Black Iron offers more info on Shymanivske iron ore project



15 декабря 2017 года
Конкорд Капитал

Black Iron (BKI)


Black Iron (BKI CN), a Canadian iron ore exploration and development company, presented on Dec. 14 its full Preliminary Economic Assessment (PEA) for its Shymanivske iron ore project in Ukraine. A short presentation on the PEA was revealed on Nov. 21.

Assuming a CFR China 62% concentrate price of 61.88 USD/t and an Fe content premium of 7.2 USD/dmtu, the PEA yields an NPV of USD 1.7 bln and an IRR of 36%, calculated post tax with a 10% discount rate. During the first few years, the company plans to produce 4 mmt per year of the premium-quality 68% concentrate, later expanding capacity to 8 mmt per year.

Dmytro Khoroshun: The full PEA provides much more details that better enable following the project’s progress once it is launched, a date that has yet to be determined. This modern project promises to be much more efficient than the existing Ukrainian mining enterprises. Particularly, we note that Ukrainian mining peers currently produce about up to 2 kt per worker per year, whereas the Shymanivske project is anticipated to produce about 25 kt per worker per year, being therefore more than ten times more efficient.

Nevertheless, we think that the assessment of the external environment provided in the PEA, particularly the product prices outlook, might be too optimistic. Namely, the most pessimistic set of price parameters, which are considered unlikely to occur, was the 62% concentrate price of 50 USD/t and an Fe content premium of 4 USD/dmtu, which we consider to be not conservative enough.

Источник: Конкорд Капитал



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