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20140123 bki corp_pres

This corporate presentation from Black Iron Inc. outlines an investment opportunity in their Shymanivske iron ore project located in Ukraine. Key highlights include a large NI 43-101 compliant iron ore resource of 646Mt measured and indicated and 188Mt inferred, access to excellent nearby infrastructure including rail, port and electricity, and support from major Ukrainian company Metinvest who has committed to financing half of project construction costs estimated between $250-500M. A bankable feasibility study shows the potential for a low cost, high quality 9.9Mtpa iron ore concentrate operation with a pre-tax NPV of $3.3B and IRR of 48% at a price of $60/tonne. The project

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A Compelling Iron Ore Investment Opportunity Corporate Presentation January 2014 TSX: BKI
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 such statements are made based on information available to them at that time, including those factors discussed in the section entitled ‘‘Risk Factors’’ in the Company’s annual information form for the year ended December 31, 2011 (and dated March 26, 2012) or as may be identified in the Company’s public disclosure from time to time, as filed under the Company’s profile on SEDAR at www.sedar.com. Forward-looking information may include, but is not limited to, statements with respect to results of the Feasibility Study (as defined below) and the mineral reserve and resource estimate, the future financial or operating performance of the Company, its subsidiaries and its projects, the development of and the anticipated timing with respect to the Shymanivske project, the ability to obtain financing; and the impact of concerns relating to permitting, regulation, governmental and local community relations. Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Estimates underlying the results of the Feasibility Study arise from engineering, geological and costing work of Lycopodium Minerals Canada Ltd. (“Lycopodium”), Soutex Inc. (“Soutex”), Watts, Griffis and McOuat Limited (“WGM”), Consulting Geologists and Engineers of Toronto, P&E Mining Consultants Inc. (“P&E”) and the Company. See the technical report relating to the feasibility study for a description of all relevant estimates, assumptions and parameters. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; the actual results of current exploration activities; other risks of the mining industry and the risks described in the annual information form of the Company. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws. This Presentation does not constitute an offer to sell, or solicitation of an offer to buy, any securities by any person in any jurisdiction in which it is unlawful for such person to make such an offering or solicitation. No representation or warranty, express or implied, is made as to the accuracy or completeness of the information set out herein, and nothing contained herein is, or shall be relied upon, as a promise or representation, whether as to the past or future. Bankable Feasibility Study (the “Feasibility Study”) – For additional information, please see the Company’s press release dated January 23, 2014. *Resource estimate compiled using historic Soviet data by Hugues de Corta, who is an independent qualified person as defined by NI 43-101. Readers should not place undue reliance on historical estimates. *The mineral resource estimate for the Shymanivske Project is based on results from 185 historical drill holes totaling 37,316 meters and 60 Black Iron drill holes, which were drilled during the Company’s Twin Hole drill program and the Definition Drill program, totaling 16,518 meters and is effective as of September 2012. Watts, Griffis and McOuat Limted (“WGM”), Consulting Geologists and Engineers of Toronto, Canada, was retained to audit an in-house mineral resource estimate completed by Black Iron. Mr. Michael Kociumbas, P.Geo, VicePresident of WGM and Mr. Richard Risto, P.Geo, Senior Geological Associate of WGM, were retained by Black Iron as independent technical consultants and are Qualified Persons as defined by NI 43-101 and are responsible for reviewing and approving this mineral resource estimate. The Feasibility Study was prepared in accordance with the guidelines of National Instrument 43101 by the independent firms of WorleyParsons Canada Services Ltd., Watts, Griffis and McOuat Limited and P&E Mining Consultants Inc. *Matt Simpson President & CEO of Black Iron, a Qualified Person as defined by NI-43-101, has reviewed and approved the scientific and technical information in this presentation. 2
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 Africa Electricity Supply Brazil Australia 3 3
Black Iron has ALL the Key Fundamentals for a Successful Low Cost Project in Place TSX: BKI Exceptional Infrastructure Sizable Resource • Significant infrastructure advantages (power, rail and port) with confirmed access and capacity • Skilled local workforce • Local partnerships • Large NI 43-101 Compliant Resource* - Shymanivske 646Mt (M+I) @ 32% Fe 188Mt (Inf) @ 30% Fe - Zelenivske (upside) 1.1 - 1.8Bt potential Close to Target Markets Skilled Leadership • Located in Kryviy Rih, Ukraine a major iron ore district, close to Europe, Turkey, Russia, Asia and Middle East • History of creating value for shareholders • Significant Ukrainian political and iron ore operations experience Compelling Economics Metinvest Development Agreement • Bankable Feasibility Study (Shymanivske Project): • Ukraine’s largest company, 9th globally in iron ore, 16th in steel • Committed to half of project construction financing (est. $250-$500M) - 9.9Mtpa of 68% Fe Conc. - Pre-tax NPV8 of US$3.3B - Pre-tax IRR of 48% * Please see note on Page 2 • Pre-tax break even price of $60/t ($64/t after-tax) 4
