MACRO METALS LIMITED — Capital/Financing Update 2013

Jul 23, 2013

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24 July 2013

Company Announcements Office ASX Limited Level 8, Exchange Plaza 2 The Esplanade PERTH WA 6000

CONFIRMATION OF SALEABLE IRON ORE CONCENTRATE METALLURGICAL UPDATE

Highlights

• Laboratory scale metallurgical testwork based on the Tenova designed flowsheet has achieved iron product grades in the range of 55-56% Fe, 3.3-4.0% SiO2, 5.9-6.4% Al2O3, 0.8% P, and 0.04% S for the lower CID-Oolite mineralisation.

• Testwork confirms the ability to produce a saleable iron ore concentrate.

• Pilot plant scale testing of a bulk sample of the lower CID-Oolite mineralisation has commenced at Mineral Technologies’ Queensland facility.

• Laboratory scale metallurgical testing for the upper CID-Oolite and Laterite mineralisation is in progress.

• With indicative product specifications now known, value-in-use and detailed market assessments to commence in consultation with a major iron ore trading group.

Australian based iron ore exploration and development company, Kogi Iron Limited (ASX: KFE) (“Kogi Iron” or the “Company”) is pleased to update shareholders on metallurgical testwork being conducted on diamond drill core samples from the lower CID-Oolite mineralisation from its 100% owned Agbaja iron ore project located in Kogi State, Republic of Nigeria, West Africa (“Agbaja” or “Agbaja Project”) (refer Figure 1).

The Agbaja Project is an extensive flat-lying, shallow, channel iron deposit (“CID”), with an Inferred Mineral Resource of 488 million tonnes at an in-situ iron grade of 43% (refer ASX announcement dated 28 September 2012). The Agbaja Project is uniquely positioned with its proximity to existing, underutilised rail, river and transshipping port infrastructure.

The metallurgical results (summarised in Table 1 and set out in detail in Metallurgical Synopsis below) confirm the potential to produce a saleable iron ore concentrate from the near-surface, flat lying iron mineralisation at Agbaja.

Table 1: Summary Results

Head Grade		Product Grade (%)	Product Grade (%)	Product Grade (%)
Fe (%)	Fe (calcined)	Fe (natural)	SiO2	Al2O3	S	P	LOI 1000
43.4	60.0	55.4	4.0	6.4	0.04	0.87	7.4

Kogi’s Non-Executive Chairman, Dr Ian Burston said “ The Phase 2 metallurgical results are very encouraging and indicate that we can produce a 55-58% Fe iron ore concentrate from the lower CIDOolite mineralisation defined at our Agbaja Project. ”

13 Colin Street PO Box 1934 Telephone: +61 8 9200 3456 West Perth Western Australia 6005 West Perth Western Australia 6872 Facsimile: +61 8 9200 3455 Australia Australia Website: www.kogiiron.com

Kogi Iron Limited ABN 28 001 894 033 ASX: KFE

He further added that, “ The positive results of this testwork have provided the impetus for us to move forward with larger scale pilot plant metallurgical testing to optimise the Tenova proposed flowsheet. We will also initiate value-in-use and detailed market assessments in conjunction with one of the larger iron ore trading houses . Preliminary discussions with trading houses suggest there is a growing market for elevated phosphorus products and the characteristics of the Agbaja Project, namely scale and the ability to provide a long term consistent product, will allow these markets to be further developed and expanded.”

Metallurgical testwork programs on the upper CID-Oolite and Laterite mineralisation will continue throughout 2013 with the objective of assessing the suitability of these sections of the orebody for the proposed flowsheet, and to optimise mass and iron recovery, and concentrate grade for the lower CIDOolite mineralisation.

The Laterite mineralisation is typically lower in phosphorus and could potentially be used to blend down phosphorus levels in the final product.

Business Plan

The Company’s business plan for the Agbaja Project is to operate at significant scale to achieve low operating costs whilst using existing transport infrastructure to deliver an iron ore concentrate to a number of steelworks for use as a blending feed stock for the iron making process. The elevated phosphorous level of the Agbaja product will attract the usual commercial discount, which the Company believes will be partially or fully offset by operating scale and the relatively low cost of mining and processing the near-surface, flat lying iron and soft mineralisation.

