Black Iron Signs Binding Documentation with Anglo American for a Royalty Investment with Associated Offtake and Right to Participate in Construction Funding
Black Iron has signed binding agreements with Anglo American for a US$4 million royalty investment and offtake rights for the Shymanivske Iron Ore Project in Ukraine. The deal includes a 1.0-1.5% gross revenue royalty for the first 60 million tonnes of production, with Anglo American securing offtake rights to at least 2.4 million tonnes per year for life of mine.
The investment will be made in two tranches: US$2.6 million immediately and the remainder upon permit renewal. Anglo American also gains first offer rights to invest at least 15% of Phase 1 construction costs post-conflict, which would increase their offtake to 100% of Phase 1 production (4 million tonnes annually). Similar rights exist for Phase 2, potentially securing 100% offtake of 8 million tonnes annually.
Black Iron ha firmato accordi vincolanti con Anglo American per un investimento in royalties di 4 milioni di dollari e diritti di compravendita per il Progetto Minerario di Ferro Shymanivske in Ucraina. L'accordo prevede una royalty sui ricavi lordi dell'1,0-1,5% per i primi 60 milioni di tonnellate di produzione, con Anglo American che assicura diritti di compravendita per almeno 2,4 milioni di tonnellate all'anno per la vita mineraria.
L'investimento sarà effettuato in due tranche: 2,6 milioni di dollari immediatamente e il restante al rinnovo del permesso. Anglo American ottiene anche diritti di prima offerta per investire almeno il 15% dei costi di costruzione della Fase 1 dopo il conflitto, il che aumenterebbe il loro diritto di compravendita al 100% della produzione della Fase 1 (4 milioni di tonnellate all'anno). Diritti simili esistono per la Fase 2, potenzialmente garantendo il 100% della compravendita di 8 milioni di tonnellate all'anno.
Black Iron ha firmado acuerdos vinculantes con Anglo American para una inversión de regalías de 4 millones de dólares y derechos de compra para el Proyecto de Mineral de Hierro Shymanivske en Ucrania. El acuerdo incluye una regalía de ingresos brutos del 1,0-1,5% por las primeras 60 millones de toneladas de producción, con Anglo American asegurando derechos de compra para al menos 2,4 millones de toneladas por año durante la vida de la mina.
La inversión se hará en dos tramos: 2,6 millones de dólares de inmediato y el resto tras la renovación del permiso. Anglo American también obtiene derechos de primera oferta para invertir al menos el 15% de los costos de construcción de la Fase 1 después del conflicto, lo que incrementaría su derecho de compra al 100% de la producción de la Fase 1 (4 millones de toneladas anuales). Existen derechos similares para la Fase 2, asegurando potencialmente el 100% de compra de 8 millones de toneladas anuales.
블랙 아이언은 앵글로 아메리칸과 우크라이나 샤이마니우스크 철광석 프로젝트에 대한 400만 달러의 로열티 투자 및 판매권에 관한 구속력 있는 계약을 체결했습니다. 이 거래에는 첫 6000만 톤 생산에 대해 1.0-1.5%의 총 수익 로열티가 포함되어 있으며, 앵글로 아메리칸은 최소한 연간 240만 톤의 판매권을 확보했습니다.
투자는 두 차례에 걸쳐 이루어질 예정이며, 그중 260만 달러는 즉시 투자되고 나머지는 허가 갱신 시에 투자됩니다. 앵글로 아메리칸은 갈등 이후에 1단계 건설 비용의 최소 15%를 투자할 수 있는 우선 제안권도 확보하여, 이를 통해 1단계 생산의 100%를 구매할 수 있는 권리를 부여받습니다(연간 400만 톤). 2단계에도 유사한 권리가 존재하여 연간 800만 톤의 100% 판매권을 확보할 수 있습니다.
Black Iron a signé des accords contraignants avec Anglo American pour un investissement en redevances de 4 millions de dollars et des droits d'achat pour le Projet de Minerai de Fer Shymanivske en Ukraine. L'accord comprend une redevance brute de 1,0-1,5% sur les premiers 60 millions de tonnes de production, avec Anglo American assurant des droits d'achat pour au moins 2,4 millions de tonnes par an pendant la durée de vie de la mine.
L'investissement sera effectué en deux tranches : 2,6 millions de dollars immédiatement et le reste lors du renouvellement du permis. Anglo American obtient également un droit de première offre pour investir au moins 15 % des coûts de construction de la Phase 1 après le conflit, ce qui augmenterait leur droit d'achat à 100 % de la production de la Phase 1 (4 millions de tonnes par an). Des droits similaires existent pour la Phase 2, garantissant potentiellement 100 % de l'achat de 8 millions de tonnes par an.
Black Iron hat verbindliche Vereinbarungen mit Anglo American über eine Lizenzgebühreninvestition von 4 Millionen US-Dollar und Abnahmerechte für das Shymanivske Eisenerzprojekt in der Ukraine unterzeichnet. Der Vertrag umfasst eine Bruttoumsatzlizenzgebühr von 1,0–1,5% für die ersten 60 Millionen Tonnen Produktion, wobei Anglo American Abnahmerechte für mindestens 2,4 Millionen Tonnen pro Jahr für die Lebensdauer der Mine sichert.