A Track Record of Iron Ore Success with Consolidated Thompson Iron Mines, Rio Tinto’s Iron Ore Company of Canada, and Ferrexpo Key Management Matt Simpson – President & CEO • • Former General Manager, Mining for Rio Tinto’s Iron Ore Company of Canada Worked for Hatch designing global metallurgical refineries George Mover – COO • Former Project General Director of Ferrexpo Yeristovo Mining, Ukraine • Since 1994 worked on numerous mining projects in Former Soviet Union (Ukraine, Russia, Kazakhstan, Armenia) Paul Bozoki – CFO • Former CFO of CD Capital Partners, operating in Former Soviet Union & Ukraine Aaron Wolfe – VP Corp Development • Former investment banker with Macquarie Nikolay Bayrak – VP Gov’t & Community Relations • Former department head, Ukrainian Ministry of Emergencies and Public Protection; Former MP and President of MP’s Parliamentary Social Club TSX: BKI Board of Directors Bruce Humphrey – Chairman • Former Chairman of Consolidated Thompson Iron Mines Jaroslav Kinach • Former Advisor to Ukraine Prime Minister and former Ukraine Country Head of EBRD Chris Westdal • Canadian Ambassador to Ukraine (1996-98) and to Russia (2003-06) Pierre Pettigrew • Former Canadian Minister for Foreign Affairs and international Trade John Detmold • Chairman & Founder of Invescture Group, S.A. de C.V. which owns Frontera Copper Corporation Dave Porter • Former VP for Rio Tinto’s Iron Ore Company of Canada and COO of Algoma Steel Matt Simpson – President & CEO 5
Project Backed by Forbes & Manhattan Success with Consolidated Thompson’s Bloom Lake Iron Mine Forbes & Manhattan Involvement TSX: BKI • World class 8Mtpa iron ore concentrate mine in Quebec • Advanced from exploration stage through development to construction − 8 mtpa capacity (66% Fe concentrate) expanding to 16 mtpa − Completed scoping study, 3 feasibility studies, secured off-take with China’s third largest steel producer (WISCO) Recently Acquired acquired for $4.9 for $4.9 billion billion • Raised over Cdn$1 bn in capital • Attracted and put in place a qualified management team First F&M involvement $1 mm market cap 2005 Q1-2011 6
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 over US$28.4B in assets and operations across 13 different areas including ownership of: • DTEK >18GW of electricity production (~26%) • • Leman Trans, ~21% of railway cars • Portinvest, ~13% of Ukraine’s port capacity Global Commodity Ranking: • 9th in Iron Ore with 33.9 MT • 16th in Steel with 18.4 MT • 33rd in Coal with 2.6 MT 7
Sound Capital Structure Attractive Valuation with Substantial Upside & Funding Support TSX: BKI Capital Structure (TSX: BKI) Shares Outstanding Stock Options Market Cap (2) Current Cash Balance(3) Black Iron Inc. (TSX: BKI) 141.5 million (1) Fully Diluted Shares Corporate Structure 5.7 million 147.2 million Metinvest Black Iron Cyprus ~US$29.3 million ~US$3.1 million Debt Balance Zelenivske Steel nil 1. 5,713,750 options exercisable at a weighted average price of $0.45 per share. 2. As at January 22, 2014, using a closing price of CAD $0.23 per share. 3. As at Sept 30, 2013 per Q3 Unaudited Financial Statements. Shymanivske Steel Metinvest Transaction Summary • Metinvest acquires 49% of Black Iron Cyprus for a total commitment up to US$535M – US$20M due upon closing – Matching of any further equity financed capital • Metinvest option to increase ownership in Black Iron Cyprus to 51% − Option vests after 3 consecutive months of production at nameplate capacity − Option priced at a 30% premium to the fair market value as derived by an independent third party Analyst Coverage 8
Deposits In Mining Friendly Region Adjacent to existing Iron Ore Producers TSX: BKI ArcelorMittal’s Kryviy Rih Iron Ore Complex • Black Iron’s Shymanivske Project Two mining and exploration permits covering 5.92 km2 − − M&I: 646Mt @ 31.6% Inferred: 188Mt @ 30.1% Railway lines Black Iron’s Zelenivske Project Mining permit at Shymanivske, which has been extensively explored, covering 2.56 km2 valid until 2024 Exploration permit at Zelenivske covering 3.36 km2 valid until 2014 • Smart & Evraz’s YuGOK Iron Ore Mine Adjacent to ArcelorMittal’s Kryviy Rih iron ore complex and Smart & Evraz’s YuGOK iron ore mine • Plan to acquire a plot of land from Ukraine Government adjacent to the Shymanivske deposit for project waste dumps, concentrator and tailings ** See Black Iron’s website at www.blackiron.com for a Corporate Video highlighting the project location and infrastructure ** 9
Large Ore Deposit with Growth Potential TSX: BKI • Banded iron formation consisting primarily of magnetite with some hematite − − Shymanivske Resource* Tonnage (Mt) Fe Tot (%) 355.1 32.0 290.7 31.1 17.9 Total Measured and Indicated 645.8 31.6 18.8 Inferred 188.3 30.1 18.4 Tonnage and grade rounded to first decimals. Cut-off grade of 10% Fe Mag Resource defined by ~54,000 metres of drilling ― Total iron grade and band width align very well with 37,000 metres of historical drilled data 19.5 Indicated Very clean ore body low in phosphorus, manganese and aluminum ― Black Iron completed a Twin Hole Drill Program consisting of 6,042 metres and a Phase II Drill Program consisting of 11,435 metres of infill drilling Fe Mag (%) Measured 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 − • Iron band thickness ranges from 40-80 m • Potential for total combined resource expansion of 1.1 to 1.8BT − Additional drilling of Shymanivske at North end of deposit and to depth − Exploration of the Zelenivske project * Please see note on page 2 10
Potential Resource Extension at Shymanivske Ground Gravity Shows Iron Ore Mineralization at North End TSX: BKI Potential resource upside to be drilled Property boundary • Ground gravity and magnetic surveys show potential extension of iron ore mineralization at North end of property as circled in red • Very likely Iron in ground Drill hole This area has not been included in the NI 43-101 resource as it has not yet been sufficiently drilled • The identified area will be a target of a future drill program to allow for a second phase process plant expansion to increase production and project value Likely just dirt in ground 11
