For Immediate Release
TORONTO, CANADA, February 11, 2021 – Black Iron Inc. (“Black Iron” or the “Company”) (TSX: BKI; OTC: BKIRF; FWB: BIN) is pleased to announce Ukraine government’s passing of a new law aimed to attract investment by providing significant tax reductions and land transfer rights. Upon a company entering into an investment agreement with Ukraine’s Cabinet of Ministers, support can be provided in the following areas that are relevant for Black Iron to construct its Shymanivske project:
- Lower taxes – exemption from corporate taxes for a period of time and value added tax for all new equipment imported for the project;
- Duty exemption – no import duties need to be paid on new equipment;
- Priority land rights – priority rights to lease state and communal land plots needed to realize the investment project; and
- Stabilization of law – the rights and duties of the investor shall be governed by the Ukrainian laws in effect at the date the investment agreement is executed unless a new law improves the investor’s position.
Implementation of the new laws relating to tax and import duty exemptions require amendments to the Tax Code of Ukraine and Customs Code of Ukraine which are currently in draft form and need to be adopted to come into effect. The current draft of the Tax Code amendments, which may be revised prior to coming into effect, includes the following provisions which would positively impact the development of the Shymanivske project:
- Exemption from the corporate profit tax for all income derived from the project during any 5 consecutive years chosen by the investor after the project has been commissioned (i.e. starts operations)
- Exemption from paying value added tax for all new equipment imported for the project
- Exemption from import duty for all new equipment imported for the project
Local authorities are allowed to reduce the land tax for land plots utilized by the project
The total monetary value of the above outlined benefits is capped at 30% of the amount of investment made to realize any project. For Black Iron, this could be a savings of up to ~US$170M through a combination of reduced upfront tax/duty payments to construct the project and initial corporate tax payments.
Black Iron’s CEO, Matt Simpson, stated:
“this is a very positive concrete measure initiated by Ukraine President Zelensky to attract additional investment to Ukraine that is greatly welcomed by international investors, including Black Iron, and should prove to be very effective. Elimination of import duties and value added tax on new equipment substantially benefits Black Iron’s investors by reducing the amount of money that needs to be raised to fund construction of the Shymanivske project. Lower corporate taxes for the first five years post achieving production could increase Black Iron’s debt capacity and also potentially accelerate construction of the second phase expansion to 8 million tonnes and/or ability to pay shareholders a dividend.”
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 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 “PEA”) 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.
For more information, please contact:
Chief Executive Officer
Black Iron Inc.
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. Forward-looking information may include, but is not limited to, statements with respect to the financial viability of the Shymanivske project (the “Project”), the price of iron ore, the demand for iron ore, the Company’s ability to obtain adequate financing, including offtake financing, the impact of new legislation in Ukraine, the Company’s ability to acquire the requisite land for Project construction, the Company’s ability to develop the Project, the ceasefire of conflict in Ukraine and the Company’s future plans. 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. The Company notes that mineral resources that are not mineral reserves do not have demonstrated economic viability.