Black Iron Inc. · TSX:BKI
Black Iron — Investor Presentation (October 2013)
25 slides from Black Iron's investor presentation, October 2013
Slide 1: A Compelling Iron Ore Investment Opportunity
A Compelling Iron Ore Investment Opportunity Corporate Presentation October 2013 TSX: BKI
Slide 2: Disclaimer: Forward Looking Statement
Disclaimer Forward Looking Statement TSX: BKI This Presentation contains ‘‘forward-looking information’’ within the meaning of applicable Canadian securities legislation. Forward-looking information is based on what management believes to be reasonable assumptions, opinions and estimates of the date
Slide 3: What Sets Black Iron Apart?
What Sets Black Iron Apart? Access to Skilled Labour & Infrastructure – Two of the Most Challenging Iron Ore Project Development Risks TSX: BKI Key Development Risks Taxes/Royalties Human Resources Canada Ukraine Access to Infrastructure Community Opposition Licensing/Permitting Access to Water Afri
Slide 4: Black Iron has ALL the Key Fundamentals for a Successful Low Cost Project in Place
Black Iron has ALL the Key Fundamentals for a Successful Low Cost Project in Place TSX: BKI Exceptional Sizable Infrastructure Resource • Significant infrastructure • Large NI 43-101 Compliant advantages (power, rail Resource* and port) - Shymanivske • Skilled local workforce 646Mt (M+I) @ 32% Fe •
Slide 5: A Track Record of Iron Ore Success
A Track Record of Iron Ore Success with Consolidated Thompson Iron Mines, Rio Tinto’s Iron Ore Company of Canada, and Ferrexpo TSX: BKI Key Management Board of Directors Matt Simpson – President & CEO Bruce Humphrey – Chairman • Former General Manager, Mining for Rio Tinto’s Iron • Former Chairman o
Slide 6: Forbes & Manhattan Involvement
Project Backed by Forbes & Manhattan Success with Consolidated Thompson’s Bloom Lake Iron Mine TSX: BKI • World class 8Mtpa iron ore concentrate Forbes & Manhattan Involvement mine in Quebec • Advanced from exploration stage through development to construction Recently Acquired acquired for $4.9 − 8
Slide 7: Major Local Development Partner: Metinvest
Major Local Development Partner: Metinvest Ukraine’s Largest Company and a Global Iron Ore & Steel Producer TSX: BKI • Over 100,000 employees; Generated US$12.6 billion of revenues and a 16% EBITDA margin in 2012 • Metinvest is owned by System Capital Management (SCM) and Smart Holding • SCM has ove
Slide 8: Sound Capital Structure
Sound Capital Structure Attractive Valuation with Substantial Upside & Funding Support TSX: BKI Capital Structure (TSX: BKI) Corporate Structure Shares Outstanding 141.4 million Black Iron Inc. (TSX: BKI) Stock Options (1) 5.3 million Metinvest Fully Diluted Shares 146.7 million Black Iron (2) Marke
Slide 9: Deposits In Mining Friendly Region
Deposits In Mining Friendly Region Adjacent to existing Iron Ore Producers TSX: BKI ArcelorMittal’s Kryviy Rih Iron Ore Complex • Two mining and exploration permits Black Iron’s covering 5.92 km2 Shymanivske Project − Mining permit at Shymanivske, which M&I: 646Mt @ 31.6% has been extensively explor
Slide 10: Large Ore Deposit with Growth Potential
Large Ore Deposit with Growth Potential TSX: BKI • Banded iron formation consisting primarily of magnetite with some hematite − Iron band thickness ranges from 40-80 m − Only 9.7-21.2 m of overburden with a strip ratio of 1.63:1, life of mine; 1.36:1 for first 8 years − Very clean ore body low in ph
Slide 11: Potential Resource Extension at Shymanivske
Potential Resource Extension at Shymanivske Ground Gravity Shows Iron Ore Mineralization at North End TSX: BKI Potential resource • Ground gravity and magnetic surveys upside to be drilled show potential extension of iron ore mineralization at North end of property as circled in red Property • This
Slide 12: Extensive Pit Shell Design and 3D Model Completed
Extensive Pit Shell Design and 3D Model Completed TSX: BKI Property Overview Concentrator Layout * Bankable Feasibility Study complete by Worley Parsons ** See Black Iron’s website at www.blackiron.com for a Virtual Mine Site Tour ** 12
Slide 13: Conventional Flowsheet (simplified)
