Vancouver, British Columbia--(Newsfile Corp. - July 24, 2013) - Black Iron Inc. (TSX: BKI) (Frankfurt: BIN) has announced an arrangement to develop the company's Ukrainian iron ore assets. Metinvest B.V., Ukraine's largest mining and steel producer, will form a development arrangement with Black Iron and will make an initial investment of US$20 million in Black Iron's wholly-owned subsidiary, Black Iron (Cyprus) Ltd, to help fund the company's two Ukrainian projects, the Shymanivske Project and the Zelenivske Project, each located in Kryvyi Rih, Ukraine.
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The initial $20 million will give Metinvest a 49% shareholding of Black Iron (Cyprus), with no increase in shares outstanding in Black Iron Inc. Black Iron will remain the operator and developer of both projects.
Each of Metinvest and Black Iron will have the option to participate in the funding of the development of the projects based on its proportionate interest in Black Iron (Cyprus), or be diluted down. Using the projected total capital investment requirements of US$1.094 billion, and assuming the development capital is 100% equity financed, Metinvest's future capital contribution could increase by up to $536 million, for the development of the Shymanivske Project. For more information on this project, please refer to the company's Bankable Feasibility Study, which is available on Sedar.com.
The Bankable Feasibility Study outlines an operation producing 9.2 million tonnes per year of high-grade 68% iron ore concentrate, projecting a 45.9% internal rate of return, a US$3.5 billion net present value at an 8% discount rate and 2.2 year payback, for a capital investment of US$1.1 billion.
Completion of this transaction is subject to receipt of all necessary regulatory approvals, including the Government of Ukraine's anti-monopoly division.
Matt Simpson, President and CEO of Black Iron stated, "Black Iron selected Metinvest for its industry-leading experience in iron ore mining and steel making, as well as its operational history in Ukraine. This agreement greatly strengthens our development team and I look forward to being closely associated with Metinvest. Together, we will help bring new world class iron ore processing, safety and environmental technologies to Ukraine."
Metinvest Group is a vertically integrated steel and mining group of companies, managing every link of the value chain, from mining and processing iron ore and coal, to making and selling semi-finished and finished steel products.
Black Iron is one of many companies under the Forbes & Manhattan umbrella. Forbes & Manhattan, a private merchant bank based in Toronto, Ontario, with offices, operations and assets across the globe, is a leader in the global resource-focused sectors.
Black Iron currently trades at $0.22, and with 141 million shares outstanding, the company is capitalized at $31 million.
For more information, please visit the company's website www.BlackIron.com or contact Michael McAllister at 416-309-2950 or email info@BlackIron.com.
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