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Ukraine stays resilient, says Black Iron CEO as firm’s main shareholder increases stake

Black Iron’s Shymanivske iron ore project in Ukraine. Credit: Black Iron.

Canadian miner Black Iron’s (TSX: BKI; US-OTC: BKIRF) largest shareholder has increased its ownership in the company to 15%, at a time when the iron ore developer has been forced to suspend work at its Shymanivske project in Ukraine, due to the ongoing Russian attack.   

RAB Capital purchased 2.5 million shares at an average price of 12.45¢ per share, Black Iron said in a press release.  

“We believe that Ukraine will remain independent as the clouds of war clear,” said Philip Richards, RAB Capital’s majority shareholder. “There is a new impetus to Ukraine joining the European Union on a fast track, which is a direct result of massive public support for Ukraine in this war…Our project will benefit greatly in my view from E.U.’s financing initiatives.”  

In an interview with The Northern Miner, Black Iron’s CEO Matt Simpson described the move as a “very big endorsement of support” from the company’s largest shareholder. 

The progress of a number of mining projects owned by major companies like Kinross Gold (TSX: K; NYSE: KGC) are expected to halt or slow down due to Russia’s ongoing invasion of Ukraine, analysts say.  

Simpson said that the invasion has had a “major impact” on the company and that it had stopped all work in Ukraine.  

“Our project is located close to a city called Kryviy Rih. At this point of time there’s no Russian forces on the ground…the attacks are predominantly focused in the north,” said Simpson. “Hard to say how this plays out over the next few days… I think Ukraine civilians and military are surprising a lot of people with their resilience.”  

This isn’t the first time that Black Iron is witnessing such a scenario. It had to put its “shovel-ready” project on ice back in 2014 when Russia annexed Ukraine’s Crimean Peninsula on the Black Sea and brought the country’s two easternmost provinces — in the Donbas region, 400 km east of Black Iron’s project — into the neighbouring Russian Federation. 

The CEO, however, doesn’t expect a prolonged war this time, and hopes it gets resolved in Ukraine’s favour in the coming weeks. But if it doesn’t, he expects a different group of shareholders to fund the company’s future.   

“If Russia is successful in taking over Ukraine, it is likely that there will be sanctions preventing international investors from investing in Russia, which would mean that we would have to look at alternate investors to fund the construction of our project,” said Simpson, adding that majority of the funding for the project have come from European and U.S.-based investors.  

The Shymanivske project is 330 km southeast of Kiev and lies in the heart of central Ukraine’s KrivBass iron ore mining district. The deposit is in the southern part of KrivBass and is less than 2 km from two open pit iron mines owned by ArcelorMittal and Metinvest/Evraz Steel. 

The project has a resource of 355 million measured tonnes grading 32% total iron and 19.5% magnetic iron, and 290 million indicated tonnes grading 31.1% total iron and 17.9% magnetic iron, using a 10% magnetic iron cut-off grade. Shymanivske also has an inferred resource of 188 million tonnes grading 30.1% total iron and 18.4% magnetic iron. 

Simpson said that the company will be completing the project’s feasibility study which is in a “very well advanced” stage.  

The Toronto-based CEO’s main priority for now though is to support his company’s team members in Ukraine, who have been provided with additional money for food and other essentials.   

“All of our team members right now are safe and they are all home to make sure they can protect their families… most people are taking up the fight.”    

(This article first appeared in The Northern Miner)