A Huge Mine, Backed By A Half-Billion Dollars In Post-IPO Funding, Was Set To Go – Then Putin’s Army Rattled Its Sword
A Huge Mine, Backed By A Half-Billion Dollars In Post-IPO Funding, Was Set To Go –
Then Putin’s Army Rattled Its Sword
Now On the Brink of Construction, The Giant Mine – With Billions In Potential Profit –
Is A Rare Opportunity At A Now Pre-IPO Price
- Mine output is ultra-high grade
- Phase I: 4 million tons annually – worth as much as $390 million in revenues each year
- Phase II: 8 million tons annually – worth as much as $780 million a year in revenues
- Mine life expectancy 20+ years
- Politically connected management team were executives at huge miners, such as Rio Tinto and Xstrata
Buried amid the mining news, in July 2019, is an eye-opening item of historic importance.
That forecast is why the mine was once the focus of enough international excitement that it caught the attention of Metinvest, a huge $10 billion iron and steel conglomerate.
Metinvest pledged $536 million towards construction of the project.
That was after Black Iron’s successful IPO that raised $38 million, at $1.40 a share, during its Toronto Stock Exchange debut.
Because of that, Black Iron was covered by major stock analysts such as RBC, Macquarie, and Cantor Fitzgerald.
That coverage put Black Iron on par with mega mining companies such as Rio Tinto (NYSE:RIO), BHP Billiton (NYSE:BHP), and ArcelorMittal (NYSE:MT).
While the four companies looked to have equal upsides, the shares in new-to-the-market Black Iron offered an inexpensive entry into the all- important commodity sector.
That’s why, by all appearances, Black Iron looked to have a perfect deal coming together. Then, Vladimir Putin shattered that dream.
In 2014, his army invaded Eastern Ukraine and the island of Crimea for the express purpose of denying it entry to the North Atlantic Treaty Organization.
As the Russians dug in, Black Iron’s main investors prudently walked away – its $536 million from Metinvest lost in the fog of war. Black Iron’s stock price tanked as its large institutional investors dumped the stock and it remains there depressed today.
And there the huge property sat. Its billions of dollars in potential profits trapped in the ground by geopolitical intrigue.
Forget Gold, Black Iron Looks To Be 2019’s Most Sensational Mining Play
But things are about to change.
Putin still keeps a small military presence in Eastern Ukraine because a nation in conflict cannot join NATO. That means Putin’s ploy stymies Ukraine’s NATO desires
But, while the situation has the scent of conflict, it’s actually quite stable. The Russians drew a permanent line in the sand 280 miles away from the Black Ironmine. There they sit.
That stability, coupled with a sharp rise in iron ore prices, is why work at Black Iron’s huge Kryvyi Rih, Ukraine, mine is now slated to begin again.
It’s also why Black Ironis now the definition of a seriously under-the-radar opportunity – one of the more intriguing ones that commodity
investors might ever see.
That will be especially true when they consider how strong share prices of major miners with iron ore operations have performed.
In July 2014, Rio Tinto shares sat at about $27. In July 2019 they’re at $60.
The story was the same for Ukraine iron ore miner Ferrexpo. It has also doubled during this period from $141 in July to the current $270.
The story is even more exciting for Champion Iron who started production earlier this year raising their share price from C$1.10 to the current C$2.55 in only seven months.
Now, Demand Is Soaring, Prices Are Climbing
Today, those share prices are on the rise because rapid global urbanization has put pressure on steel supplies, and thus, iron ore, too.
On the supply side, the world’s largest iron ore miner Brazil based Vale, had a major tailings dam failure in January 2019 resulting in 13 of their mines being shut down by court order until their tailings ponds are reconstructed. It is estimated the dam reconstruction will take two to three years and during this period iron ore prices will remain high.
And, that’s why one of the first advantages that becomes apparent with Black Iron is its access to rail, power, skilled labor, and deep-water ports as this allows for the mine to be constructed in a short period of time to take advantage of high iron ore prices.
That’s why investors who today exuberantly chase once-in-a-lifetime profits from gold and marijuana stocks should immediately readjust their sights.
Ukraine Has A Huge Iron Ore Industry
Black Iron’s mine sits in the middle of what is the country with the world’s seventh largest iron ore output.
Ukrainian mines produce 63 millions tons of ore annually. That’s more than twice the U.S. and Canada’s annual iron production combined.
Known as the Shymanivske iron ore deposit, Black Iron’s mine sits in the heart of the KrivBass iron ore mining district, which lies about 205 miles southeast from Kiev in central Ukraine.
Moreover, Back Iron’s mine is only one mile from two open pit iron ore mines owned by ArcelorMittal and Metinvest/Evraz Steel, which are among the seven iron ore mines in the district.
This is highly advantageous because it means Black Iron’s mine will be strategically well-positioned almost at the center of a huge global marketplace.
It also means there’s plenty of infrastructure – roads, rail, power, water, and a deep-sea port – and highly skilled relatively low cost
labor so Black Iron should have no issues shipping its ore to Europe, Russia, Asia, and the Middle East.
Moreover, proximity to established infrastructure translates into less capital outlay to get the mine up and running the ability to construct in a phased approach.
850 Million Tons Of Ore Is Just A Beginning
Besides being way under the radar right now, Black Iron also sports two significant positives that veteran commodities investors look for in well run Canadian mining companies.
Black Iron has filed multiple NI 43-101 compliancy reports with Canadian regulators. These are legal documents, in which geologists and engineers report a mining site’s resources and, or, economic potential.
It’s nearly certain that the strong project economics outlined in these reports is what drew Metinvest’s half a billion dollars in interest.
These reports estimate that Black Iron’sShymanivske iron ore deposit contains 852 million tons of ore which is enough to support 20-years of production.
Huge Ultra-High Grade Mine
And, those tons are packed with good news for Black Iron. They can be concentrated to produce an ultra-grade iron in the top 4% of products globally. That’s because Black Iron plans to produce a highly coveted 68% iron product – 62% is the usual and acceptable grade used in steel manufacturing.
To the layman, a 6% difference may not seem like much, but in the iron mining business it’s like grabbing the golden ring.
Steel makers pay a premium, as much 30%, for the extra concentration because it takes a lot less energy to make the same amount of steel as the 62% yields.
Today, steel makers are paying as much as $140 a ton for 68%, while 62% iron ore fetches about $120 a ton.
The other upside to the 68%, is that because it take much less coal-fired heat turn it into steel, the process creates significantly less pollution. So much so, that many steel makers consider 68% ore to be green – environmentally friendly.
But sitting on such a billion-dollar+ fortune in iron ore is nothing if it can’t get to market.
Top-Flight Management A Major Would Brag About
Black Ironscores on that front too, with world-class team that befits not a junior miner but an international major – as it once looked on track to be.
Black Iron’s all-star team is led by Matt Simpson – CEO.
Mr. Simpson was General Manager, Mining for Rio Tinto’s Iron Ore Company of Canada. He also worked for Hatch designing global metallurgical refineries.
Les Kwasik is the company’s COO. Mr. Kwasik is a successful mine developer with more than 40 years of hands-on experience at VALE and Xstrata (Glencore).
Bill Hart, the Senior Vice President for Corporate Development brings 30 year’s experience in natural resources and iron ore to the company from his time at Rio Tinto, and Cliffs Holdings.
Black Iron’s board of directors is led by Chairman Bruce Humphrey.
He is the former Chief Operating Officer of Goldcorp.
He is joined on the board by the Hon. Pierre Pettigrew, who is the former Canadian Cabinet Minister of Foreign Affairs & International Trade.
Then there’s John Detmold. He’s Chairman & Founder of Invecture Group, S.A. de C.V. which owns Frontera Copper Corporation.
Finally, there’s Dave Porter. He’s a former Vice President at Rio Tinto, and Chief Operating Officer at Algoma Steel.
The Price Of A Junior, The Potential Of A Major, Black Iron Now Favors Investors Thanks To The Russian Army
The point is, that generally only huge, major commodities companies have such powerhouse leadership from Rio Tinto, Cliffs, Xstrata, along with seasoned political advisors.
It all adds up to the…
9 Astonishing Reasons Why Black Iron Could Be A Once-In-A-Generation Mining Stock
1. Tremendous Potential– Black Iron’s Ukrainian mine was once one of the mining sector’s high-potential bright spots. So much so, the global steelmaker/iron miner Metinvest, a $10 billion company, promised $536 million to help construct Black Iron’s mine.
2. Putin’s Aggressive Move– In 2014, the Russian army invaded Ukraine. The instability caused Metinvest to back out. The situation is now stable and Black Iron is set to start work.
3. Low Price For Huge Opportunity– A share price of $1.40 was the product of Black Iron’s successful $38 million IPO. The war also caused Black Iron’s large institutional investors to bail out as well. That caused the share price to crater. The only thing that’s changed about Black Iron, since 2014, is that its share price remains depressed and cost to construct is lower.
4. Waiting To Be Tapped– As far as the mine goes, it still holds an estimated 850 million tons of ore. Moreover, the mine is located a mile from other huge mines with associated surround railway, powerlines, skilled people and ports.
5. Ultra Grade– According to geologists, what Black Iron will dig out of its mine and then concentrate is a highly coveted 68% pure ore. That’s the best.
6. Nothing But Upside– In the mine’s Phase I, Black Iron estimates it can mine 4 million tons of iron ore annually – worth as much as $390 million in revenues each year.
7. It Only Gets Better– When the mine’s phase II opens it should yield an estimated 8 million tons annually – worth as much as $780 million a year in revenues.
8. Powerhouse Leadership– Black Iron’s management are former top executives at mining powerhouses Rio Tinto, Cliffs, and Xstrata.
9. Wild Card– Metinvest, the $10 billion iron maker/miner once committed $536 million towards building Black Iron’s mine. So, all bets are off as to how high shares in Black Iron Inc. (TSX:BKI - OTC:BKIRF) could fly if Metinvest or its other neighbor ArcelorMittal looks down the road at Black Iron’s working mine and acquires Black Iron for well over one billion dollars.
A Billion-Dollar+ Mine, A War-Torn Stock Price, A Now Stable Country,
All Have Created A Rare Opportunity Where Investors Could Make The Kind Of Money That Lasts Years
That means that there’s a massive mismatch between Black Iron’s price and its potential.
Moreover, led by China, urbanization is now putting pressure on iron ore demand.
This is setting up like a dream.
It’s one in which Black Ironbecomes one of the 21stcentury’s most eye-popping mining investments.
And one where new investors could make unheard of money. That’s why mining investors should make their moves now.