Jan 18 2016
Black Iron Inc. has negotiated with Metinvest B.V. to buy back its 49% interest in Black Iron Cyprus Ltd. which owns 100% of the high quality Shymanivske iron ore project in Ukraine for US$5.6M. This transaction allows Black Iron to unlock cash previously jointly held in BKI Cyprus.
Black Iron is now unrestricted in its efforts to acquire a new high quality near term cash flow generating asset as per the strategy outlined in the Company's June 24, 2015 press release. The main goal of this strategy is to strike a balance between creating a near term share price uplift for shareholders while preserving and ultimately unlocking the value in Black Iron's Shymanivske project once there is peace in Ukraine and iron ore prices recover.
Progress to acquire near term production asset
The currently depressed global mining and metals sector presents an opportunity for companies such as Black Iron, with cash reserves, to acquire high quality distressed assets at attractive prices. Black Iron management are focused on assets that can be brought into production within a few years time to ensure the project is cash flow generating while global commodity prices rebound to generate the greatest return for shareholders. Several projects have and are currently being reviewed that show strong potential with the timing and ultimate completion of such a transaction uncertain.
Advancement of the Shymanivske Project
Discussions with the Intra-Agency Working Group ("IWG") comprised of representatives from various Ukraine Government agencies and chaired by the Ministry of Justice to resolve Black Iron's outstanding legal issues and acquire needed land remain ongoing. Progress is being made albeit at a slower pace than management aspires. The war in the eastern part of Ukraine, roughly 400km from Black Iron's Shymanivske project, is unfortunately still ongoing without clear signs of peace. For the Company to meaningfully advance its highly economic Shymanivske to construction, resolution of the outstanding legal issues, land acquisition, sustained peace in Ukraine and a recovery of iron ore prices are required.
Source: http://www.blackiron.com/