TORONTO, CANADA, March 14, 2019 – Black Iron Inc. (“Black Iron” or the “Company”) (TSX: BKI; OTC: BKIRF; FRANKFURT: BIN) is pleased to announce that Ukraine’s Ministry of Defence (“MOD”) has developed a plan to transfer the parcel of land originally sought by the Company as a location of the processing plant, tailings and waste rock for its Shymanivske iron ore project (the “Project”), as outlined in the Company’s re-scoped Preliminary Economic Assessment (“PEA”). The parcel of land proposed by Ukraine’s MOD to Black Iron in September 2018 was deemed unsuitable from a social and environmental standpoint, whereas the newly proposed parcel of land is ideal.
This newly proposed parcel of land is owned by Ukraine’s federal government and is currently being used by Ukraine’s MOD for training purposes. Black Iron is only seeking a portion of the land held, which is located adjacent to its Shymanivske ore body. This parcel of land is suitable from a social and environmental standpoint, and its close proximity to the Shymanivske ore body makes it a highly economic choice to minimize the cost incurred for hauling ore and waste. This land is also located well away from any communities and is surrounded by operating iron ore mines owned by ArcelorMittal and Metinvest.
To secure rights to this land, Black Iron needs to finalize discussions with Ukraine’s MOD regarding a compensation package the Company expects will entail the construction of new barracks and replacement of facilities that will need to be relocated. The estimated cost for relocating these facilities is already included in the US$436 million estimated for capital costs in the PEA.
Black Iron’s management is also pleased to report that several productive discussions have recently taken place with several European export credit agencies and banks that are highly supportive of helping Ukraine move toward European integration. By making investments in public companies operating in Ukraine, such as Black Iron, that have strong project economics and are expected to create a substantial number of new high-paying jobs in the region, these entities are able to give greater confidence to other investors and ultimately improve living standards for Ukrainian citizens.
Benchmark iron ore prices continue to hold in the mid $80 per tonne range, which is well above the long-term $62 per tonne used in Black Iron’s PEA, which estimated an after-tax unlevered IRR of 36% and NPV of US$1.7 billion using a 10% discount rate. The strong economic returns expected to be generated by the Shymanivske Project reinforce the unique opportunity Black Iron presents by not having to build high-cost rail, powerlines or a port, as is required with the majority of other iron ore development projects globally. As noted in Black Iron’s press release dated May 2, 2018, highly regarded market analysis firm CRU recently ranked the Project at the lowest position on the business cost curve (i.e., normalized operating costs) and as the second-lowest capital intensity undeveloped pellet feed iron ore project globally.
About Black Iron
Black Iron is an iron ore exploration and development company, advancing its 100% owned Shymanivske project located in Kryvyi 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.
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:
Black Iron Inc.,
Chief Executive Officer
Tel: +1 (416) 309-2138
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, 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 may include, but is not limited to, statements with respect to the Project, , the relationship between Glencore and the Company, the mineralization of the Project, the results of the PEA, the realization of the PEA, the Company’s ability to obtain the requisite land for the Project, the Company’s ability to obtain adequate financing 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.