Kogi Iron sees ongoing interest in Nigeria-based cast steel project
ASX-listed Kogi Iron is seeing ongoing interest from potential new investors in its Agbaja cast steel project, in Nigeria, where Kogi is starting to see global capital flows to the commodity sector.
Owing to the rapid escalation and global impacts of the coronavirus, or Covid-19, Kogi and KCM Mining have reinforced their operating guidelines to mitigate risks to staff, contractors and its community.
Additionally, as a result of the Covid-19-related market volatility, Kogi has taken fiscal measures to ensure the security of its assets and preserve its cash balance through deferred current fundraising for the feasibility study, while also stopping all non-discretionary expenditure or deferring or reducing fees for directors, contractors and consultants.
Subject to the Covid-19 guidelines and measures, the company has continued with activities during March, and work will be completed during April.
The completion follows the company approving the excavation of a small-scale trial iron mining operation that will be located at the site of a previous bulk iron-ore sample used for metallurgy and steel tests in 2018.
A local civil engineering company was awarded the contract to ensure local content, align with the Community Development Agreement and mitigate Covid-19 risks, and therefore provide an early opportunity to reinforce environmental, social and governance (ESG) procedures with the communities.
The trial pit and stockpiles of overburden and iron-ore will be used to support reserve estimates and for ore characterisation tests, water studies, building material and agriculture studies in the feasibility study.
Additionally, MD David Turvey says Kogi has established close working relationships with the Ministry of Mines and Steel Development, in Nigeria, which bodes well for ongoing support of government and growing interest from industrial parties.
Physical work on key aspects of the project’s bankable feasibility study have been delayed or deferred owing to impacts of Covid-19 and will only resume when sufficient funding is secured, and workforces are able to return to site.
The scopes of work, completion schedules, costs and decision trees for key consultant groups have been revised and/or staged to enable progress on the feasibility study as early as possible.
For funding, specifically, Kogi received unanimous, positive responses from potential new investors on its decision to defer capital raising until market volatility had reduced and on renewed investment activity.
As such, the company plans to proceed with capital raising of about $8-million for the feasibility study over the next few months or when equity markets show signs of recovery.
Targeted new investors include “high net-worth individuals or family offices and specialist resource funds” that have expressed interest following the late January to early February roadshow in Europe, London and North America.
In conjunction, the company has assessed and will trial a couple of e-funding platforms, including a specialist African project platform.