Black Iron Inc. takes immense pleasure in announcing that it has signed a non-binding Memorandum of Understanding (the “MOU”) with a subsidiary of Glencore plc (“Glencore”), in conformance to which the parties agree to involve in formal negotiations to fund the construction of the Shymanivske Iron Ore Project (the “Project”).
The MOU reflects on Glencore making an investment to help finance construction of the Project in return for obtaining the offtake of up to the complete phase one planned annual production of four million tonnes with the amount and terms still to be negotiated. Furthermore, the MOU delineates cooperation between Black Iron and Glencore to take advantage of their relationships to source the balance of funds needed to develop the Project.
In addition, the MOU enables allocation of offtake to other equity investors conditional on the investment terms provided being equal or superior to those proposed by Glencore. Presently, Black Iron is discussing with other companies that are strongly interested in obtaining supply of the ultra high-grade iron ore concentrate anticipated to be produced from the Project in return for offering construction fund.
I am excited to welcome Glencore as an offtake investor for construction of the Shymanivske Project as well as their agreement to work with us to help secure additional financing. Glencore’s involvement significantly strengthens our capability and draws on their extensive international network, experience and market knowledge.
Matt Simpson, CEO, Black Iron
The two main areas which are focused by Black Iron management are securing the complete finance package and also the necessary surface rights. As mentioned earlier, debt finance discussions are in progress with international finance institutions and European-based banks that are truly interested in the projected robust economics of the Project owing to its low operating cost and construction capital intensity.
The Project is situated in Kryvyi Rih, Ukraine, a highly developed iron ore mining region with well-established infrastructure situated far away from the conflict regions. The Project’s closeness and access to major infrastructure such as railway, paved roads, port, and powerlines as well as highly talented low-cost labor force enable a phased development strategy at considerably reduced initial capital requirements and operating costs.
Black Iron intends to produce a 68% iron content pellet feed concentrate with extremely low levels of trace elements that can be used to manufacture premium direct reduction grade pellets or high-quality iron ore blast furnace pellets. It can also be used as a sweetener in the feed for sinter production which is subsequently processed to iron in blast furnaces.