre-Feasibility Study under its belt.

Well credentialed Ian Burston will focus on immediate corporate strategy while non-executive director Brian King will oversee day-to-day activities.

He said, "I have been in this game for more than 30 years and am determined to ensure our shareholders capture the value locked up at Agbaja”.

Amongst these cost control initiatives includes a reduction in the size of the management team with managing director Iggy Tan and chief financial officer Shane Volk stepping down with immediate effect.

Volk has agreed to act as company secretary on a consultancy basis to the company.
    
The company has also commenced a process of reviewing the size, composition and skill sets of the board. 

Board members have agreed to suspend payment of their quarterly board fees with effect from 1 January 2014.

Kogi’s Nigerian operations will remain unchanged.

Next Steps

Building on the positive results from its recently completed Pre-Feasibility Study, Kogi Iron will continue its engagement with steel mills, iron ore buyers, traders and potential customers to increase the awareness of the proposed Agbaja Fines iron ore concentrate and the Project.

“It is the company’s intention to also highlight to potential investors the iron ore deposits in those parts of the Company’s existing Exploration Licences not addressed in PFS,” Burston said.

“The 16 September 2013 announcement by the Company of a significant new Exploration Target for its Nigerian Exploration Licences is testament to the large volumes of iron ore mineralisation on the Agbaja Plateau.”

Funding

Kogi also continues to engage potential investors in regards to the next tranche of funding that will enable it to implement a number of value adding initiatives to build on the PFS.

The company’s directors have agreed to advance $300,000 in loans to provide the company with sufficient working capital during these discussions.

The loans are unsecured, non-interest bearing and it is proposed that shareholder approval be sought to convert the loans to fully paid ordinary shares.

Agbaja Iron Ore Project

The Preliminary Feasibility Study established Agbaja in Nigeria as an economically robust and technically viable project with average operating costs of US$42.98 per tonne concentrate FOB.

Other key takeaways include 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 project has an Ore Reserve of 205 million tonnes at 45.7% iron, enough mineable ore to support a minimum 21 year mine plan.

So there is an advanced African iron ore project with which to advance with steel mills, iron ore buyers, traders and potential customers.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Tue, 06 May 2014 00:12:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/58001/kogi-irons-chairman-ian-burston-to-take-larger-strategic-role-68264.html
<![CDATA[News - Kogi Iron presenting at "Stars in 2014" in Sydney, 19 March ]]> https://www.proactiveinvestors.co.uk/companies/news/154397/kogi-iron-presenting-at-stars-in-2014-in-sydney-19-march--53647.html Kogi Iron (ASX: KFE) has been making quick progress at its Agbaja Iron Ore Project in Nigeria, which is one of the highest grade beneficiable iron ore resources in West Africa.

Proactive Investors has secured Iggy Tan, managing director for Kogi Iron, to present the latest updates at the upcoming "Stars in 2014 Series" Investor Forum in Sydney on 19 March 2014.

REGISTER HERE: DON'T MISS OUT

The company had earlier this month defined a maiden Ore Reserve of 205 million tonnes at 45.7% iron – enough to support a minimum 21 year mine plan for a 5 million tonne per annum operation.

It also comes just weeks after delivery of the Pre-Feasibility Study that 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.

Kogi’s long term forecast FOB price of US$73 per tonne iron ore concentrate also supports a net margin of US$30 per tonne and average EBITDA of US$136 million per annum.

The Ore Reserve will serve as the basis of the Definitive Feasibility Study that it started immediately after completing the PFS in late January.

This is scheduled for completion by the end of 2014.

Agbaja still has room to grow given the Ore Reserve and Indicated Resource (466Mt at 41.4% iron) covers just 20% of EL12124. The remaining 80% hosts a conceptual Exploration Target of 1.3 billion to 2 billion tonnes at a grade of 32-48% iron.



Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Thu, 13 Mar 2014 13:00:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/154397/kogi-iron-presenting-at-stars-in-2014-in-sydney-19-march--53647.html
<![CDATA[News - Kogi Iron defines maiden iron ore reserve of 205Mt at Agbaja, Nigeria ]]> https://www.proactiveinvestors.co.uk/companies/news/56218/kogi-iron-defines-maiden-iron-ore-reserve-of-205mt-at-agbaja-nigeria-66375.html Kogi Iron (ASX: KFE) continues to step on the gas with the definition of a maiden Ore Reserve of 205 million tonnes at 45.7% iron at its Agbaja Iron Ore Project in Nigeria just weeks after delivering a Pre-Feasibility Study.

Notably, the Ore Reserve confirms the PFS assumption that there is sufficient mineable ore to support a minimum 21 year mine plan.

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 long term forecast FOB price of US$73 per tonne iron ore concentrate supports a net margin of US$30 per tonne and average EBITDA of US$136 million per annum.

“This Ore Reserve is another important milestone in Kogi’s vision to be an African iron ore producer and comes only a matter of weeks after the Company announced the very positive results from its PFS, giving us further confidence in the Agbaja Project,” managing director Iggy Tan said.

“The 205 million tonne Maiden Ore Reserve re-affirms the PFS findings that there is sufficient mineable ore of requisite grade within the Stage 1 and Stage 2 mining areas at Agbaja to support economic mining and processing operations at an annual rate of 5 million tonnes of iron ore concentrate, for 21 years. 

“The Maiden Ore Reserve will be the basis for a Definitive Feasibility Study at Agbaja, which the company expects to complete by the end of 2014.”

Kogi had moved to immediately start the DFS after completing the PFS in late January.

Maiden Ore Reserve

The Maiden Ore Reserve of 205Mt at 45.7% iron was determined in accordance with the JORC Code (2012) by Harry Warries of independent international mining consultancy Coffey Mining Pty Ltd.

Kogi has made rapid progress towards this Reserve, first announcing a maiden Inferred Resource of 488Mt at 42.7% iron on 28 September 2013 before increasing this by 20% to 586Mt at 41.3% iron on 10 December 2013. The company had also at the same time defined an Indicated Resource of 466Mt at 41.4% iron.

The cut-off used to define the Reserve was based on the magnetic susceptibility of the mineralised material as the processing method selected for Agbaja incorporates magnetic separation.

These magnetic susceptibility measurements identified that the boundary between magnetic and non-magnetic material is very sharp.

Agbaja exhibits a relatively consistent ore profile that comprises the Zone A layer of lateritic material (non-magnetic and not treated at this stage of the Project) followed by the Zone B layer of oolitic material (magnetic).

In addition, the deposit is relatively contiguous and readily discernible. As such, no pit optimisation was undertaken. The pit design was based on the Stage 1 and Stage 2 mining areas that exhibited the lowest waste to ore strip ratio and was sufficiently large to sustain a 21 year mine life.

Coffey undertook detailed mine planning work based on the company’s 466Mt Indicated Mineral Resource and considered various material assumptions and modifying factors from the PFS to determine the Ore Reserve.

Agbaja Iron Ore Project

The Agbaja Project unique sedimentary magnetite Channel Iron Deposit (CID) that is 100% owned by Kogi Iron and includes 17 exploration licenses that cover 400 square kilometres. 

Drilling and development efforts are focussed within Exploration Licence EL12124 where the Resource and Reserves are located.

The Reserve is sufficient to support a 5 million tonne per annum project for a period of 21 years.

Magnetite iron mineralisation is contained within very shallow and flat lying channel iron deposits that are ideal for low cost surface mining using traditional truck/excavator open pit development.

Agbaja is ideally located close to the Niger River, and within 60 kilometres of an under-utilised heavy haulage rail line that leads to the Port of Warri, and just north of Lokoja with a population of 90,000 which serves as the capital city of Kogi State.

The PFS had focused on the use of barging to transport ore with barging and transhipping costs estimated at around US$19 per dry metric tonne free on board, or $0.0297 per tonne kilometre.

Analysis

With the estimate of a maiden Ore Reserve of 205Mt at 45.7% iron just weeks after completing the Pre-Feasibility Study for its Agbaja Iron Ore Project, Kogi Iron has established one of the key elements for the Definitive Feasibility Study.

Progress on the project has been quick with just six months between establishing a maiden Inferred Resource and today’s Ore Reserve announcement, which in itself a milestone - and a fast one at that.

Coupled with the PFS establishing the project as being economically robust and technically viable, Agbaja is very well placed at the forefront of West Africa, as the next iron ore hub underpinned by Chinese seaborne demand as it looks to diversify away from the large Australian iron ore producers.

Kogi remains an iron ore player to watch and corporate interest from China or Asian steel companies would not surprise as they move to lock-in African iron ore supplies.

Notably, Agbaja Fines have low silica content, which is much sought after by Asian customers, and is relatively coarse, making it more attractive for sintering.

The Resource and now Reserve is also one of the highest grade beneficiable iron ore resources in West Africa with massive scale potential given that it covers just 20% of EL12124.

The remaining 80% hosts a conceptual Exploration Target of 1.3 billion to 2 billion tonnes at a grade of 32-48% iron.

Proactive Investors maintains a share price target of $0.28 (undiluted) on successful completion of the DFS at the end of 2014.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Tue, 04 Mar 2014 21:53:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/56218/kogi-iron-defines-maiden-iron-ore-reserve-of-205mt-at-agbaja-nigeria-66375.html
<![CDATA[News - Kogi Iron aiming to become a major West African iron ore producer ]]> https://www.proactiveinvestors.co.uk/companies/news/56000/kogi-iron-aiming-to-become-a-major-west-african-iron-ore-producer-66146.html Recommendation: Speculative Buy
Sector: Materials
Target Price: $0.28
ASX Code: KFE
52 Week -:
Current: $0.095
High: $0.22
Low: $0.08
Issued Shares: 320.2M
Options: NIL
Cash: $1.2M
Market Cap: $30.4M
Enterprise Value: $29.2M

 

- Kogi Iron (ASX: KFE) has established first mover status for the development of Nigerian iron ore assets at the Agbaja Plateau Iron Ore Project.

- JORC Indicated and Inferred Resources of 586 million tonnes at 41.3% Fe established over 20% of Exploration License 12124.

- The remaining 80% of EL12124 host identified targets with a conceptual range of 1.3 – 2.0 billion tonnes at a grade of 32-48% Fe. The remaining 14 tenements are untouched by modern exploration methods.

- Kogi Iron has completed a Preliminary Feasibility Study for production of 5 million tonnes per annum of magnetite concentrate at a grade of 56% Fe, and reported CAPEX and OPEX costs that are amongst the lowest in the world for new iron ore mine development.

- CAPEX of US$497 million expected to be paid out from the first 48 months of production from annualised EBITDA of US$136 million.

