Further Lowers Strip Ratio For Mine Plan
Perth, Jan 15, 2014 AEST (ABN Newswire) - Australian based iron ore development company, Kogi Iron Limited (
ASX:KFE) ("Kogi", "Kogi Iron" or the "Company") and it's 100% owned Nigerian operating company, KCM Mining Limited ("KCM") are pleased to report that based on further optimisation of mine planning, the strip ratio for its 100% owned Agbaja Project has been reduced from 0.72 to 1, down to 0.55 to 1. Waste material movement has been reduced by 23% and overall material movement reduced by 9% On 27 November 2013, the Company announced that global, independent mining consulting group, Coffey had been engaged to undertake the Mine Design. Two mining areas (Stage 1 and Stage 2) were identified, pits designed, and material movement schedules completed (refer Figure 1). On 10 December 2013, the Company announced an Updated Mineral Resource estimate, including a maiden Indicated Mineral Resource of 466 million tonnes at 41.4% Fe, with the balance of the Mineral Resource classified as Inferred (120 million tonnes at 41.1% Fe).
Based on the higher geological confidence of an Indicated Mineral Resource, the mine plan has been re-run and further optimised. The overall strip ratio for both the Stage 1 and Stage 2 mining areas (see Figure 1) now averages 0.55 to 1. At an iron ore concentrate production rate of 5.0 Mtpa, this represents an average annual rate of feed of around 10.6 Mtpa, with overburden and waste of 5.8 Mtpa.
The Stage 1 mining area is approximately 7.2 km2, it is west of the proposed plant site and contains approximately 158 Mt of mineral resources (see Table 1). Targeting the magnetic fraction of the mineral resource, the average grade of material identified for mining is estimated at 46.1% Fe, with a corresponding strip ratio of approximately 0.55 to 1. As currently designed this area should provide processing plant feed for an initial 15 years. The Stage 2 mining area is approximately 2.2 km2 and is to the east of the proposed plant site. This area is estimated to contain approximately 66 Mt of mineral resources.
The average grade of material identified for mining is estimated at 44.8% Fe, with a corresponding strip ratio of approximately 0.56 to 1. As currently designed this area should provide processing plant feed for an additional 6 years, bringing the combined total plant feed from the two areas to 21 years. The two mining areas have an overall average strip ratio estimated at 0.55 to 1, providing 224 Mt of feed (123 Mt waste), at an average grade of 45.7% Fe. Such a low strip ratio has minimised mining costs over the 21 year mine plan and is proving to be a distinct advantage of the project.
Estimated Mining Costs
As part of the Preliminary Feasibility Study ("PFS"), the Company has received budget mining quotations from several leading mining contractors. At the lower strip ratio mine plan, estimated mining costs (overheads, overburden, waste and ore) equate to approximately US$8.00/t of iron ore concentrate.
Kogi's Managing Director, Iggy Tan said: "The Company is very excited and encouraged by the excellent results achieved in the mine plan and subsequent mining cost estimate. The reduced strip ratio of 0.55 to 1 is low in iron ore mining industry terms. This has always been a distinct advantage of the Agbaja iron ore project, it has now been defined and recognised in the mining study. Reflecting the low stripping regime, pricing received from leading mining contractors with West African experience has resulted very competitive mining costs. Mining costs at close to US$8.00/t of concentrate are very competitive, and puts us in good stead for highly competitive overall operating costs which will be finalised as part of the current PFS.
A lot of hard work at an accelerated pace by Kogi's management and project team means that we are still on track to deliver the PFS by the end of quarter 1, 2014".
Table 1 - Stage 1 and Stage 2 Mine Areas Key Physicals
------------------------------------------------------------- Feed (Mt) Fe % Waste (Mt) Avg. Strip Ratio Area (km2)Stage 1 158 46.06 86 0.55 7.24Stage 2 66 44.81 37 0.56 2.16-------------------------------------------------------------Total 224 45.7 123 0.55 5.52-------------------------------------------------------------
To view tables and diagrams, please visit:
http://media.abnnewswire.net/media/en/docs/ASX-KFE-664124.pdf
About Macro Metals Limited
Macro Metals Limited is an ASX-listed company (ASX:M4M) with the intent to build a cast steel plant on the Agbaja Plateau in Kogi State, Nigeria. The project will utilise company leased iron ore deposits and will supply a cast steel feedstock to steel manufacturing and product fabricators in Nigeria and overseas.
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