In the context of iron grade, the Agbaja iron ore concentrate is similar to the products produced from the channel iron deposits mined in the Pilbara by Rio Tinto (Robe Valley Operations and Yandicoogina), BHP Billiton (Yandi), Brockman Mining Limited (Marillana) and BC Iron Limited/ Fortescue Metals Group Ltd Nullagine Project. For example, from Yandi, BHP Billiton produces a Yandi™ Fines product with typical specifications of 57.9% Fe, 5.4% SiO2, 1.45% Al2O3, 0.01% S, 0.04% P and 10% LOI. Additional comparisons with the Agbaja product are summarised in Table 2.

Table 2: Iron Ore Product Comparison

			Product Grade (%)	Product Grade (%)	Product Grade (%)
Company	Project	Fe (calcined)	Fe (natural)	SiO2	Al2O3	P	LOI
Kogi Iron	Agbaja	60.0	55.4	4.0	6.4	0.87	7.4
Brockman Mining	Marillana	61.5	55.6	5.3	3.7	0.09	9.4
BHP Billiton	Yandi	64.3	57.9	5.4	1.45	0.04	10.0
BC Iron	Nullagine	64.2	56.2	4.1	2.4	0.02	12.1

Now that the quality of the Agbaja iron ore concentrate has been defined, a focus in the second half of 2013 is to work with one of the larger iron ore trading houses to develop likely markets and value-inuse assessments. The Company understands that elevated phosphorus products in the order of 0.40.5% P are currently being sold into the market for a $0.50 per tonne penalty for each 0.1% phosphorus above 0.08%, and that these elevated phosphorus/low silica products (like the Agbaja iron ore concentrate) are becoming more acceptable in the market as low silica Brazilian supply is depleted.

Metallurgical Synopsis

Following the completion of the Phase 1 metallurgical testwork program in January 2013, the Company engaged Tenova Mining & Minerals (part of the global Tenova Iron & Steel and Mining Industries group, (formerly Bateman Engineering)) (“Tenova”) to review the Phase 1 testwork results and propose a conceptual metallurgical flowsheet to upgrade the iron mineralisation at Agbaja from an average in-situ resource grade of 43% to 55-58% Fe. The proposed conceptual flowsheet was then to be validated through a series of laboratory scale metallurgical tests (“Phase 2 Program”).

The conceptual flowsheet developed by Tenova, which is stylised in Figure 2, contemplates feed size reduction to -0.6mm followed by simple gravity pre-concentration and wet, low intensity magnetic

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separation to clean and re-clean concentrates to final concentrate grade. Importantly, given the softness of the ore the first size reduction to -0.6mm and gravity pre-concentration is achieved without power intensive grinding mills.

The Phase 2 Program was planned and supervised by Tenova and laboratory scale testwork was carried out by ALS Metallurgy in Perth, Western Australia, using representative composite samples of the lower CID-Oolite ore zone prepared from the 2012 PQ diamond drill holes.

Gravity Pre-Concentration

Gravity pre-concentration at -0.6mm and a separation SG of 3.6 was successful at reducing silica grade from 17.6% to 3.3% whilst achieving a mass and iron recovery (yield) of 48.2% and 60% respectively with the iron grade increasing from 43.4% Fe in the feed stream to 53.9% Fe in the gravity concentrate. Concentrate phosphorus and alumina grades were marginally decreased, and sulphur grade was marginally increased. Key results are summarised in Table 3.

Table 3: Summary Gravity Pre-Concentration Results

	Recovery (%)	Recovery (%)			Grade (%)	Grade (%)
Stream	Mass	Fe	Fe	SiO2	Al2O3	S	P	LOI 1000
Feed	100.0	100.0	43.4	17.6	7.7	0.12	0.93	9.6
Concentrate	48.2	59.4	53.9	3.3	5.9	0.17	0.85	9.6

In conducting the laboratory scale gravity pre-concentration testwork, the composite lower CID-Oolite sample was crushed to -0.6mm and the fines fraction (-0.038mm) screened out for LIMS cleaning. The −0.6mm+0.038mm fraction was then subject to heavy liquid separation at 3.6SG. The +3.6SG density fraction forms the Concentrate and the minus 3.6SG density fraction the Tail.