- Kogi Iron has potential to become a major developer of West African iron ore assets, and help crack the current iron oligopoly between Australia and Brazil.

- Kogi Iron has commenced a Definitive Financial Study that will look to reach first iron concentrate production by late 2016 or early 2017.

- The Company has managerial talent and is led by Ian Burston who was also instrumental in the development of the Western Australian iron ore industry. He served as Managing Director of Hamersley Iron and Portman Mining, Non-Executive Director of Fortescue Metals Group, Chairman of Aztec and Executive Chairman of Cape Lambert Resources.

- Kogi Iron estimate annualised production of 5 million tonnes of iron concentrate will produce an EBITDA of ~A$154 million (A$0.88) for the first stage of the Agbaja Project.

- Proactive investors forecasts that Agbaja will be worth A$90.8 million, or $0.28 per Kogi Iron share (undiluted) on completion of Definitive Financial Study at the end of 2014 (see peer group analysis).  

- Our peer group analysis and valuation sees additional and significant valuation increases as Agbaja is funded and developed.

- It has not factored in a potential investment from an Asian steel company, which would boost this valuation.

SPECULATIVE BUY

 

Kogi Iron Ltd (ASX:KFE) is an ASX listed explorer and developer of the Agbaja Plateau Iron Ore Project (Agbaja Project) that is located in Kogi State, Republic of Nigeria.

AGBAJA IRON PROJECT IN NIGERIA

The Agbaja Project is 100% owned by Kogi Iron and includes 17 exploration licenses that cover 400 square kilometres. Drilling and development efforts are focussed within Exploration Licence EL12124 where a current JORC 2012 compliant Indicated Resource of 466 million tonnes at 41.4% Fe (iron) and an Inferred Resource of 120 million tonnes at 41.1% Fe (cut-of grade of 20% Fe) has been defined, and constitutes one of the highest grade beneficiable iron ore deposits in West Africa. 

Magnetite iron mineralisation is contained within very shallow and flat lying channel iron deposits that are ideal for low cost surface mining. Kogi Iron has completed drilling and resource estimates over 20% of the Agbaja Project area and has identified additional conceptual exploration targets of 1.3 – 2.0 billion tonnes at 32 – 48% iron within EL12124 and adjacent licenses.

DEVELOPMENT FOCUS AT EXPLORATION LICENCE 12124

Agbaja is ideally located close to the Niger River, and within 60 kilometres of an under-utilised heavy haulage rail line that leads to the Port of Warri, and just north of Lokoja with a population of 90,000 which serves as the capital city of Kogi State. The State is known for production of cash crops and the country’s largest steel facility at Ajaokuta, and largest cement factory at Obajana.

 

AGBAJA IS A HIGHLY UNIQUE IRON PROJECT

MAGNETITE WITHIN  AGBAJA FORMATION (LATERITE AND OOLITE), WIDTH OF 3-6 KM AND LENGTH OF 20 KM ACROSS TOP OF MESA

Agbaja is a unique sedimentary magnetite Channel Iron Deposit (CID) that is located across the top of a large mesa that has a width of 3-6 kilometres and length of 20 kilometres. The resource carries grades of ~46% Fe, and softer and coarser ore that liberates at ~250 microns. 

Most magnetite deposits are classified as Banded Iron Formation (BIF) with grades of 25 – 40% Fe that liberate at ~45 microns, and are significantly more expensive to process.



PRELIMINARY FEASIBILITY STUDY CONFIRMS ROBUSTNESS OF AGBAJA PROJECT 

Kogi Iron has just completed a Preliminary Feasibility Study  “PFS” that was headed by Coffey Mining for resource and mining planning, and Tenova Australia for metallurgy and processing. Seven additional consultants reported on bioleaching, pipeline, barging, operations, markets, financial modelling, environmental and social issues. 

The PFS was based around a magnetite concentrate production rate of 5 million tonnes per annum, over a mine life of 21 years and projected:

- CAPEX of US$497 million to generate an Internal Rate of Return of 23.7%.
- Pre-tax Net Present Value of US$420 million, at a 12% discount rate.
- Capital intensity of US$99.4 per tonne.
- Average OPEX of US$42.98 per tonne, Free On Board or FOB.
- Four year CAPEX payback.
- Based on a long term FOB price of US$73.00 per tonne of iron ore concentrate.
- Producing a net margin of US$30.00 per tonne and EBITDA of US$136 million per year.

This places Agbaja in the bottom quartile for capital intensity, and bottom half of the operating cost curve of global magnetite projects. A Definitive Feasibility Study has now been approved and is expected to be completed by the fourth quarter of 2014.

Low CAPEX and OPEX driven by:

- Low strip ratio of 0.55:1 for open pit operations.
- Soft and coarse ore requires no drilling or blasting, moderate grinding costs, and use of simple plant design.
- Excellent local infrastructure that includes availability of natural gas to power plant, and river barges to transport concentrate to port.
- Life of Mine of 21 years applied in the PFS, but Indicated Mineral Resources are sufficient to maintain an output of 5 million tonnes per annum for over 35 years.



LOW STRIP RATIO 

Kogi Iron reports a low strip ratio of 0.55:1, whereas typical West Australian iron ore miners report higher strip ratios of ~1:1.and up to 4:1. Low strip ratios reduce both capital and operating expenses that are incurred at the commencement of open pit mining, and opening up of new areas of production.

 

SOFT AND COARSE ORE – EASY TO MINE

Agbaja is unique in that it is only one of three globally known sedimentary hosted magnetite deposits. Typical magnetite deposits are found in banded ironstone formations or “BIF” that require large amounts of energy and intensive grinding to liberate the iron from associated natural matrix. 
 
Agbaja ore is soft and friable that requires a coarse grind and simple magnetic separation, providing lower capital and operating costs. BIF magnetite deposits typically grade 25-40% Fe, whereas Agbaja averages 41.3% Fe, and with selective mining of higher grades will provide a head grade of 45.7% Fe to the process plant.



EXCELLENT INFRASTRUCTURE 

Agbaja is 15 kilometres northwest of Lokoja which is serviced with electric power, cell phones, schools, and hospitals. The city is located on the Niger River which has a nearby barge loading facility at Banda that is underutilized, and suitable for shipment of iron ore concentrate to the Gulf of Guinea. 

The immediate area is served by a dual lane road that links to the capital of Abuja which is 165 kilometres to the southwest, and has an international airport.



MINE LAYOUT AND MINE PLAN

The Company has identified two mining areas for Stage One and Stage Two of operations. Sites have been selected and designs completed for the process plant and open pit mining operations. 
Stage One contains ~158 million tonnes of Indicated Resources with an average grade of 46.1% Fe, and strip ratio of 0.55:1. This will provide an initial mine life of 15 years at 5 million tonnes per annum.  

Stage Two contains ~66 million tonnes of Indicated Resources with an average grade of 44.8% Fe with a strip ratio of 0.56:1. This area will provide plant feed for an additional 6 years at a rate of 5 million tonnes per annum.



MINING OPERATIONS

The Company has opted to utilise contractors to complete site development and conduct mining operations. Detailed proposals have been received from three contractors, two of which are based in West Africa, and all are similar in approach and price.  

Mining costs (as stated in the PFS) are currently at US$3.69 per tonne for ore delivered to the process plant, and are US$8.12 per tonne for processed magnetite concentrate ready for shipment.



METALLURGY AND PROCESSING

Tenova Mining and Minerals and Trical Mining and Metallurgical Services completed metallurgical test programs that confirmed a primary grind size of 600 microns to liberate the iron, and a final grind size at a relatively coarse 250 microns. This will be followed by Low Intensity Magnetic Separation, which is a well proven technology for processing high volumes of iron concentrates that will take an iron feed of ~45%Fe to a concentrate of ~56% Fe.

SCEMATIC LAYOUT OF MINING OPERATION, PROCESS PLANT AND BARGE LOADING FACILITY

The milling circuit will process a nominal 3,900 tonnes per hour of solids based on a circulating load of 100% of new feed of 1,590 tonnes per hour. Mill discharge slurry density will be maintained at 70% and fed to the Rougher Magnetic Separation “RMS” circuit.

Each RMS unit is expected to recover 67% of the feed to the circuit and produce concentrate slurry at 60% solids density which will feed to a Cleaner Magnetic Separator “CMS”. The CMS circuit will upgrade the slurry to 56% Fe, with non-magnetic material reporting to tailings, and 5 million tonnes per annum of magnetite concentrate reporting to bioleach ponds. 

Microbial treatment in the ponds will reduce the phosphorous content to 0.25%. Once the phosphorous level falls within the target range the slurry will be thickened and pumped along a pipeline to the Banda barge loading facility. The slurry will then be vacuum filtered, washed with water and sent to the product load out station with a maximum moisture content of less than 10%.

Recovered process water will be piped back to the process plant and river barges will transport the concentrate to a barge transfer station at Escravos from where it will be transferred to ocean going barges for delivery to a transhipment facility moored in the Gulf of Guinea.



POWER 

Power for plant operations will be provided by a dedicated natural gas fired electric power station. The gas will be supplied from the prolific oil and gas province in the Niger Delta and supplied via an underutilized natural gas pipeline that runs close to the proposed plant site.

Dedicated diesel gensets will power the Banda barging facility and the Escarvos transfer station.



TRANSPORTATION OF CONCENTRATES

Studies indicate that barge shipments of concentrates along the Niger River will be 2-2.5 times less expensive than rail transportation to the port of Warri. The concentrate will be loaded into Mississippi type barges (carrying a total of 19,200-32,000 tonnes) that will be propelled in groups of four barges by push boats operating at 10 knots per hour. Travel time from Banda to the Escravos Transfer Station in the Niger Delta will take around 33 hours and cover 602 kilometres.

The river barges will transfer the concentrate into a 20,000 tonne self-propelled and self-unloading ocean going barge. The ocean going barge will then travel 33 kilometres into the Gulf of Guinea and transfer the concentrate to a floating transhipment storage facility with a capacity of 200,000 tonnes. This facility will load Panamax and Cape size ships for export of iron concentrates to world markets. 

The Free On Board transport cost including all vessel and transhipment storage facility costs are estimated at US$18.77 per metric tonne, or a rate of US$0.0296 per metric tonne for each kilometre travelled. 



OPERATIONS MANAGEMENT – WORKFORCE

Construction of mine and process plant at Agbaja will require a temporary work force of 800 – 1,000 personnel.

The Company projects manning levels for Kogi at 274 directly employed staff, 224 mining contractor staff, and 43 other contractors. Recruitment will focus on employment of skilled local residents that will meet their own accommodation needs.



