Black Iron selects EPCM contractor for its mining complex

Black Iron (BKI CN), an iron ore resources company, reported on August 20 that it selected the Fluor Transworld Services company as its main engineering, procurement and construction management contractor (EPCM). The company is preparing to commence detailed design and construction of the Shimanivske Iron Ore Mining Complex.

Roman Topolyuk: The selection of an EPCM contractor is an important first step after the company announced in July an agreement with Metinvest (METINV) to develop the Shymanivske and Zelenivske iron ore deposits jointly. However, even more significant drivers will be the expected acquisition of additional, required land plots for its production facilities, as well as the gaining of approvals from authorities.

The success of these developments will spur the raising of debt financing (to up to 60% of the total estimated CapEx of USD 1.1 bln), as well as conclude an off-take agreement. Black Iron trades at a EV/resources multiple of 0.03 USD/t, which is a 47-53% discount to junior iron ore companie