Black Iron (TSE:BKI) unveiled Wednesday assay results from a diamond drill program at its Shymanivske iron ore project in Ukraine, with iron grades again exceeding 30%.
The company said it continues to be encouraged by the results of
infill drilling, with the intersection of thick iron bands in each hole
at grades of over 30% iron.
Of note from the three infill holes announced today, hole BISH-67
returned 103.5 metres grading 30.7% iron, including 27.0 metres at 34.4%
iron, and 73.0 metres at 32% iron, including 45.0 metres of 34% iron.
"Results from the infill drilling work continue to validate our
understanding of the Shymanivske deposit and our belief that the
majority of the inferred historical mineral resource will be
successfully upgraded to measured and indicated mineral resource
categories in our new mineral resource estimate, which is anticipated in
the summer of 2012," said COO George Mover.
The three drill holes are part of a 20,000 metre definition and
exploration drill program initiated by the company last October. The
campaign is designed to upgrade mineral resources to higher categories
to allow a larger mineral resource estimate to be considered in the
ongoing feasibility study.
The program is also designed to focus on exploration holes in the
northern end of the property, an area that has not yet been explored but
where the company said additional resources could exist.
Ukraine-based Mekhanobrchermet (Research Institute of Mineral
Processing in Ferrous Metals) has been hired to complete independent
metallurgical test work on the recovered drill core, the company said.
As previously announced in March, there is now no drilling underway
at Shymanivske as the company waits for additional permissions required
to drill. Black Iron has said it believes the timing for the re-start of the drill program should not affect the project's current development path.
In December, the mineral explorer hired WorleyParsons to finish a
feasibility study for its Shymanivske project, which is slated to be
released in the fourth quarter 2012.
The 100 percent-owned Shymanivske project in Kryviy Rih, Ukraine has
NI 43-101 compliant 373 million measured and indicated resources grading
31.3% iron and 480 million tonnes of inferred resources grading 30.2%
The property is surrounded by five other operating mines including
ArcelorMittal's iron ore complex. The company has said that existing
infrastructure, including access to power, rail and port facilities,
will allow for a quick development timeline to production.
A preliminary economic assessment of the project showed a low cost
pellet plant feed operation with a projected high value and net cash
The preliminary report, completed by BBA of Montreal, considered two
production scenarios over a 28 year mine life. The 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.
The first option projected 42.1 percent internal rate of return, with
a whopping US$3 billion net present value, at an eight percent discount
The 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
Earlier this month, the company announced the results of the initial
three infill drill holes at Shymanivske, with each intersecting
significant iron bands grading 30% iron ore or more.
Highlights included hole BISH-63, which returned 150 metres grading
33.2% total iron, including 74 metres grading 35.0% total iron.
The company also holds an exploration permit for the adjacent
Zelenivske project, which it intends to explore further to determine the