Extensive Pit Shell Design and 3D Model Completed (Property Overview) * Bankable Feasibility Study complete by Lycopodium Minerals Canada Ltd. TSX: BKI 12
Concentrator Footprint Compressed by Staggering HPGRs and Stacking LIMS * Bankable Feasibility Study complete by Lycopodium Minerals Canada Ltd. TSX: BKI 13
Conventional Flowsheet Producing High Quality Iron Ore Products TSX: BKI Fe SiO2 P S Al2O3 Mn P80 68.0% 4.5% 0.02% 0.05% 0.43% 0.03% 32 µm B.F. Pellets Fe SiO2 S CaO/SiO2 SiO2+Al2 O3 CaO+MgO Compress. 65.5% 4.5% <0.01% 0.15% 5.1% 1.0% 318kg/pel D.R. Concentrate Fe SiO2 P S Al2O3 Mn P80 69.5% 1.3% 0.02% 0.05% 0.28% 0.03% 32 µm D.R. Pellets Fe SiO2 S CaO/SiO2 SiO2+Al2 O3 CaO+MgO Compress. 67.4% 2.0% <0.01% 0.34% 2.4% 1.2% 283g/pel Value-Add Alternative Products Core Product B.F. Concentrate 14
Excellent Infrastructure with confirmed access 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-owned rail line • Confirmation in July 2010 from Ukrainian Government that there is sufficient capacity to haul at least an additional 20 million tonnes of iron ore per annum • 5 deep water ports accessible by rail with iron ore facilities available • Preferred port option is Yuzhny located ~430 km away and providing access to the Black Sea and global seaborne iron ore markets ** See Black Iron’s website at www.blackiron.com for a Corporate Video highlighting the project location and infrastructure ** 15
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 properties • Approx 20% to 25% shorter transport distance to growth markets of India and China compared to North and South American producers • Excellent Ukrainian logistical advantages • Densely populated roadway infrastructure • 468 million tonnes of cargo transported via rail • 155 million tonnes of cargo transported via ship 16
Ukraine: A Mining Friendly Country in Transition TSX: BKI • Democratic Republic; S&P Sovereign Risk rating of B − Member of WTO − • GDP growth of 4.2% in 2010; 5.2% in 2011; 0.2% in 2012 (impacted by slowdown in global economy and steel production) − • Next Presidential election to occur in Q1-2015 (5 year term) − Strong desire by citizens and business for European integration (and further separation from Russia) but government has delayed signing “Trade Agreement” over concerns of increased cost for Russian gas and trade restrictions • Joining the “Trade Agreement” with Europe would benefit Black Iron due to lower construction costs via reduced duties. However not joining is neutral for Black Iron, as the Bankable Feasibility Study was completed without those cost savings assumptions Economy dominated by agriculture & commodities Large, highly skilled labour force (pop. 45.4 million) GDP per capita only $7600/yr Literacy rate >99% − − • Mining friendly jurisdiction with strong local and national support ― ArcelorMittal and Ferrexpo plc have operated in-country for over 7 years • Low corporate tax rate of 16% reduced from 21% in 2012 • Favourable mining royalties of $0.09 per tonne of ore mined (<1%) payable to the Government Major Foreign Corporate Investors $5Bn Investment in Integrated Iron Mine/Steel Mill $3.2Bn Market Cap Iron Ore and Steel Production in Ukraine ― Steel production is Ukraine’s largest industry ― 60% of Ukraine’s total exports are commodityrelated (the majority of which is steel) $1.8Bn Investment in Shale Gas Development $10Bn Investment in Shale Gas Development $10Bn Investment in Shale Gas Development 17
Globally Significant Iron Ore District 4th largest iron ore producer & 2nd largest reserve base TSX: BKI Production Reserves 30% 21% 20% 10% Historically well explored resource base but substantially under-exploited due to historic Soviet policy 15 iron ore mines in Ukraine produced 88 million tonnes in 2012 7% Kiev Production Reserves Africa Other N. America FSU S. America Australia 0% Asia % of World Production and Reserves 40% Iron ore district trends 300 km with sedimentary rock hosted banded iron formations (Dnenpovskog complex) • 50% Black Iron’s projects are located in the heart of Ukraine’s iron ore belt – 35km from city of 750,000 people • 60% • • Global Distribution of Fe Reserves & Fe Production Poltavsky GOK Yeristovskoye Kryviy Rih Iron Ore Complex Shymanivske Zelenivske Kryviv Rih Yuzhny GOK Tsentralny C Gok YuGok Ingulestky GOK Ordzhonikize Gok Source: Based on know production and reserves as listed in the USGS 2012 Iron Ore report 18
Permit Process for Shymanivske Deposit Black Iron Remains on Track TSX: BKI Exploration Permit Explore resource potential • Conduct geophysical program • Drill ore body • State approval of explored deposit Completed Extraction Permit Deem deposit economical • Complete Ukraine version of scoping study including evaluation of various mining methods & high level environmental impact Mining Allotment Pit shell reserves & environmental impact Gov approval • Complete field environmental (OVOS) & archeological studies for Gov approval • Submit pit shell design & mapped ground surface project for Gov. approval Land Allotment Obtain surface rights for mine, refinery & tailings • Land use analysis based on plot plan showing major buildings & agreed connections to utilities, rail and roads (Proekt) • Approval of the project location • Approval from all land owners & finalize lease Construction Approval Start mine overburden removal & plant construction • Detailed design approved (Expertisa) • Obtaining the construction permit • Commissioning of the facility • Registration of the ownership to the facility Operations Approval Operate mine & refinery • Ensure compliance with Ukraine Safety, Environment, Health and Employment laws as check by regular Gov inspections • Finalize environmental permits 19
