Black Iron Inc. · TSX:BKI
Black Iron — Investor Presentation (April 2014)
28 slides from Black Iron's investor presentation, April 2014
Slide 1: A Compelling Iron Ore Investment Opportunity
A Compelling Iron Ore Investment Opportunity Corporate Presentation April 2014 TSX: BKI
Slide 2: Disclaimer: Forward Looking Statement
Disclaimer Forward Looking Statement TSX: BKI This Presentation contains ‘‘forward-looking information’’ within the meaning of applicable Canadian securities legislation. Forward-looking information is based on what management believes to be reasonable assumptions, opinions and estimates of the date
Slide 3: What Sets Black Iron Apart?
What Sets Black Iron Apart? Access to Skilled Labour & Infrastructure – Two of the Most Challenging Iron Ore Project Development Risks TSX: BKI Key Development Risks Taxes/Royalties Human Resources Canada Ukraine Access to Infrastructure Community Opposition Licensing/Permitting Access to Water Afri
Slide 4: 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 TSX: BKI Exceptional Sizable Infrastructure Resource • Significant infrastructure • Large NI 43-101 Compliant advantages (power, rail Resource* and port) with confirmed - Shymanivske access and capacity 646Mt (M+I) @
Slide 5: A Track Record of Iron Ore Success
A Track Record of Iron Ore Success with Rio Tinto’s Iron Ore Company of Canada, and Ferrexpo TSX: BKI Key Management Board of Directors Matt Simpson – President & CEO Bruce Humphrey – Chairman • Former General Manager, Mining for Rio Tinto’s Iron • Former Chairman of Consolidated Thompson Iron Ore C
Slide 6: Project Backed by Forbes & Manhattan
Project Backed by Forbes & Manhattan Success with Consolidated Thompson’s Bloom Lake Iron Mine TSX: BKI • World class 8Mtpa iron ore concentrate Forbes & Manhattan Involvement mine in Quebec • Advanced from exploration stage through development to construction Recently Acquired acquired for $4.9 − 8
Slide 7: Major Local Development Partner: Metinvest
Major Local Development Partner: Metinvest Ukraine’s Largest Company and a Global Iron Ore & Steel Producer TSX: BKI • Over 100,000 employees; Generated US$12.6 billion of revenues and a 16% EBITDA margin in 2012 • Metinvest is owned by System Capital Management (SCM) and Smart Holding • SCM has ove
Slide 8: Sound Capital Structure
Sound Capital Structure Attractive Valuation with Substantial Upside & Funding Support TSX: BKI Capital Structure (TSX: BKI) Corporate Structure Shares Outstanding 159.2 million Black Iron Inc. Metinvest B.V. (TSX: BKI) (Ukraine private) Stock Options(1) 5.7 million 51% 49% (2) Warrants 17.7 million
Slide 9: Deposits In Mining Friendly Region
Deposits In Mining Friendly Region Adjacent to existing Iron Ore Producers TSX: BKI ArcelorMittal’s Kryvyi Rih Iron Ore Complex • Two mining and exploration permits Black Iron’s covering 5.92 km2 Shymanivske Project − Mining permit at Shymanivske, which M&I: 646Mt @ 31.6% has been extensively explor
Slide 10: Large Ore Deposit with Growth Potential
Large Ore Deposit with Growth Potential TSX: BKI • Banded iron formation consisting primarily of magnetite with some hematite − Iron band thickness ranges from 40-80 m − Only 9.7-21.2 m of overburden with a strip ratio of 1.63:1, life of mine; 1.36:1 for first 8 years − Very clean ore body low in ph
Slide 11: Potential Resource Extension at Shymanivske
Potential Resource Extension at Shymanivske Ground Gravity Shows Iron Ore Mineralization at North End TSX: BKI Potential resource • Ground gravity and magnetic surveys upside to be drilled show potential extension of iron ore mineralization at North end of property as circled in red Property • This
Slide 12: Extensive Pit Shell Design and 3D Model Completed
Extensive Pit Shell Design and 3D Model Completed (Property Overview) TSX: BKI 12 * Bankable Feasibility Study complete by Lycopodium Minerals Canada Ltd.
Slide 13: Concentrator Footprint Compressed by Staggering HPGRs and Stacking LIMS
Concentrator Footprint Compressed by Staggering HPGRs and Stacking LIMS TSX: BKI 13 * Bankable Feasibility Study complete by Lycopodium Minerals Canada Ltd.
