Black Iron - Public Hearing to Obtain Surface Rights at the Shymanivske Project Completed & Iron Ore Prices Rising



- Public Hearing to Transfer Surface Rights for the Shymanivske Project From the City of Kryviy Rih Completed - Iron Ore Prices Trending Up and Currently ~$80/T Off a Low of Us$38/T One Year Ago

TORONTO, ONTARIO--(Marketwired - Jan. 23, 2017) - Black Iron Inc. ("Black Iron" or the "Company") (TSX:BKI)(FRANKFURT:BIN) is pleased to announce that, as required by local law, a public hearing to obtain feedback on the city of Kryviy Rih's plans to include the surface rights for the area upon which Black Iron's Shymanivske project resides (the "Shymanivske Land") in the city's territorial plan (an official city map which indicates how land in the city of Kryviy Rih will be used) was recently completed. Pursuant to Ukrainian law, a special committee of the Kryviy Rih city council, has also been created to review, with Black Iron's management, feedback from this public hearing along with any written submissions prior to making a recommendation to the Kryviy Rih city council on whether to include a potential lease to the Company of the Shyamnivske Land in the city of Kryviy Rih's 2017 territorial plan. Based on the positive feedback received to date, Black Iron management is hopeful of a positive decision from the Kryviy Rih city council before the end of Q1 2017. Upon receiving a positive decision, Black Iron management will then be able to develop a detailed land allotment plan for the Shymanivske project as required by the city of Kryviy Rih prior to signing a lease agreement with the city of Kryviy Rih.

Progress has also been made with Ukraine's Ministry of Defense to lease land required for the waste rock, tailings and processing plant at the Shymanivske project. Several meetings have been held with the Ministry of Defense to discuss alternative options on parcels of land that could be made available to Black Iron. Although the Ministry of Defense is supportive of leasing land to Black Iron, the timing of any such lease remains of concern to them given this land is currently used as a training ground in support of the conflict in the Eastern part of the country. The cease fire in Eastern Ukraine brokered last year is largely holding and there has not been further movement of the front line for several months. It is important to note that the Shymanivske project is located over 400km away from the area of conflict and several surrounding iron ore mines owned by ArcelorMittal and Metinvest/Evraz continue to operate in the ordinary course.

Iron ore prices have trended up over the past year as seen in the chart below and are currently around US$80/T (compared to a low of US$39/T approximately one year ago). Black Iron's feasibility study (please see Black Iron's technical report dated January 24, 2014 titled "Feasibility Study of the Shymanivske Iron Ore Deposit for Black Iron Inc." under the Company's profile on SEDAR, the "Technical Report") was based on a long term iron ore price of US$95/T projecting an operating cost of US$45/T, estimated capital costs of US$1.1 billion and an assumed exchange rate of 8UAH: US$1 to provide an after tax IRR of 39.1% and NPV of US$2.6 billion (using an 8% discount rate). Based on the current exchange rate of approximately 28UAH: US$1, and assuming all other factors set out in the Technical Report remain the same, Black Iron expects that its operating costs and capital costs would be significantly lower, resulting in higher economic returns for the Shymanivske project than originally expected.

To view the chart, please click on the following link :