Black Iron Update ON Project Construction Financing
BLACK IRON UPDATE ON PROJECT CONSTRUCTION FINANCING
For Immediate Release
TORONTO, CANADA, December 2, 2019 – Black Iron Inc. (“Black Iron” or the “Company”) (TSX:
BKI; OTC: BKIRF; Frankfurt: BIN) management continue to make sound progress arranging the
financing for Shymanivske project construction, including the receipt of expressions of interest
from European banks and export credit agencies to provide US$250 to 300 million of debt.
Construction of phase one to produce four million tonnes per year of 68% iron content pellet feed
is estimated to cost US$436 million, as further detailed in Black Iron’s most recent Preliminary
Economic Assessment. As is typical for financing the development of mining projects, based on
discussions with potential investors and financiers, the Company estimates that ~US$175 million
(40%) will be equity and the balance ~US$261 million (60%) financed as debt , not including
financing charges and working capital.
Black Iron’s CEO , Matt Simpson, commented: “It is great to see such strong interest from well
known, highly regarded, providers of debt financing for project construction. The indicative interest
rates, grace period prior to starting repayment and loan duration in the expressions of interest
received by the Company are very competitive . The recent announcement of the MOU between
the Company and Ukraine’s government to transfer a critical parcel of land to the Company is an
important milestone that both anchor offtake and debt investors have been waiting to see. The
Company is currently negotiating binding terms for the land transfer, including the compensation
amount, and expect this to conclude following a binding product sale (i.e. offtake) agreement as
a portion of the funds invested by the offtake company will be used to cover the land transfer
costs. Now that an MOU on land transfer has been reached, we look forward to commercial
negotiations for project construction financing being accelerated.”
Majority of the required equity for project construction is anticipated to come from offtake by a
large trading company and/or steel mill that is interested to purchase Black Iron’s pellet feed on
a long-term contract at a slight discount to market price in exchange for making both a prepayment
and acquiring ownership in the Shymanivske project. Several multi-billion companies, including
Glencore, as previously announced, are currently conducting due diligence to consider such an
investment.
Additionally, there are two Asia based construction companies that have conducted site visits and
expressed serious interest to invest up to US$50 million of equity in kind in exchange for being
awarded the construction contract. Equity in kind means these companies will receive shares of
Black Iron on a monthly basis over the planned twenty -four-month construction period as partial
payment for equipment and services invoiced instead of the full payment being made in cash.
This is beneficial to Black Iron shareholders as these shares will only be issued once the balance
of construction funding is secured, announce d and construction has commenced at which time
Black Iron management expects the Company’s share price to be materially higher.
From a sequence standpoint, discussions are being held simultaneously with equity and debt
investors as both are ultimately required to fund project construction. It is likely the anchor equity
and offtake investor will be announced first followed by completion of an updated feasibility study
and environmental impact assessment upon which the debt financing can be secured to allow for
construction start around the end of next year.
About Black Iron
Black Iron is an iron ore exploration and development company that holds permits for the
Shymanivske project located in Kryviy Rih, Ukraine which is ranked by CRU as lowest cost
undeveloped iron ore project globally. The Shymanivske project is located in very close proximity
to major infrastructure including railway, power, ports and skilled labour allowing for a relatively
quick and low-cost construction. It contains a NI 43-101 compliant mineral resource estimated to
be 646 Mt Measured and Indicated mineral resources, consisting of 355 Mt Measured mineral
resources grading 32.0% total iron and 19.5% 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 (the “ Preliminary Economic
Assessment”) under the Company’s prof ile 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.
For more information, please contact:
Matt Simpson
Chief Executive Officer
Black Iron Inc.
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. Forward -looking information may include,
but is not limited to, statements with respect to the Company’s ability to develop the Shymanivske project,
the mineralization of the Shymanivske project, the expected support from the Ukrainian government, the
ability to develop the Shymanivske project, the Company’s ability to raise adequate capital, the Company’s
ability to secure the requisite land rights and the Company’s future plans . Generally, forwa rd 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 a nd 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 doe s not undertake to update any forward -looking information, except
in accordance with applicable securities laws. The Company notes that mineral resources that are not
mineral reserves do not have demonstrated economic viability.