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.
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.
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