ENVIRONMENTAL AND SOCIAL ISSUES

Greenwater Environment Services has completed an Environmental and Social Impact Assessment or ESIA that concluded there are no environmental or social impediments for the development of the Agbaja Project. The project area covers low value scrub land, savannah woodland and grasslands that have limited agricultural use or environmental significance.

The statement also notes that the project will generate long term employment and service opportunities that will enrich and develop local communities.

An Environmental Management Plan has also been prepared that mitigates the environmental impact of proposed mining and processing activities.



CAPITAL EXPENDITURE (CAPEX)

Estimates include mine development US$11.9 million, process plant US$132.7 million, pipeline to Banda and Escravos facility US$120.2 million, utilities and infrastructure US$108.2 million, insurance, fills and spares US$32.5 million, EPCM contract US$46.5 million, contingencies US$45.1 million for a total of US$497.1 million or US$99.4 per tonne.



OPERATING EXPENDITURE (OPEX) 

Estimates include mining US$8.12 per tonne, processing and pipeline costs US$13.96 per tonne, Barging and FOB US$18.77 per tonne, general and administration US$2.13 per tonne for a total of US$42.98 per tonne.



CATALYSTS – 2014 TO FIRST QUARTER OF 2017

- Completion of Definitive Financial Study by end of 2014.
- Approval of Environmental and Social Impact Assessment by Nigerian authorities.
- Grant of mining lease and completion of project funding by the end of 2014.
- Engineering, Procurement and Construction Management Contract executed.
- Construction phase of 76 weeks commencing early to mid-2015.
- Commissioning Q4 of 2016, or Q1 2017.



NIGERIA – A RESOURCE DRIVEN ECONOMY

Nigeria is a former British colony that gained independence in 1960. The country has a population of 163 million people that elects its President and parliament by popular vote. 

Oil production is currently at 2.5 million barrels per day and makes up 95% of all exports. Higher oil prices have allowed the nation to run a budget surplus in 2012, and provided for a GDP growth rate of 7.2% in 2013.   

Standard Bank forecasts that Nigeria will be the fastest growing of the MINT economies (Mexico, Indonesia, Nigeria and Turkey) and will be driven by the strongest fiscal balance, lowest public debt and market reforms. The country currently attracts $8.9 billion in foreign investment, which is 16% of Africa’s total.

Citigroup studies project that GDP growth for Nigeria has potential to place it within the top ten world economies by 2050. 

The Agbaja project is governed by the contemporary Nigerian Minerals and Mining Act 2007 that provides a quick and easy approvals process, and does not impose any free carried participation by government or local entities. The corporate tax rate is set at 30%, iron ore royalties at 3%, and provides a transparent and consistent tax structure.

 

IRON ORE MARKET AND KOGI PRODUCT

China is expected to import more iron ore as domestic production grades continue to fall. Asian countries such as India, Indonesia and Vietnam are expected to increase iron ore imports to fuel greater industrialisation. 

West African iron ore resources such as Agbaja have the potential to break the current iron ore supply oligopoly that exists in Australia and Brazil, and supply global markets with an additional source of good quality iron ore.

 

Kogi Iron PROJECTED AT US$103 PER TONNE BASED ON 5 YEAR CHINESE IMPORT PRICING AT TIANJIN PORT

Agbaja fines are projected to contain 56% Fe, 3.8% S102, 6.6% Al2O3, P 0.25%. Low silica, phosphorus and impurity levels will appeal to Asian buyers because they reduce blast furnace operational issues, low titanium levels will produce more fluid slag, and their coarse nature is ideal for sintering. 

Agbaja fines are ideal as a blend with high silica, low phosphorus product from the Pilbara (Australia) or Brazil, and will attract a slight discount for phosphorus and alumina content. 

Kogi’s long term forecast for these 56% Fe fines are US$73 per tonne FOB Nigeria, and equates to iron ore fines of 58% Fe landed at Tiajin Port of China at US$103 per tonne. This forecast pricing is at 85% of current pricing into Tiajin, and serves as a proxy for Asian pricing of imported iron fines of the same quality. 

A more detailed marketing analysis and strategy will be carried out in the DFS and will include sintering testing, individual bulk samples for prospective customers, and a full Value in Use analysis for a more complete evaluation of the product.

 

PEER GROUP ANALYSIS AND VALUATION

Agbaja capital intensity is estimated at US$99 per tonne, and falls into the lowest quartile for global magnetite projects.  

This is significantly more competitive than magnetite projects that have been proposed in Western Australia, and include Jack Hills with a capital intensity of A$140 per tonne, Extension Hill of A$145 per tonne, and Mount Ida of A$185 per tonne. Funding will obviously flow to projects like Agbaja that report a faster repayment of debt on a smaller CAPEX. 

Major Australian iron ore miners that mine hematite from massive iron resources in the Pilbara are not immune from higher CAPEX. Rio Tinto produces 290 million tonnes per annum of iron ore from its international operations, and reports a drop in capital intensity from A$150 to A$120-$130 per for new annualised production from the Pilbara.

A similar situation applies to OPEX. Fortescue Metals Group projects shipment of 155 million tonnes of 62% Fe from its Western Australian operations in 2014, and forecasts a total production cost of US$51 per tonne. 

These high CAPEX and OPEX numbers are impacting Chinese investment into development of alternative and lower cost sources of iron ore. African Minerals Ltd (AIM: AMI) is fast tracking the development of the Tonkolili iron ore resource in Sierra Leone with the support of  major Chinese investors that include Shandong Iron & Steel, China Railways Material Company and an upcoming investment of US$990 million by Tewoo for a 10% stake that values Tonkolili at US$6 billion. 

Tonkolili is currently producing and targeting a run rate of 20 million tonnes per annum in 2014. Projected EBITDA is US$31 per tonne or US$620 million, and capital intensity of US$120 per tonne. 

The PFS for Agbaja projects an EBITDA of US$136 million / A$154 million, and application of the same EBITDA to market valuation that Tewoo applies to Tonkolili produces a market valuation of US$1.5 billion / A$1.71 billion.  

The AIM market currently capitalises African Minerals Ltd at A$994.7 million for a projected 65% interest in Tonkolili, or A$76.51 per tonne of annualised output. Applying the same valuation to Kogi Iron’s proposed output of 5 million tonnes per annum produces a valuation of A$382.6 million or $1.19 per Kogi Iron share on an undiluted basis, and applies on commencement of production.

Zanga Iron (AIM: ZIOC) is developing a large scale iron ore resource in the Republic of Congo in a joint venture with Xstrata. The Company owns a 50% interest and has completed studies for a 12 million tonne per annum production rate, with a capital intensity of US$200 per tonne, and cash costs of US$40 per tonne. Zanga is valued at A$108.9 million or A$18.15 per tonne of proposed annualised output. 

Kogi Iron is currently moving into a bankable feasibility stage, and valuations should be roughly comparable with Zanga, which remains unfunded. This equates to a valuation of A$90.8 million for Kogi Iron, on completion of Definitive Feasibility Studies, or A$0.28 per share.        

SPECULATIVE BUY

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.


Disclaimer

You understand and agree that no content published constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made.

However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

The contributors make every effort to ensure that the information and material contained in this report is accurate and correct and has been obtained from reliable sources. However, no representation is made about the accuracy or completeness of the information and material and it should not be relied upon as a substitute for the exercise of independent judgment. Proactive Investors does not accept any liability, including negligence, for any loss or damage arising from the use of, or reliance on, the material contained in this report. There are general risks associated with any investment in securities. Investors should be aware that these risks might result in loss of income and capital invested.

WARNING: No recipients should rely on any recommendation (whether express or implied) contained in this document without obtaining specific advice from their advisers. All investors should therefore consider the appropriateness, in light of their own objectives, financial situation and/or needs, before acting on the advice.

DISCLOSURE: Proactive Investors, its directors, associates, employees or representatives may not affect a transaction upon its or their own account in the investments referred to in this report or any related investment until the expiry of 24 hours after the report has been published.

]]>
Tue, 25 Feb 2014 22:15:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/56000/kogi-iron-aiming-to-become-a-major-west-african-iron-ore-producer-66146.html
<![CDATA[News - Kogi Iron PFS delivers US$43/t operating costs for Agbaja Iron Ore Project ]]> https://www.proactiveinvestors.co.uk/companies/news/55194/kogi-iron-pfs-delivers-us43t-operating-costs-for-agbaja-iron-ore-project-65275.html Kogi Iron’s (ASX: KFE) Preliminary Feasibility Study has established its Agbaja Iron Ore Project in Nigeria is an economically robust and technically viable project with average operating costs of US$42.98 per tonne concentrate FOB.

With that, the company will move immediately to a Definitive Feasibility Study as a precursor to a decision to mine at Agbaja, which is expected to be completed by end of Q4 2014.
    
Other key takeaways include 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 highly positive results of the study determined that the development and operation of a mine and processing plant at Agbaja to produce 5 Mtpa of iron ore concentrate is technically feasible, economically viable and socially and environmentally acceptable,” managing director Iggy Tan.

Agbaja has a four year capital payback and ranks in the bottom quartile for capital intensity (US$99.4 per tonne) and the bottom half of operating costs curve of magnetite projects and comparable to some DSO hematite iron ore projects.

Tan noted that this is due to “the softness of the Agbaja material and the resultant moderate grinding intensity and simple processing plant design, the low strip ratio (0.55:1), gas fired power and river barging for concentrate transport”.

The long term forecast FOB price of US$73 per tonne iron ore concentrate supports a net margin of US$30 per tonne and average EBITDA of US$136 million per annum.

“These strong results have led to approval from the Board of Kogi Iron to proceed to a Definitive Feasibility Study as a precursor to a decision to mine at Agbaja. The DFS is expected to be completed by end of Q4 2014,” Tan added.

Capital Costs

Capital Costs are estimated at US$497.1 million with the major components being the processing facility and associated infrastructure, which were estimated by independent process engineering consultant Tenova Australia Limited.

Major equipment costs were based on budget quotations from single source suppliers. The balance of the remaining equipment was derived from Tenova knowledge of similar projects and historical databases. 

Platework items and buildings have been quantified from the mechanical equipment list and general arrangement drawings, with supply rates and installation durations using similar locality historical data.

Concrete, steelwork, pipework and electrical/instrumentation allowances have been applied as a factored percentage per the cost of mechanical equipment on a facility by facility basis.

The Concentrate Pipelines, Banda Barge Facility Infrastructure, Escravos Transfer Facility Infrastructure and general process plant and off-site infrastructure costs were provided by other consultants.

