Welcome!

Microsoft Cloud Authors: Yeshim Deniz, Janakiram MSV, Andreas Grabner, Stackify Blog, Liz McMillan

News Feed Item

Black Iron Releases Feasibility Study Showing 45.9% IRR, 2.2 Year Payback and U.S. $3.5 Billion NPV for Shymanivske Project

TORONTO, ONTARIO -- (Marketwire) -- 11/15/12 -- Black Iron Inc. ("Black Iron" or the "Company") (TSX:BKI)(FRANKFURT:BIN) is pleased to announce the results of the Bankable Feasibility Study ("BFS") completed on its Shymanivske Iron Ore Project located in Kryviy Rih, Ukraine (the "Project"). The BFS outlines an operation producing 9.2 million tonnes per year of high-grade 68% iron ore concentrate, projecting a 45.9% internal rate of return ("IRR") and a U.S. $3.5 billion net present value ("NPV") at an 8% discount rate.

The BFS was completed by WorleyParsons Canada Services Ltd. ("WorleyParsons"), Watts, Griffis and McOuat Limited ("WGM"), Consulting Geologists and Engineers of Toronto, and P&E Mining Consultants Inc. ("P&E"). Mr. Michael Kociumbas, P.Geo., and Mr. Rick Risto, P.Geo., both with independent firm WGM, are Qualified Persons as defined by NI 43-101. WGM has previously visited the site, collected independent core samples and reviewed the QA/QC data received to date. Mr. Risto has reviewed and approved the underlying sampling, analytical and test data used for the estimate and Mr. Kociumbas is responsible for auditing the in-house mineral resource estimate as supplied by Black Iron. The estimate is classified as Measured, Indicated and Inferred mineral resources, consistent with the CIM definitions referred to in National Instrument 43-101. The complete BFS report will be filed on SEDAR and Black Iron's website within 45 days of the publication of this news release.

The Table below summarizes the key elements of the BFS:

High-Grade 68% Concentrate (all currency is USD, pre-tax)


----------------------------------------------------------------------------
NPV at 8% discount rate                                      $  3.5 billion 
----------------------------------------------------------------------------
IRR                                                                    45.9%
----------------------------------------------------------------------------
Total Estimated Capital Costs (excluding sustaining capital) $ 1094 million 
----------------------------------------------------------------------------
Life of Mine FOB OPEX (Beneficiation, Mine & Transportation) $     43.97 /t 
Mine Gate OPEX (Beneficiation & Mine)                        $     29.67 /t 
----------------------------------------------------------------------------
High-Grade 68% Concentrate Sales Price Forecast - based on                  
 long term CFR benchmark price of $95/T @ 62% iron adjusted                 
 for Black Iron's higher iron content and shorter shipping                  
 distance to end users                                                      
  (Year 1, 2016)                                             $          125 
  (Year 2)                                                   $          117 
  (Year 3 onward; long-term)                                 $          115 
----------------------------------------------------------------------------
Average Annual Cash Flow                                     $  593 million 
----------------------------------------------------------------------------
Estimated Mine Life                                                16 years 
----------------------------------------------------------------------------
Final Product Iron Grade (Fine Iron Ore Concentrate)                 68% Fe 
----------------------------------------------------------------------------
Measured and Indicated Resource (at 31.6% iron)                    645.8 Mt 
----------------------------------------------------------------------------
Proven and Probable Reserves (at 31.1% iron)                       448.2 Mt 
----------------------------------------------------------------------------
Annual Production Rate (average life of mine, post ramp-up                  
 year)                                                               9.2 Mt 
----------------------------------------------------------------------------
Projected Plant Start-up and Commissioning                         Q4, 2015 
----------------------------------------------------------------------------
Projected Commencement of Revenue Generation                       Q1, 2016 
----------------------------------------------------------------------------
Projected Years to Payback (at 8% Discount Rate)                  2.2 years 
----------------------------------------------------------------------------

Matt Simpson, Black Iron's President and CEO, commented, "The operation outlined by this BFS for the Shymanivske Project clearly illustrates the potential for a high-value, low net cost iron ore development project. The projected high NPV, net cash flows, and relatively low unit cost for concentrate arise from Black Iron's advantages, which include an iron ore deposit with significant existing infrastructure (railway, power lines and port) in addition to access to low-cost skilled labour. We continue to deliver on our objective timetable and our results to date, coupled with this engineering study, make a compelling case for expediting the development of the Shymanivske Project."

