Canada's Black Iron with assets in Ukraine has bought back its 49% of shares in Black Iron Cyprus Ltd. (BKI Cyprus), the full owner of Shymanivske project (Kryvy Rih, Dnipropetrovsk region), from Metinvest for $5.6 million, the company said in a report.

"This transaction allows Black Iron to unlock cash previously jointly held in BKI Cyprus. Black Iron is now unrestricted in its efforts to acquire a new high quality near term cash flow generating asset as per the strategy outlined in the Company's June 24, 2015 press release," the company said.

Discussions with the intra-agency working group comprised of representatives from various Ukraine Government agencies and chaired by the Justice Ministry to resolve Black Iron's outstanding legal issues and acquire needed land remain ongoing. Progress is being made albeit at a slower pace than management aspires. For the Company to meaningfully advance its highly economic Shymanivske to construction, resolution of the outstanding legal issues, land acquisition, sustained peace in Ukraine and a recovery of iron ore prices are required.

On June 24, 2015, Black Iron said that the company decided to buy back and cancel up to 10% of its shares and plans to discuss the possibility of acquiring troubled but promising assets in the sector with its Ukrainian partner Metinvest. The company has implemented a comprehensive business plan designed to increase shareholder value through a three pronged approach during this period of depressed iron ore prices and ongoing war in Ukraine. This plan is aimed at striking a balance between creating a near term share price uplift for shareholders while preserving and ultimately unlocking the value in Black Iron's flagship Shymanivske project by doing the following: buying back and cancelling up to 10% of the current common shares of the company in the public float; reviewing strategic transactions to acquire a near term producing and cash flow generating asset; and continue the advancement of the flagship Shymanivske project albeit with curtailed spending to preserve cash.

According to the document, the depressed global mining and metals sector presents an opportunity for companies such as Black Iron with cash reserves to acquire high quality distressed assets at attractive prices. The Black Iron management is currently reviewing several opportunities that show potential to generate cash return within a few years.

Acquisition of such a project at this time will require approval from Metinvest B.V. as the bulk of Black Iron's cash reserves, essential for the acquisition and its working capital requirements, resides in the 51% owned Black Iron Cyprus subsidiary of which Metinvest B.V. owns the remaining 49%.