TORONTO, March 05, 2018 (GLOBE NEWSWIRE) -- Black Iron Inc. (“Black Iron” or the “Company”) (TSX:BKI) (OTC:BKIRF) (FRANKFURT:BIN) responds to statements made by the President of the United States (“U.S.”), Donald Trump, who has indicated his intention to impose a 25% import duty on steel. The Company does not anticipate that these duties, once implemented, will have any significant impact on global iron ore prices despite being a main component of steel given the U.S. only consumes approximately 6% of total global steel produced, as explained below. The Company does not expect the proposed tariffs on steel to have an adverse impact to the value of the Company’s Shymanivske Iron Ore Project (“Shymanivske” or the “Project”) given the very conservative US$62 per tonne benchmark priced used in the Company’s Preliminary Economic Assessment to estimate the after tax unlevered 36% Internal Rate of Return on the Project as compared to today’s 25% higher benchmark iron ore price of US$78 per tonne. Full details regarding the Company’s Preliminary Economic Assessment can be found in the NI 43-101 compliant technical report entitled “Preliminary Economic Assessment of the Re-scoped Shymanivske Iron Ore Deposit” effective November 21, 2017 under the Company's profile on SEDAR at www.sedar.com.
In general, these proposed duties are most likely to result in an increase in prices to the American consumer for domestically produced goods such as cars, soda cans and building materials. It is also expected to directly impact the main exporters of steel to the U.S. including Canada, Brazil, South Korea, Mexico and Russia as seen in Figure 1: http://www.globenewswire.com/NewsRoom/AttachmentNg/96896adb-fe07-4759-8cb0-2bbabc7818f3.
Based on statistics compiled by the World Steel Association, global production of steel is approximately 1.6 billion tonnes per year. The U.S. produces approximately 79 million tonnes per year and is a net importer of 22 million tonnes per year, which in aggregate is only 6% of global production. China, which supplies less than 1% of the steel imported into the U.S., produced 808 million tonnes in 2016. China’s production comprises 50% of global steel production and the Company believes that it is the country to focus on when analysing iron ore prices. Given that the proposed U.S. tariff is not expected to have an impact on China’s steel production and therefore China’s demand for iron ore, it is not likely to have any impact on the global price of iron ore.
In China, the demand for high grade iron ore is likely to increase given the new environmental regulations imposed in November 2017 which have already resulted in numerous domestic iron ore miners being forced to shut down due to the low quality of iron ore produced. The new environmental regulations are driving a shift towards higher quality iron ore both in terms of iron content and use of pellets/pellet feed. These higher quality iron products require less coal to be burnt in the production of steel which is a large component of multiple products used in everyday life ranging from utensils to cars and building structures. Black Iron expects to produce an ultra high-grade premium 68% iron ore product from the Project. This ultra high-grade product is within the top 4% of global production based on grade and highly desirable for China’s steel mills given the new Chinese regulations.
The Company continues to advance the acquisition of the Shymanivske surface rights as well as working to secure off-take agreements as part of the path to construction of the Project. The Company will provide an update on the progress of these items very soon.
About Black Iron
Black Iron is an iron ore exploration and development company, advancing its 100% owned Shymanivske project located in Kryviy Rih, Ukraine. The Shymanivske project contains a NI 43-101 compliant resource estimated to be 646 Mt Measured and Indicated mineral resources, consisting of 355 Mt Measured mineral resources grading 31.6% total iron and 18.8% magnetic iron, and Indicated mineral resources of 290 Mt grading 31.1% total iron and 17.9% magnetic iron, using a cut-off grade of 10% magnetic iron. Additionally, the Shymanivske project contains 188 Mt of Inferred mineral resources grading 30.1% total iron and 18.4% magnetic iron. The Shymanivske project is surrounded by five other operating mines, including ArcelorMittal's iron ore complex. Please visit the Company's website at www.blackiron.com for more information.
The technical and scientific contents of this press release have been prepared under the supervision of and have been reviewed and approved by Matt Simpson, P.Eng., CEO of Black Iron, who is a Qualified Person as defined by NI 43-101.
|For more information, please contact:|
|Lisa Doddridge||Matt Simpson|
|Vice President, Strategic Communications||Chief Executive Officer|
|Tel: +1 (416) 309-2698||Tel: +1 (416) 309-2138|
This press release contains forward-looking information. 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, 2016 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 the Project, the impact of tariffs on the price of Steel, the demand for steel globally and in China, the mineralization of the Project, the results of the PEA, the realization of the PEA, the expectations of future cash flows, the expected economics forecast, the geo-political climate in Ukraine, the Company’s ability to obtain the requisite land rights for the Project and other requisite permits or approvals, and future plans for the Company’s development. 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". 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.