Conservative Financial Model Inputs Supported by Firm LOIs and In-Country Operating Benchmarks TSX: BKI Annual Production: 9.9 Mt Iron Content: 68.0% Estimated Mine Life: (modeled reserves) (total defined resource) 14 years ~19 years Projected Plant Start-Up: Q4 2016 Projected Revenue Commencement: Q1 2017 Long-term CFR Benchmark Price: Estimated Capital Investment: $95/t US$1,097 million (capital intensity) US$111/t Sustaining Capital Cost: US$483 million Estimated Operating Expenses: (average FOB) (average at Mine Gate) * Bankable Feasibility Study completed by Lycopodium Minerals Canada Ltd. ** See Disclaimer on page 2 ** US$44.54/t US$29.64/t 20
Black Iron’s Operating Cost Competitiveness Shymanivske: First Quartile to Local Markets; Second Quartile to China TSX: BKI Total Cash Cost (US$/t CFR) 2013E Iron Ore Cost Curve Spot: $124/t BKI delivered to Europe/Middle East Markets BKI delivered to China World Cumulative Production (%) Source: Company data; Wood Mackenzie; BMO Capital Markets * Adjusted for iron content and shipping distance ** See Disclaimer on page 2 ** 21
** See Disclaimer on page 2 ** Source: Company data; Renaissance Capital estimates 211 217 221 222 190 192 200 180 186 188 189 236 Grange Resources… Average = 162 Xstrata (Geulb el Aouj) Baffinland CITIC Pacific (Sino) Atlas Iron (Balla Balla) BHP (Samarco) ArcelorMittal (Western… Aquila (West Pilbara) BHP (RGP5&6) Anglo American (Minas Rio) Gindalbie (Karara) Rio Tinto (Pilbara) 157 159 159 160 167 Atlas Iron (Ridley) Xstrata (Zanaga) Auila (Hardey) Alderon IRC (K&S) 134 135 141 142 109 109 111 122 London Mining IRC (Kuranakh) Ferrexpo (Yeristovo) Kumba Sundance Rio Tinto (IOC) Black Iron Fortescue (Expansion) 84 87 90 92 ArcelorMittal (Western… African Minerals (DSO) Xstrata (Askaf) African Minerals (phase2) Vale (Shimandou 1) 100% 75% 50% 25% 0% Black Iron’s Capital Cost Advantage Shymanivske Relative to Other Iron Ore Projects TSX: BKI CAPEX Forecast (US$/t of capacity) 258 22
Strong Cash Flow & Significant Return Metrics Positions Black Iron Well for Project Financing TSX: BKI Unlevered Model Returns: BFS 2013 Average Annual Cash Flow: (pre-tax) (after-tax) Net Present Value (8% Discount): (pre-tax) (after-tax) Internal Rate of Return: (pre-tax) (after-tax) Projected Payback (8% Discount): (pre-tax) (after-tax) $630 million $536 million US$3.3 billion US$2.6 billion 48% 39% 2.0 years 2.5 years Strong Annual Cash Flows provide a quick invested capital payback and supports Project debt financing ** See Disclaimer on page 2 ** 23
Black Iron Stacks Up Relative to Competition Strong Economics Reinforced by Favourable Tax and Royalties TSX: BKI Tax Regime 32.0 48.0 Royalties 5% New Millenium Black Iron Alderon Gindalbie Brockman Northland Iron Road 2.6 Post-Tax & Royalty IRR (%) 39.1 2% 16.9 18.9 20.5 22.7 23.1 Alderon 29.3 38.0 16% Northland 25.0 35.0 1.0 0.1 0.3 0.6 Brockman Pre-Tax & Royalty IRR (%) 29% 1.8 1.8 1.9 Gindalbie Gindalbie New Millenium Black Iron Alderon Northland Iron Road Centaurus Macarthur Brockman 3.2 3.3 3.3 3.4 4.9 39%2 Macarthur 7.3 1.5 0.3 0.5 1.1 Post-Tax & Royalty NPV8 (US$ billions) 30% +30%1 Centaurus Pre-Tax & Royalty NPV8 (US$ billions) Black Iron <0.1%3 New Millenium Black Iron Brockman Gindalbie Northland Alderon New Millenium 5-8% Source: Company data; Press Release; Research Estimates Disclaimer: Post-tax and royalty graphs are for illustrative purposes only using simple math. These numbers have not been reported, nor are they substantiated by a financial model. 1 Super-Profits tax >A$75 million profit. 2 Includes Brazil mining tax of $4 / tonne of iron ore. 3 Royalties of $0.09 per tonne of ore mined. 24
Black Iron’s Target Capital Funding Strategy 49% 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 51% Debt Investment 49% Black Iron Inc. (TSX: BKI) Metinvest Export Credit Agencies (US$250-300 million) (US$300-400 million) 9.9Mtpa Off-take (US$250-300 million) Bank Debt / High-Yield Bonds (US$250-350 million) Capital Markets (US$0-50 million) Significant Off-take Opportunity with Equity Funding Support from Metinvest ** See Disclaimer on page 2 ** ** % and $ amounts are indicative only and subject to negotiation ** 25
Black Iron Continues to Deliver Shymanivske Project Development Timeline TSX: BKI 2011-2012 2013 2014 Future Drill metallurgical holes Scoping Study/PEA Definition Drilling Bankable Feasibility Study Pilot Plant Test Work Land Acquisition Off-take Permitting Detailed Engineering Construction Production Milestone Achieved ** See Disclaimer on page 2 ** 2014 Milestone 26
Black Iron Value Proposition TSX: BKI Skilled Leadership Strategic Partners Exceptional Infrastructure Sizable Resource Close to Target Markets Compelling Economics * Please see note on Page 2 Experienced management team and Board with history of creating value for shareholders of Consolidated Thompson, RioTinto and Ferrexpo Metinvest: Largest company in Ukraine; committed to half of project financing Excellent access to skilled labour, power, rail & ports Large iron ore deposit with NI 43-101 compliant resource* • 646 Mt Measured & Indicated resource @ 31.6% iron; additional 188 Mt of Inferred resource @ 30.1% iron, which will be concentrated to ~68% iron • Potential for resource expansion to 1.1-1.8 Bt Close to Steel Mills in: W.Europe, Turkey, Russia, Asia and Middle East High margins due to close proximity to multiple steel mills, skilled labour cost advantage and favourable corporate tax rate of 16% • Bankable Feasibility Study for 9.9Mt of high-grade 68% iron ore concentrate – NPV of US$3.3 billion and 48% IRR (US$2.6 billion and 39% after-tax) 27 27
Shymanivske Project Site TSX: BKI
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 info@blackiron.com TSX: BKI Follow us:

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20140123 bki corp_pres

  • 1.
