Black Iron Inc.
TSX : BKI
FRANKFURT : BIN

Black Iron Inc.
Metinvest B.V.

Metinvest B.V.

July 15, 2014 08:01 ET

Black Iron Inc. and Metinvest B.V. Close Strategic Investment and Development Arrangement

TORONTO, ONTARIO--(Marketwired - July 15, 2014) -

- FINAL US$5 MILLION INSTALLMENT PAYMENT HAS BEEN RECEIVED BY BLACK IRON, COMPLETING THE INITIAL US$20 MILLION COMMITMENT

- ADDITIONAL POTENTIAL INVESTMENT BY METINVEST COULD REACH AS MUCH AS US$536 MILLION TO FINANCE HALF OF THE CONSTRUCTION COST

Black Iron Inc. ("Black Iron" or the "Company") (TSX:BKI)(FRANKFURT:BIN) has received the fourth and final installment payment of US$5 million from Metinvest B.V. ("Metinvest") as part of the previously announced closing schedule (see press release dated April 15, 2014) for the strategic investment and development arrangement (the "Arrangement") (see press release dated July 23, 2013) pertaining to Black Iron (Cyprus) Ltd. ("BKI Cyprus").

In conjunction with the closing of the Arrangement and receipt of the US$20 million, Metinvest has been issued common shares in BKI Cyprus representing an aggregate total of 49% of the share capital of BKI Cyprus. No common shares in Black Iron have been issued as part of the Arrangement. Black Iron remains the operator and developer of the Shymanivske Project and the Zelenivske Project (collectively, the "Projects").

Each of Metinvest and Black Iron will have the option to participate in the funding of the development of the Shymanivske Iron Ore Project based on their proportionate interest in BKI Cyprus or be diluted down. Using the projected total capital investment requirements as outlined in the Company's Bankable Feasibility Study (as filed under the Company's profile on SEDAR on January 27, 2014) of US$1097 million, Metinvest's future capital contribution could be up to US$536 million (being 49% of US$1097 million) for the development of the Projects. The Arrangement contains strict dilution provisions designed to create a strong incentive for continued participation in any future equity financings for the Projects.

Yuriy Ryzhenkov, General Director and CEO of Metinvest, commented, "Metinvest and Black Iron remain committed to helping rebuild Ukraine's economy through the development of the Shymanivske Iron Ore Project. Apart from the creation of thousands of new jobs and tens of millions annually in tax revenues, Ukrainians will also benefit from new world class iron ore processing, safety and environmental technologies."

Matt Simpson, President and CEO of Black Iron, commented, "With this strategic arrangement now closed, and our relationship with Metinvest formally in place, once there is peace in Ukraine, we look forward to building the world-class iron ore producing mine outlined in our January 2014 Feasibility Study that shows a pre-tax 48% internal rate of return, two year payback and US$3.3 billion net present value. We see tremendous opportunities ahead for all stakeholders in Black Iron as this project is needed more than ever to help reinvigorate Ukraine's economy as the country emerges from the current revolution."

About Metinvest

Metinvest 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. The Group comprises steel and mining production facilities located in Ukraine, Europe and the USA and has a sales network covering all key markets. Metinvest is the largest employer in Ukraine and accounts directly for 2.3% of the country's Gross Domestic Product (GDP) growing to 6.3% of Ukraine's GDP on an indirect basis. Metinvest's Strategic Vision: Metinvest strives to become the leading integrated steel maker in Europe demonstrating sustainable growth and profitability independently from the phases of economic cycle and providing the return on investment above the average industry levels. Metinvest Group is structured into two operating divisions: Metallurgical Division and Mining Division. Metinvest is made up of over 100,000 employees globally and in 2013 produced 36.9 million tonnes of iron ore, 11.4 million tonnes of coal and 12.4 million tonnes of steel.

The major shareholder of Metinvest Group is Metinvest B.V., a holding company owned by System Capital Management Group (71.25%) and Smart-Holding (23.75%).

About Black Iron

Black Iron is an iron ore exploration and development company, advancing its 51% owned Shymanivske project located in Kryviy Rih, Ukraine. This project contains an NI 43-101 compliant resource estimated to be 645.8 Mt Measured and Indicated mineral resources, consisting of 355.1 Mt Measured mineral resources grading 32.0% Total iron and 19.5% Magnetic iron, and Indicated mineral resources of 290.7 Mt grading 31.1% Total iron and 17.9% Magnetic iron, using a cut-off grade of 10% Magnetic iron. Additionally, the project contains 188.3 Mt of Inferred mineral resources grading 30.1% Total iron and 18.4% Magnetic iron. Full mineral resource details can be found in the National Instrument 43-101 compliant technical report dated January 24, 2014 titled "Feasibility Study of the Shymanivske Iron Ore Deposit for Black Iron Inc." under the Company's profile on SEDAR at www.sedar.com. The project is surrounded by five other operating mines, including ArcelorMittal's iron ore complex. The Company believes that existing infrastructure, including access to power, rail and port facilities, will allow for a quick development timeline to production. Further, the Company holds an exploration permit for the adjacent Zelenivske project, which it intends to further explore to determine its potential. Please visit the Company's website at www.blackiron.com, or write us at info@blackiron.com for more information.

The technical and scientific contents of this press release have been prepared under the supervision of and have been reviewed and approved by Matt Simpson, P.Eng, President and CEO of Black Iron Inc., who is a Qualified Person as defined by NI 43-101. For further information, please see the technical report of the Company, which is available on SEDAR at www.sedar.com.

Forward-Looking Information

This press release contains forward-looking information. Forward-looking information is based on what management believes to be reasonable assumptions, opinions and estimates of the date such statements are made based on information available to them at that time, including those factors discussed in the section entitled "Risk Factors" in the Company's annual information form for the year ended December 31, 2013 (and dated March 14, 2013) or as may be identified in the Company's public disclosure from time to time, as filed under the Company's profile on SEDAR at www.sedar.com. Forward-looking information may include, but is not limited to, statements with respect to the closing of the Arrangement, the impact of the Arrangement on the local economy, the future financial or operating performance of the Company, its subsidiaries and its projects, the development of and the anticipated timing with respect to the Shymanivske project, the ability to obtain financing on commercially reasonable terms; and the impact of concerns relating to permitting, regulation, governmental and local community relations. Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; the actual results of current exploration activities; other risks of the mining industry and the risks described in the annual information form of the Company. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

Contact Information

  • Black Iron Inc.
    Michael McAllister
    Manager, Investor Relations
    +1 (416) 309-2950
    info@blackiron.com

    Black Iron Inc.
    Matt Simpson
    President & CEO
    +1 (416) 309-2138

    Metinvest Holdings LLC
    Alexey Komlyk
    Head of Media and Marketing Communications
    +380623881703
    press@metinvestholding.com