In early March 2018 ASX-listed Kogi Iron entered a detailed due diligence with an investment fund to act as a ‘corner stone’ investor to potentially finance the completion of studies required to progress the Agbaja cast steel project in Nigeria.
Both sides carried on negotiations in good faith despite the company receiving a Section 249D notice on 11 May 2018.
The directors agreed a structure that worked for both sides and the board unanimously signed off on the final subscription offer made to the potential investor.
Kogi Iron went into a trading halt on 29 May 2018 to enable the transaction to complete.
Unfortunately, the potential investor has decided that the disruptive risks associated with the 249D action are material and as a result of this have suspended talks pending the outcome of the shareholder vote at the extraordinary general meeting on 2 July 2018.
The board is collectively disappointed by this action but hopes to be in a position to resume discussions immediately after the shareholder vote.
Kogi Iron is focusing exclusively on the advancement of its Agbaja iron ore project in Nigeria’s Kogi state which it has advanced over the last seven years.
The significant drop in iron ore prices has more recently seen the company revise its supply aspirations for its production – which through on-going revised test work – appears well suited to the Nigerian steel industry.
Kogi Iron and its Agbaja project (held by the company’s 100% owned Nigerian subsidiary KCM Mining) have an interesting background.
Kogi Iron chairman, Dr Ian Burston, discovered the project seven years back after being invited to visit Kogi State to assess a small iron ore deposit for feed-stock for a proposed steel works facility which comprised a traditional blast furnace and needed iron ore to feed it.
A preliminary feasibility study released by Kogi Iron revealed that the Agbaja mineral resource was a unique sedimentary hosted magnetite deposit with a resource grade averaging 41.3% iron.