In the recent quarterly report it was noted that an "independent...

In the recent quarterly report it was noted that an "independent investment research report" has been commissioned. Presumably Kogi Iron hopes the report will demonstrate to shareholders and future investors that there is significant value at the current share price.

The quarterly also contained several references by the company to the Agbaja project's NPV, reported as US$273m in the company's feasibility study dated 13 December 2021. The company seems keen to establish the NPV as the basis for the project's future market value.

As mentioned in previous posts, my experience is that a company's enterprise value (EV) is generally (substantially) less than its NPV. To confirm the basis for my opinion I recently calculated the EV / NPV ratio for FMG, Champion Iron, Mt Gibson Iron and Grange Resources. I used EBITDA (as reported by au.finance.yahoo.com) as a proxy for net cash flow. (EBITDA and NCF are not the same but for the purposes of this simple exercise they are good enough.) In order to compare my results with Kogi Iron's I ran the numbers over 25 years and used an 8% discount rate. The analysis is real, not nominal.

The results were - and note this is my analysis and I make no claims that it is correct - FMG 35%; Champ 29%; Mt Gib 15%; and Grange 13%. So, FMG's EV (reported by au.finance,yahoo.com) is just 35% of the NPV8 I calculated.

Pick whatever EV / NPV percentage you like for the Agbaja project (but remember it is in Nigeria,and is considerably more complicated than just digging iron ore out of the ground) and apply that number to the post project completion value I calculated from the feasibility study - US780m (being US$273m pre-completion + US$507m capex).

Just for fun, let's use 20%. That generates a post-completion market value for the Agbaja project of US$156m (versus an NPV8 of US$780m).

To my point, to create a post-completion value of US$156m, capex of US$507m is required. As I said some time ago, Houston we have a problem - and it doesn't matter how you look at it.

It also seem whoever is to prepare the "independent investment research report" has an interesting time ahead of them.

Once again, theses are my numbers and cannot be relied upon. Anyone considering investing in Kogi Iron should do their own research and analysis.

Finally, if I have made a mistake please let me know.