Black Iron Signs US$100 Million Royalty Investment Term Sheet

TORONTO, ON / ACCESSWIRE / December 22, 2020 / Black Iron Inc. ("Black Iron" or the "Company") (TSX:BKI); (OTC PINK:BKIRF); (FWB:BIN) is pleased to announce that it has entered into a non-binding royalty term sheet for US$100 million with a prominent United States based institutional investor.

Matt Simpson, CEO of Black Iron, stated: "This major planned investment from a high caliber institution is game-changing for Black Iron. It aims to provide the company with a substantial portion of the necessary construction financing, and, more importantly, the basis for a long-term partnership with a highly respected financial institution. As one of the lowest cost iron ore mines globally, Black Iron is poised to deliver tremendous value to its shareholders as we embark on the final stages of our capital raise and seek to begin construction in the second half of 2021."

The company has received nonbinding term sheets from global investment banks for $260 million to $300 million in first lien financing. Additionally, the Company has received multiple nonbinding term sheets from offtake parties that not only commit to purchase 100% of the company's iron concentrate, but also to invest a substantial amount of equity into the project. These investments in conjunction with this $100 million royalty provide the necessary capital to complete the first four million tonne phase of development.

This US$100 million investment would be funded upon entering into a binding definitive agreement and the achievement of certain closing conditions. In exchange for investing US$100 million, the investor is entitled to receive a perpetual 6.75% royalty on the phase-one volume of four million tonnes.

In conjunction with this announcement, Black Iron has issued thirty million non-transferable common share purchase warrants (the "Warrants") to Perpetual Iron Inc. ("Perpetual") at an exercise price of $0.31 valid for five years for facilitating and supporting negotiations between Black Iron and the investor. None of these Warrants vest (i.e. Perpetual being able to exercise) until binding agreements are signed with investor. Ten million Warrants will vest upon Black Iron entering into a binding definitive agreement with investor and the balance of the Warrants will vest upon Black Iron's initial draw of the Facility upon which there will also be a payment to Perpetual of US$4 million. Should Black Iron not enter into a binding definitive agreement with this investor within two years from the date hereof, all Warrants issued to Perpetual will be voided. The issuance of these Warrants includes restrictions on the number of shares Perpetual can sell during the first three years post issuance while Black Iron constructs its Shymanivske Project and brings it into operation.

About Black Iron

Black Iron is an iron ore exploration and development company, advancing its 100% owned Shymanivske project located in Kryviy Rih, Ukraine. The Shymanivske project contains a NI 43-101 compliant mineral resource estimated to be 646 Mt Measured and Indicated mineral resources, consisting of 355 Mt Measured mineral resources grading 32.0% total iron and 19.5% magnetic iron, and Indicated mineral resources of 290 Mt grading 31.1% total iron and 17.9% magnetic iron, using a cut-off grade of 10% magnetic iron. Additionally, the Shymanivske project contains 188 Mt of Inferred mineral resources grading 30.1% total iron and 18.4% magnetic iron. Full mineral resource details can be found in the NI 43-101 compliant technical report entitled "Preliminary Economic Assessment of the Re-scoped Shymanivske Iron Ore Deposit" effective November 21, 2017 under the Company's profile on SEDAR at www.sedar.com. The Shymanivske project is surrounded by five other operating mines, including ArcelorMittal's iron ore complex. Please visit the Company's website at www.blackiron.com 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, CEO of Black Iron, who is a Qualified Person as defined by NI 43-101.

For more information, please contact:

Matt Simpson
Chief Executive Officer
Black Iron Inc.
Tel: +1 (416) 309-2138

Forward-Looking Information

This press release contains forward-looking information. 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. Forward-looking information may include, but is not limited to, statements with respect to the financial viability of the Project, the Company's ability to obtain adequate financing, including offtake financing, the Company's ability to enter into definitive agreements with MSD Partners, the Company's ability to acquire the requisite land for Project construction, the Company's ability to develop the Shymanivske project, the ceasefire of conflict in Ukraine and the Company's future plans. 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". 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. The Company notes that mineral resources that are not mineral reserves do not have demonstrated economic viability.

SOURCE: Black Iron Inc.