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|Metinvest and Canadian Company Agree to Develop Iron Ore Assets|
|= The agreements create a path to become a prominent shareholder of the projects =|
Metinvest B.V., Ukraine's mining and steel producer announced on Jul 23 that the company has executed definitive agreements to form a development arrangement with Black Iron Inc. and to invest in Black Iron (Cyprus) Ltd (BKI Cyprus), which is currently a wholly-owned subsidiary of Black Iron. The agreements create a defined path for Metinvest to become a prominent shareholder of Black Iron's two development projects (the Shymanivske Project and the Zelenivske Project), each located in Kryvyi Rih (former Krivoy Rog), Ukraine.|
Metinvest will immediately take up an initial private placement of shares in BKI Cyprus for aggregate gross proceeds of US$20 million. This investment will give Metinvest a 49% shareholding of BKI Cyprus' share capital. Each of Metinvest and Black Iron will have the option to participate in the funding of the development of the projects based on its proportionate interest in BKI Cyprus. Using the projected total capital investment requirements as outlined in the company's Bankable Feasibility Study of US$1,094 million, and assuming the development capital is 100% equity financed, Metinvest's future capital contribution could increase by up to US$536 million (being 49% of US$1,094 million) for the development of the Shymanivske Project. In addition to the private placement of BKI Cyprus shares, Metinvest will also be granted a non-transferable option to acquire additional shares in BKI Cyprus to increase their effective ownership to 51% post achieving full run rate production of 9.2 million tonnes per annum concentrate for three consecutive months.
Metinvest Group is a vertically integrated steel and mining group of companies, having steel works including Azovstal Iron and Steel Works, Ilyich Iron and Steel Works, and Yenakiieve Steel as well as raw material resources interests. In 2012, the company produced 36.2 million tonnes of iron ore, 11.6 million tonnes of coal and 12.5 million tonnes of steel.
Black Iron is an iron ore exploration and development company in Canada, advancing its wholly-owned Shymanivske project located in Kryviy Rih, Ukraine to production. This project contains 646 Mt Measured and Indicated mineral resources grading 31.6% Total iron and 188 Mt of Inferred mineral resources grading 30.1% Total iron. Further, the company holds an exploration permit for the adjacent Zelenivske project.
|last modified : Thu 01 Aug, 2013 [10:17]|