    A Compelling IronOre Investment Opportunity Corporate Presentation January 2014 TSX: BKI
  • 2.
    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 such statements are made based on information available to them at that time, including those factors discussed in the section entitled ‘‘Risk Factors’’ in the Company’s annual information form for the year ended December 31, 2011 (and dated March 26, 2012) or as may be identified in the Company’s public disclosure from time to time, as filed under the Company’s profile on SEDAR at www.sedar.com. Forward-looking information may include, but is not limited to, statements with respect to results of the Feasibility Study (as defined below) and the mineral reserve and resource estimate, the future financial or operating performance of the Company, its subsidiaries and its projects, the development of and the anticipated timing with respect to the Shymanivske project, the ability to obtain financing; and the impact of concerns relating to permitting, regulation, governmental and local community relations. Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Estimates underlying the results of the Feasibility Study arise from engineering, geological and costing work of Lycopodium Minerals Canada Ltd. (“Lycopodium”), Soutex Inc. (“Soutex”), Watts, Griffis and McOuat Limited (“WGM”), Consulting Geologists and Engineers of Toronto, P&E Mining Consultants Inc. (“P&E”) and the Company. See the technical report relating to the feasibility study for a description of all relevant estimates, assumptions and parameters. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; the actual results of current exploration activities; other risks of the mining industry and the risks described in the annual information form of the Company. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws. This Presentation does not constitute an offer to sell, or solicitation of an offer to buy, any securities by any person in any jurisdiction in which it is unlawful for such person to make such an offering or solicitation. No representation or warranty, express or implied, is made as to the accuracy or completeness of the information set out herein, and nothing contained herein is, or shall be relied upon, as a promise or representation, whether as to the past or future. Bankable Feasibility Study (the “Feasibility Study”) – For additional information, please see the Company’s press release dated January 23, 2014. *Resource estimate compiled using historic Soviet data by Hugues de Corta, who is an independent qualified person as defined by NI 43-101. Readers should not place undue reliance on historical estimates. *The mineral resource estimate for the Shymanivske Project is based on results from 185 historical drill holes totaling 37,316 meters and 60 Black Iron drill holes, which were drilled during the Company’s Twin Hole drill program and the Definition Drill program, totaling 16,518 meters and is effective as of September 2012. Watts, Griffis and McOuat Limted (“WGM”), Consulting Geologists and Engineers of Toronto, Canada, was retained to audit an in-house mineral resource estimate completed by Black Iron. Mr. Michael Kociumbas, P.Geo, VicePresident of WGM and Mr. Richard Risto, P.Geo, Senior Geological Associate of WGM, were retained by Black Iron as independent technical consultants and are Qualified Persons as defined by NI 43-101 and are responsible for reviewing and approving this mineral resource estimate. The Feasibility Study was prepared in accordance with the guidelines of National Instrument 43101 by the independent firms of WorleyParsons Canada Services Ltd., Watts, Griffis and McOuat Limited and P&E Mining Consultants Inc. *Matt Simpson President & CEO of Black Iron, a Qualified Person as defined by NI-43-101, has reviewed and approved the scientific and technical information in this presentation. 2
  • 3.
    What Sets BlackIron 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 Africa Electricity Supply Brazil Australia 3 3
  • 4.
    Black Iron hasALL the Key Fundamentals for a Successful Low Cost Project in Place TSX: BKI Exceptional Infrastructure Sizable Resource • Significant infrastructure advantages (power, rail and port) with confirmed access and capacity • Skilled local workforce • Local partnerships • Large NI 43-101 Compliant Resource* - Shymanivske 646Mt (M+I) @ 32% Fe 188Mt (Inf) @ 30% Fe - Zelenivske (upside) 1.1 - 1.8Bt potential Close to Target Markets Skilled Leadership • Located in Kryviy Rih, Ukraine a major iron ore district, close to Europe, Turkey, Russia, Asia and Middle East • History of creating value for shareholders • Significant Ukrainian political and iron ore operations experience Compelling Economics Metinvest Development Agreement • Bankable Feasibility Study (Shymanivske Project): • Ukraine’s largest company, 9th globally in iron ore, 16th in steel • Committed to half of project construction financing (est. $250-$500M) - 9.9Mtpa of 68% Fe Conc. - Pre-tax NPV8 of US$3.3B - Pre-tax IRR of 48% * Please see note on Page 2 • Pre-tax break even price of $60/t ($64/t after-tax) 4
  • 5.
    A Track Recordof Iron Ore Success with Consolidated Thompson Iron Mines, Rio Tinto’s Iron Ore Company of Canada, and Ferrexpo Key Management Matt Simpson – President & CEO • • Former General Manager, Mining for Rio Tinto’s Iron Ore Company of Canada Worked for Hatch designing global metallurgical refineries George Mover – COO • Former Project General Director of Ferrexpo Yeristovo Mining, Ukraine • Since 1994 worked on numerous mining projects in Former Soviet Union (Ukraine, Russia, Kazakhstan, Armenia) Paul Bozoki – CFO • Former CFO of CD Capital Partners, operating in Former Soviet Union & Ukraine Aaron Wolfe – VP Corp Development • Former investment banker with Macquarie Nikolay Bayrak – VP Gov’t & Community Relations • Former department head, Ukrainian Ministry of Emergencies and Public Protection; Former MP and President of MP’s Parliamentary Social Club TSX: BKI Board of Directors Bruce Humphrey – Chairman • Former Chairman of Consolidated Thompson Iron Mines Jaroslav Kinach • Former Advisor to Ukraine Prime Minister and former Ukraine Country Head of EBRD Chris Westdal • Canadian Ambassador to Ukraine (1996-98) and to Russia (2003-06) Pierre Pettigrew • Former Canadian Minister for Foreign Affairs and international Trade John Detmold • Chairman & Founder of Invescture Group, S.A. de C.V. which owns Frontera Copper Corporation Dave Porter • Former VP for Rio Tinto’s Iron Ore Company of Canada and COO of Algoma Steel Matt Simpson – President & CEO 5
  • 6.
