Black Iron Inc. · TSX:BKI
Black Iron — Investor Presentation (October 2019)
24 slides from Black Iron's investor presentation, October 2019
Slide 1: A Compelling Investment Opportunity
TSX: BKI A COMPELLING INVESTMENT OPPORTUNITY Corporate Presentation 2019
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 Highly Profitable Company
BLACK IRON HAS ALL THE KEY FUNDAMENTALS FOR A HIGHLY PROFITABLE COMPANY IN PLACE Globally Top Ranked Project Premium Product in • Ranked as lowest cost undeveloped Supply Deficit pellet feed project globally • 68% iron content vs. benchmark 62% • Preliminary Economic Assessment = less emissions to p
Slide 4: Black Iron Ranked Best Iron Concentrate Development Project
BLACK IRON RANKED BEST IRON CONCENTRATE DEVELOPMENT PROJECT Black Iron’s Shymanivske Project has the highest economic returns and lowest costs Highest financial return Lowest cost Shymanivske Note: The cost values shown have been normalised to a 62% Fe fines product (CFR China) in order to allow for
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 sells for ~$18-40/T premium Most new mines are located >100km • Price premium rising due to environmental from rail a
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: 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$312 million Estimated Operating Ex
Slide 8: Strong Investment Returns in All Price Scenarios
STRONG INVESTMENT RETURNS IN ALL PRICE SCENARIOS Low operating & capital costs to ride all market cycles After tax NPV at a 10% discount rate, IRR (Based on 40% equity & 60% debt financing) 8
Slide 9: Black Iron's Target Capital Funding Strategy
BLACK IRON’S TARGET CAPITAL FUNDING STRATEGY Discussions currently ongoing with strategic equity partner(s) that will contribute to financing construction in return for offtake MOU for offtake and equity investment agreement for first 4MTpa production signed with Glencore Construction Capital Phase
Slide 10: Several Major Milestones Being Delivered Over Next Months
SEVERAL MAJOR MILESTONES BEING DELIVERED OVER NEXT 6 MONTHS 2011-2018 2019-2020 2021-2022 Off-take & Project Finance 1 4 Land Acquisition 2 Bankable Feasibility Study 3 Pilot Plant Test Work Permitting Detailed Engineering Construction 5 Production 6 Milestone Achieved Several catalysts over
Slide 11: Significantly Undervalued vs Peer Developers
SIGNIFICANTLY UNDERVALUED VS PEER DEVELOPERS Ferrexpo is a good indicator of share price potential Enterprise Value / Contained Reserves Fe (US$/tonne) Ferrexpo: $6.530/tonne Ferrexpo is an iron ore pellet producer $5.679 with mines in Ukraine and global sales. They have been mining, $0.332 processi
Slide 12: Sound Capital Structure
SOUND CAPITAL STRUCTURE Attractive Valuation with Substantial Upside & Funding Support Capital Structure (TSX: BKI) Pre 2015 Analyst Coverage Shares Outstanding 186.3 million Stock Options 9.8 million DSU 5.1 million Warrants 13.4 million Fully Diluted Shares 214.5 million Market Cap1 $16.8 million
Slide 13: 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 14: 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 from $95/T to $40/T Quali
Slide 15: Deposit in Mining Friendly Region
DEPOSIT 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 Renewable in 20 year increments Black Iron’s Shymanivske Project Adjacent to ArcelorMittal’s
Slide 16: 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 – only 5hrs to reach Turkey Iron ore district trends 300km with sedimentary rock hosted banded iron formations 20% to 25% shorter tra
Slide 17: Business Conditions Improving in Ukraine
BUSINESS CONDITIONS IMPROVING IN UKRAINE Economy improving following geo-political and economic turbulence World Bank: Ease of Doing Business Rank • Fitch Sovereign Risk rating of B (stable) Rank out of 190 countries, the lower the rank the easier to do business • Recently upgraded based on newly el
Slide 18: Now Is the Ideal Time to Invest in Black Iron
NOW IS THE IDEAL TIME TO INVEST IN BLACK IRON Top Ranked Project Highly respected market intelligence group Wood Mackenzie rank Black Iron as highest development stage IRR (internal rate of return) and CRU as lowest operating cost globally Solid Plan to Finance mid 2020 Construction Leveraging offta
Slide 19: 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
Slide 20: Major High-Grade Iron Ore Supply Shortfall Forecast
MAJOR HIGH-GRADE IRON ORE SUPPLY SHORTFALL FORECAST Black Iron has a premium 68% iron content pellet feed • In the long-run, the market will require new pellet feed projects to be developed to meet forecasted demand • CRU estimates “gap” between supply and demand starts to emerge in the early 2020s
Slide 21: 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 22: 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 23: 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 24: 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