MACRO METALS LIMITED — Interim / Quarterly Report 2017

Jan 29, 2018

QUARTERLY REPORT DECEMBER 2017

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Nigerian Subsidiary
Nigerian Subsidiary Nigerian Subsidiary
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30 JANUARY 2018

QUARTERLY REPORT – DECEMBER 2017

Australian based iron ore development company, Kogi Iron Limited (ASX: KFE) (“Kogi”, “Kogi Iron”, or the “Company”) and its 100% owned Nigerian operating company, KCM Mining Limited (“KCM”) presents the quarterly activity report for the three months ended 31 December 2017.

Key activities by the Company during the quarter were:

PROJECT TESTWORK PROGRAM COMMENCED

Testing of the bulk sample of iron ore from the Agbaja Iron Project in Nigeria commenced during the period.

The scope of the testwork program includes beneficiation, smelting and converting, and is being conducted by Mintek in South Africa, a global leader in mineral processing and pyro-metallurgy. The aim of the testwork is to definitively confirm the flow sheet for the treatment of the iron ore to produce iron billets for steel making. The outcome from the testwork will be used to define the final design criteria to complete the DFS and ultimately to finalise both debt and equity funding for the Project. Kogi has appointed its own representative, based in South Africa, to monitor the testwork program and costs, as well as providing regular feedback to the Board of Directors.

Beneficiation phase of testing was recently completed with the Smelting phase to be completed over the coming months.

MINING LEASE GRANTED

Mining Lease ML25376 was granted to KCM Mining Limited (“KCM”), Kogi’s 100% owned Nigerian subsidiary, by the Federal Republic of Nigeria, Ministry of Mines and Steel Development. The Lease covering 20 cadastral units over 4 square kilometres is valid for a period of 25 years and is renewable. KCM now holds 100% interest in Mining Leases ML24606, ML24607 and ML 25376 and retains its interest in Exploration Licences EL14847 and EL16998.

KFE Capital Summary Ordinary Shares: 592,154,685 Unlisted options: 29.8m Share price: $0.14 Market capitalisation: $82.9m	Board of Directors Dr Ian Burston –Non Executive Chairman Mr Kevin Joseph –Executive Director Mr Don Carroll –Non Executive Director Mr Michael Tilley –Non Executive Director Mr Martin Wood –Non Executive Director	Contact Unit 23, 4 Ventnor Avenue, West Perth WA 6005 Tel : +61 8 9200 3456 Email:info@kogiiron.com W: www.kogiiron.com

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FUNDING AGREEMENT TERMINATED

On 3 October 2017, the Company advised that the Share Purchase Subscription Agreement (“Agreement’) with Bergen was terminated. The final share issuance in relation to the agreement occurred on the 16[th] November 2017.

FINANCIAL ADVISORS

The Company appointed London-based SD Capital Advisory Limited and GKB Ventures Limited, as joint finance advisors to assist in the development of debt and equity funding options for the Kogi integrated steel project in Nigeria. The funding option analysis will be undertaken jointly by both advisors and will assist the company in developing a funding strategy whilst the feasibility study is underway.

CORPORATE

On 17 October 2017, the Company appointed Martin Wood as a Non-Executive Director. Mr Wood is the founder and Managing Director of Vicarage Capital, a London based full service brokerage house focused on the resources sector. He brings to Kogi a long career in advising mid cap UK corporate companies on project finance negotiations, M&A execution, asset disposal and strategic advice. Subsequent to quarter end, Mr Wood was appointed Managing Director and Chief Executive Officer of Kogi.

At the end of the quarter, the Company had cash at bank of $105,000.

As at 31 December 2017, the Company had 592,154,685 fully paid ordinary shares on issue and 29,800,000 unlisted options (exercise price $0.0305, expiry date 16 Nov 2019).

