Canada’s Black Iron proceeds with development of Ukraine-based iron ore project

Wednesday, 23 December 2020 17:53:41 (GMT+3)   |   Istanbul

Canadian iron ore exploration and development company Black Iron has announced that it has signed a non-binding royalty sheet for $100 million with a US-based institutional investor.

“This major planned investment from a high-caliber institution is game-changing for Black Iron. It aims to provide the company with a substantial portion of the necessary construction financing, and, more importantly, the basis for a long-term partnership with a highly respected financial institution. As one of the lowest cost iron ore mines globally, Black Iron is poised to deliver tremendous value to its shareholders as we embark on the final stages of our capital raise and seek to begin construction in the second half of 2021,” Matt Simpson, CEO of Black Iron, stated.

Within the scope of this agreement, the investor is entitled to receive a perpetual 6.75 percent royalty on the first phase, which it is designed to produce four million of iron ore concentrate.

Besides that, earlier the company received nonbinding term sheets from global investment banks for $260-300 million in first lien financing. Additionally, the company has received multiple nonbinding term sheets from offtake parties that not only commit to purchase 100 percent of the company’s iron ore concentrate, but also to invest a substantial amount of equity into the project. These investments in conjunction with this $100 million royalty provide the necessary capital to complete the first phase of development.

Black Iron advances its 100 percent owned Shymanivske project located in Kryviy Rih, Ukraine. The Shymanivske project contains a NI 43- 101 compliant mineral resource estimated to be 646 million mt of measured and indicated mineral resources, consisting of 355 million mt of measured mineral resources grading 32.0 percent total iron and 19.5 percent magnetic iron, and indicated mineral resources of 290 million mt grading 31.1 percent total iron and 17.9 percent magnetic iron, using a cut-off grade of 10 percent magnetic iron.

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