Black Iron Inc. (
TSX: T.BKI,
Stock Forum), through its subsidiary Shymanivske Steel LLC, has executed a Protocol of Intent Agreement (PIA) with SE Prydniprovska Zaliznytsia (SE), the government agency accountable for Ukraine's railways, guaranteeing access to their rail transportation network to transport up to 20 million metric tonnes of iron ore annually from Shimanivska Station near Black Iron's Shymanivske project to Chernomorska Station at Port Yuzhny, Ukraine.
The Shymanivske project contains an NI 43-101 compliant resource, with 645.8 million tonnes measured and indicated mineral resources, consisting of 355.1 million tonnes measured mineral resources grading 32.0% total iron and 19.5% magnetic iron, and indicated mineral resources of 290.7 million tonnes grading 31.1% total iron and 17.9% magnetic iron, using a cut-off grade of 10% magnetic iron.
According to the
Black Iron press release, although Black Iron only requires approximately half of the initial 20 million tonne capacity on the rail based on initial production plans, securing this increased capacity provides flexibility to allow for potential future expansion. The rail PIA takes effect immediately and remains in place until a definitive commercial contract is signed, which is expected to occur closer to the commencement of production in mid-2015.
"We are extremely pleased to have executed this rail protocol agreement, representing another significant milestone in the continued development of our Shymanivske iron ore project," stated Matt Simpson, President and CEO of Black Iron. "This PIA confirms Black Iron's access to the rail network, which when combined with our previously announced PIA's for port facility access and power supply means all three critical pieces of infrastructure required to successfully operate an iron ore mine have been secured."
The rail PIA, along with the previously announced port PIA provides Black Iron the ability to access the global seaborne iron ore market and target important growth markets of Turkey, the Middle East, India and China, among others. The project's unique location also allows Black Iron to target large end-users of iron ore in Europe and Russia completely by rail. Both transportation options, along with a third alternative of barging material on the Dnieper River, are being considered by the company and prospective off-take partners for the project.
Black Iron continues to progress on its timeline to production having recently received approval from the
Antimonopoly Committee of Ukraine for the previously announced strategic investment and development arrangement with Metinvest B.V. The company will continue working together with its local development partner to complete other PIA's for the remaining core infrastructure needs such as water and land in the near term.
Black Iron is an iron ore exploration and development company, advancing its Shymanivske project in Ukraine.
On Wednesday, Black Iron rose 11.8% and was trading at $0.19 a share. The company had a market cap of $26.9 million, based on 141.4 million shares outstanding.