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

Location
Kogi state, Nigeria.

Client
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 of 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.

Jobs to be Created
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.

Value
Capital costs are estimated at $497.1-million.

Duration
First production is expected between the end of the fourth quarter of this year and the first quarter of 2017.

Latest Developments
Kogi has been granted two mining licences for its Agbaja project.

The mining licences cover 90.7 km2 and contain 586-million tonnes of indicated and inferred mineral resources.

Kogi is discussing potential joint venture (JV) opportunities with a number of parties that have expressed an interest in participating in the Agbaja project, with the company having said that these discussions were at an early stage and remained incomplete.

A JV arrangement is only one of a number of funding mechanisms being considered for the project.

Meanwhile, Kogi will undertake a 50 t bulk sample operation for metallurgical testing over the coming weeks. The testing, to be conducted by Mintek, in Johannesburg, will form an integral part of the definitive feasibility study for Agbaja.

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.