Metinvest B.V., the holding company of the largest metal and mining group Metinvest, has sent the fourth and final installment payment of $5 million to Black Iron Inc. (Canada) as part of the previously announced closing schedule for the strategic investment and development arrangement pertaining to Black Iron (Cyprus) Ltd. (BKI Cyprus), which has iron ore assets in Ukraine.
According to a press release of the Metinvest Group issued on Tuesday, the fourth installment was sent on July 15, 2014.
“In conjunction with the closing of the arrangement and receipt of
the $20 million total, Metinvest has been issued common shares in BKI
Cyprus representing an aggregate total of 49 percent of the share capital of
BKI Cyprus. No common shares in Black Iron have been issued as part of
the arrangement. Black Iron remains the operator and developer of the
Shymanivske Project and the Zelenivske Project,” reads the press
release.
Each of Metinvest and Black Iron will have the option to participate
in the funding of the development of the Shymanivske Iron Ore Project
based on their proportionate interest in BKI Cyprus or be diluted down.
Using the projected total capital investment requirements as outlined
in the Company’s Bankable Feasibility Study (as filed under the
company’s profile on SEDAR on January 27, 2014) of $1.097 billion,
Metinvest’s future capital contribution could be up to $536 million
(being 49 percent of $1.097 billion) for the development of the projects. The
arrangement contains strict dilution provisions designed to create a
strong incentive for continued participation in any future equity
financings for the projects.
“Metinvest and Black Iron remain devoted to helping rebuild Ukraine’s
economy through the development of the Shymanivske Iron Ore Project.
Apart from the creation of thousands of new jobs and tens of millions
annually in tax revenues, Ukrainians will also benefit from new world
class iron ore processing, safety and environmental technologies,” Yuriy
Ryzhenkov, General Director and CEO of Metinvest, said.
“With this strategic arrangement now closed, and our relationship
with Metinvest formally in place, once there is peace in Ukraine, we
look forward to building the world-class iron ore producing mine
outlined in our January 2014 Feasibility Study that shows a pre-tax 48 percent
internal rate of return, two year payback and $3.3 billion net present
value. We see tremendous opportunities ahead for all stakeholders in
Black Iron as this project is needed more than ever to help reinvigorate
Ukraine’s economy as the country emerges from the current revolution,”
Matt Simpson, President and CEO of Black Iron, said.
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 major shareholder of Metinvest Group is Metinvest B.V., a holding
company owned by System Capital Management Group (71.24 percent) and
Smart-Holding (23.76 percent).
Black Iron is an iron ore exploration and development company,
advancing its 51 percent owned Shymanivske project located in Kryvy 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 percent Total iron and 19.5 percent
Magnetic iron, and Indicated mineral resources of 290.7 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 project contains 188.3 Mt of Inferred
mineral resources grading 30.1 percent Total iron and 18.4 percent 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.