    Project Backed byForbes & Manhattan Success with Consolidated Thompson’s Bloom Lake Iron Mine Forbes & Manhattan Involvement TSX: BKI • World class 8Mtpa iron ore concentrate mine in Quebec • Advanced from exploration stage through development to construction − 8 mtpa capacity (66% Fe concentrate) expanding to 16 mtpa − Completed scoping study, 3 feasibility studies, secured off-take with China’s third largest steel producer (WISCO) Recently Acquired acquired for $4.9 for $4.9 billion billion • Raised over Cdn$1 bn in capital • Attracted and put in place a qualified management team First F&M involvement $1 mm market cap 2005 Q1-2011 6
  • 7.
    Major Local DevelopmentPartner: 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 over US$28.4B in assets and operations across 13 different areas including ownership of: • DTEK >18GW of electricity production (~26%) • • Leman Trans, ~21% of railway cars • Portinvest, ~13% of Ukraine’s port capacity Global Commodity Ranking: • 9th in Iron Ore with 33.9 MT • 16th in Steel with 18.4 MT • 33rd in Coal with 2.6 MT 7
  • 8.
    Sound Capital Structure AttractiveValuation with Substantial Upside & Funding Support TSX: BKI Capital Structure (TSX: BKI) Shares Outstanding Stock Options Market Cap (2) Current Cash Balance(3) Black Iron Inc. (TSX: BKI) 141.5 million (1) Fully Diluted Shares Corporate Structure 5.7 million 147.2 million Metinvest Black Iron Cyprus ~US$29.3 million ~US$3.1 million Debt Balance Zelenivske Steel nil 1. 5,713,750 options exercisable at a weighted average price of $0.45 per share. 2. As at January 22, 2014, using a closing price of CAD $0.23 per share. 3. As at Sept 30, 2013 per Q3 Unaudited Financial Statements. Shymanivske Steel Metinvest Transaction Summary • Metinvest acquires 49% of Black Iron Cyprus for a total commitment up to US$535M – US$20M due upon closing – Matching of any further equity financed capital • Metinvest option to increase ownership in Black Iron Cyprus to 51% − Option vests after 3 consecutive months of production at nameplate capacity − Option priced at a 30% premium to the fair market value as derived by an independent third party Analyst Coverage 8
  • 9.
    Deposits In MiningFriendly Region Adjacent to existing Iron Ore Producers TSX: BKI ArcelorMittal’s Kryviy Rih Iron Ore Complex • Black Iron’s Shymanivske Project Two mining and exploration permits covering 5.92 km2 − − M&I: 646Mt @ 31.6% Inferred: 188Mt @ 30.1% Railway lines Black Iron’s Zelenivske Project Mining permit at Shymanivske, which has been extensively explored, covering 2.56 km2 valid until 2024 Exploration permit at Zelenivske covering 3.36 km2 valid until 2014 • Smart & Evraz’s YuGOK Iron Ore Mine Adjacent to ArcelorMittal’s Kryviy Rih iron ore complex and Smart & Evraz’s YuGOK iron ore mine • Plan to acquire a plot of land from Ukraine Government adjacent to the Shymanivske deposit for project waste dumps, concentrator and tailings ** See Black Iron’s website at www.blackiron.com for a Corporate Video highlighting the project location and infrastructure ** 9
  • 10.
    Large Ore Depositwith Growth Potential TSX: BKI • Banded iron formation consisting primarily of magnetite with some hematite − − Shymanivske Resource* Tonnage (Mt) Fe Tot (%) 355.1 32.0 290.7 31.1 17.9 Total Measured and Indicated 645.8 31.6 18.8 Inferred 188.3 30.1 18.4 Tonnage and grade rounded to first decimals. Cut-off grade of 10% Fe Mag Resource defined by ~54,000 metres of drilling ― Total iron grade and band width align very well with 37,000 metres of historical drilled data 19.5 Indicated Very clean ore body low in phosphorus, manganese and aluminum ― Black Iron completed a Twin Hole Drill Program consisting of 6,042 metres and a Phase II Drill Program consisting of 11,435 metres of infill drilling Fe Mag (%) Measured 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 − • Iron band thickness ranges from 40-80 m • Potential for total combined resource expansion of 1.1 to 1.8BT − Additional drilling of Shymanivske at North end of deposit and to depth − Exploration of the Zelenivske project * Please see note on page 2 10
  • 11.
    Potential Resource Extensionat Shymanivske Ground Gravity Shows Iron Ore Mineralization at North End TSX: BKI Potential resource upside to be drilled Property boundary • Ground gravity and magnetic surveys show potential extension of iron ore mineralization at North end of property as circled in red • Very likely Iron in ground Drill hole This area has not been included in the NI 43-101 resource as it has not yet been sufficiently drilled • The identified area will be a target of a future drill program to allow for a second phase process plant expansion to increase production and project value Likely just dirt in ground 11
  • 12.
    Extensive Pit ShellDesign and 3D Model Completed (Property Overview) * Bankable Feasibility Study complete by Lycopodium Minerals Canada Ltd. TSX: BKI 12
  • 13.
    Concentrator Footprint Compressedby Staggering HPGRs and Stacking LIMS * Bankable Feasibility Study complete by Lycopodium Minerals Canada Ltd. TSX: BKI 13
  • 14.
    Conventional Flowsheet Producing HighQuality Iron Ore Products TSX: BKI Fe SiO2 P S Al2O3 Mn P80 68.0% 4.5% 0.02% 0.05% 0.43% 0.03% 32 µm B.F. Pellets Fe SiO2 S CaO/SiO2 SiO2+Al2 O3 CaO+MgO Compress. 65.5% 4.5% <0.01% 0.15% 5.1% 1.0% 318kg/pel D.R. Concentrate Fe SiO2 P S Al2O3 Mn P80 69.5% 1.3% 0.02% 0.05% 0.28% 0.03% 32 µm D.R. Pellets Fe SiO2 S CaO/SiO2 SiO2+Al2 O3 CaO+MgO Compress. 67.4% 2.0% <0.01% 0.34% 2.4% 1.2% 283g/pel Value-Add Alternative Products Core Product B.F. Concentrate 14
  • 15.