The breakdown of capital costs is:

-    Mine Development: US$11.9 million;
-    Processing Plant US$132.7 million;
-    Pipeline, Banda & Escravos US$120.2 million;
-    Utilities and Infrastructure US$108.2 million;
-    Insurance , IT, First Fills, Spares US$32.5 million;
-    EPCM US$46.5 million; and
-    Contingency US$45.1 million.

Operating Costs

Agbaja operating costs of US$42.98 per tonne concentrate consists of:

-    Mining: US$8.12/t;
-    Processing: US$13.96/t;
-    Barging (FOB): US$18.77/t; and
-    General and Administration: US$2.13.

Financial Evaluation

Cash flow modelling of the proposed operation shows a pre-tax, equity Net Present Value for the project of US$420 million (at discount rate of 12%) with total EBITDA cash flow generated over the 21 year project life of US$2.854 billion. 

The cash flow model utilises real dollars as its basis and thus does not factor any inflationary impact on revenue or expenses, and a discount rate of 12% was used for NPV determination. 

The pre-tax Internal Rate of Return is 23.7%.

Based on total capital expenditure of US$497 million and full year production cash flow of US$136 million (average), the project has a payback period (excluding financing costs) of 4 years. A long term forecast price of US$73 per tonne FOB Nigeria (56% Fe, with discounts) has been used. 

The project generates an average of US$365 million of sales revenue per annum.

Agbaja Resource and Location

The PFS assessed the technical and economic viability for the development of an iron ore mining and processing operation at Agbaja to produce 5 million tonnes of upgraded iron ore concentrate per annum.

This is based on the current Resource of 586 million tonnes at 41.3% iron within EL12124 – one of 17 exploration licences held by the company – with the majority, or about 466 million tonnes at 41% iron, classified in the higher confidence Indicated category.

These are sufficient to support a 5Mtpa project for a period of more than 35 years though a mine plan sufficient for 21 years production was used in the PFS.

Agbaja is one of just two channel iron (CID) magnetite deposits in the world while its average iron grade of 41.3% places it at the top end of magnetite projects world-wide, which generally range from 20% to 40%.

The CID material is relatively soft and friable and only requires moderate grinding, simple magnetic separation, and only a coarse grind particle size to liberate the iron. 

Consequently mining and processing costs for the Agbaja project are relative low compared to other magnetite projects. Agbaja’s estimated total operating costs rank in the bottom quartile when compared to operating costs other magnetite projects.

Yield is expected to be about 45%, for a final iron ore concentrate grade of approximately 56% iron.

The project’s proximity to existing, under-utilised river and port infrastructure suitable for the transport of bulk commodities is another of the project’s key competitive advantages.

Barging and transhipping costs are estimated at around US$19 per dry metric tonne free on board, or $0.0297 per tonne kilometre.


River Barging Configuration

In addition, the Agbaja Plateau where the project is located in is just 15 kilometres northwest of the city of Lokoja in Kogi State and 165 kilometres southwest by road to Nigeria’s capital of Abuja.

Lokoja has reticulated electrical power, cellular telephone networks, primary and secondary schools, hospitals and other amenities while Abuja has a large international airport with daily flights to Europe, the middle-east and other African nations and is connected to Abuja by a well maintained duel carriageway tarmac road.

Nigeria is recognised as one of the fastest growing country’s in the world and is forecast to become the world’s fifth largest economy by 2050.

Its move to diversify away from oil production has also led the government to encourage new forms of investment with mining being one of the highest priority industries.

Mine Plan

Two mining areas (Stage 1 and Stage 2) have been identified, pits have been designed, and material movement schedules completed. The processing plant is proposed to be located in the northeast portion of the area covered by the Resource and between the two areas.

The Stage 1 mining area is approximately 7.2 square kilometres, it is west of the proposed plant site and contains about 158Mt of mineral resources. Targeting the magnetic fraction of the mineral resource, the average grade of material identified for mining is estimated at 46.1% iron, with a corresponding strip ratio of approximately 0.55 to 1. 

As currently designed, this area should provide processing plant feed for an initial 15 years. 

The Stage 2 mining area covers about 2.2 square kilometres and is to the east of the proposed plant site. This area is estimated to contain approximately 66Mt of mineral resources.



The average grade of material identified for mining is estimated at 44.8% iron, with a corresponding strip ratio of about 0.56 to 1. 

As currently designed this area should provide processing plant feed for an additional 6 years, bringing the combined total plant feed from the two areas to 21 years. 

Kogi has opted for a mining contractor to conduct all site development, overburden and waste removal, open-pit mining including site rehabilitation, haulage and ore feed to a primary crusher. 

Mining operations will be conducted on a 24/7, 365 days per year basis and it is envisaged that production drilling and blasting will not be required, as all material is regarded as soft and friable, and amenable to “free-dig”.

Proposals have already been received from three mining contractors, two of which have West African contract mining experience.

A three stage crushing circuit has been designed, comprising of two double deck banana scaling screens, one primary crusher/sizer, one secondary cone crusher, two tertiary crushers and three single deck final product screens, delivering a <15 mm product (P80) to a conical mill feed stockpile.

The nominal throughput of the plant is 1,894 t/hr to achieve 11.1 Mtpa of feed.

The milling circuit will consist of one 6.7m diameter by 9.2m long ball mill with dual 4,500kW drives, operating in closed circuit with 30 multi-deck screens for classification of the solids.

Simple bioleaching will also be used to reduce phosphorous levels in Agbaja iron ore to 0.25% from 0.9%.


Proposed overall plant layout at Agbaja

Analysis

The PFS establishes Kogi Iron’s Agbaja Iron Ore Project as economically robust and technically viable project with an impressive average operating cost of US$42.98 per tonne concentrate FOB, placing it at the bottom half of operating costs curve of magnetite projects and comparable to some DSO hematite iron ore projects.

Agbaja is very well placed at the forefront of West Africa, as the next iron ore hub underpinned by Chinese seaborne demand as it looks to diversify away from the large Australian iron ore producers.

Kogi remains an iron ore player to watch and corporate interest from China or Asian steel companies would not surprise as they move to lock-in African iron ore supplies.

Agbaja Fines will have the advantage of low silica content, which will strongly appeal to Asian customers.  For a magnetite concentrate Agbaja Fines will be quite coarse, which makes the product more attractive for sintering and is in the size range of concentrates commonly sintered in China.

The Agbaja Mineral Resource is one of the highest grade beneficiable iron ore resources in West Africa with massive scale potential. A crucial ingredient to the commercial viability of an iron ore mine is access to bulk commodity transport infrastructure, which is one of Agbaja's key competitive advantages.

At a market cap of circa $18 million, the intrinsic value of inherent in Agbaja is not factored into the Kogi share price.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Wed, 29 Jan 2014 00:36:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/55194/kogi-iron-pfs-delivers-us43t-operating-costs-for-agbaja-iron-ore-project-65275.html
<![CDATA[News - Kogi Iron's Agbaja ore requires simple beneficiation, low operating costs ]]> https://www.proactiveinvestors.co.uk/companies/news/55079/kogi-irons-agbaja-ore-requires-simple-beneficiation-low-operating-costs-65148.html Kogi Iron (ASX:KFE) has finalised the processing plant design for its Agbaja Iron Ore Project in Kogi State, Nigeria requiring moderate grinding intensity due to the relatively soft Agbaja material.

A simple beneficiation process will be required using magnetic separation with a favourable coarse final product particle size of 250 micron which should ensure low operating costs.

A Preliminary Feasibility Study (PFS) is nearing completion, the processing plant design is a key part of the study. 

The study will also indicate a favourable processing cost estimate at Agbaja of US$16/tonne of iron ore concentrate, highly competitive for a magnetite project.

Grinding will be followed by Low Intensity Magnetic Separation (LIMS) which is a robust, high capacity and well established mineral processing technology. 

For the Agbaja material, laboratory testing of LIMS has demonstrated sound primary separation of iron bearing material for a reasonable final product grade and yield, after regrinding of the material.

Yield is expected to be around 45%, for a final iron ore concentrate grade of 56% iron.

Agbaja Iron Ore Project

Agbaja has an overall resource of 586 million tonnes at 41.3% iron. Notably, 466 million tonnes at 41.4% iron is in the higher confidence indicated category.

There is also potential for large scale expansion given that just 20% of the prospective area has been drilled tested. Kogi had previously estimated an Exploration Target of between 1.8 billion tonnes and 3Bt at 32% to 48% iron that offers further growth potential.

The project is close to established transport infrastructure, which includes barging along the Niger River to the sea port.

Estimated PFS Processing Costs

As a part of the PFS, the company has estimated processing costs based on equipment power loads, employee salaries, consumables, maintenance, sample analysis, reagents, grinding media, and various other operating expenditures. 

The total estimate indicates that iron ore concentrate will cost in the region of US$16/t to process at Agbaja.

Kogi’s Managing Director, Iggy Tan said “the proposed Agbaja processing plant uses a very simple beneficiation process for magnetite ore which will keep operating costs low.

Magnetite deposits are typically found in banded ironstone formations (BIFs) whereas Agbaja is one of only three known channel iron deposits (CID) to host potentially commercial magnetite."

Typically, BIF magnetite deposits require large amounts of energy intensive grinding (around 14 kWhr/t feed) to liberate the iron however the relative softness of the Agbaja CID material requires only moderate grinding (8.5 kWhr/t feed) and simple magnetic separation to liberate the iron. 

"Consequently, mining and processing costs for Agbaja are expected to be very competitive when compared with other magnetite projects,” Tan said.

Low strip ratio

Recently, Kogi reported a reduced strip ratio of 0.55 to 1 for Agbaja, which is low in iron ore mining which plays to the distinct advantage that the Agbaja iron ore project possesses.

Reflecting the low stripping regime, pricing received from leading mining contractors with West African experience has resulted very competitive mining costs.

Which saw mining costs at close to US$8.00/tonnes of concentrate which are very competitive, and puts Kogi in good stead for highly competitive overall operating costs which will be finalised as part of the current PFS.


Analysis

All the pieces are coming together for Kogi and its Agbaja iron ore project with every step demonstrating the relative cost advantages of the project.   The release of the upcoming Preliminary Feasibility Study should provide more detail and forms a near term share price catalyst for Kogi Iron.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Thu, 23 Jan 2014 23:39:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/55079/kogi-irons-agbaja-ore-requires-simple-beneficiation-low-operating-costs-65148.html
<![CDATA[News - Kogi Iron reduces operating and capital costs for barging of Agbaja iron ore ]]> https://www.proactiveinvestors.co.uk/companies/news/55005/kogi-iron-reduces-operating-and-capital-costs-for-barging-of-agbaja-iron-ore-65068.html Kogi Iron (ASX: KFE) continues to build the investment case for its Agbaja iron ore project in Nigeria with optimisation of a barging study reducing both operating and capital cost estimates.

