Black Iron Inc. (TSX:BKI)(FRANKFURT:BIN) -
-- PROJECT ECONOMICS FROM BANKABLE FEASIBILITY STUDY ARE ROBUST AND HAVE
THE POTENTIAL TO GET STRONGER
-- ADDITIONAL PILOT PLANT TEST WORK SUGGESTS THAT OPPORTUNITIES EXIST TO
INCREASE THROUGHPUT AND DECREASE OPERATING COSTS OR POTENTIALLY TO LOWER
CAPITAL COSTS
-- TEST WORK CONFIRMS ABILITY TO PRODUCE FOUR DIFFERENT HIGH-GRADE
PRODUCTS: BLAST FURNANCE (BF) CONCENTRATE, BF PELLETS, DIRECT REDUCTION
(DR) CONCENTRATE, AND DR PELLETS
-- ADDITIONAL ANNOUNCEMENTS EXPECTED NEAR TERM ON INFRASTRUCTURE USE AND
OTHER STRATEGIC DEVELOPMENTS
Black Iron Inc. ("Black Iron" or the "Company") would like to
express its appreciation to shareholders for their continued
support of the Company. Positive strides continue to be made in the
advancement of the Shymanivske Iron Ore Project ("Shymanivske" or
the "Project") and we would like to take this opportunity to update
you on what has been happening and why we continue to believe that
our future remains promising!
Despite challenging times in the global capital markets, we have
remained busy since releasing the results of our Bankable
Feasibility Study ("BFS") in Q4 2012. Much has changed since we
successfully completed our initial public offering on the Toronto
Stock Exchange. We have strategically deployed the monies raised
and have significantly advanced test work and engineering at
Shymanivske. Now, more than ever, we believe the Project has the
potential to become a world class iron ore producer. Here is just a
quick summary of our recent notable achievements:
-- Bankable Feasibility Study. On December 18, 2012, we filed our National
Instrument 43-101-compliant Bankable Feasibility Study entitled
"Feasibility Study of the Shymanivske Iron Ore Deposit for Black Iron
Inc." (the "Report"). The Report contains a comprehensive mine to port
breakdown of our Project. In terms of economic robustness, the Report
shows a 45.9% internal rate of return, 2.2 year payback and US$3.5
billion net present value (all pre-tax), for a 9.2 million tonne per
year high-grade 68% iron concentrate producer. The capital cost
estimates for the Project were reported at $1.094 billion, or $119 per
tonne of installed capacity, ranking it in the first quartile of
development projects. A full copy of the Report may be found under the
Company's profile on SEDAR.
-- Pilot Plant Test Work. We are currently conducting pilot plant test work
with an emphasis on firming up the process flow sheet, equipment sizing
and product specifications. While this test work is still ongoing, we
believe we have found significant opportunities to achieve even better
cobber (i.e. magnetic separation stage located between the primary
crushing and grinding stages) rejection rates, which may lead to
stronger Project economics. If these opportunities prove to be possible,
they have the potential to either increase the Project throughput and
reduce operating costs, or maintain current throughput rates and reduce
capital costs. Either outcome has the potential to materially increase
the Project IRR and NPV.
-- Pellet Testing Complete. We continue to investigate the opportunity to
produce a high-grade pellet product. To this end, we have completed all
basket and pot grade testing. We await the final results but all
indications thus far support a positive conclusion on physical and
pyromet characteristics. In terms of product grade, these blast furnace
pellets would have an iron content of 65% with only 4% silica.
-- Direct Reduction Capability. We have also confirmed the ability to
produce an ultra-high-grade, direct reduction concentrate product and
direct reduction pellet. The direct reduction concentrate would have
iron content greater than 69% with 1.3% silica. Direct reduction
products sell at a premium to blast furnace material and would open up
more end markets for our product.
We will continue to work on these advancements and look forward
to reporting on the final conclusions over the balance of the year.
We are also working on a number of initiatives that we believe will
help generate additional interest in Black Iron. Specifically:
-- Advancing Infrastructure Contracts. One of the things that differentiate
Black Iron from many of the other iron ore developers is our access to
existing infrastructure with available capacity. We have been discussing
our usage requirements with the various rail, port, power and municipal
utilities providers and believe we will be in a position to enter into
final-stage negotiation of use agreements in the near future. Securing
these infrastructure contracts will further de-risk our Project
development.
-- Strengthening Our Local Presence. A key part of building a world-class
mining operation is the quality and depth of your team at site,
particularly when operating in a foreign country. We have been working
diligently to augment our already strong presence in Ukraine, but have
come across a unique opportunity to potentially work with a major local
company. We hope to execute on this opportunity in the near term, which
could further differentiate us from other developers.
-- Off-Take Discussions Picking Up. The release of the BFS brought
significantly more attention to our Project and its potential role as a
supplier of high-grade iron ore products. We have had a number of
positive discussions with prospective off-takers with a number of groups
actively reviewing our data and testing our ore. Finding an off-take
group, or groups, is a high priority at this stage as we see the off-
taker as playing a vital role in our financing plan for the Project's
development.
As a team, our top priority is the successful development of our
iron ore assets. An extension of this priority is ensuring that our
efforts are accurately reflected in our share price. We admit that
we are disappointed with recent trading prices but we are working
hard to develop the Company and to unlock value for shareholders.
With the work we have completed since the BFS, the news flow that
will follow our recent initiatives, and support from new and
existing shareholders, we remain highly motivated to grow the
Company and execute our strategic plan. As we progress, we will
continue to update you through our website and press release. Our
future remains promising!
Thank you again for your continued support.
Sincerely,
BLACK IRON INC.
Matt Simpson - President & CEO
George Mover - COO
Paul Bozoki - CFO
Aaron Wolfe - VP, Corporate Development
Nikolay Bayrak - VP, Gov't & Community Relations
Christine Gallo - Corporate Secretary
Michael McAllister - Manager, Investor Relations
About Black Iron
Black Iron is an iron ore exploration and development company,
advancing its 100 percent-owned Shymanivske project located in
Kryviy Rih, Ukraine. This project contains an NI 43-101 compliant
resource, with 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. 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, follow us on Facebook:
BlackIronInc or Twitter: @BlackIronBKI 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.
Forward-Looking Information
This press release contains forward-looking information within
the meaning set out in Canadian securities laws. 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, 2012 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 results of the feasibility
study dated December 17, 2012 (the "Feasibility Study", as filed
under the Company's profile on SEDAR at www.sedar.com) and the
mineral reserve and resource estimate, the future financial or
operating performance of the Company, its subsidiaries and its
projects, the development of and the anticipated timing with
respect to the Shymanivske project, the ability to obtain
financing; and the impact of concerns relating to permitting,
regulation, governmental and local community relations. 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".
Estimates underlying the results of the Feasibility Study arise
from engineering, geological and costing work of WorleyParsons
Canada Services Ltd. ("WorleyParsons"), Watts, Griffis and McOuat
Limited ("WGM"), Consulting Geologists and Engineers of Toronto,
P&E Mining Consultants Inc. ("P&E") and the Company. See
the technical report relating to the Feasibility Study for a
description of all relevant estimates, assumptions and parameters.
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.
Contacts: Black Iron Inc. Michael McAllister Manager, Investor
Relations +1 (416) 309-2950info@blackiron.com Black Iron Inc. Matt
Simpson President & Chief Executive Officer +1 (416) 309-2138
www.blackiron.com
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