ASX-listed Kogi Iron’s latest drill core samples from its Agbaja iron ore project in Nigeria have confirmed the potential to produce a saleable iron ore concentrate.The update follows the completion of metallurgical testwork being conducted on diamond drill core samples from the lower CID-Oolite mineralisation from Agbaja iron ore project located in Kogi State, Republic of Nigeria, West Africa.

Kogi Iron is an Australian based iron ore exploration and development company and owns 100% of the Agbaja Project. Its business plan for the Agbaja Project is to operate at significant scale to achieve low operating costs, whilst using existing transport infrastructure to deliver an iron ore concentrate to a number of steelworks for use as a blending feed stock for the iron making process.

The elevated phosphorous level of the Agbaja product will attract the usual commercial discount, which the company believes will be partially or fully offset by operating scale and the relatively low cost of mining and processing the near-surface, flat lying iron and soft mineralisation.

In the context of iron grade, the Agbaja iron ore concentrate is similar to the products produced from the channel iron deposits mined in the Pilbara by Rio Tinto (Robe Valley Operations and Yandicoogina), BHP Billiton (Yandi), Brockman Mining Limited (Marillana) and BC Iron Limited/ Fortescue Metals Group Ltd Nullagine Project. For example, from Yandi, BHP Billiton produces a Yandi™ Fines product with typical specifications of 57.9% Fe, 5.4% SiO2, 1.45% Al2O3, 0.01% S, 0.04% P and 10% LOI.

Agbaja is an extensive flat-lying, shallow, channel iron deposit (CID), with an Inferred Mineral Resource of 488 million tonnes at an in-situ iron grade of 43% (refer ASX announcement dated 28 September 2012). The Agbaja Project is uniquely positioned with its proximity to existing, underutilised rail, river and trans-shipping port infrastructure.

The metallurgical results confirm the potential to produce a saleable iron ore concentrate from the near-surface, flat lying iron mineralisation at Agbaja.

Kogi’s Non-Executive Chairman, Dr Ian Burston said: “The Phase 2 metallurgical results are very encouraging and indicate that we can produce a 55-58% Fe iron ore concentrate from the lower CID-Oolite mineralisation defined at our Agbaja Project.”

He further added that, “The positive results of this testwork have provided the impetus for us to move forward with larger scale pilot plant metallurgical testing to optimise the Tenova proposed flowsheet. We will also initiate value-in-use and detailed market assessments in conjunction with one of the larger iron ore trading houses. Preliminary discussions with trading houses suggest there is a growing market for elevated phosphorus products and the characteristics of the Agbaja Project, namely scale and the ability to provide a long term consistent product, will allow these markets to be further developed and expanded.”

Metallurgical testwork programmes on the upper CID-Oolite and Laterite mineralisation will continue throughout 2013 with the objective of assessing the suitability of these sections of the orebody for the proposed flowsheet, and to optimise mass and iron recovery, and concentrate grade for the lower CID-Oolite mineralisation.

Metallurgical Synopsis

Following the completion of the Phase 1 metallurgical testwork programme in January 2013, the company engaged Tenova Mining & Minerals (part of the global Tenova Iron & Steel and Mining Industries group, (formerly Bateman Engineering)) (Tenova) to review the Phase 1 testwork results and propose a conceptual metallurgical flowsheet to upgrade the iron mineralisation at Agbaja from an average in-situ resource grade of 43% to 55-58% Fe.

The proposed conceptual flowsheet was then to be validated through a series of laboratory scale metallurgical tests. The conceptual flowsheet developed by Tenova contemplates feed size reduction to -0.6mm followed by simple gravity pre-concentration and wet, low intensity magnetic separation to clean and re-clean concentrates to final concentrate grade. Importantly, given the softness of the ore the first size reduction to -0.6mm and gravity pre-concentration is achieved without power intensive grinding mills.

The Phase 2 programme was planned and supervised by Tenova and laboratory scale testwork was carried out by ALS Metallurgy in Perth, Western Australia, using representative composite samples of the lower CID-Oolite ore zone prepared from the 2012 PQ diamond drill holes.

Pilot Scale Testwork

The company has provided an 80kg sample of lower CID-Oolite mineralisation to Queensland based Mineral Technologies to conduct pilot scale gravity and magnetic separation testwork as a next step following the completion of Phase 2 laboratory scale testwork.

It is expected that the pilot scale testwork will produce approximately 40kg of concentrate that is proposed to be provided to potential end users for value-in-use and market assessments.

Mineral Technologies undertakes professional sample and pilot testwork across a wide range of minerals including iron ore and is highly regarded for producing accurate and reliable testwork results.

The pilot scale programme at Mineral Technologies is expected to take approximately three months to complete.

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