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The Price Of A Junior With The Near-term Potential Of A Major

  1. Low Price for Huge Upside Opportunity – Black Iron’s project represents a potential US$1.7 billion asset that currently trades at a market capitalization of only ~US$130 million (~CAD$160 million)
  2. Top Ranked Project – two of the world’s most respected commodity analysis companies rank Black Iron as the lowest cost undeveloped iron ore project globally
  3. Premium Product in Supply Deficit – the 68% iron content product planned to be produced ranks in the top 4% globally, results in 30% lower emissions to produce steel and is predicted to be in supply deficit by market intelligence firm CRU
  4. Iron Ore Price Rally – Iron ore is the highest price appreciating mainstream commodity driven by government’s globally spending billions on infrastructure projects.
  5. Exceptional Infrastructure – very close proximity of railway, power, ports and skilled labour allows for a low-cost phased build
  6. Quality Leadership – Black Iron’s board and management are former top executives at mining powerhouses Rio Tinto, Cliffs, and Consolidated Thompson
  7. Strong Government Support – Ukraine’s newly elected President Zelensky has publicly stated his support of Black Iron’s project development
  8. On the Verge of Rerating – several major milestones are planned to be delivered in the coming months as the project advanced towards construction.

Market Fundamentals Are Strong

Industrial growth is built on steel, and steel comes from iron ore, which makes it essential to our way of life. Over two billion tonnes of iron ore are mined every year with a value in excess of US$160 billion to produce items people touch everyday ranging from forks and chairs all the way through to cars, bridges and skyscrapers.

The market for iron ore is strong with commodity sales price at a ten year high. Big mining companies focused on iron ore have seen a rally of investor support because of their high earnings and large dividends whereas the share price of most juniors is just starting to move presenting a big opportunity for investors.

Price increases are being supported by fundamentals with demand driven by global economic government stimulus focused on infrastructure projects including US$1.9 trillion in the United States alone.

This is why investors should take a hard look at Black Iron Inc. (TSX: BKI; OTC: BKIRF; FRANKFURT: BIN) which is developing its Shymanivske iron ore project ranked by highly respected commodity analysis groups CRU and Wood MacKenzie as having the highest economic return and lowest cost undeveloped iron ore project globally.

Black Iron’s Unique Position

Black Iron Inc. (TSX: BKI; OTC: BKIRF; FRANKFURT: BIN) is advancing its 100% owned Shymanivske iron ore project located in Ukraine to production that has several things going for it:

  1. Exceptional infrastructure access allows for lower upfront cost phased construction along with the very high 68% iron content purity of its final product is where Black Iron really differentiates itself
    Phase 1 – plan to produce 4 million tonnes per year generates US$388 million of revenue
    Phase 2 – expansion to 8 million tonnes per year doubles revenue to US$776 million
  2. Project located in an established mining region surrounded by five operating iron ore mines owned by majors including ArcelorMittal, Metinvest and Evraz
  3. Project previously on the brink of being constructed having raised majority of the funds required from Metinvest (major iron ore and steel producer with US$12 billion per year in revenue) prior to war breaking out in Eastern Ukraine 450 kilometers (280 miles) from site causing major shareholders to sell out depressing the share price to its current level
  4. Situation now stable with front line not materially moving in over 5 years resulting in multibillion-dollar international companies such as ArcelorMittal announcing $1.8 billion iron investment and Brookfield Asset Management announcing $170 million investment
  5. Ukraine recently elected a new pro-European reform government that is currently making major reforms to substantially increase foreign investment and new the President publicly stated his support for Black Iron’s Shymanivske project to be developed as a priority
  6. World Bank’s annual ease of doing business index ranks Ukraine 64 out of 190 countries in 2020 which is a substantial improvement over the last ten years
  7. Highly experienced team that formerly held senior roles in iron ore-based companies including RioTinto, Cliff’s and Consolidated Thompson

Location, Location, Location

For large production rate mining projects, to cost effectively mine and process the ore, you need ready access to railway and a deep seaport to move the product to markets, a secure power source and a reliable skilled labor force. Being able to access all these at low cost makes or breaks the project!

