Professional Documents
Culture Documents
Corporate Presentation
January 2012
TSX: BKI
Disclaimer
Forward Looking Statement
TSX: BKI
This Presentation contains forward-looking information which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its subsidiaries (collectively, the Company) and its mineral projects; the future prices of metals; the anticipated results of exploration activities; the estimation of mineral resources; the realization of mineral resource estimates; capital, development, operating and exploration expenditures; costs and timing of the development of the Companys mineral properties; timing of future exploration; requirements for additional capital; government regulation of mining operations; anticipated results of economic and technical studies; environmental matters; reclamation expenses; title disputes or claims; limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Often, but not always, forward-looking information can be identified by the use of words and phrases 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 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 the opinions and estimates of management as of the date such statements are made and is based on information currently available to management and upon what management believes to be reasonable assumptions, including, among others, that general business, economic, competitive, political and social uncertainties remain favorable; that actual results of exploration activities justify further studies and development of the Companys mineral projects; that the future prices of metals, and iron ore in particular, remain at levels that justify the exploration and future development and operation of the Companys mineral projects; that ore body quality and characteristics remain as anticipated; that there is no failure of plant, equipment or processes to operate as anticipated; that accidents, labour disputes and other risks of the mining industry do not occur; that the jurisdictions in which the Company operates remain politically stable; that there are no unanticipated delays in obtaining governmental approvals or financing or in the completion of future studies, development or construction activities; that the actual costs of exploration, and studies remain within budgeted amounts; that regulatory and legal requirements required for exploration or development activities do not change in any adverse manner, as well as those factors discussed in the section entitled Risk Factors in this Final Prospectus of the Company dated March 16, 2011 or as may be identified in the Companys public disclosure from time to time, as filed under the Companys profile on SEDAR at www.sedar.com. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in the forward-looking information, there may be other factors that cause such actions, events or results to differ from those anticipated, estimated or intended. Any inaccuracy in the assumptions identified above may also cause actual actions, events or results to differ materially from those described in the forward-looking information. Forward-looking information contained herein is made as of the date of this Presentation and the Company disclaims any obligation to update any forward-looking information, whether as a result of new information, future events or results, except as may be required by applicable securities laws. There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, potential investors should not place undue reliance on forward-looking information. This Presentation does not constitute an offer to sell, or solicitation of an offer to buy, any securities by any person in any jurisdiction in which it is unlawful for such person to make such an offering or solicitation. No representation or warranty, express or implied, is made as to the accuracy or completeness of the information set out herein, and nothing contained herein is, or shall be relied upon, as a promise or representation, whether as to the past or future.
Exceptional Infrastructure
35km from city of Kryviy Rih (pop. 750k); paved road to site 2 km from state-owned rail and power lines with surplus capacity & five deep water ports accessible by rail (140-515km)
Two properties held Shymanivske & Zelenivske Shymanivske - 373 Mt Measured & Indicated resource @ 31.3% iron; additional 480 Mt of Inferred resource @ 30.2% iron, which will be concentrated to ~65% iron Potential for resource expansion by further drilling of both deposits
Sizable Resource
Project located in Kryviy Rih, Ukraine; one of the worlds major iron ore districts
Close to target markets: W.Europe, Turkey, Russia, Asia and Middle East Surrounded by 7 other operating iron ore mines
High margins due to close proximity to multiple steel mills, relative labour cost advantage and favourable corporate tax rate of 16%
PEA for 7.3Mt Pellet Plant Feed NPV of US$3.0 billion and 42.1% IRR PEA for 7.6Mt Pellet NPV of US$4.1 billion and IRR of 35.2%
Skilled Management
Experienced management team with history of creating value for shareholders of Consolidated Thompson, RioTinto and Ferrexpo
3
* Resource estimate compiled using historic Soviet data by Hugues de Corta, who is an independent qualified person as defined by NI 43-101
140.1 million 1.7 million 8.2 million 1.5 million 151.5 million ~US$100 million ~US$25.0 million nil
$1.20
$1.00 $0.80 $0.60
Stock Options
$0.40
$0.20 $0.00
23-May-11
9-May-11
28-Mar-11
10-Oct-11
24-Oct-11
18-Jul-11
7-Nov-11
19-Dec-11
21-Nov-11
6-Jun-11
12-Sep-11
15-Aug-11
Fully Diluted Shares Market Cap(4) Current Cash Balance Debt Balance
Analyst Coverage
Maxim Sytchev Rajiv Chail John Hughes Philip Ker
4
29-Aug-11
26-Sep-11
11-Apr-11
25-Apr-11
20-Jun-11
1. 1,653,312 warrants exercisable at $1.40 per share (IPO financing). 2. 5,700,000 options exercisable at $1.40 per share and 2,530,000 options exercisable at $0.54. 3. 1,500,000 shares reserved for Directors, Executives, Employees and Consultants. 4. As at January 10, 2011, using a closing price of CAD 0.71 per share.
