KEY POINTS
- Macro Metals plans to sell its Agbaja iron ore project in Kogi State for US$5.67 million.
- The company expects about A$5.1 million in net proceeds if the deal is completed.
- Macro Metals will focus the funds on expanding its Western Australian mining operations.
Macro Metals Limited has agreed to sell its entire interest in the Agbaja Iron Ore Project in Kogi State, Nigeria, as part of a strategic decision to focus more heavily on its mining services and resource development operations in Western Australia.
The Australian-listed mining company has signed a non-binding term sheet with RSIN Nigeria Limited for the sale of 100 per cent of KCM Mining Limited, the company that owns the Agbaja project.
The proposed transaction is valued at US$5.67 million and is structured on a cash-free and debt-free basis.
If completed, Macro Metals expects to receive net proceeds of approximately A$5.1 million after transaction costs linked to the deal.
Although the agreement marks an important step towards Macro Metals’ exit from Nigeria, the transaction is not yet final.
The proposed sale remains subject to the completion of a definitive share purchase agreement and satisfactory due diligence by RSIN Nigeria.
It will also require regulatory approvals in Nigeria and China, confirmation of important metallurgical intellectual property rights and an extension of the existing community development agreement with the Agbaja community.
Under the proposed conditions, the community agreement would need to remain in place until at least December 2031.
The transaction includes an escrow down payment and a holdback arrangement, with the final proceeds subject to the agreed terms and successful completion of the transaction.
Macro Metals to Exit Nigerian Iron Ore Business
The proposed divestment would bring an end to Macro Metals’ direct exposure to the Agbaja Iron Ore Project, which has been a significant part of its Nigerian mining interests.
The company, formerly known as Kogi Iron Limited, has spent years advancing the project through exploration, drilling and feasibility work. It also developed proprietary metallurgical technology aimed at reducing the high phosphorus content associated with the project’s iron ore and improving its suitability for steel production.
The Agbaja project is located in Kogi State and has long been viewed as a potentially significant iron ore development opportunity.
However, Macro Metals is now seeking to redirect its resources towards areas it believes can deliver stronger growth and more immediate opportunities.
Following completion of the sale, Macro Metals plans to use the proceeds to strengthen its Western Australian mining services and resource development activities.
The company said the move would allow it to redeploy capital towards its Australian operations without having to raise additional equity.
Avoiding equity dilution means existing shareholders would not have their ownership stakes reduced through a new share issue to fund the company’s expansion.
Despite its planned exit, Macro Metals said the transaction is structured to provide continuity for stakeholders connected to the Agbaja project.
The requirement for an extension of the community development agreement through at least 2031 is one of the conditions attached to the proposed sale.
This is intended to ensure that the interests and commitments associated with the local Agbaja community remain part of the project’s future as ownership changes hands.