Additional work is planned to optimise the gravity pre-concentration step. At a separation SG of 3.3 (rather than 3.6), mass and iron recovery were increased to 74.2% and 89.4% respectively, with a marginal reduction in iron concentrate grade from 53.9% to 52.1%. Consequently, overall iron and mass recovery could be improved utilising a lower gravity SG cut.

LIMS Cleaning

The Concentrate produced at the gravity pre-concentration stage and shown in Table 3 above was cleaned with low intensity magnetic separation (“LIMS”) at increasing magnetic field strengths from 250Gauss through to 4500G with the aim of producing a final product stream (+55% Fe) and a middlings stream for further processing, in addition to reducing sulphur levels to 0.04%. After the initial LIMS cleaning, the middlings stream was ground to nominally 80% passing 75µm to liberate iron oxides from composite particles and re-treated with LIMS at 250G. Grinding of the middlings stream to 80% passing 75µm is a proposed amendment to the conceptual flowsheet.

LIMS cleaning at 250G (after grinding the middlings stream to 80% passing 75µm) was successful at producing an iron ore concentrate grading 55.4% Fe and reducing sulphur grades to 0.035%.

Overall Yields and Product Grades

Overall yields and product grades incorporating all the flowsheet steps are summarised in Table 4.

Table 4: Yields and Product Grades

	Recovery (%)	Recovery (%)			Product Grade (%)	Product Grade (%)	Product Grade (%)
Stream	Mass	Fe	Fe	SiO2	Al2O3	S	P	LOI 1000
Feed	100.0	100.0	43.4	17.6	7.7	0.12	0.93	9.6
Gravity Concentrate	48.2	59.4	53.9	3.3	5.9	0.17	0.85	9.6
LIMS Concentrate	38.6	49.1	55.4	4.0	6.4	0.04	0.87	7.4

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Pilot Scale Testwork

The Company has provided an 80kg sample of lower CID-Oolite mineralisation to Queensland based Mineral Technologies to conduct pilot scale gravity and magnetic separation testwork as a next step following the completion of Phase 2 laboratory scale testwork.

It is expected that the pilot scale testwork will produce approximately 40kg of concentrate that is proposed to be provided to potential end users for value-in-use and market assessments.

Mineral Technologies undertakes professional sample and pilot testwork across a wide range of minerals including iron ore and is highly regarded for producing accurate and reliable testwork results.

The pilot scale program at Mineral Technologies is expected to take approximately three months to complete.

For further information, please contact:

Ian Burston Non-Executive Chairman

or

Shane Volk Company Secretary

• 61 8 9200 3456 info@kogiiron.com

Shareholders are encouraged to visit the Company website (www.kogiiron.com) and sign up to email alerts to receive the latest information released to the ASX.

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About Kogi Iron Limited

Kogi Iron Limited ( ASX: KFE ) (“Kogi Iron” or the “Company”) is an ASX listed company focused on the exploration and development of its 100% owned Agbaja iron ore project located in Kogi State, Republic of Nigeria, West Africa (“Agbaja” or “Agbaja Project”).

In recent years Nigeria has sought to diversify its economy, which is dominated by hydrocarbons, into minerals and related industries. Nigeria is the largest country by population in Africa. Nigeria had a GDP real growth rate of 7.2% in 2011, and in 2007 passed a new Mining and Minerals Act, which includes favourable fiscal terms for foreign investment in mining.

The Company holds a land position of approximately 400km[2] covering 15 tenements, with the main focus being EL12124 covering most of the Agbaja Plateau.

The Agbaja Plateau hosts an extensive, shallow, flat-lying channel iron deposit with an Inferred Mineral Resource of 488 million tonnes with an in-situ iron grade of 42.7% reported in accordance with the JORC Code. This mineral resource comprises approximately 18% by area of EL12124.

The Agbaja Project is uniquely positioned being approximately 60km from an existing and underutilised standard gauge railway, which accesses port infrastructure at Warri.

The Company is currently completing resource definition and metallurgical test work programs, and infrastructure and transport studies to define salient project parameters and to underpin preparation of a scoping study later in 2013.

Kogi Iron has on issue 288,084,126 fully paid ordinary shares.

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For further information, please contact us by email info@kogiiron.com by telephone on +61 (0)8 9200 3456 or visit us at www.kogiiron.com

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