Research Report

This is a great opportunity for investors to get in on a largely technically de-risked asset at compelling valuation. BKI is in a very strong position and capable of entering construction within the next 12 months:

• A large resource base to support a 17-year mine life, which remains open to the north and at depth.
• An ultra-high premium product for a growing more environmentally conscious market, with the lowest costs and highest potential returns of any Fe pellet feedstock project worldwide.
• Excellent existing infrastructure, management and local support to the highest levels and funding agreements, albeit currently non-binding in place.

In terms of valuation metrics, if we look at after tax NPV8% using the current broker consensus long term Fe price of US$68.75/t or at earnings multiples for existing iron pellet producers in Ukraine, both then heavily discounted by 90% for country, financing and construction risk, we get a valuation range between US$182- US$316m. This is a 1.8-3.16 multiple of the company’s current C$124.82m (US$99.86m) market capitalisation.

This all leads us to believe that for those comfortable with the Ukraine, Shymanivske is the most exciting iron ore development project available in the world today