Canada's Black Iron, the iron ore exploration and development company with assets in Ukraine, has decided to proceed with a new preliminary economic assessment on its 100% owned Shymanivske project, the company has said on its website.

As background, Black Iron released a positive feasibility study on the Project in 2014. The study was based on the annual production of 9.9 million tonnes of high grade 68% iron content concentrate, used the long-term broker consensus iron ore price at the time of $95 per tonne and an exchange rate of UAH 8 to the U.S. dollar.

Today the exchange rate is approximately UAH 26: $1 and iron ore with 62% iron content is selling for approx. $64 per tonne.

"Using the current exchange rate is expected to materially reduce the projected upfront capital cost since a significant amount of the construction costs including labor, concrete, steel and secondary equipment such as conveyors will be Ukraine based. The lower exchange rate also results in significantly lower operating costs as achieved by existing Ukraine iron ore miners," the company said.

Canada's BBA Inc. led the preparation of the company's former PEA and therefore is highly familiar with the project to complete the new PEA in an efficient manner. The company expects to release the results of the PEA and file a technical report in Q4 2017.

In October 2010 Black Iron acquired Geo-Alliance Ore East Limited, a Cyprus-based subsidiary of Geo Alliance Group Limited of EastOne Investment Group belonging to Ukrainian businessman Victor Pinchuk, together with licenses worth $13 million, and renamed it Black Iron (Cyprus) Ltd.

The Cypriot company owns over 99% of the shares in Shymanivske Steel LLC and Zelenivske Steel (both based in Dnipro), which own licenses to exploit iron ore mines for the period until November 1, 2024 and November 1, 2014 respectively.

In July 2013, Metinvest, Ukraine's largest mining and steel group, has reached an agreement with Black Iron Inc on investment in Black Iron (Cyprus) Ltd (BKI Cyprus), a subsidiary of the Canadian mining company that owns the iron ore assets in Ukraine. The agreements require Metinvest to make an initial investment of $20 million in BKI Cyprus to help finance the projects. Later Metinvest left the project.