The recently announced acquisition, takeover, backdoor listing,...

The recently announced acquisition, takeover, backdoor listing, reverse takeover, or whatever you want to call it, has shone a spotlight on Kogi's Nigerian project.

That project has two assets: 1. A decent-sized resource, and 2. An attractive market for steel billets. Put the two together and you should have a great project.

However, it hasn't happened. Why? The resource is low grade with too high levels of P for an "off the shelf" steel making process to be used. As a result, a bespoke or semi-bespoke process is required (giving rise to the occasional comment by punters about Kogi's valuable "IP"). The bespoke process had to be validated in batch tests (which have not been concluded). Once validated, scale up through multiple continuous process pilots would be required until production reached a point where lenders would be prepared to take completion risk on a commercial-scale project. All that would have cost a bomb - and it would all have been equity.

The recent transaction which brings WA iron ore areas into the portfolio is, in my opinion, an admission by the Board that Nigeria is simply too hard - at this stage, for a company the size of Kogi, or whatever reason. Will the Board announce a withdrawal from Nigeria? Given they can't even tell shareholders who is behind Diversified Metals Holdings, the answer has to be "No". But given the capital raising mentioned in the recent announcement is focused on WA, I think the Nigerian project will just wither away.

So, I agree with Chiller. The focus is now on WA. Personally, given the attractive (and protected) steel market in Nigeria, I think that is a big mistake; the Board should have found the horsepower necessary to solve the technical problems - and they should have done so years ago. Now, Kogi is just one of many WA junior iron ore companies hoping to get lucky.