Black Iron (TSE:BKI) reported Wednesday that it received a favourable court ruling allowing it to resume drilling activities at its Shymanivske iron ore project in Kryiv Rih, Ukraine.
The Dnepropetrovsk District Administrative Court ruled in favour of the company with respect to a temporary suspension of activity at the site, imposed by the Dnepropetrovsk Region Ecological Inspectorate.
Following the decision, the company will now apply for the required drilling permits and mobilize diamond drill rigs back to site in preparation for its first definition and exploration program, which is aiming to increase the size of the resource at the property to 1.0 to 2.0 billion tonnes at a grade of 28% to 32% iron.
Investors cheered the news, with shares of the iron ore explorer rising nearly 15 percent to trade at $0.63 as of 1:45pm ET.
Currently, the Shymanivske project has an existing NI 43-101 compliant measured and indicated mineral resource containing 345 million tonnes grading 32% iron, and an additional inferred mineral resource containing 469 million tonnes grading 31% iron.
The company's new targets are based on known mineralized zones open along strike to the north and at depth, as well as on results from a recently completed ground geophysical program.
President and CEO of Black Iron, Matt Simpson, commented: "This program has the potential to not only increase the overall size of the mineral deposit, but also upgrade the mineral categorization of the resource.
"Based on an increase in size to the mineral deposit, we would begin analyzing the potential to increase our projected annual production rate. An increase in annual production should significantly add to the project value."
The initial definition and exploration drill program will consist of 20,000 metres of drilling, laboratory assays of core, and an updated independent resource estimate by Watts, Griffis and McOuat Limited - due out in the second quarter of 2012.
The drill campaign will start with seven drills once necessary permits are received, and is expected to take five months to complete.
Drilling will be directed at upgrading the inferred resource to the measured and indicated categories, Black Iron said, as well as expanding the known mineralization to the north of the Shymanivske property and at depth across the deposit, targeting new areas outlined by the ground gravity survey.
COO of Black Iron, George Mover, added: "It is an exciting time for Black Iron as we expect this program will upgrade the categorization and add significant tonnage to our mineral resource estimate for the Shymanivske Project."
Results from the drilling program will be released on a regular basis, the company said.
The Shymanivske project is surrounded by five other operating mines including ArcelorMittal's iron ore complex.
Black Iron also holds an exploration permit for the adjacent Zelenivske project which it intends to further explore.