MINERAL TENEMENTS

As at 31 December 2017, the following mineral tenements were held by KCM. All of the mineral tenements are located in the Federal Republic of Nigeria and KCM has a 100% interest in each tenement:

Mining Lease 24606 Exploration Licence 14847 Mining Lease 24607 Exploration Licence 16998 Mining Lease 25376

For more information, please contact:

Kogi Iron Limited Tel (office): +61 8 9200 3456 Email: info@kogiiron.com

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About Kogi Iron (ASX: KFE)

Kogi Iron Limited is a Perth-based company with the objective of becoming an African iron ore and steel producer through the development of its 100% owned Agbaja iron ore and steel project located in Kogi State, Republic of Nigeria, West Africa (“Agbaja” or “Agbaja Project”).

Nigeria has substantial domestic demand for steel products, which is currently met largely through imports. The Agbaja project, located on the Agbaja plateau approximately 15km northwest of Lokoja city in Kogi State and approximately 200km southwest of Abuja, the capital city of Nigeria, opens the opportunity for domestic production of steel billets.

The Company holds a land position which covers a large part of the Agbaja Plateau. The Agbaja Plateau hosts an extensive, shallow, flat-lying channel iron deposit with an Indicated and Inferred Mineral Resource of 586 million tonnes with an in-situ iron grade of 41.3% reported in accordance with the JORC Code (2012). This mineral resource covers approximately 20% of the prospective plateau area within ML24606 and ML24607.

Table 1 – Summary Grade Tonnage for Laterite (Zone A) and Oolitic (Zone B) Horizons (20% Fe lower cut off is applied) Refer ASX announcement 10 December 2013.

Classification	Tonnes (Mt)	Fe (%)
Zone A (Laterite Mineralisation)
Indicated	147.5	33.2
Inferred	33.9	31.7
Total Indicated + Inferred (Zone A)	181.4	32.9
Zone B (Oolitic Mineralisation)
Indicated	318.7	45.2
Inferred	86.3	44.7
Total Indicated + Inferred (Zone B)	405.0	45.1
Combined Zone A and Zone B
Total Indicated	466.2	41.4
Total Inferred	120.1	41.1
Total Indicated + Inferred	586.3	41.3

The Company confirms that it is not aware of any information or data that materially affects the information included in the original market announcements and, in the case of estimated Mineral Resources, which all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcements.

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

KOGI IRON LIMITED ABN Quarter ended (“current quarter”) 28 001 894 033 31 DECEMBER 2017

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter $A’000	Current quarter $A’000	Year to date (6 months) $A’000
1.	Cash flows from operating activities
1.1	Receipts from customers		-	-
1.2	Payments for
	(a) exploration & evaluation		(411)	(566)
	(b) development		-	-
	(c) production		-	-
	(d) staff costs		-	-
	(e) administration and corporate costs		(320)	(494)
1.3	Dividends received (see note 3)		-	-
1.4	Interest received		1	1
1.5	Interest and other costs of finance paid		-	-
1.6	Income taxes paid		-	-
1.7	Research and development refunds		-	-
1.8	Other (provide details if material)		-	-
1.9	Net cash from / (used in) operating
	activities		(730)	(1,059)
2.	Cash flows from investing activities
2.1	Payments to acquire:
	(a) property, plant and equipment		-	-
	(b) tenements (see item 10)		-	-
	(c) investments		-	-
	(d) other non-current assets		-	-

