Black Iron Inc (TSE:BKI) updated on progress at its Shymanivske iron ore project in Ukraine, where it says the ministry of defence has developed a plan to transfer some land for a processing plant, tailings and waste rock.
"This parcel of land is suitable from a social and environmental standpoint, and its close proximity to the Shymanivske ore body makes it a highly economic choice to minimize the cost incurred for hauling ore and waste," Black Iron said in a statement Thursday.
It also noted the land was well away from any communities and was surrounded by operating iron ore mines owned by ArcelorMittal and Metinvest.
To secure the rights to this land, Black Iron must finalize with the MOD a compensation package expected to entail the construction of new barracks and replacement of facilities that will need to be relocated.
The estimated cost for relocating these facilities is already included in the US$436 million estimated for capital costs in the PEA (preliminary economic assessment).
Black Iron also noted that "several productive" discussions had recently taken place with several European export credit agencies and banks, which were highly supportive of helping Ukraine move toward European integration.
"By making investments in public companies operating in Ukraine, such as Black Iron, that have strong project economics and are expected to create a substantial number of new high-paying jobs in the region, these entities are able to give greater confidence to other investors and ultimately improve living standards for Ukrainian citizens," said the firm.
The Toronto-based resource group also noted that benchmark iron ore prices continued to hold in the mid $80 per tonne range, which is well above the long-term $62 per tonne used in the firm's PEA, which estimated an after-tax IRR (internal rate of return) of 36% and NPV (net present value) of US$1.7 billion using a 10% discount rate.
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