    Excellent Infrastructure withconfirmed access 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-owned rail line • Confirmation in July 2010 from Ukrainian Government that there is sufficient capacity to haul at least an additional 20 million tonnes of iron ore per annum • 5 deep water ports accessible by rail with iron ore facilities available • Preferred port option is Yuzhny located ~430 km away and providing access to the Black Sea and global seaborne iron ore markets ** See Black Iron’s website at www.blackiron.com for a Corporate Video highlighting the project location and infrastructure ** 15
  • 16.
    Strategic Global Location CloseProximity 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 properties • Approx 20% to 25% shorter transport distance to growth markets of India and China compared to North and South American producers • Excellent Ukrainian logistical advantages • Densely populated roadway infrastructure • 468 million tonnes of cargo transported via rail • 155 million tonnes of cargo transported via ship 16
  • 17.
    Ukraine: A MiningFriendly Country in Transition TSX: BKI • Democratic Republic; S&P Sovereign Risk rating of B − Member of WTO − • GDP growth of 4.2% in 2010; 5.2% in 2011; 0.2% in 2012 (impacted by slowdown in global economy and steel production) − • Next Presidential election to occur in Q1-2015 (5 year term) − Strong desire by citizens and business for European integration (and further separation from Russia) but government has delayed signing “Trade Agreement” over concerns of increased cost for Russian gas and trade restrictions • Joining the “Trade Agreement” with Europe would benefit Black Iron due to lower construction costs via reduced duties. However not joining is neutral for Black Iron, as the Bankable Feasibility Study was completed without those cost savings assumptions Economy dominated by agriculture & commodities Large, highly skilled labour force (pop. 45.4 million) GDP per capita only $7600/yr Literacy rate >99% − − • Mining friendly jurisdiction with strong local and national support ― ArcelorMittal and Ferrexpo plc have operated in-country for over 7 years • Low corporate tax rate of 16% reduced from 21% in 2012 • Favourable mining royalties of $0.09 per tonne of ore mined (<1%) payable to the Government Major Foreign Corporate Investors $5Bn Investment in Integrated Iron Mine/Steel Mill $3.2Bn Market Cap Iron Ore and Steel Production in Ukraine ― Steel production is Ukraine’s largest industry ― 60% of Ukraine’s total exports are commodityrelated (the majority of which is steel) $1.8Bn Investment in Shale Gas Development $10Bn Investment in Shale Gas Development $10Bn Investment in Shale Gas Development 17
  • 18.
    Globally Significant IronOre District 4th largest iron ore producer & 2nd largest reserve base TSX: BKI Production Reserves 30% 21% 20% 10% Historically well explored resource base but substantially under-exploited due to historic Soviet policy 15 iron ore mines in Ukraine produced 88 million tonnes in 2012 7% Kiev Production Reserves Africa Other N. America FSU S. America Australia 0% Asia % of World Production and Reserves 40% Iron ore district trends 300 km with sedimentary rock hosted banded iron formations (Dnenpovskog complex) • 50% Black Iron’s projects are located in the heart of Ukraine’s iron ore belt – 35km from city of 750,000 people • 60% • • Global Distribution of Fe Reserves & Fe Production Poltavsky GOK Yeristovskoye Kryviy Rih Iron Ore Complex Shymanivske Zelenivske Kryviv Rih Yuzhny GOK Tsentralny C Gok YuGok Ingulestky GOK Ordzhonikize Gok Source: Based on know production and reserves as listed in the USGS 2012 Iron Ore report 18
  • 19.
    Permit Process forShymanivske Deposit Black Iron Remains on Track TSX: BKI Exploration Permit Explore resource potential • Conduct geophysical program • Drill ore body • State approval of explored deposit Completed Extraction Permit Deem deposit economical • Complete Ukraine version of scoping study including evaluation of various mining methods & high level environmental impact Mining Allotment Pit shell reserves & environmental impact Gov approval • Complete field environmental (OVOS) & archeological studies for Gov approval • Submit pit shell design & mapped ground surface project for Gov. approval Land Allotment Obtain surface rights for mine, refinery & tailings • Land use analysis based on plot plan showing major buildings & agreed connections to utilities, rail and roads (Proekt) • Approval of the project location • Approval from all land owners & finalize lease Construction Approval Start mine overburden removal & plant construction • Detailed design approved (Expertisa) • Obtaining the construction permit • Commissioning of the facility • Registration of the ownership to the facility Operations Approval Operate mine & refinery • Ensure compliance with Ukraine Safety, Environment, Health and Employment laws as check by regular Gov inspections • Finalize environmental permits 19
  • 20.
    Conservative Financial ModelInputs Supported by Firm LOIs and In-Country Operating Benchmarks TSX: BKI Annual Production: 9.9 Mt Iron Content: 68.0% Estimated Mine Life: (modeled reserves) (total defined resource) 14 years ~19 years Projected Plant Start-Up: Q4 2016 Projected Revenue Commencement: Q1 2017 Long-term CFR Benchmark Price: Estimated Capital Investment: $95/t US$1,097 million (capital intensity) US$111/t Sustaining Capital Cost: US$483 million Estimated Operating Expenses: (average FOB) (average at Mine Gate) * Bankable Feasibility Study completed by Lycopodium Minerals Canada Ltd. ** See Disclaimer on page 2 ** US$44.54/t US$29.64/t 20
  • 21.