• See chapter 19 for defined terms

1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

Consolidated statement of cash flows	Consolidated statement of cash flows	Current quarter $A’000	Current quarter $A’000	Year to date (6 months) $A’000
2.2	Proceeds from the disposal of:
	(a) property, plant and equipment		-	-
	(b) tenements (see item 10)		-	-
	(c) investments		-	-
	(d) other non-current assets		-	-
2.3	Cash flows from loans to other entities		-	-
2.4	Dividends received (see note 3)		-	-
2.5	Other (provide details if material)		-	-
2.6	Net cash from / (used in) investing
	activities		-	-
3.	Cash flows from financing activities
3.1	Proceeds from issues of shares		66	1,109
3.2	Proceeds from issue of convertible notes		-	-
3.3	Proceeds from exercise of share options		-	-
3.4	Transaction costs related to issues of
	shares, convertible notes or options		(2)	(82)
3.5	Proceeds from borrowings		-	-
3.6	Repayment of borrowings		-	-
3.7	Transaction costs related to loans and
	borrowings		-	-
3.8	Dividends paid		-	-
3.9	Other (provide details if material)		-	-
3.10	Net cash from / (used in) financing
	activities		64	1,027
4.	Net increase / (decrease) in cash and
	cash equivalents for the period
4.1	Cash and cash equivalents at beginning of
	period		771	137
4.2	Net cash from / (used in) operating
	activities (item 1.9 above)		(730)	(1,059)
4.3	Net cash from / (used in) investing activities
	(item 2.6 above)		-	-
4.4	Net cash from / (used in) financing activities
	(item 3.10 above)		64	1,027
4.5	Effect of movement in exchange rates on
	cash held		-	-
4.6	Cash and cash equivalents at end of
	period		105	105

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

5.	Reconciliation of cash and cash	Current quarter	Previous quarter
	equivalents	$A’000	$A’000
	at the end of the quarter (as shown in the
	consolidated statement of cash flows) to the
	related items in the accounts
5.1	Bank balances	105	771
5.2	Call deposits	-	-
5.3	Bank overdrafts	-	-
5.4	Other (provide details)	-	-
5.5	Cash and cash equivalents at end of
	quarter (should equal item 4.6 above)	105	771

6.	Payments to directors of the entity and their associates	Current quarter
		$A'000
6.1	Aggregate amount of payments to these parties included in item 1.2		92
6.2	Aggregate amount of cash flow from loans to these parties included
	in item 2.3		-
6.3	Include below any explanation necessary to understand the transactions	included in
	items 6.1 and 6.2

Payments of executive director’s remuneration

7. Payments to related entities of the entity and their Current quarter associates $A'000

7.1 Aggregate amount of payments to these parties included in item 1.2 - 7.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 -

7.3 Include below any explanation necessary to understand the transactions included in items 7.1 and 7.2

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

8.	Financing facilities available	Total facility amount	Amount drawn at
	Add notes as necessary for an	at quarter end	quarter end
	understanding of the position	$A’000	$A’000
8.1	Loan facilities	-		-
8.2	Credit standby arrangements	-		-
8.3	Other (please specify)	-		-
8.4	Include below a description of each facility above, including the lender,		interest rate and
	whether it is secured or unsecured. If any additional facilities have been entered into or are
	proposed to be entered into after quarter	end, include details of those facilities as well.

9.	Estimated cash outflows for next quarter	$A’000
9.1	Exploration and evaluation		670
9.2	Development		-
9.3	Production		-
9.4	Staff costs		-
9.5	Administration and corporate costs		330
9.6	Other (provide details if material)		-
9.7	Total estimated cash outflows		1,000*

* The Company has entered into mandates with Terrain Capital Ltd and SD Capital Advisory Limited to raise up to $2 million (before costs), with the right to accept oversubscriptions of a further $2 million (before costs). The estimated cash outflows are made on the assumption of completing the capital raising and may be revised dependant on funding availability.

10.	Changes in	Tenement	Nature of interest	Interest at	Interest
	tenements	reference		beginning	at end of
	(items 2.1(b) and	and		of quarter	quarter
	2.2(b) above)	location
10.1	Interests in mining	n/a	n/a	n/a	n/a
	tenements and
	petroleum tenements
	lapsed, relinquished
	or reduced
10.2	Interests in mining	ML25376	Conversion of	100%	100%
	tenements and petroleum tenements	Nigeria	Exploration licences to Mining Leases
	acquired or increased

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

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Sign here: ............................................................ Date: 30 January 2018 (Company secretary)

Print name: Kevin Hart

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms 1 September 2016

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