Kogi Iron's (ASX: KFE) shares will look to trade higher after incorporating phosphorous bioleaching into the process plant design that is part of the ongoing Preliminary Feasibility Study for its wholly-owned Agbaja Iron Ore Project in Nigeria.

Notably, university testwork has demonstrated that simple bioleaching can reduce phosphorous levels in Agbaja iron ore to 0.25% from 0.9%, potentially increasing the price received for it.

Process design suggests bioleaching will have minimal impact on capital and operating costs while a specialist consultant is carrying out optimisation testwork.

“The Agbaja mineralisation has a number of unique characteristics, including the porosity of the iron bearing oolites, which makes the mineralisation amenable to bioleaching,” managing director Iggy Tan said.

“Bioleaching is used extensively in mineral processing and the potential to apply this simple, low cost processing method at Agbaja is an exciting development.

“The application of this beneficiation process will both broaden the market for the proposed Agbaja concentrate and importantly, increase the net price received. The key to taking full advantage of this opportunity is keeping the process simple which the team has certainly embraced.”

Proposed Process Design

The proposed process design utilises simple bioleach holding ponds, with a nutrient rich aerated solution introduced from the base of the pond, percolating upwards through the iron ore concentration to the surface over time.

Concentrate from the processing plant will be pumped into one of eight holding ponds as iron rich slurry and the bacterial culture will be introduced together with the aerated nutrient solution.

A total of eight holding ponds of 138 metres by 138 metres are envisaged to support a continuous operation with solid depths in the ponds proposed at around 3 metres.

Simple Bioleach Pond System

The sub-micron particles that will constitute the Agbaja iron ore concentrate are highly porous, allowing the bacterial microbes to easily enter and feed on the phosphorus within the crystal structure.

The phosphorus will report to the microbe biomass and solution and will be flushed from the concentrate when leaching is complete.

Aerated solution will be continually pumped into the ponds during the residence period to provide oxygen and nutrients for the microbial cultures during leaching.

A bleed stream will be removed from the circulating solution in order to remove metabolites and deleterious elements from the bacterial action.

The bleed stream is likely to be able to be used as a rich phosphorous fertilizer, which present opportunities for use such as in mine area rehabilitation work and as a general fertiliser.

Once phosphorus levels in the ponds have reduced, the concentrate slurry will be pumped out using a slurry pump mounted on a pontoon.

The phosphorous reduced slurry will then be thickened and stored in a tank for pumping down from the plateau to the proposed barge loading facility, at Banda on the Niger River.

The proposed design utilises simple and proven pumping technology for the transport of the slurry concentrate and avoids the more traditional and costly heap leach style of bioleaching.

This is expected to have minimal impact on project capital and operating costs.

Agbaja Iron Ore Project

Agbaja has overall Resources of 586 million tonnes at 41.3%, of which 466Mt at 41.4% iron is in the higher confidence Indicated category.

There is potential for further growth given that just 20% of the prospective area within EL12124 has been drilled.

The project is close to established transport infrastructure, which includes barging along the Niger River to the sea port.

Kogi has also highlighted the low strip ratios averaging 0.72 to 1 over 20 years – including a ratio of 0.42 to 1 in the first three years – that will minimise future mining costs.

To top of it off, beneficiating Agbaja ore requires just simple magnetic separation, further supporting expectations that the project would have low costs.

The current Indicated Resources is sufficient to support an operation producing in excess of the 5 million tonnes per annum scenario that was being developed in the Scoping Study.

Analysis

The potential for phosphorous bioleaching to upgrade iron ore from the Agbaja Iron Ore Project at minimal additional cost could be value accretive to Kogi Iron.

Agbaja is already expected to have low costs thanks to its low strip ratios averaging 0.72 to 1 over 20 years; the use of simple magnetic separation to beneficiate the ore and ready access to transport infrastructure.

The recent definition of a maiden JORC Indicated Resource of 466 million tonnes at 41.4% iron as well as the subsequent decision to upgrade its Scoping Study to a Pre-Feasibility Study further highlights the attractiveness of the project.