Financial Sensitivities at Various Discount Rates


----------------------------------------------------------------------------
IRR (pre-tax)                                             45.9%             
----------------------------------------------------------------------------
                                                      Pre-Tax               
                                                      NPV USD        Payback
Discount Rate                                      (Millions)        (Years)
----------------------------------------------------------------------------
0%                                           $           8392            1.9
----------------------------------------------------------------------------
6%                                           $           4328            2.1
----------------------------------------------------------------------------
8%                                           $           3524            2.2
----------------------------------------------------------------------------
10%                                          $           2887            2.3
----------------------------------------------------------------------------

The Project has favourable economic potential across a range of discount rates. The operations outlined in this BFS are projected to generate over U.S. $1136 million in average annual revenue over the life of mine.

On the basis of the metallurgical test work completed for this BFS, it is estimated that the process weight recovery of 32.7% would yield a project life of 16 years at an average strip ratio of 1.63:1, according to the current estimated resource. The Company believes that additional exploration and definition drilling work have the potential to expand the existing resource and upgrade the 188.3 Mt of Inferred mineral resource to the Measured and Indicated classification, potentially adding up to 5 years to the Project life. With successful exploration in the North end of Shymanivske and the addition of resources from the nearly adjacent Zelenivske Project, Black Iron expects to be able to support an even higher annual production rate, which would further increase the already favourable Project NPV.

George Mover, Black Iron's Chief Operating Officer, added, "We are pleased with the level of engineering expertise and rigour behind this BFS. Through the process, we implemented several improvements to the work completed last year for our Preliminary Economic Assessment. We have found and verified solutions to optimize the process flow sheet, to reduce the stripping ratio through mine phasing, and to increase our weight recoveries. As a result, we are now considering an initial operation with 26% higher annual production and 16% lower operating costs than in our previous study. The relatively low-unit operating cost of production, coupled with close proximity to Turkish, European, and Middle East customers, means that this operation has the potential to remain profitable despite fluctuations in the iron ore price."

Details and Assumptions

Total initial capital expenditures are estimated at U.S. $1094 million to produce a high-grade 68% iron ore concentrate. The capital cost estimate excludes the sustaining capital cost of U.S. $689 million. The initial assessment of the preferred port facility indicates that sufficient capacity currently exists for the planned production.


----------------------------------------------------------------------------
Summary of Estimated Initial Capital Costs                    USD (millions)
----------------------------------------------------------------------------
Mining Capitalized Pre-Stripping Costs                                    61
----------------------------------------------------------------------------
Mine Fleet Lease Costs                                                    62
----------------------------------------------------------------------------
Concentrator and Site Infrastructure                                     654
----------------------------------------------------------------------------
Environmental and Tailings Management                                     20
----------------------------------------------------------------------------
Rail Spur                                                                  9
----------------------------------------------------------------------------
Port Facilities                                                          nil
----------------------------------------------------------------------------
Indirect Costs and Land Acquisition                                      189
----------------------------------------------------------------------------
Contingency (10%)                                                         99
----------------------------------------------------------------------------
TOTAL                                                                   1094
----------------------------------------------------------------------------

The total average operating costs over 16 years are estimated at U.S. $43.97 per tonne of high grade 68% iron ore concentrate.


----------------------------------------------------------------------------
                                                                USD/tonne of
                                                                 Concentrate
                                                                    (Average
Summary of Estimated Operating Costs                              Mine Life)
----------------------------------------------------------------------------
Mining                                                     $           13.51
----------------------------------------------------------------------------
Concentrator                                               $           14.30
----------------------------------------------------------------------------
Site Infrastructure                                        $            0.75
----------------------------------------------------------------------------
Sales and General Administration                           $            0.75
----------------------------------------------------------------------------
Environmental and Tailings Management                      $            0.37
----------------------------------------------------------------------------
Rail Transportation                                        $            7.39
----------------------------------------------------------------------------
Port Facility                                              $            6.90
----------------------------------------------------------------------------
TOTAL                                                      $           43.97
----------------------------------------------------------------------------

Consistent with practice in the industry, this BFS has been prepared with an engineering accuracy of +/-15%.

Currency Sensitivity

For the purpose of the BFS an exchange rate of 8.1 UAH per USD has been used for the CAPEX (up to Jan. 2016) and 9.0 UAH per USD for the OPEX and Sustaining Capital (2016 and beyond). Variations in the exchange rates from year 2016 and beyond impact the financial analysis as follows.

