Black Iron Inc. · TSX:BKI
Black Iron — Investor Presentation (July 2018)
27 slides from Black Iron's investor presentation, July 2018
Slide 1: A Compelling Iron Ore Investment Opportunity
TSX: BKI A COMPELLING IRON ORE INVESTMENT OPPORTUNITY Corporate Presentation 2018
Slide 2: Disclaimer
DISCLAIMER Forward Looking Statement This Presentation contains ‘‘forward-looking information’’ within the meaning of applicable Canadian securities legislation. Forward-looking information is based on what management of Black Iron Inc. (“Black Iron”, “BKI” or the “Company”) believes to be reasonabl
Slide 3: Black Iron Has All the Key Fundamentals for a Successful Low Cost Project
BLACK IRON HAS ALL THE KEY FUNDAMENTALS FOR A SUCCESSFUL LOW COST PROJECT IN PLACE Premium Exceptional Grade Product Infrastructure • 68% iron content vs. benchmark 62% BI • Rail 2km and power 30km from = less emissions to produce steel property with access to 5 ports • Very low impurities including
Slide 4: Project Previously on Brink of Construction
PROJECT PREVIOUSLY ON BRINK OF CONSTRUCTION Development history & go forward plan 03 07 01 $511M construction 05 Situation today IPO Toronto finance commitment War breaks out Front line stable Stock Exchange from Metinvest Iron ore price falls Iron ore ~$60/T Raised $38M at 9th largest iron ore mine
Slide 5: What Sets Black Iron Apart?
WHAT SETS BLACK IRON APART? Ability to Phase Build due to close Ultra High Grade 68% Product proximity to rail, power, port and skilled people • Black Iron’s 68% iron content product currently sells for ~$47/T premium Most new mines are located >100km • Price premium rising due to environmental from
Slide 6: 68% Grade Product Is Ultra Premium
68% GRADE PRODUCT IS ULTRA PREMIUM Black Iron’s 68% product is top 4% Seaborne Iron Ore Product by Grade >67% 65 - 67% 70% 62 - 65% 65% 58 - 62% % Fe <58% 60% 55% 50% 0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 Cumulative Production (Mt) Data source: CRU 2017 Benefits o
Slide 7: Significantly Undervalued vs Peer Developers
SIGNIFICANTLY UNDERVALUED VS PEER DEVELOPERS Ferrexpo is a good indicator of share price potential Enterprise Value / Contained M&I Fe (US$/tonne) Ferrexpo: $2.598/tonne $1.650 Ferrexpo is an iron $0.305 ore pellet producer $0.175 $0.213 $0.002 $0.043 $0.049 with mines in New Millenium Black BC Alde
Slide 8: Sound Capital Structure
SOUND CAPITAL STRUCTURE Attractive Valuation with Substantial Upside & Funding Support Capital Structure (TSX: BKI) Pre 2015 Analyst Coverage Shares Outstanding 159.7 million Stock Options 12.7 million DSU 2.4 million Warrants Nil Fully Diluted Shares 174.9 million Market Cap1 $14.4 million Working
Slide 9: Management & Board Have Track Record of Iron Ore Success
MANAGEMENT & BOARD HAVE TRACK RECORD OF IRON ORE SUCCESS Key Management Board of Directors Matt Simpson – CEO Bruce Humphrey – Chairman • Former General Manager, Mining for Rio Tinto’s Iron Ore • Former Chairman of Consolidated Thompson Iron Ore Company of Canada and Chief Operating Officer of Goldc
Slide 10: Project Highlights
PROJECT HIGHLIGHTS
Slide 11: Deposits in Mining Friendly Region
DEPOSITS IN MINING FRIENDLY REGION Adjacent to Five Existing Iron Ore Producers, Rail and Power lines Mining permit at Shymanivske covering ArcelorMittal’s Kryvyi Rih Iron Ore Complex 2.56km2 valid until 2024 o Renewable in 20 year increments Black Iron’s Shymanivske Project Adjacent to ArcelorMitta
Slide 12: Rail, Port & Power Access Secured
RAIL, PORT & POWER ACCESS SECURED Essential for a Successful Iron Ore Project o Letters of Intent in place for electricity (140MW) and natural gas (900m3/hr @85kPa) o Paved roads to site, located 8km away from the city of Kryvyi Rih, population 750 000, which has a highly skilled work force supporti
Slide 13: Strategic Global Location
STRATEGIC GLOBAL LOCATION Close Proximity to Target Markets with Abundant Port and Rail Access Project surrounded by steel mills in Europe, Turkey and the Middle East Iron ore district trends 300km with sedimentary rock hosted banded iron formations 20% to 25% shorter transport distance to growth ma
Slide 14: Business Conditions Improving in Ukraine
