MACRO METALS LIMITED — Interim / Quarterly Report 2020

Oct 30, 2019

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Nigerian Subsidiary
Nigerian Subsidiary Nigerian Subsidiary
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QUARTERLY REPORT SEPTEMBER 2019 31 October 2019

QUARTERLY REPORT – SEPTEMBER 2019

Australian based iron ore and steel 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 30 September 2019.

Key activities by the Company during the quarter were:

CONSULTING ENGINEERING REVIEW

Farnborough Engineering Consulting Services (FEC) completed their review on potential capital and operating costs of the Agbaja Cast Steel Project. As part of the review FEC considered the thorough testing regime conducted by Tenova including the processes and technologies identified for producing Direct Reduced Iron (DRI), as well as for smelting and refining DRI. The review investigated proposed capital costs which varied depending on the source of the steel making equipment and also investigated operating costs, determining the larger proposed contributor to costs and variables. The FEC report has provided confidence to the Board to scope the terms for a full Bankable Feasibility Study (BFS) for the Agbaja Cast Steel Project. The Board continues towards its aim of securing funding to commence the work required for the BFS.

SHAREHOLDER UPDATE MEETINGS

During August, Board members participated in meetings in Perth, Melbourne, Sydney, Adelaide and Brisbane with shareholders. These meetings provided an opportunity for management to update shareholders on the Company’s status, activities and directions. These meetings also provided valuable feedback in relation to areas such as shareholder communication, to which the board has taken steps to continue to improve.

NIGERIA SITE VISIT

Managing Director, David Turvey, visited Nigeria for meetings with crucial local representatives and to further progress the project. He met with the Company’s technical and administrative team, the Agbaja Plateau local Community including The Olu, the “Paramount Community Leader” and engineering and environmental consultants. The Community meeting highlighted the Company’s commitment to the Community Development Plan with initial funding initiatives such as education support, road maintenance and construction of a water bore and tank.

PLANNED FUTURE ACTIVITIES

The Company is proceeding with raising a total of $10 million for the BFS as well as Working Capital to take the project to financial close. The Company continues its negotiations with various parties regarding this targeted amount and will update shareholders when definitive agreements have been reached.

KFE Capital Summary Ordinary Shares: 663,548,234 Listed Options: 142,328,948 Share price: $0.044 Market capitalisation: $29m	Board of Directors Mr Don Carroll –Non-Executive Chairman Mr David Turvey –Managing Director Mr Greg Boulton AM –Non-Executive Director Mr Peter Huljich –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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CORPORATE

At the end of the quarter, the Company had cash at bank of $441,000

As at 30 September 2019 the Company had 663,548,234 fully paid ordinary shares and 142,328,948 Listed Options on issue.

MINERAL TENEMENTS

As at 30 September 2019, 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 28784 Mining Lease 25376

For more information, please contact:

Kogi Iron Limited Tel (office): +61 8 9200 3456

Email: info@kogiiron.com

About Kogi Iron (ASX: KFE)

Kogi Iron Limited is a Perth-based company with the objective of becoming a producer of cast steel product that can be sold to manufacturers of steel products through the development of its 100% owned Agbaja Cast 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 (%)	Classification Tonnes (Mt) Fe (%)	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 referred to in this announcement and, in the case of estimated Mineral Resources, all material assumptions and technical parameters underpinning the estimates in the relevant market announcement 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”)

ABN		Quarter ended (“current quarter”)	Quarter ended (“current quarter”)
28 001 894 033		30 SEPTEMBER 2019
Consolidated statement of cash flows		Current quarter $A’000	Year to date (3 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 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		- (144) - - (350) (267) - 1 - - - -	- (144) - - (350) (267) - 1 - - - -
		(760)	(760)
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

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/options 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 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 3.10 Net cash from / (used in) financing activities	- - - (226)* - - - - -	- - - (226)* - - - - -
	(226)	(226)

*issue costs relate to options issued on 28[th] June 2019 and 3[rd] July 2019. The proceeds received from the option issue were recorded in the June 2019 quarter.

4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 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) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	1,427 (760) - (226) -	1,427 (760) - (226) -
	441	441

• 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 equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 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)	140 301 - -	1,427 - - -
	441	1,427
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 1.2 367 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
		Current quarter $A'000
		367
		-

Payments to directors that resigned including CEO outstanding fees and to related party of director for reimbursement of overseas office and support costs incurred.

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

7. 7.1 7.2	Payments to related entities of the entity and their associates Current qu $A'000 Aggregate amount of payments to these parties included in item 1.2 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 Add notes as necessary for an understanding of the position Total facility amount at quarter end $A’000 Amount drawn at quarter end $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.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
		-	-
		-	-
		-	-

9. Estimated cash outflows for next quarter	$A’000
9.1 Exploration and evaluation 9.2 Development 9.3 Production 9.4 Staff costs 9.5 Administration and corporate costs 9.6 Other 9.7 Total estimated cash outflows	170 - - 100 140
	410*

* The Directors are currently evaluating capital raising alternatives to provide additional funding for the Company’s future planned activities and further details will be provided as soon as these plans have been completed. Estimated cash outflows include discretionary expenditure that will only be incurred if the directors are comfortable there are sufficient cash reserves available for these and future costs.

10. Changes in tenements (items 2.1(b) and 2.2(b) above)	Tenement reference and location	Nature of interest	Interest at beginning of quarter	Interest at end of quarter
10.1 Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced	n/a	n/a	n/a	n/a
10.2 Interests in mining tenements and petroleum tenements acquired or increased	n/a	n/a	n/a	n/a

• 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: 31 October 2019 (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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