Black Iron Inc.

TSX : BKI
FRANKFURT : BIN


Black Iron Inc.

April 15, 2014 17:01 ET

Metinvest B.V. Makes Initial US$5 Million Investment in Black Iron and Finalizes Closing Schedule for Balance of US$20 Million Previously Announced

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

  • CLOSING OF THE STRATEGIC INVESTMENT AND DEVELOPMENT ARRANGEMENT WILL OCCUR IN FOUR EQUAL MONTHLY INSTALLMENTS OF US$5M EACH BETWEEN APRIL 15 AND JULY 15, 2014

  • THE FIRST US$5 MILLION INSTALLMENT HAS BEEN RECEIVED BY BLACK IRON FROM METINVEST

Black Iron Inc. ("Black Iron" or the "Company") (TSX:BKI) (FRANKFURT:BIN) and Metinvest B.V. ("Metinvest") have agreed to a closing schedule for the previously announced strategic investment and development arrangement (the "Arrangement") pertaining to Black Iron (Cyprus) Ltd. ("BKI Cyprus") outlined in the Metinvest or Black Iron news releases dated July 23, 2013.

In conjunction with the closing of the Arrangement, Metinvest will make an initial US$20 million financial contribution to the Shymanivske Iron Ore Project through the subscription of shares of BKI Cyprus. This contribution will take place over four equal monthly installments with the initial US$5 million installment received to the account of BKI Cyprus today. The balance of US$15 million is scheduled to be received in three equal installments on May 15, 2014, June 16, 2014 and July 15, 2014. Upon receipt of each installment, Metinvest will be issued common shares of approximately 12% of the share capital of BKI Cyprus, for a total upon completion of the investment of 49% of the share capital of BKI Cyprus. Black Iron Inc. will retain the remaining ownership position in BKI Cyprus and remains responsible to lead development of the Shymanivske Iron Ore Project.

"We are pleased to have established a schedule to close the initial investment and Arrangement with Metinvest, including the completion of documentation and receipt of the first US$5 million contribution. The closing schedule provides immediate funding for the continued development of our world-class iron ore project, with the completed Arrangement ultimately providing a solution to 49% of the project's equity construction capital needs" stated Matt Simpson, President & CEO of Black Iron. "Metinvest is the largest employer, iron ore miner and steel producer in Ukraine so its employees bring substantial in-country knowledge plus contacts to augment Black Iron's team. Black Iron and Metinvest are strong believers in the economic attractiveness of the Shymanivske Iron Ore Project and we look forward to developing this world-class asset."

Yuriy Ryzhenkov, General Director and CEO of Metinvest, added, "Completion of the Arrangement is an important step for Ukraine and its economy. Coupled with Metinvest's existing contributions, the development of the Shymanivske Iron Ore Project represents a major international investment in Ukraine that will increase local employment, improve local infrastructure and heighten environmental standards for the Kryvyi Rih region."

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, with 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 December 17, 2012 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, 2011 (and dated March 26, 2012) 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; 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.

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