Black Iron Stock Price, News & Analysis

Black Iron Inc. (BKIRF) is an iron ore exploration and development company focused on advancing the Shymanivske Iron Ore Project in Ukraine. The company is classified in the Iron and Steel Mills and Ferroalloy Manufacturing industry within the broader manufacturing sector. Its primary asset is the 100% owned Shymanivske Iron Ore Project located in Kryvyi Rih, central Ukraine, an established iron ore mining district.

According to multiple company disclosures, the Shymanivske project is surrounded by several operating iron ore mines, including Metinvest's YuGOK and ArcelorMittal's iron ore complex. Black Iron highlights that full mineral resource details and projected project economics for Shymanivske are set out in an NI 43-101 technical report titled "(Amended) Preliminary Economic Assessment of the Re-scoped Shymanivske Iron Ore Deposit" published in March 2020 with an effective date of November 21, 2017 under the company's profile on SEDAR.

Core business focus

Black Iron describes itself as an iron ore exploration and development company. Its business activities are centered on advancing Shymanivske from the exploration and assessment stage toward potential mine development. The company has reported work on feasibility-level engineering, environmental and social impact assessments, land access arrangements and permitting steps that are required for mining permit renewal and potential future construction.

The project is located in an area with existing mining infrastructure and other operating iron ore mines. Company news releases note that the project area benefits from proximity to operating mines and related infrastructure in the Kryvyi Rih region. Black Iron has also reported that it has been progressing technical studies and public hearings in Ukraine related to mining a portion of the ore body as part of the process to renew its extraction permit.

Shymanivske Iron Ore Project

The Shymanivske Iron Ore Project is Black Iron's flagship asset. The company states that it owns 100% of this project. It has repeatedly referred investors to the NI 43-101 preliminary economic assessment for detailed mineral resource information and project economics. The project is characterized by the company as a high-purity iron ore development located in a historic iron ore basin in central Ukraine.

Company communications describe Shymanivske as one of the more advanced large-scale mining developments in Ukraine, with engineering and permitting work well progressed. Black Iron has also noted that the project is surrounded by multiple operating iron ore mines and that it is located in Kryvyi Rih, a central Ukrainian city with an established iron ore industry.

Project development activities

Over a series of news releases, Black Iron has outlined several key elements of its project development work:

• Advancement of a feasibility study for Shymanivske, with engineering work led by Wood Plc.
• Preparation of an Environmental and Social Impact Assessment (ESIA) by Environmental Resources Management (ERM).
• Negotiations and agreements relating to land leases and land transfer, including a multi-year land lease with Kryvyi Rih City covering surface rights over a large portion of the Shymanivske ore body.
• Completion of Ukraine-based engineering, environmental and social impact studies and public hearings required to mine a portion of the ore body as part of the extraction permit renewal process.
• Discussions with Ukraine's Ministry of Defence regarding central government land that is currently used as a firing range, which the company has identified as a potential location for future processing facilities, tailings and waste rock stockpiles.

Black Iron has also reported that the Shymanivske project is considered by the company to be one of the most advanced large-scale mining projects in Ukraine, and that it has been brought close to construction readiness in the past, subject to geopolitical developments.

Strategic partnerships and funding structures

Black Iron has disclosed a legally binding royalty and offtake transaction with Anglo American. Under this transaction, Anglo American agreed to a royalty investment in exchange for a gross revenue royalty on initial production from Shymanivske and secured offtake rights to a portion of the project's planned output. The company has stated that:

• Anglo American will invest a total of US$4 million in two tranches as a royalty investment tied to early production volumes.
• The investment grants Anglo American offtake rights to the higher of 60% or 2.4 million tonnes per year of Phase 1 production for the life of mine.
• Anglo American has rights of first offer and first refusal to participate in funding portions of Phase 1 and Phase 2 construction costs in exchange for expanded offtake rights.

Black Iron has also indicated that it previously ran a competitive process for investment and offtake, which resulted in several mining and trading companies expressing interest. The company has noted that this process and the resulting agreements reflect interest in the project based on its projected economics and high-purity iron ore product, while also acknowledging the uncertainties associated with the war in Ukraine.

Geopolitical context and project risk

Company disclosures repeatedly reference the impact of the war in Ukraine and geopolitical risk on project timing and feasibility study publication. For example, Black Iron has reported that publication of a feasibility study for Shymanivske cannot occur until there is peace in Ukraine and site visits can resume, as required to meet National Instrument 43-101 feasibility study standards. The company has also noted that certain infrastructure, foreign exchange assumptions and other conditions must be reasonably justified at the time of study publication.

Black Iron's news releases include forward-looking information disclaimers that highlight risks related to the war in Ukraine, general business and economic conditions, the results of exploration activities and other mining industry risks. The company emphasizes that mineral resources are not mineral reserves and do not have demonstrated economic viability.

Additional project initiatives

Beyond Shymanivske, Black Iron has reported activity related to the Julienne Lake iron ore deposit in Canada. The company has stated that it submitted proposals to the Government of Newfoundland and Labrador to acquire the Julienne Lake undeveloped iron ore resource and that it was shortlisted in a competitive bid process. Black Iron has also indicated that global miner Anglo American supports its efforts related to Julienne Lake.

Company communications describe Julienne Lake as an undeveloped iron ore deposit located adjacent to an operating iron ore mine in Canada. Historical work is said to indicate potential for a low strip ratio and high iron recovery, with the potential to produce high-purity iron ore. Black Iron has linked this potential to cleaner steelmaking applications in its public statements.

Capital markets and shareholder base

Black Iron's shares trade on the Toronto Stock Exchange under the symbol BKI and over-the-counter under the symbol BKIRF, with an additional listing in Frankfurt under BIN, as reflected in several news releases. The company has disclosed that RAB Capital is a significant shareholder and that RAB Capital increased its ownership stake through open market purchases, reaching an ownership level of approximately 15% of the company's shares at the time of that disclosure.

Black Iron has also highlighted that the royalty investment from Anglo American was structured without issuing additional shares, which the company has characterized as supportive of existing shareholders. The company has noted that proceeds from the royalty transaction are intended in part to support permit renewal work for Shymanivske.

Corporate governance and management updates

Black Iron has announced several leadership and governance developments. These include the appointment of a new Chief Financial Officer with extensive experience in the resource sector and the appointment of a new Chairman of the Board who has decades of experience in mining and steel industry operations, safety, health, sustainable development, communications and community relations. The company has also acknowledged the contributions of outgoing executives and directors in its public statements.

ESG and community considerations

Through its updates on the ESIA and related work, Black Iron has indicated that it is assessing environmental and social impacts associated with the Shymanivske project. The company has referenced efforts to locate future processing facilities, tailings and waste rock stockpiles in a way that aims to minimize environmental and community impacts while maintaining project viability. It has also mentioned cooperation with local authorities and support for humanitarian initiatives related to the conflict in Ukraine.

Summary

In summary, Black Iron Inc. is an iron ore exploration and development company whose primary focus is the 100% owned Shymanivske Iron Ore Project in Kryvyi Rih, Ukraine. The company operates within the iron and steel-related manufacturing sector and is working through technical studies, environmental and social assessments, land access arrangements and permit processes. It has secured a royalty and offtake agreement with Anglo American and has engaged engineering and environmental consultants to advance project studies. Black Iron also reports interest in the Julienne Lake iron ore deposit in Canada. All forward-looking plans and project economics referenced by the company are subject to the risks and uncertainties outlined in its public disclosures, including geopolitical risks in Ukraine and the fact that mineral resources do not have demonstrated economic viability.