Die Investition erfolgt in zwei Tranchen: 2,6 Millionen US-Dollar sofort und der Rest nach Genehmigungsverlängerung. Anglo American erhält auch das Recht auf ein erstes Angebot, um mindestens 15% der Baukosten der Phase 1 nach dem Konflikt zu investieren, was ihren Abnahmeanteil auf 100% der Produktion der Phase 1 (4 Millionen Tonnen pro Jahr) erhöhen würde. Ähnliche Rechte bestehen für Phase 2, wodurch potenziell 100% der Abnahme von 8 Millionen Tonnen pro Jahr gesichert werden können.
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Royalty investment of US
$4 million strengthens Black Iron's balance sheetAnglo American secures offtake rights to at least 2.4 million tonnes per year for life of mine
Anglo American has first offer and refusal rights to secure further offtake rights in exchange for funding at least
15% of the cost to construct each phase of the Shymanivske Iron Ore Project, which will produce an ultra-high-grade ~68% iron, uniquely positioned to meet the increasing global demand for green steel
TORONTO, ON / ACCESSWIRE / November 7, 2024 / Black Iron Inc. ("Black Iron" or the "Company") (TSX:BKI)(OTC PINK:BKIRF)(FWB:BIN) is pleased to announce the signing of a legally binding royalty agreement and offtake agreement (together, the "Transaction Documents") with Anglo American for a US
Background
Black Iron's Shymanivske Iron Ore Project (the "Project") located in Kryvyi Rih, central Ukraine, will be developed in two phases - with Phase 1 producing approximately 4 million tonnes per annum and Phase 2 production increasing to approximately 8 million tonnes per annum.
Terms of the Transaction
Certain key terms of the Transaction that have been agreed upon include:
Anglo American will invest US
$4 million in two tranches in exchange for a gross revenue royalty of1.0% should the prevailing65% iron CFR China iron ore price be less than US$120 per tonne and1.5% should the price be equal to or higher than US$120 per tonne for Black Iron's first 60 million tonnes of production at the Project (the "Royalty"). The first tranche consisting of US$2.6 million will be invested now and the balance upon Black Iron renewing its permits;Black Iron reserves the right to buy back this Royalty at any time at a buyback price that provides a pre-agreed internal rate of return to Anglo American;
Anglo American's investment in the Royalty secures it offtake rights to the higher of (a)
60% or (b) 2.4 million tonnes per year of the Phase 1 production for life of mine (the "Offtake");The agreement also provides for a right of first offer for Anglo American to further invest at least
15% of the Phase 1 construction cost as part of a consortium after the conflict in Ukraine ends. Such additional investment by Anglo American would result in the increase of its offtake to100% of the Phase 1 production for an expected 4 million tonnes per annum.Additionally, Anglo American also has first refusal rights to fund a further
15% of expansion construction cost for Phase 2 of the Project. Provision of such funding would secure Anglo American100% of the life of mine offtake rights for Phase 2 of the Project, for an expected 8 million tonnes per annum.The Offtake includes a profit-sharing component which aligns the interests of both parties and thereby generates a strong interdependent relationship of mutual benefit. Black Iron and Anglo American will also mutually benefit from any realized shipping cost savings by selling the product to steel mills located closer to Ukraine than China, such as those in the Middle East where there is strong demand for such high purity direct reduction iron ore.
Black Iron's CEO Matt Simpson stated: "Black Iron is excited to welcome Anglo American as an investor and offtake partner given their extensive global experience in the mining sector. Raising US
Anglo American is a leading global mining company focused on the responsible production of copper, premium iron ore and crop nutrients - future-enabling products that are essential for decarbonising the global economy, improving living standards, and food security. Its portfolio of world-class operations and outstanding resource endowments offers value-accretive growth potential across all three businesses, positioning the company to deliver into structurally attractive major demand growth trends.
Black Iron had previously selected Cargill as the offtake purchaser in May 2021. However, a definitive agreement was fully negotiated but not executed, and Cargill's May 2021 non-binding memorandum of understanding has since expired, leading to a competitive investment and offtake process being re-tendered. In selecting Anglo American, Black Iron engaged Bacchus Capital Advisers to run a global competitive process resulting in several interested leading mining and trading companies signing confidentiality agreements. This confirms the strong interest in the Project given its compelling projected economics and high purity product despite the uncertainly associated with the war in Ukraine.
About Black Iron
Black Iron is an iron ore exploration and development company, advancing its
For more information, please contact:
Matt Simpson
Chief Executive Officer
Black Iron Inc.
info@blackiron.com
Forward-Looking Information
This press release contains forward-looking information. Forward-looking information is based on what management believes to be reasonable assumptions, opinions and estimates of the date such statements are made based on information available to them at that time. Forward-looking information may include, but is not limited to, statements with respect to entering into the Offtake, the Transaction and the Transaction Documents, Phase 1 and Phase 2 of the Project, renewal of mining permits for the Project, use of proceeds from the Transaction, declaration of martial law in Ukraine, outcome of the war in Ukraine, the permitting of the Shymanivske Iron Ore Project and grade and use of iron ore from the Shymanivske Iron Ore Project. Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to: general business, economic, competitive, geopolitical and social uncertainties; progress of the Company's service providers; negotiations with third parties; other risks of the mining industry and the risks described in the annual information form of the Company. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws. The Company notes that mineral resources are not mineral reserves and do not have demonstrated economic viability.
SOURCE: Black Iron Inc.
View the original press release on accesswire.com
FAQ
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