Optimisation has reduced estimated barging and transhipping costs to around US$19 per dry metric tonne free on board, or $0.0297 per tonne kilometre.

This was due to the removal of the proposed re-handle of iron ore concentrate at Port Warri and its replacement with a river barge to ocean going barge transfer station at Escravos in the Niger River Delta, which would also reduce capital cost estimates.

“The company is pleased with the outcome of the barging optimisation work which demonstrates that barging transportation of iron ore concentrate is not only a readily available and effective transport solution, but a most economic option,” managing director Iggy Tan said.

“Barging is widely accepted as a lower cost form of bulk commodity transport compared to both rail and trucking, so the proximity of river transport remains a unique competitive advantage of the Agbaja Iron Ore Project. 

“Our estimated FOB transport cost of just under 3 cents/tonne per kilometre, or around $19.00 per tonne of concentrate, puts us in good stead for a highly competitive overall operating cost estimate in our PFS.”

Optimised Barging Study

The optimised Niger River involves iron ore concentrate being pumped about 22 kilometres from the Agbaja Plateau down to the Banda barge loading facility located on the west bank of the Niger River.

The concentrate will then be filtered to reduce the moisture content to less than 10% and conveyed to a covered stockpile.

Barge loading from the stockpile will take place using a travelling, luffing, telescoping barge loader filling Mississippi-type barges in a four barge configuration.

Each barge configuration will be 286 metre by 21 metre barge and is designed to carry loads of 4,800 tonnes to 8,000 tonnes, depending on river water levels. This will be propelled by shallow draft four engine push boats with a preferred speed of 10 knots.

Iron ore concentrate will be transported about 602 kilometres from Banda along the Niger River to the Escravos Transfer Station at the Niger River Delta, a journey time of about 33 hours.

At the Escravos Transfer Station the concentrate will be transferred to a 20,000t ocean going sea barge.

The Escravos stockpile will allow the ocean barge to be loaded at a rate of 4,000t/hr and will minimise loading wait times and river barge cycles.

The 20,000t self-propelled and self-unloading ocean going barge will then transport the concentrate to a floating transhipment storage facility with a storage capacity of 200,000t in the Gulf of Guinea about 33 kilometres offshore that will allow loading of Panamax and Cape size OGV’s for global export markets.


Proposed Escravos Transfer Station

Agbaja Iron Ore Project

Kogi had last week reduced the strip ratio at the Agbaja project to 0.55 to 1 over 21 years from the original 0.72 to 1 based on the higher geological confidence of the 466 million tonne at 41.4% iron Indicated Resource.

This reduced waste material movement by 23% and overall material movement by 9%. Together with cost quotations received from leading mining contractors, this has allowed the company to estimate mining costs at US$8 per tonne of concentrate.

Agbaja has an overall Resource of 586 million tonnes at 41.3% iron with potential for further growth given that just 20% of the prospective area has been drilled tested.

Analysis

The optimisation of the Niger River Barging Study lands further support to the investment case for Kogi Iron’s Agbaja iron ore project being a low cost source of iron production in Nigeria.

With low mining costs and now low transport costs while iron ore prices hold firm, Kogi is an iron ore player to watch as it moves to develop the potential of its Agbaja Project.

The upcoming Preliminary Feasibility Study will provide a clearer picture of the project’s economics.

Proactive Investors continues to view Kogi’s current share price of $0.096 and market cap of $16 million as being undemanding.


Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Wed, 22 Jan 2014 06:14:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/55005/kogi-iron-reduces-operating-and-capital-costs-for-barging-of-agbaja-iron-ore-65068.html
<![CDATA[News - Kogi Iron further reduces strip ratio at Agbaja Iron Ore Project ]]> https://www.proactiveinvestors.co.uk/companies/news/54806/kogi-iron-further-reduces-strip-ratio-at-agbaja-iron-ore-project-64854.html Kogi Iron’s (ASX: KFE) Agbaja Iron Ore Project in Nigeria continues to take shape as a low cost operation with the 21 year strip ratio being reduced to 0.55 to 1 from 0.72 to 1.

Together with cost quotations received from leading mining contractors, this has allowed the company to estimate mining costs at US$8 per tonne of concentrate.

Waste material movement has been reduced by 23% and overall material movement reduced by 9% after the mine plan was revised based on the Indicated Resource of 466 million tonnes at 41.4% iron.

Budget mining cost quotations have been received from leading African experienced mining contractors, which assisted with the cost estimate.

Managing director Iggy Tan said the company was excited by the results achieved in the mine plan and mining cost estimate.

 “The reduced strip ratio of 0.55 to 1 is low in iron ore mining industry terms. This has always been a distinct advantage of the Agbaja iron ore project, it has now been defined and recognised in the mining study,” he added.

“Reflecting the low stripping regime, pricing received from leading mining contractors with West African experience has resulted very competitive mining costs. 

“Mining costs at close to US$8.00/t of concentrate are very competitive, and puts us in good stead for highly competitive overall operating costs which will be finalised as part of the current PFS.”

He added the accelerated work by the company’s management and project teams meant it was still on track to deliver the Preliminary Feasibility Study by the end of the first quarter 2014.

Mine Plan

Based on the higher geological confidence of an Indicated Resource, Kogi Iron re-ran and further optimised the Agbaja mine plan.

The 21 year overall strip ratio for both the Stage 1 and Stage 2 mining areas now averages 0.55 to 1. 

At an iron ore concentrate production rate of 5.0 million tonnes per annum, this represents an average annual rate of feed of around 10.6Mtpa, with overburden and waste of 5.8Mtpa.

The Stage 1 mining area is approximately 7.2 square kilometres, it is west of the proposed plant site and contains about 158Mt of mineral resources. Targeting the magnetic fraction of the mineral resource, the average grade of material identified for mining is estimated at 46.1% iron, with a corresponding strip ratio of approximately 0.55 to 1. 

As currently designed, this area should provide processing plant feed for an initial 15 years. 

The Stage 2 mining area covers about 2.2 square kilometres and is to the east of the proposed plant site. This area is estimated to contain approximately 66Mt of mineral resources.

The average grade of material identified for mining is estimated at 44.8% iron, with a corresponding strip ratio of about 0.56 to 1. 

As currently designed this area should provide processing plant feed for an additional 6 years, bringing the combined total plant feed from the two areas to 21 years. 

The two mining areas have an overall average strip ratio estimated at 0.55 to 1, providing 224Mt of feed (123Mt waste), at an average grade of 45.7% iron.

The low strip ratio has minimised mining costs over the 21 year mine plan and is proving to be a distinct advantage of the project.

Mining Costs

Kogi Iron has received a budget mining quotations from several leading mining contractors as part of the PFS.

This has allowed it to estimate mining costs – including overheads, overburden, waste and ore – of about US$8 per tonne of concentrate.

Agbaja Iron Ore Project

Agbaja has an overall resource of 586 million tonnes at 41.3% iron. Notably, 466 million tonnes at 41.4% iron is in the higher confidence indicated category.

There is also potential for large scale expansion given that just 20% of the prospective area has been drilled tested. Kogi had previously estimated an Exploration Target of between 1.8 billion tonnes and 3Bt at 32% to 48% iron that offers further growth potential.

The project is close to established transport infrastructure, which includes barging along the Niger River to the sea port.

Strengthening the case for Kogi is the recent addition of phosphorous bioleaching to the process plant design at Agbaja as part of the ongoing prefeasibility study.

Testwork has demonstrated that simple bioleaching can reduce phosphorous levels in Agbaja iron ore to 0.25% from 0.9%, potentially increasing prices received and hence cash inflow to Kogi. 

This increased cashflow model for Agbaja is further optimised by the expectation that bioleaching will have negligible impact on capital and operating costs.

The proposed design utilises simple and proven pumping technology for the transport of the slurry concentrate and avoids the traditional and more costly heap leaching process.

Analysis

With estimated mining costs of just US$8 per tonne of concentrate and a 21-year strip ratio of just 0.55 to 1, Kogi Iron’s Agbaja Iron Ore Mine continues to take shape as a low cost source of iron production in Nigeria.

The company has consistently hit operating targets and delivered innovative methods of reducing costs and increasing mining efficiency and end products.

With the iron ore price holding firm despite mainstream uncertainty over supply/demand metrics, Kogi is an iron ore player to watch as it moves to develop the potential of its Agbaja Project.

The upcoming Preliminary Feasibility Study will provide a clearer picture of the project’s economics while the substantial Exploration Target of between 1.8 billion tonnes and 3Bt at 32% to 48% iron offers potential for further growth. 

Considering these factors, Kogi’s current share price of $0.096 and market capitalisation of $16 million is very undemanding.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Wed, 15 Jan 2014 01:52:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/54806/kogi-iron-further-reduces-strip-ratio-at-agbaja-iron-ore-project-64854.html
<![CDATA[News - Kogi Iron receives offtake interest for fines product from its Agbaja Iron Ore Project ]]> https://www.proactiveinvestors.co.uk/companies/news/54671/kogi-iron-receives-offtake-interest-for-fines-product-from-its-agbaja-iron-ore-project-64716.html Kogi Iron (ASX: KFE) has received sound interest from potential offtake customers and partners for the proposed Agbaja Fines product from its wholly-owned Agbaja Iron Ore Project in Nigeria.

The company has defined the typical indicative analysis for the product based on Preliminary Feasibility Study metallurgical test-work and processing plant design incorporating bioleaching.

Managing director Iggy Tan said discussions are ongoing as it progresses towards completion of its Preliminary Feasibility Study.

“Favourable attributes of Agbaja Fines will include low silica values, high loss on ignition and the coarse nature (250 micron) of the final product,” he added.

“With initial transport via river barging, followed by transhipment to Cape size ocean going vessels, the company will be well positioned to provide cost effective cargo sizes for customers.”

The typical indicative analysis shows that Agbaja Fines consists of 60.4% iron (Calcined), 3.8% SiO2, 6.6% AI2O3, 0.25% phosphorus and 5.45% water.

Agbaja Iron Ore Project

Agbaja has an overall resource of 586 million tonnes at 41.3% iron. Notably, 466 million tonnes at 41.4% iron is in the higher confidence indicated category.

There is also potential for large scale expansion given that just 20% of the prospective area has been drilled tested.

This gives rise to the possibility of Kogi's flagship project holding a total iron resource of almost 3 billion tonnes

The project is close to established transport infrastructure, which includes barging along the Niger River to the sea port.

