15 July 2014
Final US$5 million installment payment has been received by black iron, completing the initial US$20 million commitment. Additional potential investment by metinvest could reach as much as US$536 million to finance half of the construction cost
July 15, 2014 – Black Iron Inc. (“Black Iron” or the “Company”) (TSX: BKI; FRANKFURT: BIN) has received the fourth and final installment payment of US$5 million from Metinvest B.V. (“Metinvest”) as part of the previously announced closing schedule (see press release dated April 15, 2014) for the strategic investment and development arrangement (the “Arrangement”) (see press release dated July 23, 2013) pertaining to Black Iron (Cyprus) Ltd. ("BKI Cyprus").
In conjunction with the closing of the Arrangement and receipt of the US$20 million, Metinvest has been issued common shares in BKI Cyprus representing an aggregate total of 49% of the share capital of BKI Cyprus. No common shares in Black Iron have been issued as part of the Arrangement. Black Iron remains the operator and developer of the Shymanivske Project and the Zelenivske Project (collectively, the “Projects”).
Each of Metinvest and Black Iron will have the option to participate in the funding of the development of the Shymanivske Iron Ore Project based on their proportionate interest in BKI Cyprus or be diluted down. Using the projected total capital investment requirements as outlined in the Company’s Bankable Feasibility Study (as filed under the Company’s profile on SEDAR on January 27, 2014) of US$1097 million, Metinvest’s future capital contribution could be up to US$536 million (being 49% of US$1097 million) for the development of the Projects. The Arrangement contains strict dilution provisions designed to create a strong incentive for continued participation in any future equity financings for the Projects.
Yuriy Ryzhenkov, General Director and CEO of Metinvest, commented, “Metinvest and Black Iron remain devoted to helping rebuild Ukraine’s economy through the development of the Shymanivske Iron Ore Project. Apart from the creation of thousands of new jobs and tens of millions annually in tax revenues, Ukrainians will also benefit from new world class iron ore processing, safety and environmental technologies.”
Matt Simpson, President and CEO of Black Iron, commented, “With this strategic arrangement now closed, and our relationship with Metinvest formally in place, once there is peace in Ukraine, we look forward to building the world-class iron ore producing mine outlined in our January 2014 Feasibility Study that shows a pre-tax 48% internal rate of return, two year payback and US$3.3 billion net present value. We see tremendous opportunities ahead for all stakeholders in Black Iron as this project is needed more than ever to help reinvigorate Ukraine’s economy as the country emerges from the current revolution.”
For more information, please contact:
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Michael McAllister Manager, Investor Relations Black Iron Inc. Tel: +1 (416) 309-2950 Email: info@blackiron.com
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Matt Simpson President & CEO Black Iron Inc. Tel: +1 (416) 309-2138 |
Alexey Komlyk Head of Media and Marketing Communications Metinvest Holdings LLC Tel: +380623881703 Email: press@metinvestholding.com |
- For editors:
Metinvest is a vertically integrated steel and mining group of companies, managing every link of the value chain, from mining and processing iron ore and coal to making and selling semi-finished and finished steel products. The Group comprises steel and mining production facilities located in Ukraine, Europe and the USA and has a sales network covering all key markets. Metinvest is the largest employer in Ukraine and accounts directly for 2.3% of the country’s Gross Domestic Product (GDP) growing to 6.3% of Ukraine’s GDP on an indirect basis. Metinvest's Strategic Vision: Metinvest strives to become the leading integrated steel maker in Europe demonstrating sustainable growth and profitability independently from the phases of economic cycle and providing the return on investment above the average industry levels. Metinvest Group is structured into two operating divisions: Metallurgical Division and Mining Division. Metinvest is made up of over 100,000 employees globally and in 2013 produced 36.9 million tonnes of iron ore, 11.4 million tonnes of coal and 12.4 million tonnes of steel.
The major shareholder of Metinvest Group is Metinvest B.V., a holding company owned by System Capital Management Group (71.24%) and Smart-Holding (23.76%).
Black Iron is an iron ore exploration and development company, advancing its 51% owned Shymanivske project located in Kryviy Rih, Ukraine. This project contains an NI 43-101 compliant resource estimated to be 645.8 Mt Measured and Indicated mineral resources, consisting of 355.1 Mt Measured mineral resources grading 32.0% Total iron and 19.5% Magnetic iron, and Indicated mineral resources of 290.7 Mt grading 31.1% Total iron and 17.9% Magnetic iron, using a cut-off grade of 10% Magnetic iron. Additionally, the project contains 188.3 Mt of Inferred mineral resources grading 30.1% Total iron and 18.4% Magnetic iron. Full mineral resource details can be found in the National Instrument 43-101 compliant technical report dated January 24, 2014 titled "Feasibility Study of the Shymanivske Iron Ore Deposit for Black Iron Inc." under the Company's profile on SEDAR at www.sedar.com. The project is surrounded by five other operating mines, including ArcelorMittal's iron ore complex. The Company believes that existing infrastructure, including access to power, rail and port facilities, will allow for a quick development timeline to production. Further, the Company holds an exploration permit for the adjacent Zelenivske project, which it intends to further explore to determine its potential. Please visit the Company's website at www.blackiron.com, or write us at info@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, President and CEO of Black Iron Inc., who is a Qualified Person as defined by NI 43-101. For further information, please see the technical report of the Company, which is available on SEDAR at www.sedar.com.