- Black Iron and Ukraine’s National Railway have signed an updated letter of intent, securing transportation capacity for the iron ore to be derived in the future from the Shymanivske project
- As Black Iron comes closer to initiating Shymanivske construction, it is renewing letters of intent for all of the vital infrastructure that will be required for the mining and transportation of iron ore
- The company is also carrying out discussions with banks and financial entities to secure the financing necessary to commence construction and mining at a time when iron ore prices continue to climb
Black Iron Inc. (TSX: BKI) (OTC: BKIRF) (GR: BIN) has renewed a letter of intent with Ukraine’s national railway that will secure transportation capacity for the iron ore derived from the Shymanivske Project. As per the terms of the agreement, the national railway will transport product from the project’s mine site to the Black Sea Port of Yuzhny, according to a company press release (http://ibn.fm/Dnnze).
This announcement once again confirms the ready accessibility and the benefits resulting from the well-established infrastructure in the region.
The Shymanivske iron ore project has access to premier infrastructure, including nearby electrical power, railway and five seaports. Most of the iron ore development projects across the globe necessitate the costly construction of rail, power lines and/or deep seaport at significant cost. Rail, for example, costs roughly $3 million per mile, while powerlines cost $1 million per mile and deep seaports can easily eclipse a few hundred million to construct. Since most iron ore projects are located several hundred miles from rail and/or power, building this major infrastructure can easily cost several hundreds of millions prior to even building the mine and processing plant, resulting in total project costs of well over $1 billion. These issues are eliminated in Black Iron’s case through the availability of all required infrastructure in the Shymanivske region. In addition, Black Iron can benefit from the cost-efficient and skilled workforce available for hire.
As Black Iron is coming closer to initiating construction, it is renewing letters of intent for vital infrastructure like rail, power and port capacity.
“Renewing the LOI with Ukraine’s National Railway is an important step in providing assurance to current and future investors in our Project. We are very fortunate to be able to access such high-quality infrastructure which is right on the doorstep of our Project. We appreciate the close cooperation we have received from all levels of government in Ukraine and from the National Railway,” Black Iron CEO Matt Simpson said in a news release.
Apart from focusing on infrastructure availability, Black Iron is also working to secure funds for Shymanivske construction on the back of announcing an offtake and investment memorandum of understanding with Glencore. The company is carrying out finance discussions with export credit agencies, European banks, royalty/stream companies and private equity firms. The ultimate goal is to secure the required debt and equity funding package to initiate construction.
Black Iron’s Shymanivske Project is located in Ukraine’s Kryvyi Rih region. The area is highly developed and has established iron ore mining traditions.
Upon finalization of construction, the project is expected to produce ultra-high-grade 68 percent iron ore concentrate with few impurities at low production costs. This fact, combined with the strong demand for high-grade iron ore that will potentially grow even further in the future, results in a high anticipated return on investment from Shymanivske.
In May 2018, a CRU analysis suggested that Black Iron’s Shymanivske iron ore project ranks at the lowest position of the business cost curve and at the second-lowest position on the basis of capital intensity out of all global underdeveloped pellet feed iron ore projects.
The technical and scientific contents of this article 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, visit the company’s website at www.BlackIron.com
NOTE TO INVESTORS: The latest news and updates relating to BKIRF are available in the company’s newsroom at http://ibn.fm/BKIRF