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Australian based iron ore development company, Kogi Iron Limited (ASX:KFE) ("Kogi", "Kogi Iron", or the "Company") and its 100% owned Nigerian operating company, KCM Mining Limited ("KCM") wishes to advise immediate plans to reorganise Company activities.
In the context of the current weakness in capital markets, and available funding for exploration and development companies, the changes are intended to minimise costs and enable the Company to complete a number of low cost, valuing adding activities.
Kogi Iron recently completed a Preliminary Feasibility Study of its 100% owned Agbaja iron ore project located in Kogi State, Republic of Nigeria ("Agbaja" or "Agbaja Project").
Cost Control Initiatives
Management
Managing Director, Mr Iggy Tan and Chief Financial Officer and Company Secretary Mr Shane Volk, have agreed to step down with immediate effect. Mr Volk has agreed to act as Company Secretary on a consultancy basis to the Company. The Board takes this opportunity to thank Mr Tan and Mr Volk for their significant contribution to the Company, in particular the successful completion of the Preliminary Feasibility Study ("PFS") for the Agbaja Project.
All other Perth based Company employees have been released.
The Company's Chairman, Dr Ian Burston, will henceforth become more activity involved with the immediate strategy of the Company and non-executive director, Mr Brian King will oversee day-to-day activities. Together with non-executive directors Don Carroll and Joe Ariti, they are experienced and highly competent iron ore industry executives.
"Despite the current challenges facing exploration and development companies, our team remains convinced of the quality and deliverability of the Agbaja Project. I have been in this game for more than 30 years and am determined to ensure our shareholders capture the value locked up at Agbaja" Dr Burston said.
Board
As part of the reorganisation, the Company has commenced a process of reviewing the size, composition and skill sets of the Board, to ensure they reflect the Company's available resources and compliment the proposed work programmes. The non-executive directors have agreed to suspend the payment of their quarterly board fees, effective 1 January 2014.
Nigerian Operations
There are no changes to the Company's Nigerian operations, where executive director Kevin Joseph and his Nigerian team will continue to advance the Agbaja Project. Mr Joseph is a 23 year resident of Nigeria with extensive experience in the West African region.
Next Steps
Building on the positive results from the recently completed PFS, Kogi Iron will continue its engagement with steel mills, iron ore buyers, traders and potential customers to increase the awareness of the proposed Agbaja Fines iron ore concentrate and consolidate the understanding of the Agbaja Project's ore reserves, processing method, transport solution, mineral resources and overall project size and scale.
Commenting on Agbaja's potential size and scale Dr Burston said: "It is the Company's intention to also highlight to potential investors the iron ore deposits in those parts of the Company's existing Exploration Licences not addressed in PFS. The 16 September 2013 announcement by the Company of a significant new Exploration Target for its Nigerian Exploration Licences is testament to the large volumes of iron ore mineralisation on the Agbaja Plateau".
Funding
As reported in its March 2014 Quarterly Activities Report, the Company continues to engage with potential investors in respect to the next tranche of funding to enable the implementation of a number of value adding initiatives building on the PFS.
In order to provide the Company with sufficient working capital during ongoing funding discussions, various non-executive directors have agreed to advance loans to the Company for $300,000 in aggregate. The loans are unsecured, non-interest bearing and it is proposed that in due course shareholder approval be sought to convert the loans to fully paid ordinary shares of the Company at a premium to the prevailing market price.
The Company is committed to realising value for its shareholders from Agbaja and the current reorganisation will allow the Company to clearly focus on this important objective.
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