Black Iron Makes Significant Advancements Towards Construction of Shymanivske
Black Iron Makes Significant Advancements Towards Construction of
Shymanivske
TORONTO, March 12, 2018 -- Black Iron Inc. (“Black Iron” or the “Company”) (TSX:BKI) (OTC:BKIRF) (FRANKFURT:BIN)
continues to advance the Shymanivske Iron Ore Project (“Shymanivske” or the “Project”) towards construction. The Company
has made significant progress towards acquiring the surface rights for the land required for construction and is working on
securing financing for the Project. The Company has received significant interest from potential off-take partners as a result of
the strengthening of the iron ore price, which has increased by more than 25% since the re-scoped Preliminary Economic
Assessment (“PEA”) was released on November 21, 2017. Land acquisition and the securing of future financing are two of the
critical path activities required to advance Shymanivske to construction.
IRON ORE PRICES CONTINUE TO STRENGTHEN IMPROVING PROJECT IRR TO OVER 50%
Since publishing the re-scoped Preliminary Economic Assessment, benchmark iron ore prices have rallied from US$62 per
tonne (“T”) to US$70/T as of March 9, 2018, an increase of close to 13% resulting in stronger economic returns and significant
interest in the Project. Figure 1 provides the Project’s projected Net Present Value (“NPV”) and Internal Rate of Return (“IRR”)
based on the current iron ore (“Fe”) price and quality adjustments using a 10% discount rate.
A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/a539abc3
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Based on prevailing iron ore prices and adjustments for product quality mainly related to iron content, Black Iron’s construction
capital is estimated to have an estimated 51% after tax IRR and US$1.4 billion NPV, assuming 60% debt financing, 10%
discount rate and an initial capital cost of US$436 million. Even under highly pessimistic long-term iron ore prices of US$50/T,
the Project generates IRR’s in excess of 20%.
LAND ACQUISITION ADVANCING
Since releasing the revised Project economics, the Company has accelerated its efforts to secure the necessary land surface
rights for the mine and plant.
The leases related to three parcels of land that are required to begin construction are currently held within two Ukrainian
Government groups. The first parcel of land is held by the Kryviy Rih City Council who have been very supportive. In December
2016, they arranged public hearings on behalf of the Company which were very positive and led to the required permission to
conduct a land allotment study on the property. The land allotment study is a detailed report which shows the Kryviy Rih City
Council how the Company proposes to use the leased land. Black Iron’s team and specialist consultants have completed
more than 50% of the land allotment study to date. The second parcel of land is held by Ukraine’s Central Government and is
currently being used by the Ministry of Defence for training purposes. Multiple discussions have been held, year to date, with
high ranking Ukrainian Government officials including the First Deputy Prime Minister and Deputy Minister of Defence of
Ukraine, both of whom are supportive of the Project and are now reviewing options for the land transfer. The final parcel of land
is held by Ukraine’s State Forestry, who have submitted the required documents for this land to be re-zoned and transferred to
the Kryviy Rih City Council, who will in turn, lease the property to the Company.
The acquisition of these land packages will represent a significant milestone in beginning construction of the Project and the
Company expects this process to be completed prior to year end.
CONSTRUCTION FUNDING AND OFF-TAKE AGREEMENTS ADVANCING
The Company continues to pursue various financing options for construction of the Project and has received significant interest
from multiple groups which are currently conducting due diligence. Interest is driven by the prolific economics of the Project,
supported by the low initial capital costs, and the opportunity for financiers to secure access to the ultra high-grade premium
iron product that Shymanivske is expected to produce. The ultra high-grade premium 68% Fe product is in the top 4% of the
world’s current production, is rare and commands a very significant premium. The potential financiers include several multi
billion-dollar steel mills, global trading houses and other mining companies. Due diligence is well advanced, in most cases,
with on-site visits by these prospective financiers being the next step. In addition, CRU has been commissioned to conduct a
detailed marketing study on behalf of Black Iron to identify additional buyers of the ultra premium product who will also be
targeted for financing and to potentially secure other off-take agreements.
Obtaining financing for the Project will represent another significant milestone toward the construction of Shymanivske and the
Company is pleased with the level of interest it is receiving from potential financiers.
Over the coming months, the Company expects to secure the land leases and formalize financing while also renewing its
major infrastructure contracts. Once these milestones have been achieved, the Company will be well positioned to initiate
construction.
About Black Iron
Black Iron is an iron ore exploration and development company, advancing its 100% owned Shymanivske project located in
Kryviy Rih, Ukraine. The Shymanivske project contains a NI 43-101 compliant resource estimated to be 646 Mt Measured and
Indicated mineral resources, consisting of 355 Mt Measured mineral resources grading 31.6% total iron and 18.8% magnetic
iron, and Indicated mineral resources of 290 Mt grading 31.1% total iron and 17.9% magnetic iron, using a cut-off grade of 10%
magnetic iron. Additionally, the Shymanivske project contains 188 Mt of Inferred mineral resources grading 30.1% total iron
and 18.4% magnetic iron. Full mineral resource details can be found in the NI 43-101 compliant technical report entitled
“Preliminary Economic Assessment of the Re-scoped Shymanivske Iron Ore Deposit” effective November 21, 2017 under the
Company's profile on SEDAR at www.sedar.com. The Shymanivske project is surrounded by five other operating mines,
including ArcelorMittal's iron ore complex. Please visit the Company's website at www.blackiron.com for more information.
The technical and scientific contents of this press release have been prepared under the supervision of and have been reviewed
and approved by Matt Simpson, P.Eng., CEO of Black Iron, who is a Qualified Person as defined by NI 43-101.
Cautionary Statement
The PEA is preliminary in nature, and it includes inferred mineral resources that are considered too speculative geologically to
have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no
certainty that the PEA will be realized.
For more information, please contact:
Lisa Doddridge Matt Simpson
Vice President, Strategic Communications Chief Executive Officer
Tel: +1 (416) 309-2698 Tel: +1 (416) 309-2138
Forward-Looking Information
This press release contains forward-looking information. Forward-looking information is based on what management believes
to be reasonable assumptions, opinions and estimates of the date such statements are made based on information available
to them at that time, including those factors discussed in the section entitled ‘‘Risk Factors’’ in the Company’s annual
information form for the year ended December 31, 2016 or as may be identified in the Company’s public disclosure from time
to time, as filed under the Company’s profile on SEDAR at www.sedar.com. Forward-looking information may include, but is
not limited to, statements with respect to the Project, the mineralization of the Project, the results of the PEA, the realization
of the PEA, the expectations of future cash flows, the expected economics forecast, the geo-political climate in Ukraine, the
Company’s ability to obtain the requisite land rights for the Project and other requisite permits or approvals, the Company’s
ability to secure financing for the Project and future plans for the Company’s development. Generally, forward looking
information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is
expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be
taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially
different from those expressed or implied by such forward-looking information, including but not limited to: general business,
economic, competitive, geopolitical and social uncertainties; the actual results of current exploration activities; other risks of
the mining industry and the risks described in the annual information form of the Company. Although the Company has
attempted to identify important factors that could cause actual results to differ materially from those contained in forward-
looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can
be no assurance that such information will prove to be accurate, as actual results and future events could differ materially
from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking
information. The Company does not undertake to update any forward-looking information, except in accordance with applicable
securities laws.