BUSINESS CONDITIONS IMPROVING IN UKRAINE Economy improving following geo-political and economic turbulence • Fitch Sovereign Risk rating of B- (stable) World Bank: Ease of Doing Business Rank Rank out of 190 countries, the lower the rank the easier to do business • Commodity driven economy (agricult
Slide 15: Large Ore Deposit with Growth Potential
LARGE ORE DEPOSIT WITH GROWTH POTENTIAL Total defined mineral resources Tonnage Fe Tot Fe Mag Shymanivske (Mt) (%) (%) Measured 355 32.0 19.5 Banded iron formation consisting primarily of magnetite with some hematite Indicated 290 31.1 17.9 o Iron band thickness ranges from 40-80M Total M&I Resource
Slide 16: 2017 Updated Economic Study Highlights
2017 UPDATED ECONOMIC STUDY HIGHLIGHTS High Value, Low Cost Iron Ore Development Project Phase 1: 4Mt Annual Production: Phase 2: 8Mt Iron Content: 68.0% Estimated Capital Investment: Phase 1: US$436 million (capital intensity, includes 17% contingency) Phase 2: US$312 million Estimated Operating Ex
Slide 17: Strong Investment Returns in All Price Scenarios
STRONG INVESTMENT RETURNS IN ALL PRICE SCENARIOS Low operating & capital costs to ride all market cycles After tax NPV at a 10% discount rate and IRR based on 40% equity & 60% debt financing 17
Slide 18: Black Iron's Rank Against Other Development Projects
BLACK IRON’S RANK AGAINST OTHER DEVELOPMENT PROJECTS Shymanivske ranked lowest on the business cost curve for pellet feed development projects Pellet feed project Business Costs, delivered China, 2030 (real 2016) 110 1,026 100 1st quartile 2nd quartile 3rd quartile 4th quartile Shymanivske 90 80 70
Slide 19: Black Iron's Target Capital Funding Strategy
BLACK IRON’S TARGET CAPITAL FUNDING STRATEGY Black Iron is seeking strategic equity partner(s) that will contribute to financing construction of the mine in return for offtake of the annual production Construction Capital Phase 1 – US$436M 40% 60% ($175M) ($260M) Export Credit Stream/Offtake Agencie
Slide 20: Permit Process for Shymanivske Deposit
PERMIT PROCESS FOR SHYMANIVSKE DEPOSIT Black Iron Remains on Track Exploration Extraction Mining Construction Operations Land Allotment Permit Permit Allotment Approval Approval Explore resource Deem deposit Pit shell reserves & Obtain surface rights Start mine Operate mine & potential economical en
Slide 21: Shymanivske Project Development Timeline
SHYMANIVSKE PROJECT DEVELOPMENT TIMELINE 2011-2017 2018 2019-2021 Drill metallurgical holes ✓ Scoping Study/PEA ✓ Definition Drilling ✓ Bankable Feasibility Study ✓ ✓ Pilot Plant Test Work ✓ Land Acquisition ✓ Off-take & Project Finance Permitting ✓ Detailed Engineering Construction Production ** Se
Slide 22: Several Catalysts Over Next 12 Months
SEVERAL CATALYSTS OVER NEXT 12 MONTHS Arrange pre-paid offtake agreement 1 to reduce equity required for 4 Secure surface rights for ore body construction financing Secure surface rights for plant, Initiate debt discussions for 2 Tailings and waste rock 5 construction financing 3 Obtain land allotme
Slide 23: Black Iron Value Proposition
BLACK IRON VALUE PROPOSITION Skilled Leadership Experienced management team and board with history of creating value for shareholders of RioTinto and Consolidated Thompson Exceptional Infrastructure - Scalable Build Excellent access to skilled labour, power, rail & ports = relatively low capital con
Slide 24: Appendix
APPENDIX
Slide 25: Potential Resource Extension at Shymanivske
POTENTIAL RESOURCE EXTENSION AT SHYMANIVSKE Ground Gravity Shows Iron Ore Mineralization at North End Potential resource upside to be drilled Ground gravity and magnetic surveys show potential extension of iron ore mineralization at north end of Property property as circled in red boundary o This ar
Slide 26: Conventional Flowsheet: Producing High Quality Iron Ore Products
CONVENTIONAL FLOWSHEET Producing High Quality Iron Ore Products B.F. Concentrate B.F. Pellets D.R. Concentrate D.R. Pellets Fe 68.0% Fe 65.5% Fe 69.5% Fe 67.4% Value-Add Alternative Core Product SiO2 4.5% SiO2 4.5% SiO2 1.3% SiO2 2.0% P 0.02% S <0.01% P 0.02% S <0.01% Products S 0.05% CaO/SiO2 0.15
Slide 27: Contact Us
TSX: BKI CONTACT US: FOLLOW US: 805-65 Queen Street West www.blackiron.com Toronto, ON, Canada, M5H 2M5 Toronto: +1(416) 309 2138 Ukraine: +380 (56) 409 2536 info@blackiron.com