Conventional Flowsheet (simplified) Producing High Quality Iron Ore Products TSX: BKI Drill Blast Load & Haul Crush Vertical Mill Ball Mill (x2) HPGR Magnetic Separator Sulphur Floatation Concentrate Pellet Plant (optional) Fe 68.0% Pellets SiO2 4.5% Fe 65.0% P 0.02% SiO2 4.13% S 0.05% P 0.025% Al2O
Slide 14: Excellent Infrastructure
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-own
Slide 15: Strategic Global Location
Strategic Global Location Close Proximity to Target Markets with Abundant Port and Rail Access TSX: BKI • Project is surrounded by steel mills in Europe, Turkey and the Middle East • River barge & rail access to Western Europe. • Five dry bulk tonnage ports accessible using railway running beside pr
Slide 16: Ukraine: A Mining Friendly Country
Ukraine: A Mining Friendly Country Strong Local and National Support TSX: BKI • Politically stable Democratic republic • Mining friendly jurisdiction with strong local and national support ― Parliament reelected in October 2012 for a further five year term ― ArcelorMittal and Ferrexpo plc have opera
Slide 17: Globally Significant Iron Ore District
Globally Significant Iron Ore District 4th largest iron ore producer & 2nd largest reserve base TSX: BKI • Black Iron’s projects are located in the heart of Global Distribution of Fe Reserves & Ukraine’s iron ore belt Fe Production – 35km from city of 750,000 people • Iron ore district trends 300 km
Slide 18: Permit Process for Shymanivske Deposit
Permit Process for Shymanivske Deposit Black Iron Remains on Track TSX: BKI Exploration Extraction Mining Land Construction Operations Permit Permit Allotment Allotment Approval Approval Explore Deem deposit Pit shell reserves Obtain surface Start mine Operate mine & resource economical & environmen
Slide 19: BFS Highlights – High Grade Concentrate
BFS Highlights – High Grade Concentrate High Value, Low Net Cost Iron Ore Development Project TSX: BKI Annual Production: 9.2 Mt Iron Content: 68.0% Estimated Capital Investment: US$1,094 million (capital intensity) US$119/t Estimated Operating Expenses: (average FOB) US$43.97/t (average at Mine Gat
Slide 20: Black Iron's Target Capital Funding Strategy
Black Iron’s Target Capital Funding Strategy 50% of Equity Capital Solidified with Metinvest Transaction; 100% of Off-Take Still Available TSX: BKI Estimated Capital Investment US$1.1 billion 40% 60% Equity Investment Debt Investment 51% 49% Black Iron Inc. Metinvest Export Credit Agencies (TSX: BKI
Slide 21: Favourable Tax and Royalties in Ukraine
Favourable Tax and Royalties in Ukraine Black Iron to Other Iron Ore Developers TSX: BKI Pre-Tax & Royalty NPV8 Tax Regime Post-Tax & Royalty NPV8 30% (US$ billions) (US$ billions) +30%1 7.3 39%2 4.9 2.9 3.2 3.3 3.4 3.5 1.8 1.8 1.9 1.5 29% 1.0 0.3 0.5 1.1 0.1 0.3 0.6 Macarthur Macarthur Northland Bl
Slide 22: Black Iron's Capital Cost Advantage
Vale (Shimandou 1) African Minerals (phase2) Xstrata (Askaf) ** See Disclaimer on page 2 ** African Minerals (DSO) 84 87 90 92 ArcelorMittal (Western… Fortescue (Expansion) Black Iron 109 109 119 Rio Tinto (IOC) 122 Sundance Source: Company data; Renaissance Capital estimates Kumba Ferrexpo (Yeristo
Slide 23: Black Iron Continues to Deliver
Black Iron Continues to Deliver Shymanivske Project Development Timeline TSX: BKI 2011 2012 2013 Future H1 H2 H1 H2 H1 H2 Drill metallurgical holes Scoping Study/PEA Definition Drilling Bankable Feasibility Study Land Acquisition Environmental Studies Offtake Permitting Detailed Engineering Construc
Slide 24: Black Iron Value Proposition
Black Iron Value Proposition TSX: BKI Skilled Experienced management team and Board with history of creating value Leadership for shareholders of Consolidated Thompson, RioTinto and Ferrexpo Strategic Metinvest: Largest company in Ukraine; committed to half of project financing Partners Forbes & Man
Slide 25: Contact Information
CONTACT INFORMATION 65 Queen Street West Suite 805, P.O. Box 71 Toronto, Ontario, Canada M5H 2M5 www.blackiron.com Investor Relations Toronto: +1 (416) 309-2950 - Michael McAllister, IR Manager London: +44 (0) 207 466 5000 Ukraine: +380 (56) 409-2536 [email protected] Follow us: TSX: BKI