Kogi has also highlighted the low strip ratios averaging 0.72 to 1 over 20 years – including a ratio of 0.42 to 1 in the first three years, further streamlining operating expenditure.

Strengthening the case for Kogi is the recent addition of phosphorous bioleaching to the process plant design at Agbaja as part of the ongoing prefeasibility study.

Testwork has demonstrated that simple bioleaching can reduce phosphorous levels in Agbaja iron ore to 0.25% from 0.9%, potentially increasing prices received and hence cash inflow to Kogi. 

This increased cashflow model for Agbaja is further optimised by the expectation that bioleaching will have negligible impact on capital and operating costs.

The proposed design utilises simple and proven pumping technology for the transport of the slurry concentrate and avoids the traditional and more costly heap leaching process.

Analysis

The typical indicative analysis highlights the high iron and low silica levels present in the Agbaja Fines product fromKogi Iron’s Agbaja Iron Ore Project.

That it has already received sound interest provides further support towards its development momentum, which has included low strip ratios and a decision to skip the Scoping Study and move straight to a Preliminary Feasibility Study.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Fri, 10 Jan 2014 03:14:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/54671/kogi-iron-receives-offtake-interest-for-fines-product-from-its-agbaja-iron-ore-project-64716.html
<![CDATA[News - Kogi Iron completes key study for Agbaja iron project, Nigeria ]]> https://www.proactiveinvestors.co.uk/companies/news/54545/kogi-iron-completes-key-study-for-agbaja-iron-project-nigeria-64587.html Kogi Iron (ASX: KFE) has completed the key Environmental and Social Impact Assessment (ESIA) for its Agbaja Iron Ore Project that found no environmental or social impediments for its development.

The ESIA, which received strong support from the Nigerian Government and local communities, also found the project would positively impact the local economy, Kogi State and Nigeria.

Notably, the strong official support gives added investor confidence that Kogi's iron operations will transition smoothly into production and cashflow.

The company will now submit the ESIA to the Federal Ministry of Environment in January 2014, where there will be a mandatory 21 working day public exposure period, followed by a panel review of the ESIA conducted by the Nigerian Federal Ministry of Environment and Mines Environmental Compliance Department. 

Approval of the ESIA is anticipated at the completion of this process

ESIA Details

The ESIA work was conducted by Greenwater Environmental Services and is a key component of the company’s Preliminary Feasibility Study (PFS) evaluating the technical and economic viability of a 5 million tonne per annum iron ore operation at Agbaja.

No rare or endangered species of flora or fauna were identified in the proposed mine and operational areas, and furthermore the ESIA stated that anticipated environmental impacts from associated activities can be successfully managed via the requisite Environmental Management Plan, submitted as part of the ESIA.

It added that the project would:

-    Create jobs and job opportunities for locals during site preparation, construction and installation and operational phases;
-    Improve the socio-economic standing of the host communities;
-    Increase income of the local populace;
-    Accommodate an increase in the availability of iron ore for local and international market;
-    Stimulate the local economy resulting in economic empowerment; and
-    Increase the acquisition of job skills by host communities.

Agbaja Iron Ore Project

Agbaja has an overall resource of 586 million tonnes at 41.3% iron. Notably, 466 million tonnes at 41.4% iron is in the higher confidence indicated category.

There is also potential for large scale expansion given that just 20% of the prospective area has been drilled tested.

This gives rise to the possibility of Kogi's flagship project holding a total iron resource of almost 3 billion tonnes

The project is close to established transport infrastructure, which includes barging along the Niger River to the sea port.

Kogi has also highlighted the low strip ratios averaging 0.72 to 1 over 20 years – including a ratio of 0.42 to 1 in the first three years, further streamlining operating expenditure.

Strengthening the case for Kogi is the recent addition of phosphorous bioleaching to the process plant design at Agbaja as part of the ongoing prefeasibility study.

Testwork has demonstrated that simple bioleaching can reduce phosphorous levels in Agbaja iron ore to 0.25% from 0.9%, potentially increasing prices received and hence cash inflow to Kogi. 

This increased cashflow model for Agbaja is further optimised by the expectation that bioleaching will have negligible impact on capital and operating costs.

The proposed design utilises simple and proven pumping technology for the transport of the slurry concentrate and avoids the traditional and more costly heap leaching process.

Analysis

Kogi has the potential to become a source of iron ore production in Nigeria, considering its existing and potential resources.

The company has consistently hit operating targets and delivered innovative methods of reducing costs and increasing mining efficiency and end products.

With the iron ore price holding firm despite mainstream uncertainty over supply/demand metrics, Kogi is an iron ore player to watch as it moves to develop the potential of its Agbaja Project.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Tue, 07 Jan 2014 03:42:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/54545/kogi-iron-completes-key-study-for-agbaja-iron-project-nigeria-64587.html
<![CDATA[News - Kogi Iron to upgrade Agbaja iron ore using phosphorous bioleaching ]]> https://www.proactiveinvestors.co.uk/companies/news/54237/kogi-iron-to-upgrade-agbaja-iron-ore-using-phosphorous-bioleaching-64265.html Kogi Iron's (ASX: KFE) shares will look to trade higher after incorporating phosphorous bioleaching into the process plant design that is part of the ongoing Preliminary Feasibility Study for its wholly-owned Agbaja Iron Ore Project in Nigeria.

Notably, university testwork has demonstrated that simple bioleaching can reduce phosphorous levels in Agbaja iron ore to 0.25% from 0.9%, potentially increasing the price received for it.

Process design suggests bioleaching will have minimal impact on capital and operating costs while a specialist consultant is carrying out optimisation testwork.

“The Agbaja mineralisation has a number of unique characteristics, including the porosity of the iron bearing oolites, which makes the mineralisation amenable to bioleaching,” managing director Iggy Tan said.

“Bioleaching is used extensively in mineral processing and the potential to apply this simple, low cost processing method at Agbaja is an exciting development.

“The application of this beneficiation process will both broaden the market for the proposed Agbaja concentrate and importantly, increase the net price received. The key to taking full advantage of this opportunity is keeping the process simple which the team has certainly embraced.”

Proposed Process Design

The proposed process design utilises simple bioleach holding ponds, with a nutrient rich aerated solution introduced from the base of the pond, percolating upwards through the iron ore concentration to the surface over time.

Concentrate from the processing plant will be pumped into one of eight holding ponds as iron rich slurry and the bacterial culture will be introduced together with the aerated nutrient solution.

A total of eight holding ponds of 138 metres by 138 metres are envisaged to support a continuous operation with solid depths in the ponds proposed at around 3 metres.


Simple Bioleach Pond System

The sub-micron particles that will constitute the Agbaja iron ore concentrate are highly porous, allowing the bacterial microbes to easily enter and feed on the phosphorus within the crystal structure.

The phosphorus will report to the microbe biomass and solution and will be flushed from the concentrate when leaching is complete.

Aerated solution will be continually pumped into the ponds during the residence period to provide oxygen and nutrients for the microbial cultures during leaching.

A bleed stream will be removed from the circulating solution in order to remove metabolites and deleterious elements from the bacterial action.

The bleed stream is likely to be able to be used as a rich phosphorous fertilizer, which present opportunities for use such as in mine area rehabilitation work and as a general fertiliser.

Once phosphorus levels in the ponds have reduced, the concentrate slurry will be pumped out using a slurry pump mounted on a pontoon.

The phosphorous reduced slurry will then be thickened and stored in a tank for pumping down from the plateau to the proposed barge loading facility, at Banda on the Niger River.

The proposed design utilises simple and proven pumping technology for the transport of the slurry concentrate and avoids the more traditional and costly heap leach style of bioleaching.

This is expected to have minimal impact on project capital and operating costs.

Agbaja Iron Ore Project

Agbaja has overall Resources of 586 million tonnes at 41.3%, of which 466Mt at 41.4% iron is in the higher confidence Indicated category.

There is potential for further growth given that just 20% of the prospective area within EL12124 has been drilled.

The project is close to established transport infrastructure, which includes barging along the Niger River to the sea port.

Kogi has also highlighted the low strip ratios averaging 0.72 to 1 over 20 years – including a ratio of 0.42 to 1 in the first three years – that will minimise future mining costs.

To top of it off, beneficiating Agbaja ore requires just simple magnetic separation, further supporting expectations that the project would have low costs.

The current Indicated Resources is sufficient to support an operation producing in excess of the 5 million tonnes per annum scenario that was being developed in the Scoping Study.

Analysis
   
The potential for phosphorous bioleaching to upgrade iron ore from the Agbaja Iron Ore Project at minimal additional cost could be value accretive to Kogi Iron.

Agbaja is already expected to have low costs thanks to its low strip ratios averaging 0.72 to 1 over 20 years; the use of simple magnetic separation to beneficiate the ore and ready access to transport infrastructure.

The recent definition of a maiden JORC Indicated Resource of 466 million tonnes at 41.4% iron as well as the subsequent decision to upgrade its Scoping Study to a Pre-Feasibility Study further highlights the attractiveness of the project.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Wed, 18 Dec 2013 05:43:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/54237/kogi-iron-to-upgrade-agbaja-iron-ore-using-phosphorous-bioleaching-64265.html
<![CDATA[News - Kogi Iron fast-tracks Agbaja, shifts gear up to Preliminary Feasibility Study ]]> https://www.proactiveinvestors.co.uk/companies/news/54127/kogi-iron-fast-tracks-agbaja-shifts-gear-up-to-preliminary-feasibility-study-64150.html Kogi Iron (ASX: KFE) is fast-tracking its Agbaja Iron Ore Project in Nigeria by upgrading the Scoping Study that is currently underway to a Preliminary Feasibility Study.

This is underpinned by the recently completed Indicated Resource of 466 million tonnes at 41.4% iron for the project, which benefits from established transport infrastructure.

“The study work embarked on by the company this year was deliberately specified at a level of detail consistent with the requirement of a PFS in anticipation of the upgrade of the majority of the Mineral Resources at the Agbaja Project from Inferred to Indicated towards the end of this year,” managing director Iggy Tan said.

He noted the new JORC 2012 code states that any technical and economic studies - no matter how detailed – that assess the viability of developing an Inferred Resource can only ever constitute a Scoping Study for the purposes of public reporting.

“The 10 December 2013 ASX announcement by the Company of a 466 million tonne Indicated Mineral Resource at Agbaja was the catalyst to enable the company to consider upgrading the previously announced Scoping Study to a PFS,” Tan added.

“Advancing straight to a PFS is a credit to the Nigerian and Australian based members of the study team; it positions the company well to continue to advance the Agbaja Project towards development. 