Impact of Ukraine Hryvna Exposure - BFS Currency Sensitivity


----------------------------------------------------------------------------
                                                      (UAH/USD)             
                                        ------------------------------------
Exchange Rate as of year 2016 onward          8:1      9:1     10:1     11:1
----------------------------------------------------------------------------
NPV @ 8% discount U.S. $ (millions)          3334     3524     3677     3800
----------------------------------------------------------------------------
Total Estimated Capital Cost                 1094     1094     1094     1094
----------------------------------------------------------------------------
Estimated Operating Cost ($/tonne)          46.73    43.97    41.75    39.96
----------------------------------------------------------------------------
Average Annual Cash Flow U.S. $                                             
 (millions)                                   568      593      613      629
----------------------------------------------------------------------------

Bankable Feasibility Study Report

The BFS has been prepared in accordance with the guidelines of National Instrument 43-101, by the independent firms of WorleyParsons Canada Services Ltd., Watts, Griffis and McOuat Limited and P&E Mining Consultants Inc. WorleyParsons is a leading full-service engineering firm and has experience in the sector that includes the design and construction supervision of many components of some of the world's leading iron ore assets. The final BFS technical report, which will also include the current mineral resource estimate, will be filed on SEDAR within 45 days of the publication of this news release.

Pellet Plant Alternative

Black Iron has investigated an alternative production scenario, which would include the production of high-grade iron ore pellets. The pellet production alternative is not included as part of the BFS.

Analyst and Shareholder Conference Call

Black Iron will host a conference call today at 8:00 a.m., EST (November 15, 2012) to discuss the BFS results. To participate in the call please dial the following:

International: +1 416 340 8527

Toll Free North America: 1 877 240 9772

To register and listen to the webcast of the call, please go to Black Iron's website at www.blackiron.com.

Qualified Persons

The contents of this press release have been prepared under the supervision of and reviewed and approved by Qualified Persons, as follows:


--  Rob Spiering, P.Eng., Project Manager, WorleyParsons QP for the Process
    Plant and Infrastructure;

--  Michael Kociumbas, P.Geo. and Rick Risto, P.Geo., Watts, Griffis and
    McOuat Limited, QPs for mineral resources and QA/QC and data
    verification;

--  Eugene Puritch, P.Eng., P&E Mining Consultants Inc., QP for the mine
    engineering aspects.

These persons are Qualified Persons as defined by NI 43-101, are independent of Black Iron, and have reviewed the content of this press release. For further information, please see the technical report of the Company, which is available on SEDAR at www.sedar.com.

Additional information about the Project can be found in the technical report filed on SEDAR at www.sedar.com, entitled "Resource Estimate - Shymanivske Deposit in Ukraine," and dated January 31, 2011.

About Black Iron

Black Iron is an iron ore exploration and development company, advancing its 100 percent-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. 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 [email protected] for more information.

Forward-Looking Information

This press release contains forward-looking information which may include, but is not limited to, statements about the results of the FS and the development potential of the Company and its project; the timing and amount of future exploration and development of the project; and the future financial or operating performance of the Company and its projects. Often, but not always, forward-looking information can be identified by the use of words such as "plans," "expects," "is expected," "budget," "scheduled," "estimates," "forecasts," "intends," "anticipates" or "believes" or variations (including negative variations) of such words and phrases, or by the use of words or phrases that state that certain actions, events or results "may," "could," "would," "might" or "will" be taken, occur or be achieved.

