Name of the Project
Agbaja iron-ore and steel project.

Location
Kogi state, Nigeria.

Project Owner/s
Kogi Iron.

Project Description
The Agbaja plateau hosts an extensive shallow, flat-lying-channel iron deposit, with mineral resources currently estimated at 586-million tonnes at 41.3% iron (within EL12124). Most of the mineral resources are classified as indicated (466-million tonnes at 41.4% iron) and the balance as inferred (120-million tonnes at 41.1% iron).

The Agbaja mineral resource was the basis for the project’s prefeasibility study (PFS). There are sufficient indicated mineral resources at Agbaja to support a five-million-tonne-a-year iron-ore mining and processing operation for more than 35 years. A mine plan entailing 21 years of production was used in the PFS.

The PFS completed in January 2014 proposes the construction of the mine in two stages. The estimated 7.2 km² Stage 1 mining area, west of the plant site, contains about 158-million tonnes of indicated mineral resources. Targeting the magnetic fraction of the indicated mineral resource, the average grade of material identified for mining is estimated at 46.1% iron, with a corresponding strip ratio of about 0.55:1. As currently designed, this area will provide processing plant feed for an initial 15 years at the planned concentrate production rate of five-million tonnes a year.

The estimated 2.2 km² Stage 2 mining area is located to the east of the plant site and contains about 66-million tonnes of the indicated mineral resources. The average grade of material is estimated at 44.8% iron, with a strip ratio of about 0.56:1. This area will provide processing plant feed for an additional six years, bringing the combined plant feed from the two areas to 21 years at a concentrate production rate of five-million tonnes a year. Kogi has opted for a mining contractor to conduct all site development, overburden and waste removal, as well as openpit mining, including site rehabilitation, haulage and ore feed to a primary crusher. Mining operations will be conducted 24/7, 365 days a year and it is envisaged that production drilling and blasting will not be required, as all material is regarded as soft, friable and amenable to free-dig.

The processing plant will have a primary grind size of 600 μm, with a final grind size at a relatively coarse 250 μm.

Grinding will be followed by low-intensity magnetic separation (LIMS). This technology has demonstrated reliable primary separation of iron-bearing material for a reasonable final product grade and yield after regrinding the material. Yield is estimated at 45% for a final iron-ore concentrate grade of about 56% iron.

The concentrate slurry will be filtered at Banda to have a moisture content of less than 10% and conveyed to a covered stockpile. Barge loading will be done using a travelling, luffing, telescoping barge loader, filling Mississippi-type barges in a configuration of four barges.

The iron-ore concentrate will be transported an estimated 602 km from Banda along the Niger river to the Escravos transfer station, in the Niger Delta.

At the Escravos transfer station, the concentrate will be transferred into a 20 000 t self-propelled and self-unloading ocean barge.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an estimated pretax net present value, at a 12% discount rate, of $420 million and an internal rate of return of 23.7%, with a four-year capital payback.

Capital Expenditure
Capital costs are estimated at $497.1-million.

Planned Start/End Date
First production is expected between the end of the fourth quarter of this year and the first quarter of 2017.

Latest Developments
Kogi has reiterated that it is focused on progressing a bankable feasibility study (BFS) for the project, subject to raising up to $8-million to complete the study.

Project development funding will only be finalised after the completion of a BFS.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Kogi Iron, tel +61 8 9200 3456, fax +61 8 9200 3455 or email info@kogiiron.com.