“This strategy effectively fast tracks the time it takes to reach a development decision by completing the technical and economic assessments of the project to a high level of detail from the outset. 

“This is consistent with Kogi's status as a first mover in Nigeria's iron ore mining industry and our stated aim of becoming an African iron ore producer."

Studies underway for Agbaja include preferred mine design (with material movement schedules), a preferred mineral processing method and associated plant design, a transport study, a market study, and an environmental and social impact assessment study. 

Detailed capital cost and operating cost estimates (including mining, power, barging, slurry pipe and water return) are being obtained from prospective contractors and suppliers, enabling financial modelling of the proposed development.

Agbaja Iron Ore Project

Besides the Indicated of 466Mt at 41.4% iron, Agbaja has overall Resources of 586Mt at 41.3% iron with potential for further growth given that just 20% of the prospective area within EL12124 has been drilled.

The project is close to established transport infrastructure, which includes barging along the Niger River to the sea port.

Kogi has also highlighted the low strip ratios averaging 0.72 to 1 over 20 years – including a ratio of 0.42 to 1 in the first three years – that will minimise future mining costs.

To top of it off, beneficiating Agbaja ore requires just simple magnetic separation, further supporting expectations that the project would have low costs.

The current Indicated Resources is sufficient to support an operation producing in excess of the 5 million tonnes per annum scenario that was being developed in the Scoping Study.

Analysis

Kogi Iron has proven the wisdom of conducting its Scoping Study at the level required for Pre-Feasibility Studies.

With Resources at Agbaja Iron Ore Project now at the Indicated category, the company can skip a stage and move straight to a Pre-Feasibility Study, effectively reducing the time it would take to reach a development decision on the project.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Fri, 13 Dec 2013 00:02:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/54127/kogi-iron-fast-tracks-agbaja-shifts-gear-up-to-preliminary-feasibility-study-64150.html
<![CDATA[News - Kogi Iron ups iron ore resource and confidence at Agbaja, Nigeria ]]> https://www.proactiveinvestors.co.uk/companies/news/54006/kogi-iron-ups-iron-ore-resource-and-confidence-at-agbaja-nigeria-64027.html Kogi Iron (ASX: KFE) has increased confidence in its Agbaja Iron Ore Project in Nigeria with a maiden JORC Indicated Resource estimate of 466 million tonnes at 41.4% iron.

Overall Resources at the project have also increased by 20% to 586Mt at 41.3% iron with potential for further growth given that just 20% of the prospective area within EL12124 has been drilled.

Agbaja benefits from established transport infrastructure, which includes barging along the Niger River to the sea port.

The company has also highlighted in late November the low strip ratios averaging 0.72 to 1 over 20 years – including a ratio of 0.42 to 1 in the first three years – that will minimise future mining costs

“The Updated Mineral Resource is an important milestone in Kogi’s vision to be an African iron ore producer. Of significance is the classification of 466 million tonnes of resources as Indicated,” managing director Iggy Tan said.

“Not only does this demonstrate an increased level of geological confidence in the Agbaja deposit, but it provides a solid platform upon which the company can continue to advance the current Scoping Study that is assessing the technical and economic viability of potentially producing 5 Mtpa of iron ore concentrate at Agbaja.”

He added that the Indicated Resource could provide enough material for more than 35 years of production at this annual rate.

“Considering Kogi Iron has drilled only 20% of the area prospective for channel iron mineralisation within EL12124 on the Agbaja Plateau, the potential scale of the iron mineralisation on the plateau should not be underestimated.

“The Indicated Mineral Resource, as it currently stands, clearly has potential to support an operation producing in excess of the 5 Mtpa scenario being contemplated in the Scoping Study. 

“The average iron grade of 41.4% ranks Agbaja as one of the highest grade, beneficiable iron ore deposits in West Africa which we believe sets it apart from other projects.”

Resource Upgrade

The updated Resource, which is in accordance with JORC 2012 standards, was increased through both extensional and infill drilling as well as an improved understanding of the geology and mineralisation after further field work was completed in 2013.

The confidence in the geological interpretation is good with iron mineralisation being of a Channel Iron type flat lying deposit that is continuous and homogeneous.

This is aerially extensive across the Agbaja Plateau.

A total of 686 reverse circulation drill holes were drilled for 16,244 metres together with a total of 11 diamond drill holes were drilled for 233 metres.

Mining and Metallurgical Methods

It is currently considered that mined material will be crushed to around <10mm by a two stage crushing system. 

The crushed material will be further milled, fed to a beneficiation plant and through a simple magnetic separation process, with a final upgraded iron ore concentrate to be produced. 

Previously announced metallurgical testwork have demonstrated the recovery using the proposed flow sheet, optimising mass and iron recovery, and concentrate grade for the mineralisation.

Studies have identified, designed and developed material movement schedules for the Stage 1 and Stage 2 open pit mining area.

The Stage 1 mining area is about 6 square kilometres and is located west of the proposed processing plant site. 

Targeting the magnetic fraction of the mineral resource, the average grade of material identified for mining is estimated at about 46% iron, with a corresponding strip ratio of approximately 0.68 to 1. 

As currently designed this area should provide processing plant feed for an initial 14 years.

Stage 2 covers about 2.2 square kilometres to the east of the proposed plant.

Strip ratio is calculated at approximately 0.81 to 1 and the should provide feed for an additional 6 years, bringing the combined total plant feed from the two areas to 20 years.

The areas were selected to minimise estimated strip ratio and maximise exposure to the thickest portions of the higher grade magnetic Oolite zones of mineralisation.

Logistics

Agbaja benefits from established transport infrastructure.

Ore will be transported by slurry pipeline about 20 kilometres to the Banda Barge facility where it will be transported by 3,000 tonne river barges along the Niger River to a proposed transhipment facility at Port Warri for export.

Potential also exists for rail transport of ore as there is an established under-utilised railway to Port Warri that would require a 59 kilometre spur line to access though this is beyond the scope of the current Scoping Study.

Analysis

Shares in Kogi Iron should open higher today with the resource upgrade for its Agbaja Iron Ore Project highlighting its potential for development as well as the scale of the Resource on the Agbaja Plateau.

With just 20% of the prospective area drilled, there is room for further resource upgrades with more exploration and drilling.

The company has already mapped out Stage 1 and Stage 2 open pits with low stripping ratios that would minimise future mining costs along with a 20 year mine schedule that gives the project a high level of mine life certainty.

Processing further highlights the low cost of the project with just simple magnetic separation required to beneficiate the ore while the Nigerian government is also known to have given Agbaja a strong endorsement.

Other catalysts include the Scoping Study, which is scheduled for completed in the first quarter of 2014.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Mon, 09 Dec 2013 22:52:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/54006/kogi-iron-ups-iron-ore-resource-and-confidence-at-agbaja-nigeria-64027.html
<![CDATA[News - Kogi Iron directors back themselves by increasing shareholdings ]]> https://www.proactiveinvestors.co.uk/companies/news/53876/kogi-iron-directors-back-themselves-by-increasing-shareholdings--63892.html Kogi Iron (ASX: KFE) directors have aligned their economic interests to shareholders by increasing their individual shareholdings in the company through personal investments.

It is also a vindication of the development potential and value that can be extracted for shareholders at the Agbaja Iron Ore Project in Nigeria.

Notably, the directors now hold a combined total of 59.2 million shares, or 18.5% of the total shares on issue, in the company.

The company had recently highlighted low strip ratios that will minimise future mining costs at Agbaja. 

These average 0.42 to 1 during the first three years of operating the Stage 1 pit before increasing to a still attractive 20 year strip ratio of 0.72 to 1 for both the Stage 1 and Stage 2 pits.

“This most recent subscription to Kogi shares by my fellow Director and I continues the practice of the Board participating “hand in hand” with our fellow shareholders to provide capital to the Company,” chairman Dr Ian Burston said.

“It also demonstrates our continued support for the Agbaja Project in Nigeria, the Scoping Study work that is nearing completion, and the new Managing Director Iggy Tan and his team.”

Directors' Shares

Burston acquired 5,555,556 shares at $0.09 each for a total consideration of $500,000 from his participation in the recent Share Purchase Plan that raised $0.97 million.

This brings his total shareholding up to 14,222,223 ordinary shares, just under half, or 7.5 million, of which are loan shares previously issued under the company’s loan share plan.

Non-executive director Don Carroll bought 1,111,111 shares for $100,000 under the SPP, bringing his total shareholding up to 9,111,111 shares.

Of these 6 million are previously issued loan shares.

Tan had acquired 7.5 million shares priced at $0.11 each under the company’s loan share plan.

Analysis

The cash commitments of $500,000 and $100,000 by Burston and Carroll respectively for the recent SPP are a strong vote of confidence in extracting further value and uplift in share price of Kogi Iron and its Agbaja Iron Ore Project.

This is logical given the factors that differentiate the project. These include:

-    The very low strip ratios for the project’s Stage 1 and Stage 2 mine areas;
-    A 20 year mine schedule that gives a high level of mine life certainty;
-    Proximity to established transport infrastructure;
-    Scope to increase the Resource beyond its current 488Mt at 42.7% iron; and
-    The requirement for just simple magnetic separation to beneficiate the ore.

With a Scoping Study nearing completion at Agbaja, a $19 million valuation (and share price of around $0.10) seems light given the strength of the iron ore price and interest building in the study results.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Wed, 04 Dec 2013 23:02:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/53876/kogi-iron-directors-back-themselves-by-increasing-shareholdings--63892.html
<![CDATA[News - Kogi Iron study points to low strip ratios for Agbaja Iron Ore Project ]]> https://www.proactiveinvestors.co.uk/companies/news/53669/kogi-iron-study-points-to-low-strip-ratios-for-agbaja-iron-ore-project-63653.html Kogi Iron (ASX: KFE) has highlighted the low strip ratios that will minimise future mining costs at its Agbaja Iron Ore Project in Nigeria after completing pit shell designs for the Stage 1 and Stage 2 mine areas under the Scoping Study.

Notably, the first three years of operation will enjoy an average strip ratio of 0.42 to 1 before it ramps up to a still attractive 20 year strip ratio of 0.72 to 1.

Another advantage granted by the design of the pit shells is that the company now has more than 20 years of ore feed scheduled, giving it a level of certainty going ahead.

Kogi has also identified a possible location for a processing plant in the northeast of the Resource Area between the two mining areas as part of its Scoping Study for a 5 million tonne per annum iron ore project at Agbaja.

Agbaja has a 488 million tonne at 42.7% iron Inferred Resource, which is high for African iron ore, and access to transport infrastructure including barging along the Niger River to the sea port.

