Black Iron (OTC:BKIRF) has received its Mine Allotment Certificate from the central government in Ukraine, which is a major step forward to obtain all necessary approvals to start the construction activities on its Shymanivske iron ore project in Ukraine. According to the company, this certificate is an indication that the central government expects the project to effectively be built in the near future. More importantly, the award of a mining allotment certificate also means the planned open pit shell has been approved, which could be an important step forward.
I'm (positively) surprised to see Black Iron is still going full-speed ahead with the development of the Symanivske project as I wouldn't have blamed the management for taking things more slowly as it doesn't look like the armed conflict in the east will go away soon. Even though the company emphasizes it's business as usual in the other parts of Ukraine, seeing that the central government is indeed continuing its day to day business is quite refreshing and reassuring.
Despite this update, I will stay on the sidelines until a clearer picture about how the armed conflict in the east will be ended arises. I commend and applaud the Black Iron management team for pushing this project ahead - it shows a lot of commitment - but the geopolitical situation scares me right now. The project is quite good, but as I explained in my previous article, it is risky as long as the unrest in the country remains at an elevated level. A stable and reliable political situation is imperative for the full value of Black Iron to surface otherwise this company might forever be a so-called 'value trap'.
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