Black Iron Letter to Shareholders: Our Future Remains Promising! TORONTO, ONTARIO -- (Marketwired) -- 07/09/13 -- Black Iron Inc. (TSX:BKI)(FRANKFURT:BIN) - -- PROJECT ECONOMICS FROM BANKABLE FEASIBILITY STUDY ARE ROBUST AND HAVE THE POTENTIAL TO GET STRONGER -- ADDITIONAL PILOT PLANT TEST WORK SUGGESTS THAT OPPORTUNITIES EXIST TO INCREASE THROUGHPUT AND DECREASE OPERATING COSTS OR POTENTIALLY TO LOWER CAPITAL COSTS -- TEST WORK CONFIRMS ABILITY TO PRODUCE FOUR DIFFERENT HIGH-GRADE PRODUCTS: BLAST FURNANCE (BF) CONCENTRATE, BF PELLETS, DIRECT REDUCTION (DR) CONCENTRATE, AND DR PELLETS -- ADDITIONAL ANNOUNCEMENTS EXPECTED NEAR TERM ON INFRASTRUCTURE USE AND OTHER STRATEGIC DEVELOPMENTS Black Iron Inc. ("Black Iron" or the "Company") would like to express its appreciation to shareholders for their continued support of the Company. Positive strides continue to be made in the advancement of the Shymanivske Iron Ore Project ("Shymanivske" or the "Project") and we would like to take this opportunity to update you on what has been happening and why we continue to believe that our future remains promising! Despite challenging times in the global capital markets, we have remained busy since releasing the results of our Bankable Feasibility Study ("BFS") in Q4 2012. Much has changed since we successfully completed our initial public offering on the Toronto Stock Exchange. We have strategically deployed the monies raised and have significantly advanced test work and engineering at Shymanivske. Now, more than ever, we believe the Project has the potential to become a world class iron ore producer. Here is just a quick summary of our recent notable achievements: -- Bankable Feasibility Study. On December 18, 2012, we filed our National Instrument 43-101-compliant Bankable Feasibility Study entitled "Feasibility Study of the Shymanivske Iron Ore Deposit for Black Iron Inc." (the "Report"). The Report contains a comprehensive mine to port breakdown of our Project. In terms of economic robustness, the Report shows a 45.9% internal rate of return, 2.2 year payback and US$3.5 billion net present value (all pre-tax), for a 9.2 million tonne per year high-grade 68% iron concentrate producer. The capital cost estimates for the Project were reported at $1.094 billion, or $119 per tonne of installed capacity, ranking it in the first quartile of development projects. A full copy of the Report may be found under the Company's profile on SEDAR. -- Pilot Plant Test Work. We are currently conducting pilot plant test work with an emphasis on firming up the process flow sheet, equipment sizing and product specifications. While this test work is still ongoing, we believe we have found significant opportunities to achieve even better cobber (i.e. magnetic separation stage located between the primary crushing and grinding stages) rejection rates, which may lead to stronger Project economics. If these opportunities prove to be possible, they have the potential to either increase the Project throughput and reduce operating costs, or maintain current throughput rates and reduce capital costs. Either outcome has the potential to materially increase the Project IRR and NPV. -- Pellet Testing Complete. We continue to investigate the opportunity to produce a high-grade pellet product. To this end, we have completed all basket and pot grade testing. We await the final results but all indications thus far support a positive conclusion on physical and pyromet characteristics. In terms of product grade, these blast furnace pellets would have an iron content of 65% with only 4% silica. -- Direct Reduction Capability. We have also confirmed the ability to produce an ultra-high-grade, direct reduction concentrate product and direct reduction pellet. The direct reduction concentrate would have iron content greater than 69% with 1.3% silica. Direct reduction products sell at a premium to blast furnace material and would open up more end markets for our product. We will continue to work on these advancements and look forward to reporting on the final conclusions over the balance of the year. We are also working on a number of initiatives that we believe will help generate additional interest in Black Iron. Specifically: -- Advancing Infrastructure Contracts. One of the things that differentiate Black Iron from many of the other iron ore developers is our access to existing infrastructure with available capacity. We have been discussing our usage requirements with the various rail, port, power and municipal utilities providers and believe we will be in a position to enter into final-stage negotiation of use agreements in the near future. Securing these infrastructure contracts will further de-risk our Project development. -- Strengthening Our Local Presence. A key part of building a world-class mining operation is the quality and depth of your team at site, particularly when operating in a foreign country. We have been working diligently to augment our already strong presence in Ukraine, but have come across a unique opportunity to potentially work with a major local company. We hope to execute on this opportunity in the near term, which