Canadian iron ore exploration and development company Black Iron (TSX: BKI) (OTC: BKIRF) (GR: BIN) this morning reaffirmed economic projections for its Shymanivske project, citing a weeks-long surge in iron ore prices after Vale, one of the world’s largest iron ore producers, took 11 mines offline, significantly hindering supply. The shut-down of Vale’s mines represents ~6% of global consumption with a combined production loss of 70Mtpa. In response, Iron ore prices spiked to the current US$87/T for benchmark 62 percent iron content fines and US$106/T for 65 percent iron content fines. While analysts have mixed projections on the length of time the iron content benchmark price will stay at elevated levels, there is consensus that prices of iron content products, more specifically prices for iron ore pellet products, will increase for at least the next few years as the industry responds to lower supply. As a result, the premium 68 percent iron pellet feed product that Black Iron plans to produce is expected to sell for a significantly higher price than benchmark iron ore for at least the next two to three years. The company intends to build its Shymanivske project in two phases, taking advantage of its proximity to rail, power, ports and skilled labor to reduce upfront capital and time required to generate cashflows. The first phase of the Shymanivske project, expected to produce 4 million tonnes a year, requires a capital investment of US$436 million. An additional US$312 million is required to double the Shymanivske project’s production capacity to 8 million tonnes, which could potentially be fully funded from the free cash generated by phase 1 production.
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About Black Iron Inc.
Black Iron is an iron ore exploration and development company, advancing its 100 percent owned Shymanivske project located in Kryviy Rih, Ukraine. The Shymanivske project contains a NI 43-101 compliant resource estimated to be 646 Mt Measured and Indicated mineral resources, consisting of 355 Mt Measured mineral resources grading 31.6 percent total iron and 18.8 percent magnetic iron, and Indicated mineral resources of 290 Mt grading 31.1 percent total iron and 17.9 percent magnetic iron, using a cut-off grade of 10 percent magnetic iron. Additionally, the Shymanivske project contains 188 Mt of Inferred mineral resources grading 30.1 percent total iron and 18.4 percent magnetic iron. Full mineral resource details can be found in the NI 43-101 compliant technical report entitled “Preliminary Economic Assessment of the Re-scoped Shymanivske Iron Ore Deposit” effective November 21, 2017, under the company’s profile on SEDAR. The Shymanivske project is surrounded by five other operating mines, including ArcelorMittal’s iron ore complex. For more information, visit the company’s website at www.BlackIron.com.
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