  1. Black Iron’s project has confirmed access to major infrastructure including:State-owned rail line with surplus capacity only 2km (1mile) from site
  2. Railway connects to five ports on the Black Sea located only 230 to 430kms (140 to 270 miles) away for export of iron ore to steel mills located close by in Europe, Middle East and Asia
  3. Surplus of low-cost electricity readily accessible from high voltage power lines 30km (20miles) from site
  4. Paved roads to site connect with the city of Kryvyi Rih (population 650,000) which is only 8 km (5 miles) away and has a highly skilled relatively low-cost work force

This project’s location is ideal to construct a low cost and highly profitable mine.

Highlights From The Recent Independent Preliminary Economic Assessment*

As seen in the table below, Black Iron Inc. (TSX: BKI; OTC: BKIRF; FRANKFURT: BIN) has a conservative Net Present Value of US$1.9 billion using a conservative long term iron ore price of US$62 per tonne but is currently trading at a market capitalization of only ~US$130 million (~CAD$160 million) presenting major upside potential in the share price for investors on a company that has completed several economic and technical studies to bring it to the brink of starting construction. When current actual higher benchmark iron ore prices are used the return on investment is even greater than predicted in the preliminary economic assessment as shown below.

Path to Production

The company’s management team has already signed a non-binding term sheet for a US$100 million royalty and two heads of agreements with construction companies out of which one will be selected who will also invest US$65 million. This project was recently shown to large steel mills and global trading houses who are interested to secure off-take rights and anticipates the announcement of an agreement with substantial funding for project construction very soon. Discussions are also currently ongoing with several mainly European based banks and exports credit agencies to secure construction funding, some of which have a mandate to help Ukraine with its transition towards European values and integration.

Highly Experienced Management Team and Board

Senior Management

Matt Simpson — CEO and Director
Matt Simpson is the former General Manager of Mining for Rio Tinto’s Iron Ore Company of Canada, where he managed a team of over 620 people and multi-hundred million dollar per year budget. Prior to Rio Tinto, he worked for Hatch where designed and constructed global metallurgical refineries.

Paul Bozoki — CFO
Paul Bozoki is the former CFO of CD Capital Partners, operating in the Soviet Union and Ukraine.

Bill Hart — SVP Corporate Development
Bill Hart has 30 years of experience selling iron ore while working for Rio Tinto, Cliffs Natural Resources and, most recently, Roy Hill Holdings Ltd.

Stefan Gueorguiev – Project Director
Over 25 years experience in the engineering and construction of mineral processing plants including most recently as VP Projects & Construction for Polyus.

Pavlo Komarysky – General Director, Shymanivske Steel
Experienced lawyer with extensive relationships in Ukraine.

Board of Directors

Bruce Humphrey — Chairman
Bruce Humphrey is the former chairman of Consolidated Thompson Iron Ore and Chief Operating Officer of Goldcorp.

Dave Porter — Director
Dave Porter is the former VP of Rio Tinto’s Iron Ore Company of Canada and COO of Algoma Street.

John Detmold — Director
John Detmold is the Chairman and Founder of Invecture Group S.A. de C.V., which owns Frontera Copper Corporation.

Pierre Pettigrew — Director
Pierre Pettigrew is the former Canadian Minister for Foreign Affairs and International Trade.

Zenon Potoczny
President of the Canada-Ukraine Chamber of Commerce & VP Operations for Ukrainian World Congress.

Three analysts have picked up research coverage on Black Iron and there reports can be viewed using this link: https://blackiron.com/research-reports/. The most recent report comes from UK based Hannam & Partners who state “High-quality iron ore from Ukraine to drive Green Steel revolution – initiating with C$1.56/share price target.”

Questions? Contact Us.

    The technical and scientific contents of this note 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.

    * Full details can be found in the NI 43-101 compliant technical report entitled “Amended Preliminary Economic Assessment of the Re-scoped Shymanivske Iron Ore Deposit” effective March 3, 2020 (the “PEA”), under the Company's profile on SEDAR at www.sedar.com.

    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.

    This document 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, 2018 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 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. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.