Anyone with relevant capital markets experience knows the market...

Anyone with relevant capital markets experience knows the market value of a resource deposit rarely bears any relationship to its NPV. In a previous post I made reference to a couple of pre-development resource companies with market caps of 3 or 4% of the NPV of their projects, as assessed by independent experts.

In Kogi Iron's case, the future market value of the Agbaja steel billet project (based on industry EV / EBITDA multiples) is less than 50% of its projected capital cost. As a result - and in my opinion - the project will not proceed in its current form and therefor has no value. Perhaps in the hands of a more experienced or creative team, value in excess of capex can be realised but given the project has never attracted the level of interest such an outcome would require, the likelihood of that happening does not appear to be high.

Kevscranes like to say that iron ore and steel prices are rising and that will benefit Kogi Iron's projects. The reality is a rising tide lifts all boats and so in relative terms Kogi will be no more attractive in a higher price environment than it is now in the eyes of the global investors who support steel producers. If Kogi is "relatively cheaper" (ie available at a lower multiple) it may attract such investors but that is the only reason. This logic applies no matter which of Kogi Iron's projects is considered - the entry terms for experienced industry investors must be attractive.