Forward-looking information is based on certain assumptions and analyses made by the Company and based on known facts at the time. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company and/or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained in this press release, including, without limitation, those described in the Company's public disclosure documents which may be found under the Company's profile on SEDAR. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in such forward-looking information, there may be other factors that may cause actions, events or results to differ from those anticipated, estimated or intended. Should one or more of these risks or uncertainties materialize, or should assumptions underlying such forward-looking information prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by the forward-looking information contained in this press release. The forward-looking information contained herein is made as of the date of this press release and the Company disclaims any obligation to update or review such information or statements, whether as a result of new information, future events or results or otherwise, except as required by law.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
SYS-CON Events announced today that Calligo, an innovative cloud service provider offering mid-sized companies the highest levels of data privacy and security, has been named "Bronze Sponsor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Calligo offers unparalleled application performance guarantees, commercial flexibility and a personalised support service from its globally located cloud plat...
"We provide IoT solutions. We provide the most compatible solutions for many applications. Our solutions are industry agnostic and also protocol agnostic," explained Richard Han, Head of Sales and Marketing and Engineering at Systena America, in this SYS-CON.tv interview at @ThingsExpo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Internet of @ThingsExpo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devic...
"The Striim platform is a full end-to-end streaming integration and analytics platform that is middleware that covers a lot of different use cases," explained Steve Wilkes, Founder and CTO at Striim, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
SYS-CON Events announced today that DXWorldExpo has been named “Global Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Digital Transformation is the key issue driving the global enterprise IT business. Digital Transformation is most prominent among Global 2000 enterprises and government institutions.
SYS-CON Events announced today that Datera, that offers a radically new data management architecture, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datera is transforming the traditional datacenter model through modern cloud simplicity. The technology industry is at another major inflection point. The rise of mobile, the Internet of Things, data storage and Big...
"We've been engaging with a lot of customers including Panasonic, we've been involved with Cisco and now we're working with the U.S. government - the Department of Homeland Security," explained Peter Jung, Chief Product Officer at Pulzze Systems, in this SYS-CON.tv interview at @ThingsExpo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We are focused on SAP running in the clouds, to make this super easy because we believe in the tremendous value of those powerful worlds - SAP and the cloud," explained Frank Stienhans, CTO of Ocean9, Inc., in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
DX World EXPO, LLC., a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
"MobiDev is a Ukraine-based software development company. We do mobile development, and we're specialists in that. But we do full stack software development for entrepreneurs, for emerging companies, and for enterprise ventures," explained Alan Winters, U.S. Head of Business Development at MobiDev, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
While the focus and objectives of IoT initiatives are many and diverse, they all share a few common attributes, and one of those is the network. Commonly, that network includes the Internet, over which there isn't any real control for performance and availability. Or is there? The current state of the art for Big Data analytics, as applied to network telemetry, offers new opportunities for improving and assuring operational integrity. In his session at @ThingsExpo, Jim Frey, Vice President of S...
SYS-CON Events announced today that DXWorldExpo has been named “Global Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Digital Transformation is the key issue driving the global enterprise IT business. Digital Transformation is most prominent among Global 2000 enterprises and government institutions.
In his opening keynote at 20th Cloud Expo, Michael Maximilien, Research Scientist, Architect, and Engineer at IBM, discussed the full potential of the cloud and social data requires artificial intelligence. By mixing Cloud Foundry and the rich set of Watson services, IBM's Bluemix is the best cloud operating system for enterprises today, providing rapid development and deployment of applications that can take advantage of the rich catalog of Watson services to help drive insights from the vast t...
SYS-CON Events announced today that EnterpriseTech has been named “Media Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. EnterpriseTech is a professional resource for news and intelligence covering the migration of high-end technologies into the enterprise and business-IT industry, with a special focus on high-tech solutions in new product development, workload management, increased effic...
SYS-CON Events announced today that Massive Networks, that helps your business operate seamlessly with fast, reliable, and secure internet and network solutions, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. As a premier telecommunications provider, Massive Networks is headquartered out of Louisville, Colorado. With years of experience under their belt, their team of...
SYS-CON Events announced today that Cloud Academy named "Bronze Sponsor" of 21st International Cloud Expo which will take place October 31 - November 2, 2017 at the Santa Clara Convention Center in Santa Clara, CA. Cloud Academy is the industry’s most innovative, vendor-neutral cloud technology training platform. Cloud Academy provides continuous learning solutions for individuals and enterprise teams for Amazon Web Services, Microsoft Azure, Google Cloud Platform, and the most popular cloud com...
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and ...
SYS-CON Events announced today that CHEETAH Training & Innovation will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct. 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CHEETAH Training & Innovation is a cloud consulting and IT training firm specializing in improving clients cloud strategies and infrastructures for medium to large companies.
SYS-CON Events announced today that Datanami has been named “Media Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datanami is a communication channel dedicated to providing insight, analysis and up-to-the-minute information about emerging trends and solutions in Big Data. The publication sheds light on all cutting-edge technologies including networking, storage and applications, and thei...
The current age of digital transformation means that IT organizations must adapt their toolset to cover all digital experiences, beyond just the end users’. Today’s businesses can no longer focus solely on the digital interactions they manage with employees or customers; they must now contend with non-traditional factors. Whether it's the power of brand to make or break a company, the need to monitor across all locations 24/7, or the ability to proactively resolve issues, companies must adapt to...