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 (NYSE: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 (NASDAQ: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.
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.