could further differentiate us from other developers. -- Off-Take Discussions Picking Up. The release of the BFS brought significantly more attention to our Project and its potential role as a supplier of high-grade iron ore products. We have had a number of positive discussions with prospective off-takers with a number of groups actively reviewing our data and testing our ore. Finding an off-take group, or groups, is a high priority at this stage as we see the off- taker as playing a vital role in our financing plan for the Project's development. As a team, our top priority is the successful development of our iron ore assets. An extension of this priority is ensuring that our efforts are accurately reflected in our share price. We admit that we are disappointed with recent trading prices but we are working hard to develop the Company and to unlock value for shareholders. With the work we have completed since the BFS, the news flow that will follow our recent initiatives, and support from new and existing shareholders, we remain highly motivated to grow the Company and execute our strategic plan. As we progress, we will continue to update you through our website and press release. Our future remains promising! Thank you again for your continued support. Sincerely, BLACK IRON INC. Matt Simpson - President & CEO George Mover - COO Paul Bozoki - CFO Aaron Wolfe - VP, Corporate Development Nikolay Bayrak - VP, Gov't & Community Relations Christine Gallo - Corporate Secretary Michael McAllister - Manager, Investor Relations About Black Iron Black Iron is an iron ore exploration and development company, advancing its 100 percent-owned Shymanivske project located in Kryviy Rih, Ukraine. This project contains an NI 43-101 compliant resource, with 645.8 Mt Measured and Indicated mineral resources, consisting of 355.1 Mt Measured mineral resources grading 32.0% Total iron and 19.5% Magnetic iron, and Indicated mineral resources of 290.7 Mt grading 31.1% Total iron and 17.9% Magnetic iron, using a cut-off grade of 10% Magnetic iron. Additionally, the project contains 188.3 Mt of Inferred mineral resources grading 30.1% Total iron and 18.4% Magnetic iron. The project is surrounded by five other operating mines, including ArcelorMittal's iron ore complex. The Company believes that existing infrastructure, including access to power, rail and port facilities, will allow for a quick development timeline to production. Further, the Company holds an exploration permit for the adjacent Zelenivske project, which it intends to further explore to determine its potential. Please visit the Company's website at www.blackiron.com, follow us on Facebook: BlackIronInc or Twitter: @BlackIronBKI or write us at firstname.lastname@example.org for more information. The technical and scientific contents of this press release have been prepared under the supervision of and have been reviewed and approved by Matt Simpson, P.Eng., President and CEO of Black Iron Inc., who is a Qualified Person as defined by NI 43-101. For further information, please see the technical report of the Company, which is available on SEDAR at www.sedar.com. Forward-Looking Information This press release contains forward-looking information within the meaning set out in Canadian securities laws. 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, including those factors discussed in the section entitled "Risk Factors" in the Company's annual information form for the year ended December 31, 2012 or as may be identified in the Company's public disclosure from time to time, as filed under the Company's profile on SEDAR at www.sedar.com. Forward-looking information may include, but is not limited to, statements with respect to results of the feasibility study dated December 17, 2012 (the "Feasibility Study", as filed under the Company's profile on SEDAR at www.sedar.com) and the mineral reserve and resource estimate, the future financial or operating performance of the Company, its subsidiaries and its projects, the development of and the anticipated timing with respect to the Shymanivske project, the ability to obtain financing; and the impact of concerns relating to permitting, regulation, governmental and local community relations. 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". Estimates underlying the results of the Feasibility Study arise from engineering, geological and costing work of WorleyParsons Canada Services Ltd. ("WorleyParsons"), Watts, Griffis and McOuat Limited ("WGM"), Consulting Geologists and Engineers of Toronto, P&E Mining Consultants Inc. ("P&E") and the Company. See the technical report relating to the Feasibility Study for a description of all relevant estimates, assumptions and parameters. 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; the actual results of current exploration activities; 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. Contacts: Black Iron Inc. Michael McAllister Manager, Investor Relations +1 (416) 309-2950 email@example.com Black Iron Inc. Matt Simpson President & Chief Executive Officer +1 (416) 309-2138 www.blackiron.com
Black Iron Letter to Shareholders: Our Future Remains Promising!