Ukraine President backs Black Iron Project, stock rallies

Shymanivske Iron Ore project in Ukraine. Source: Black Iron Inc.

Share this article

Black Iron Inc. [BKI-TSX, BKIRF-OTC Pink, BIN-FSE] shares rallied in active trading Thursday July 4 after Ukraine’s newly-elected President Volodymyr Zelensky expressed support for the company’s 100%-owned Shymanivske Iron Ore project, located in Ukraine.

During a speech to the Economic Club of Canada, Zelensky identified Black Iron by name, noting that the company’s project is located in his home city of Kryvyi Rih and that it will be a priority for the government as it tries to attract international investors to build new mines in the country.

Kryvyi Rih is located only 8 km from the Black Iron Project and is expected be the source for the majority of the workforce.

Black Iron CEO Matt Simpson welcomed Zelensky’s comments. “Having Ukraine’s President Zelensky publicly state his personal support for the development of Black Iron’s project only one month after being elected demonstrates a clear shift by the Ukrainian Government to more proactively focus on and support major foreign investors,” Simpson said.

“It’s great to hear President Zelensky make very specific comments on the transfer of essential State Government-owned land to Black Iron for mine construction and commitment to provide maximum assistance at all stages of the project implementation,” he said.

“I look forward to working closely with the new senior officials in Ukraine’s Government to bring Black Iron through construction and into operation as a concrete example of successful major foreign investment.”

Black Iron shares advance on the news, rising 18.18% or $0.02 to 13 cents on volume of over 3.0 million. The shares trade in a 52-week range of $0.045 and 12 cents.

Black Iron is an iron ore exploration and development company, engaged in the advancement of its 100%-owned Shymanivske Project.  It contains a NI 43-101-compliant resource estimated at 646 million tonnes of measured and indicated resources. That includes a measured resource of 355 million tonnes, grading 31.6% total iron and 18.8% magnetic iron, and an indicated resource of 290 million tonnes, grading 31.1% total iron and 17.9% magnetic iron, using a cut-off grade of 10% magnetic iron.

Additionally, the Shymanivske Project contains 188 million tonne of inferred mineral resources, grading 30.1% total iron and 18.4% magnetic iron.

Black Iron has said the project is located in a highly developed iron ore mining region with well-established infrastructure located well away from conflict zones. The company plans to produce a 68% iron content pellet feed concentrate with very low levels of trace elements that can be used to produce high-quality iron ore blast furnace pellets for premium direct reduction grade pellets.

President Zelensky’s comments come after analysts were recently weighing the impact on iron ore prices of a deadly tailings dam breach at a Brazilian mine operated by Vale SA [VALE-NYSE], the world’s largest producer of iron ore and nickel.

The Brumadinho dam breach, which occurred on January 25, 2018, killed at least 65 people.  Another 279 were declared missing according to published reports.

Iron ore has staged a powerful rally in 2019 as supply disruptions in Brazil and Australia spurred projections for a global deficit. The commodity got a fresh boost last month after Rio Tinto Group cut its output guidance again.

On July 1, 2019, Australia’s government predicted that global shipments will drop by more than 4% this year. That was before a Bloomberg news report said China Iron Ore Australian Fines 62% Fe CFR North China Index was up US$2.55 per ton overnight (on July 2, 2019) at US$125.90. Futures extended their rally above US$120 per ton, notching a fresh 5-year high.


Share this article

Leave a Reply

Your email address will not be published. Required fields are marked *