Canada’s Thor Explorations, Australia’s Kogi Iron hunt for $422m to invest in Nigeria’s gold, iron ore mining

Nigerian mining sector appears to be gaining the attention of foreign investors as Canadian-listed Thor Explorations and Australian-listed Kogi Iron seeks to consolidate their investments in gold and iron mining in Osun and Kogi states respectively.

Both companies are said to be on the hunt for a combined sum of $422 million in funds to invest in their gold and iron ore fields with Thor
Exploration already looking forward to producing gold in the first quarter of 2020.

This renewed attention comes on the heels of a support interest by the World Bank in Nigeria last year when in April it said it was providing funds to help the government develop its neglected mining sector.

The bank’s support programme involved providing about $150 million to the government to enable it to jumpstart non-oil sectors of the economy that have suffered decades of neglect following an oil sector boom. Although oil prices are recovering after suffering crashes that affected government’s earnings, it has seen the need to diversify its economy.

Thor Explorations and Kogi Iron appear to see opportunities in this refocusing of government attention on non-oil sectors, especially mining and solid minerals development.

Thor Explorations owns a gold exploration licence in Osun State and has set up a mining operation known as Segilola Gold Project, for which Segun Lawson, its chief executive, says it is aiming to produce gold in the first quarter of 2020 with probable reserves of up to 500,000 ounces.

“Thor is currently developing the country’s most advanced gold mine,” Lawson said in a telephone interview with the news agency, Reuters. Lawson said he is now looking at options to raise $72 million so as to get the mine into production.

The project was brought in 2016 for a cash back up of $3.1 million plus Thor shares put at six million. Lawson’s search for $72 million is been sweetened with the promise of a rapid payback on invested funds once production starts.

According to the World Bank figures, mining provides only around 0.5 percent of GDP. It is a sector that has struggled to attract foreign investment and to meet domestic needs, forcing costly imports. The oil sector accounts for an estimated 8.7 percent of GDP and is critical for foreign exchange and fiscal revenue.

The World Bank in emailed comments to Reuters said gold “offers good prospects” although many miners say other metals, such as iron ore, are more useful.

In the case of Australia-listed Kogi Iron, the search is on for investors to provide $350 million for the company’s iron ore mining business in Kogi State, Nigeria. Martin Wood, its chief executive has, however, not put a date on when the company could begin production in the country.

Kogi Iron plans to build a steel plant using local iron ore and coal. The project in Kogi is not well positioned to export its products, but
Wood said it has the infrastructure to sell domestically and could envisage 100 percent profit margins, while reducing the country’s import
dependency.