5-Dec-11
1-Aug-11
2-Jan-12
4-Jul-11
World class 8Mtpa iron ore concentrate mine in Quebec Advanced from exploration stage through development to construction
8 mtpa capacity (66% Fe concentrate) expanding to 16 mtpa Completed scoping study, 3 feasibility studies, secured off-take with Chinas third largest steel producer (WISCO)
First F&M involvement
Raised over Cdn$1 bn in capital Attracted and put in place a qualified management team
$1 mm market cap
2005 Today
Management & Board have a history of creating value for shareholders of iron ore projects Consolidated Thompson Iron Mines, Rio Tintos Iron Ore Company of Canada and Ferrexpo Respected Ukraine professionals and former Government Advisors
Key Management Board of Directors
John Detmold
Dave Porter Matt Simpson President & CEO
Railway lines
Adjacent to ArcelorMittals Kryviy Rih iron ore complex and Smart & Evrazs YuGOK iron ore mine Plan to acquire a plot of land from Ukraine Government adjacent to the Shymanivske deposit for project waste dumps, concentrator and tailings
Total iron grade and band width align very well with historical data
Tonnage and grade rounded to first decimals. Cut-off grade of 15% Fe Tot
* Resource estimate compiled using historic Soviet data by Hugues de Corta, who is an independent qualified person as defined by NI 43-101
Ground gravity and magnetic surveys show potential extension of iron ore mineralization at North end of property as circled in red
This area has not been included in the NI 43-101 resource as it has not yet been sufficiently drilled The identified area will be a target of a future drill program
Property boundary
Drill hole
Excellent Infrastructure
Key to a Successful Iron Ore Project
TSX: BKI
Paved roads to site, located 35km away from the major city of Kryviy Rih which has a skilled work force
Surplus electricity readily accessible from high voltage power lines that run beside property ~2 km from main state-owned rail line Confirmation in July 2010 from Ukrainian Government that there is sufficient capacity to haul at least an additional 10 million tonnes of iron ore per annum
5 deep water ports accessible by rail with iron ore facilities available Preferred port option is Yuzhny located ~390 km away and providing access to the Black Sea and global seaborne iron ore markets
10
River barge & rail access to Western Europe and port access via Black Sea to global seaborne iron ore markets
Target markets include Asia, Western Europe, Turkey, and Middle East
Several dry bulk tonnage ports accessible using railway running beside properties
Approximately 20% to 25% shorter transport distance to China compared to North and South American producers1
Major Rail Line
Power, port and rail access, combined with local highly skilled workforce, provide potential to accelerate development and reduce the amount of capital investment
Europe
Russia
1 Based on approximate nautical miles distances of Odessa (Ukraine), Vitoria (Brazil) and Montreal (Canada) to Tianjin (China) as disclosed at searates.com
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Steel production is Ukraines largest industry 40% of exports Large, highly skilled labour force Population of approximately 45 million GDP per capita only $6700/yr
ArcelorMittal and Ferrexpo plc have operated incountry for over 5 years Legislated corporate tax rate reductions from 21% in 2012 to 16% in 2014 Favourable mining royalties of $0.40 per tonne of ore mined (~2%) to the Government
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Black Irons projects are located in the heart of Ukraines iron ore belt 35km from city of 750,000 people Iron ore district trends 300 km with sedimentary rock hosted banded iron formations (Dnenpovskog complex)
900
35 25
Sweden
Historically well explored resource base but substantially under-exploited due to historic Soviet policy
15 iron ore mines in Ukraine produced 72 million tonnes in 2010
Kirovograd Tarnavatskoye Poltavsky GOK Yeristovskoye Tsentralny Safonovskoye Ordzhonikize Gok Ingulestky GOK Yuzhny GOK Kuksunurskoye
Russia
United States
Ukraine
South Africa
Australia
Canada