The Resource covers just 20% of the prospective plateau area within EL12124 and considerable upside remains with an Exploration Target of between 1.8 billion tonnes and 3Bt at 32% to 48% iron.

“The two mining areas have an overall average strip ratio estimated at 0.72 to 1, which is an excellent result. Such a low forecast strip ratio will minimise mining costs for the first 20 years of operation and is proving to be a distinct advantage of this project,” managing director Iggy Tan said.

“The average strip ratio for the first three years of operation is expected to be around a low 0.42 to 1. The next phase of the work is the estimation of mining costs using quotations that are currently being submitted by a number of leading mining contractors in response to requests for proposals.

“Overall, the Scoping Study is progressing well and is being completed at a high level of detail. The study is still on track to be completed by the end of Q1 2014.”

The Scoping Study is expected to be completed by the end of first quarter 2014.

Mining Areas

Global independent mining consulting group Coffey was contracted to undertake the mine designs and have identified, design the pits and developed material movement schedules for the Stage 1 and Stage 2 mining area.

The Stage 1 mining area is about 6 square kilometres and is located west of the proposed processing plant site.

This area is estimated to contain approximately 158 million tonnes of the 488Mt Inferred Resource.

Targeting the magnetic fraction of the mineral resource, the average grade of material identified for mining is estimated at about 46% iron, with a corresponding strip ratio of approximately 0.68 to 1.

As currently designed this area should provide processing plant feed for an initial 14 years.

Stage 2 covers about 2.2 square kilometres to the east of the proposed plant.

This area is estimated to contain about 63Mt of the Inferred Resource with the average grade identified for mining estimated at about 46%. Strip ratio is calculated at approximately 0.81 to 1.

As currently designed this area should provide feed for an additional 6 years, bringing the combined total plant feed from the two areas to 20 years.

The two mining areas were identified from the 686 holes of close spaced (200 metre by 100 metre) reverse circulation drilling and 41 PQ diamond drill holes completed between late 2011 and January 2013 within the Resource Area.

The areas were selected to minimise estimated strip ratio and maximise exposure to the thickest portions of the higher grade magnetic Oolite zones of mineralisation.



Agbaja Iron Ore Project Mineralisation

The Agbaja Iron Ore Project has an Inferred Resource of 488 million tonnes at 42.7% iron along with an Exploration Target of between 1.8 billion tonnes and 3Bt at 32% to 48% iron that offers potential for further growth.

It is a unique deposit with iron mineralisation hosted in Cretaceous channel iron deposit (CID) on the Agbaja Plateau with drilling to date establishing that this is flat lying, relatively homogeneous and continuous within the mineralised channels.

The CID comprises iron-bearing nodules in an iron-rich matrix and has an average thickness of 12.5 metres. This is overlain by laterite with an average thickness of 6 metres.

Notably, the project geology is ideal for continuous surface mining.

Recently, magnetic susceptibility measurements from all 41 PQ diamond drill holes were incorporated into the resource model which has assisted in the identification of the proposed mining areas.

Primary crushing will be carried out by surface miners with secondary and tertiary crushing at the plant.

Beneficiation will be achieved using simple magnetic separation with common low intensity magnetics envisaged thanks to the relatively coarse particle size of about 250um.

This translates to lower capital and operating costs.

Logistics

Agbaja benefits from established transport infrastructure.

Ore will be transported by slurry pipeline about 20 kilometres to the Banda Barge facility where it will be transported by 3,000 tonne river barges along the Niger River to a proposed transhipment facility at Port Warri for export.

Potential also exists for rail transport of ore as there is an established under-utilised railway to Port Warri that would require a 59 kilometre spur line to access though this is beyond the scope of the current Scoping Study.

Analysis

The very low strip ratios established for the Stage 1 and Stage 2 mine areas at Kogi Iron’s Agbaja Iron Ore Project, serves to minimise future mining costs, a real differentiator for the development of the project and for Kogi.

Besides lowering costs, the design also offers a 20 year mine schedule, giving the project a high level of mine life certainty.

Considerable scope also exists for the Resource to grow beyond its current 488Mt at 42.7% iron with an Exploration Target of between 1.8 billion tonnes and 3Bt at 32% to 48% iron in the prospective plateau area.

Processing further highlights the low cost of the project with just simple magnetic separation required to beneficiate the ore.

Helping things along, the Nigerian government is also known to have given Agbaja project a strong endorsement.

There is much to look forward to in terms of catalysts for valuation upside as the company progresses its Scoping Study, which is scheduled for completed in the first quarter of 2014.  Kogi is methodically ticking the boxes at Agbaja.

Catalysts include the Scoping Study along with further exploration to both upgrade and extend the Resource.  With this in mind the current market cap. of circa $17 million is very undemanding.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Thu, 28 Nov 2013 05:52:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/53669/kogi-iron-study-points-to-low-strip-ratios-for-agbaja-iron-ore-project-63653.html
<![CDATA[News - Kogi Iron raises $1.2 million from book-build for Agbaja Project project in Nigeria ]]> https://www.proactiveinvestors.co.uk/companies/news/154396/kogi-iron-raises-12-million-from-book-build-for-agbaja-project-project-in-nigeria--48435.html Kogi Iron (ASX: KFE) has clinched $1.2 million in a book build and share placement to professional and sophisticated investors, taking it further down the road to finishing a scoping study at its Agbaja Project in Nigeria.

Funds from the placement will be applied to the completion of the study underway to evaluate a 5 million tonne per annum iron ore operation at the 100% owned Agbaja Project.

The Scoping Study is expected to be completed by the end of first quarter 2014.

The placement shares are issued at a price of $0.09 per share, an 18% discount to the 5 day VWAP price of $0.11; Kogi is offering existing shareholders new shares on the same terms via a share purchase plan.

Subject to shareholder approval, Kogi Chairman Dr Ian Burston and non-executive director Mr Don Carroll, will participate in the placement through investments of $500,000 and $100,000 respectively.

Financial support from sophisticated investors and from with company management is a strong vote of confidence in new managing director Iggy Tan's vision for Kogi to build Agbaja into a 5mtpa iron ore producer.

The Nigerian government is known to have given Agbaja project a strong endorsement.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Wed, 25 Sep 2013 12:00:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/154396/kogi-iron-raises-12-million-from-book-build-for-agbaja-project-project-in-nigeria--48435.html
<![CDATA[News - Kogi Iron enters trading halt, capital raising for Agbaja Project in Nigeria ]]> https://www.proactiveinvestors.co.uk/companies/news/154395/-kogi-iron-enters-trading-halt-capital-raising-for-agbaja-project-in-nigeria-48335.html Africa-focused Kogi Iron (ASX:KFE) will look to complete a capital raising after entering a trading halt for its shares, to build on momentum at the Agbaja Project in Nigeria.

To date, Agbaja has an established iron ore resource of 488 million tonnes grading 42.7%, which is high for African iron ore.  There is a sense this is just the tip of an iceberg, as less than 20% of the project has been explored.

The current Exploration Target for Agbaja Project is 1.8 – 3.0 billion tonnes at 32 - 48% iron.

Agbaja is in fact, a highly unique deposit as the iron mineralisation is hosted in cretaceous channel iron deposit (CID); shallow, flat-lying sedimentary sequence that is overlain by laterite ave thickness 6 metres.

Aiming for a 5 million tonne per annum project, it is 200 kilometres by sealed road south east of the capital city, Abuja.  A scoping study will look at transport options which could include Niger River infrastructure to sea port, and a barging transport.

There is also an established under-utilised railway to Port Warri, which would require a 59 kilometre spur line.

The project is known to have very high level support from the top echelon of the Nigerian government.

The trading halt will last until or before on 25 September 2013.

 

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Mon, 23 Sep 2013 12:20:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/154395/-kogi-iron-enters-trading-halt-capital-raising-for-agbaja-project-in-nigeria-48335.html
<![CDATA[News - Kogi Iron scopes low cost, 5 million tonne annual iron ore production in Nigeria ]]> https://www.proactiveinvestors.co.uk/companies/news/154394/kogi-iron-scopes-low-cost-5-million-tonne-annual-iron-ore-production-in-nigeria-47913.html Kogi Iron Limited (ASX: KFE) has commenced a scoping study for a first stage 5 million tonne per annum iron ore operation at its 100% owned Agbaja Iron Ore Project located in Kogi State, Nigeria.

The Agbaja Project is a shallow, flat lying channel iron deposit, consists of friable channel iron deposits and lends itself to a mining operation utilising cost efficient surface miners.

The mined ore, at a grade of around 42% iron, will be hauled to a processing plant and crushed to around 10mm by a simple low intensity system, then further milled and fed to a beneficiation plant via magnetic separation.

A final upgraded iron ore concentrate of 55-56% iron will be produced, slurried and pumped down to the Banda barge facility 20 kilometers to the south east.

The barging study demonstrated a lower capital and operating cost scenario for the proposed 5 Mtpa operation, compared to using the existing heavy haulage railway which is more suited to larger annual tonnages.

Kogi will continue to advance access agreements for the heavy haulage railway, as this remains an important part of a longer term transport solution for an expanded production profile.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Thu, 12 Sep 2013 13:20:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/154394/kogi-iron-scopes-low-cost-5-million-tonne-annual-iron-ore-production-in-nigeria-47913.html
<![CDATA[News - Kogi Iron reduces iron processing costs at Agbaja in Nigeria ]]> https://www.proactiveinvestors.co.uk/companies/news/154393/kogi-iron-reduces-iron-processing-costs-at-agbaja-in-nigeria-47784.html Kogi Iron (ASX:KFE) has identified a simpler beneficiation process to produce a saleable product from its Agbaja Iron Ore Project located in Nigeria, West Africa.

Metallurgical testwork in July confirmed the ability to produce a saleable iron ore concentrate utilising feed size reduction, cyclone sizing, gravity pre-concentration and wet low intensity magnetic separation.

Subsequent testwork by Kogi has demonstrated that the beneficiation process can be further simplified by adopting only the wet low intensity magnetic separation (LIMS), which has no adverse impact on overall yield or recovery.

Elimination of cyclone sizing and gravity pre-concentration will substantially reduce operating costs, and given the softness of the Agbaja ore and the coarse grind, the size reduction can be achieved with modest grinding power.

LIMS units are common in the iron ore industry, and allow for high loading and excellent selectivity at highest recovery; the reduced number of units required will result in lower maintenance and capital expenditure, and further reductions in operating costs.

Kogi is on the right track, continually searching for more efficient and lower cost pathways to production.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.

]]>
Tue, 10 Sep 2013 12:20:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/154393/kogi-iron-reduces-iron-processing-costs-at-agbaja-in-nigeria-47784.html