Black Iron announces private equity placement

Black Iron (BKI CN), a Canadian iron ore exploration
and development company with a project in Ukraine, reported on March 21 that it
intends to complete a private placement financing of up to 25 mln units of the
Company at a price of CAD 0.06 per unit. Each unit consists of one common share
and a half of one share purchase warrant. The warrant entitles the holder to
acquire one share at a price of CAD 0.09 for a period of three years. Black
Iron has the right to accelerate the warrants’ expiry date if shares trade at
CAD 0.15 or higher for ten days. The newly issued shares and warrants will be
subject to a four-month and one-day statutory hold period.

Black Iron intends to use the proceeds to advance its
Shymanivske project, to further discussions and negotiations on construction
financing and for general working capital purposes.

Dmytro Khoroshun: This
offering might be related to the memorandum of understanding that Black Iron signed in February
with Glencore (GLEN LN), and Glencore might be the investor into the new shares
and warrants. As Black Iron had 159.7 mln of shares out before this placement,
we calculate that the investor will own 13.5% of Black Iron with the new 25 mln
shares, and 19.0% if warrants are exercised.

This news is positive for both Black Iron and
Ukraine’s image as an investment destination because it demonstrates the
seriousness of foreign investors in projects such as Shymanivske.