China
Brazil
India
Liponevsky Novokonstantinovsky Kryviy Rih Iron Ore Complex Shymanivske Zelenivske Kryviv Rih
Brazil 18%
Ukraine 10%
Australia 17%
Source: USGS 2011 Iron Ore report and Metal Economics Group
13
Production Case:
Annual Production: Iron Content: Estimated Capital Investment: Estimated Operating Expenses: (average initial 20 years) (avg ex. leasing costs years 8-20) Net Present Value (8%): IRR: Annual Average Cash Flow: Projected Payback (8%):
Pellet
7.6 Mt 65.0% US$1,571.3 million US$64.15/t US$60.11/t US$4.1 billion 35.2% US$540.7 million 2.9 years
28 years
Q4 2015
28 years
Q4 2015
Vale (Shimandou 1) African Minerals (phase2) Xstrata (Askaf) African Minerals (DSO) ArcelorMittal (Western
109 109 84 87 90 92
Sundance
Kumba Ferrexpo (Yeristovo) IRC (Kuranakh) London Mining IRC (K&S) Auila (Hardey) Xstrata (Zanaga) Atlas Iron (Ridley) Rio Tinto (Pilbara) Gindalbie (Karara) Anglo Merican (Minas Rio) BHP (RGP5&6) Aquila (West Pilbara) ArcelorMittal (Western
134 135 141 142
167 157 159 160 192 200 180 186 188 189 190
Average = 161
BHP (Samarco)
Atlas Iron (Balla Balla) CITIC Pacific (Sino) Baffinland Xstrata (Geulb el Aouj) Grange Resources
TSX: BKI
15
Tax Regime
30% 34% 29% 26%
Alderon
Black Iron
Alderon
Black Iron
Brockman
Brockman
Gindalbie
16%
Royalties
5%
2%
5-8%
27.1
35.4
Northland
Northland
New Millenium
New Millenium
Alderon
Black Iron
Alderon
n/a 2%
Source: Company data; Press Release; Research Estimates Disclaimer: Post-tax and royalty graphs are for illustrative purposes only using simple math. These numbers have not been reported, nor are they substantiated by a financial model
Black Iron
Gindalbie
Gindalbie
Brockman
Brockman
New Millenium
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Company Africa Sundance Resources Zanaga Iron Ore Cape Lambert Resources Bellzone Mining Australia Gindalbie Metals Brockman Resources Iron Road Macarthur Minerals Brazil Centaurus Metals Canada New Millennium Iron Alderon Iron Ore Century Iron Mines Adriana Resources Champion Minerals Sweden Northland Resources
Stage
Total
PFS Complete
$0.51
68.0
44.4
60
27.9%
0.74
PFS Complete PEA Complete PEA Underway PEA Complete PEA Complete
Construction
$1.50
338.3
222.9
147
32.1%
Adjusted Mean (Excludes Highest and Lowest Data Point) Mean Black Iron DFS Underway $0.71 99.0 67.0 262 30.7%
50% discount
0.26
17
2011
H1 H2
2012
H1 H2
Future
Drill metallurgical holes Scoping Study/PEA Exploration & Definition Drilling Definitive Feasibility Study Environmental Studies Permitting Detailed Engineering Construction Production
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Exceptional Infrastructure
35km from city of Kryviy Rih (pop. 750k); paved road to site 2 km from state-owned rail and power lines with surplus capacity & five deep water ports accessible by rail (140-515km)
Two properties held Shymanivske & Zelenivske Shymanivske - 373 Mt Measured & Indicated resource @ 31.3% iron; additional 480 Mt of Inferred resource @ 30.2% iron, which will be concentrated to ~65% iron Potential for resource expansion by further drilling of both deposits
Sizable Resource
Project located in Kryviy Rih, Ukraine; one of the worlds major iron ore districts
Close to target markets: W.Europe, Turkey, Russia, Asia and Middle East Surrounded by 7 other operating iron ore mines
High margins due to close proximity to multiple steel mills, relative labour cost advantage and favourable corporate tax rate of 16%
PEA for 7.3Mt Pellet Plant Feed NPV of US$3.0 billion and 42.1% IRR PEA for 7.6Mt Pellet NPV of US$4.1 billion and IRR of 35.2%
Skilled Management
Experienced management team with history of creating value for shareholders of Consolidated Thompson, RioTinto and Ferrexpo
19
* Resource estimate compiled using historic Soviet data by Hugues de Corta, who is an independent qualified person as defined by NI 43-101
CONTACT INFORMATION
65 Queen Street West Suite 805, P.O. Box 71 Toronto, Ontario, Canada M5H 2M5
www.blackiron.com
Investor Relations
Investor Cubed Inc. Telephone: +1 (647) 258-3311 Toll-Free: +1 (888) 258-3323 Fax: +1 (416) 363-7977
TSX: BKI
info@blackiron.com