    Black Iron’s OperatingCost Competitiveness Shymanivske: First Quartile to Local Markets; Second Quartile to China TSX: BKI Total Cash Cost (US$/t CFR) 2013E Iron Ore Cost Curve Spot: $124/t BKI delivered to Europe/Middle East Markets BKI delivered to China World Cumulative Production (%) Source: Company data; Wood Mackenzie; BMO Capital Markets * Adjusted for iron content and shipping distance ** See Disclaimer on page 2 ** 21
  • 22.
    ** See Disclaimeron page 2 ** Source: Company data; Renaissance Capital estimates 211 217 221 222 190 192 200 180 186 188 189 236 Grange Resources… Average = 162 Xstrata (Geulb el Aouj) Baffinland CITIC Pacific (Sino) Atlas Iron (Balla Balla) BHP (Samarco) ArcelorMittal (Western… Aquila (West Pilbara) BHP (RGP5&6) Anglo American (Minas Rio) Gindalbie (Karara) Rio Tinto (Pilbara) 157 159 159 160 167 Atlas Iron (Ridley) Xstrata (Zanaga) Auila (Hardey) Alderon IRC (K&S) 134 135 141 142 109 109 111 122 London Mining IRC (Kuranakh) Ferrexpo (Yeristovo) Kumba Sundance Rio Tinto (IOC) Black Iron Fortescue (Expansion) 84 87 90 92 ArcelorMittal (Western… African Minerals (DSO) Xstrata (Askaf) African Minerals (phase2) Vale (Shimandou 1) 100% 75% 50% 25% 0% Black Iron’s Capital Cost Advantage Shymanivske Relative to Other Iron Ore Projects TSX: BKI CAPEX Forecast (US$/t of capacity) 258 22
  • 23.
    Strong Cash Flow& Significant Return Metrics Positions Black Iron Well for Project Financing TSX: BKI Unlevered Model Returns: BFS 2013 Average Annual Cash Flow: (pre-tax) (after-tax) Net Present Value (8% Discount): (pre-tax) (after-tax) Internal Rate of Return: (pre-tax) (after-tax) Projected Payback (8% Discount): (pre-tax) (after-tax) $630 million $536 million US$3.3 billion US$2.6 billion 48% 39% 2.0 years 2.5 years Strong Annual Cash Flows provide a quick invested capital payback and supports Project debt financing ** See Disclaimer on page 2 ** 23
  • 24.
    Black Iron StacksUp Relative to Competition Strong Economics Reinforced by Favourable Tax and Royalties TSX: BKI Tax Regime 32.0 48.0 Royalties 5% New Millenium Black Iron Alderon Gindalbie Brockman Northland Iron Road 2.6 Post-Tax & Royalty IRR (%) 39.1 2% 16.9 18.9 20.5 22.7 23.1 Alderon 29.3 38.0 16% Northland 25.0 35.0 1.0 0.1 0.3 0.6 Brockman Pre-Tax & Royalty IRR (%) 29% 1.8 1.8 1.9 Gindalbie Gindalbie New Millenium Black Iron Alderon Northland Iron Road Centaurus Macarthur Brockman 3.2 3.3 3.3 3.4 4.9 39%2 Macarthur 7.3 1.5 0.3 0.5 1.1 Post-Tax & Royalty NPV8 (US$ billions) 30% +30%1 Centaurus Pre-Tax & Royalty NPV8 (US$ billions) Black Iron <0.1%3 New Millenium Black Iron Brockman Gindalbie Northland Alderon New Millenium 5-8% Source: Company data; Press Release; Research Estimates Disclaimer: Post-tax and royalty graphs are for illustrative purposes only using simple math. These numbers have not been reported, nor are they substantiated by a financial model. 1 Super-Profits tax >A$75 million profit. 2 Includes Brazil mining tax of $4 / tonne of iron ore. 3 Royalties of $0.09 per tonne of ore mined. 24
  • 25.
    Black Iron’s TargetCapital Funding Strategy 49% 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 51% Debt Investment 49% Black Iron Inc. (TSX: BKI) Metinvest Export Credit Agencies (US$250-300 million) (US$300-400 million) 9.9Mtpa Off-take (US$250-300 million) Bank Debt / High-Yield Bonds (US$250-350 million) Capital Markets (US$0-50 million) Significant Off-take Opportunity with Equity Funding Support from Metinvest ** See Disclaimer on page 2 ** ** % and $ amounts are indicative only and subject to negotiation ** 25
  • 26.
    Black Iron Continuesto Deliver Shymanivske Project Development Timeline TSX: BKI 2011-2012 2013 2014 Future Drill metallurgical holes Scoping Study/PEA Definition Drilling Bankable Feasibility Study Pilot Plant Test Work Land Acquisition Off-take Permitting Detailed Engineering Construction Production Milestone Achieved ** See Disclaimer on page 2 ** 2014 Milestone 26
  • 27.
    Black Iron ValueProposition TSX: BKI Skilled Leadership Strategic Partners Exceptional Infrastructure Sizable Resource Close to Target Markets Compelling Economics * Please see note on Page 2 Experienced management team and Board with history of creating value for shareholders of Consolidated Thompson, RioTinto and Ferrexpo Metinvest: Largest company in Ukraine; committed to half of project financing Excellent access to skilled labour, power, rail & ports Large iron ore deposit with NI 43-101 compliant resource* • 646 Mt Measured & Indicated resource @ 31.6% iron; additional 188 Mt of Inferred resource @ 30.1% iron, which will be concentrated to ~68% iron • Potential for resource expansion to 1.1-1.8 Bt Close to Steel Mills in: W.Europe, Turkey, Russia, Asia and Middle East High margins due to close proximity to multiple steel mills, skilled labour cost advantage and favourable corporate tax rate of 16% • Bankable Feasibility Study for 9.9Mt of high-grade 68% iron ore concentrate – NPV of US$3.3 billion and 48% IRR (US$2.6 billion and 39% after-tax) 27 27
  • 28.
  • 29.
    CONTACT INFORMATION 65 QueenStreet 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 info@blackiron.com TSX: BKI Follow us: