Black Iron (TSE:BKI) said since its public offering one year ago, the company has made major technical and corporate advancements toward the development of its Shymanivske property, in Ukraine.
The iron ore explorer started a 20,000 metre diamond drill program, of which 13,224 metres have been completed.
drill program is designed to target the northern part of the
Shymanivske property, with the aim of boosting the resource size, the
Exploration, however, has been put on hold as the
company obtains additional permissions required to drill and address a
notice from Ukraine's Dnepropetrovsk Region Ecological Inspectorate that
suspends work on the Shymanivske and Zelenivske land plots,
"Management is currently working to obtain the required permissions and to resolve this issue with the Ecological Inspectorate;
however, it is unclear as to how long this process may take," the company said in a statement.
company believes the timing for the re-start of the drill program
should not affect the project's current development path, but it does
limit the company's ability to upgrade its mineral resources estimate in
support of a future potential increase in annual production.
December, the mineral explorer hired WorleyParsons to finish a
feasibility study for its Shymanivske iron ore project, which is
slated to be released in fourth quarter 2012.
has found a number of ways to improve the project economics with the
view to simplify process flow sheet to allow higher annual tonnage and
minimize capital and operating costs.
Additionally, Black Iron said it is focused on finishing the required work to apply for a mining allotment which is the next major
step in Ukraine’s mine permitting process.
feasibility study will build on the preliminary economic assessment of
the project, which showed a low cost pellet plant feed operation with a
projected high value and net cash flows.
In October, the company
released a preliminary economic assessment on the property. The report
had indicated a low cost pellet plant feed operation, with a project
high value and net cash flows.
The preliminary report, completed by BBA of Montreal, considered two production scenarios over a 28 year mine life.
first scenario is a 7.3 million tonne per year iron ore pellet plant
feed, while the second scenario is a production alternative
for producing 7.6 million tonnes per year of iron ore pellets.
first option projected 42.1 percent internal rate of return, with a
whopping US$3 billion net present value, at an eight percent discount
Total capital costs came in just shy of $900 million, with
a payback period of 2.2 years, and an estimated operating cost for an
initial 20 years of $52.40 per tonne.
second scenario for Shymanivske outlined the option to produce a higher
margin pellet product of 65 percent iron grade, for a higher net
present value of US$4.1 billion at the same discounted rate, but with a
reduced 35.2 percent internal rate of return, due to raised construction
which is advancing its Shymanivske project in Krivoy Rog, Ukraine, has
both a measured and indicated resource of 345 million tonnes with a
grade of about 32 percent iron, and 469 million tonnes of inferred
resources grading 31 percent iron.
Shymanivske is surrounded by five other operating mines including ArcelorMittal's (NYSE:MT) iron ore complex.