Slide 14: Value-Add Alternative
Conventional Flowsheet Producing High Quality Iron Ore Products TSX: BKI B.F. Concentrate B.F. Pellets D.R. Concentrate D.R. Pellets Fe 68.0% Fe 65.5% Fe 69.5% Fe 67.4% Core Product Alternative Value-Add Products SiO2 4.5% SiO2 4.5% SiO2 1.3% SiO2 2.0% P 0.02% S <0.01% P 0.02% S <0.01% S 0.05% CaO/
Slide 15: Secured Infrastructure Access (Rail, Port, Power)
Secured Infrastructure Access (Rail, Port Power) Key to a Successful Iron Ore Project TSX: BKI • Letters of Intent in place for Electricity (140MW) and Natural Gas (900m3/hr @85kPa) • Paved roads to site, located 35km away from the major city of Kryvyi Rih which has a highly skilled work force • Let
Slide 16: Strategic Global Location
Strategic Global Location Close Proximity to Target Markets with Abundant Port and Rail Access TSX: BKI • Project is surrounded by steel mills in Europe, Turkey and the Middle East • River barge & rail access to Western Europe. • Five dry bulk tonnage ports accessible using railway running beside pr
Slide 17: Ukraine: A Mining Friendly Country in Transition
Ukraine: A Mining Friendly Country in Transition TSX: BKI • S&P Sovereign Risk rating of B • Large, highly skilled labour force (pop. 45.4 million) − Next Presidential election to occur in Q1-2015 − GDP per capita only $7600/yr (5 year term) − Literacy rate >99% − GDP growth of 4.2% in 2010; 5.2% in
Slide 18: Globally Significant Iron Ore District
Globally Significant Iron Ore District 4th largest iron ore producer & 2nd largest reserve base TSX: BKI • Black Iron’s projects are located in the heart of Global Distribution of Fe Reserves & Ukraine’s iron ore belt Fe Production – 35km from Kryvyi Rih, city of 750,000 people • Iron ore district t
Slide 19: Permit Process for Shymanivske Deposit
Permit Process for Shymanivske Deposit Black Iron Remains on Track TSX: BKI Exploration Extraction Mining Land Construction Operations Permit Permit Allotment Allotment Approval Approval Explore Deem deposit Pit shell reserves Obtain surface Start mine Operate mine & resource economical & environmen
Slide 20: BFS Highlights – High Grade Concentrate
BFS Highlights – High Grade Concentrate High Value, Low Net Cost Iron Ore Development Project TSX: BKI Annual Production: 9.9 Mt Iron Content: 68.0% Estimated Capital Investment: US$1,097 million (capital intensity, includes 15% contingency) US$111/t Estimated Operating Expenses: (average FOB) US$44
Slide 21: Black Iron's Operating Cost Competitiveness
Black Iron’s Operating Cost Competitiveness Shymanivske: First Quartile to Local Markets; Second Quartile to China TSX: BKI 2013E Iron Ore Cost Curve Total Cash Cost (US$/t CFR China) Spot: $116/t BKI delivered to Europe/Middle East BKI delivered Markets to China World Cumulative Production (%) Sour
Slide 22: Black Iron's Capital Cost Advantage
0% Vale (Shimandou 1) African Minerals (phase2) Xstrata (Askaf) ** See Disclaimer on page 2 ** African Minerals (DSO) 84 87 90 92 ArcelorMittal (Western… Fortescue (Expansion) Black Iron 109 109 111 Rio Tinto (IOC) 25% Sundance 122 134 Source: Company data; Renaissance Capital estimates Kumba Ferrex
Slide 23: Black Iron Stacks Up Relative to Competition
Black Iron Stacks Up Relative to Competition Strong Economics Reinforced by Favourable Tax and Royalties TSX: BKI Pre-Tax & Royalty NPV8 Tax Regime Post-Tax & Royalty NPV8 30% (US$ billions) (US$ billions) +30%1 5.8 2.6 2.8 39%2 3.2 3.3 3.3 3.4 1.8 1.8 1.9 1.0 1.1 1.5 29% 0.6 0.3 0.5 0.1 0.3 Macarth
Slide 24: Black Iron's Target Capital Funding Strategy
Black Iron’s Target Capital Funding Strategy 49% of Equity Capital Solidified with Metinvest Transaction; 100% of Off-Take Still Available TSX: BKI Estimated Capital Investment US$1.1 billion 40% 60% Equity Investment Debt Investment 51% 49% Black Iron Inc. Metinvest Export Credit Agencies (TSX: BKI
Slide 25: Black Iron Continues to Deliver
Black Iron Continues to Deliver Shymanivske Project Development Timeline TSX: BKI 2011-2012 2013 2014 Future Drill metallurgical holes Scoping Study/PEA Definition Drilling Bankable Feasibility Study Pilot Plant Test Work Land Acquisition Off-take Permitting Detailed Engineering Construc
Slide 26: Black Iron Value Proposition
Black Iron Value Proposition TSX: BKI Skilled Experienced management team and Board with history of creating value Leadership for shareholders of RioTinto and Ferrexpo Strategic Metinvest: Largest company in Ukraine; committed to half of project financing Partners Exceptional Excellent access to ski
Slide 27: Shymanivske Project Site
Shymanivske Project Site TSX: BKI High voltage State-owned power lines rail line Paved Road
Slide 28: Contact Information
CONTACT INFORMATION 65 Queen Street West Suite 805, P.O. Box 71 Toronto, Ontario, Canada M5H 2M5 www.blackiron.com Investor Relations Toronto: +1 (416) 309-2134 - Michael McAllister, IR Manager Ukraine: +380 (56) 409-2536 info@blackiron.com Follow us: TSX: BKI