Sign up Australia
Proactive Investors - Run By Investors For Investors
Why invest in BKI?

Black Iron advancing Shymanivske project towards construction

Getting financing will be a "significant" milestone toward the construction, said the group
Black Iron advancing Shymanivske project towards construction
Iron ore is used to make steel

Ukraine-focused Black Iron Inc (TSE:BKI) is advancing the Shymanivske iron ore project toward construction.

It has made progress towards acquiring the surface rights for land required to build the project, expected to be obtained before year end, and is working on securing financing, it said in a statement.

READ: Black Iron shares advance as it brushes off President Trump's steel tariff plan

Getting financing will be a "significant" milestone toward the construction and Black Iron said it was pleased with the level of interest it was receiving from potential financiers.

"Since publishing the re-scoped preliminary economic assessment, benchmark iron ore prices have rallied from US$62 per tonne (T) to US$70per tonne as of March 9, 2018, an increase of close to 13% resulting in stronger economic returns and significant interest in the project," the firm said.

Based on prevailing iron ore prices and adjustments for iron quality content, Black Iron's construction capital is forecast to have an estimated 51% after tax IRR (internal rate of return) and US$1.4 billion NPV (net present value).

That assumes 60% debt financing, a 10% discount rate and an initial capital cost of US$436mln.

Various financing options

Even under highly pessimistic long-term iron ore prices of US$50 per tonne, the project generates IRRs in excess of 20%, the group said.

Since releasing the revised economics for the project, the firm has accelerated efforts to secure the necessary land surface rights for the mine and plant.

Those leases relate to three parcels of land that are required to begin construction, which are currently held within two Ukrainian government groups.

The company continues to pursue various financing options and has received significant interest from multiple groups which are currently conducting due diligence, it added.

"Over the coming months, the company expects to secure the land leases and formalize financing while also renewing its major infrastructure contracts.

"Once these milestones have been achieved, the company will be well positioned to initiate construction."

View full BKI profile View Profile

Black Iron Inc. Timeline

Related Articles

copper wires
October 12 2018
Leigh Creek will add to the cash being generated by New Mexico-based iron ore business Cobre to fund exploration and development opportunities elsewhere.
March 13 2018
Getting financing will be a "significant" milestone toward the construction, said the group
copper tubes
May 30 2018
The latest economic study at Parys Mountain has delivered some encouraging numbers against a backdrop of rising base metals prices

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use