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A Compelling Iron Ore Investment Opportunity

Corporate Presentation
January 2012

TSX: BKI

Disclaimer
Forward Looking Statement
TSX: BKI
This Presentation contains forward-looking information which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its subsidiaries (collectively, the Company) and its mineral projects; the future prices of metals; the anticipated results of exploration activities; the estimation of mineral resources; the realization of mineral resource estimates; capital, development, operating and exploration expenditures; costs and timing of the development of the Companys mineral properties; timing of future exploration; requirements for additional capital; government regulation of mining operations; anticipated results of economic and technical studies; environmental matters; reclamation expenses; title disputes or claims; limitations of insurance coverage and the timing and possible outcome of pending litigation and regulatory matters. Often, but not always, forward-looking information can be identified by the use of words and phrases such as plans, expects, is expected, budget, scheduled, estimates, forecasts, intends, anticipates, or believes or variations (including negative 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 based on the opinions and estimates of management as of the date such statements are made and is based on information currently available to management and upon what management believes to be reasonable assumptions, including, among others, that general business, economic, competitive, political and social uncertainties remain favorable; that actual results of exploration activities justify further studies and development of the Companys mineral projects; that the future prices of metals, and iron ore in particular, remain at levels that justify the exploration and future development and operation of the Companys mineral projects; that ore body quality and characteristics remain as anticipated; that there is no failure of plant, equipment or processes to operate as anticipated; that accidents, labour disputes and other risks of the mining industry do not occur; that the jurisdictions in which the Company operates remain politically stable; that there are no unanticipated delays in obtaining governmental approvals or financing or in the completion of future studies, development or construction activities; that the actual costs of exploration, and studies remain within budgeted amounts; that regulatory and legal requirements required for exploration or development activities do not change in any adverse manner, as well as those factors discussed in the section entitled Risk Factors in this Final Prospectus of the Company dated March 16, 2011 or as may be identified in the Companys public disclosure from time to time, as filed under the Companys profile on SEDAR at www.sedar.com. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in the forward-looking information, there may be other factors that cause such actions, events or results to differ from those anticipated, estimated or intended. Any inaccuracy in the assumptions identified above may also cause actual actions, events or results to differ materially from those described in the forward-looking information. Forward-looking information contained herein is made as of the date of this Presentation and the Company disclaims any obligation to update any forward-looking information, whether as a result of new information, future events or results, except as may be required by applicable securities laws. There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, potential investors should not place undue reliance on forward-looking information. This Presentation does not constitute an offer to sell, or solicitation of an offer to buy, any securities by any person in any jurisdiction in which it is unlawful for such person to make such an offering or solicitation. No representation or warranty, express or implied, is made as to the accuracy or completeness of the information set out herein, and nothing contained herein is, or shall be relied upon, as a promise or representation, whether as to the past or future.

Solid Fundamentals for Success


A High-Quality Iron Ore Development Opportunity
TSX: BKI

Good access to skilled labour, power, rail & ports

Exceptional Infrastructure

35km from city of Kryviy Rih (pop. 750k); paved road to site 2 km from state-owned rail and power lines with surplus capacity & five deep water ports accessible by rail (140-515km)
Two properties held Shymanivske & Zelenivske Shymanivske - 373 Mt Measured & Indicated resource @ 31.3% iron; additional 480 Mt of Inferred resource @ 30.2% iron, which will be concentrated to ~65% iron Potential for resource expansion by further drilling of both deposits

Large iron ore deposit with NI 43-101 compliant resource*

Sizable Resource

Close to Target Markets Compelling Economics

Project located in Kryviy Rih, Ukraine; one of the worlds major iron ore districts
Close to target markets: W.Europe, Turkey, Russia, Asia and Middle East Surrounded by 7 other operating iron ore mines

High margins due to close proximity to multiple steel mills, relative labour cost advantage and favourable corporate tax rate of 16%
PEA for 7.3Mt Pellet Plant Feed NPV of US$3.0 billion and 42.1% IRR PEA for 7.6Mt Pellet NPV of US$4.1 billion and IRR of 35.2%

Skilled Management

Experienced management team with history of creating value for shareholders of Consolidated Thompson, RioTinto and Ferrexpo
3

* Resource estimate compiled using historic Soviet data by Hugues de Corta, who is an independent qualified person as defined by NI 43-101

Sound Capital Structure


Attractive Valuation with substantial upside
TSX: BKI Capital Structure
IPOd on the TSX on March 29, 2011 ($1.40) Shares Outstanding Warrants
(1) (2) (3)
$1.60 $1.40

Historical Share Price

140.1 million 1.7 million 8.2 million 1.5 million 151.5 million ~US$100 million ~US$25.0 million nil

$1.20
$1.00 $0.80 $0.60

Stock Options

$0.40
$0.20 $0.00

Share Comp Plan

23-May-11

9-May-11

28-Mar-11

10-Oct-11

24-Oct-11

18-Jul-11

7-Nov-11

19-Dec-11

21-Nov-11

6-Jun-11

12-Sep-11

15-Aug-11

Fully Diluted Shares Market Cap(4) Current Cash Balance Debt Balance

Analyst Coverage
Maxim Sytchev Rajiv Chail John Hughes Philip Ker
4

29-Aug-11

26-Sep-11

11-Apr-11

25-Apr-11

20-Jun-11

Daniel Greenspan Robin Kozar Craig Miller

1. 1,653,312 warrants exercisable at $1.40 per share (IPO financing). 2. 5,700,000 options exercisable at $1.40 per share and 2,530,000 options exercisable at $0.54. 3. 1,500,000 shares reserved for Directors, Executives, Employees and Consultants. 4. As at January 10, 2011, using a closing price of CAD 0.71 per share.

5-Dec-11

1-Aug-11

2-Jan-12

4-Jul-11

Project Backed by Forbes & Manhattan


Success with Consolidated Thompsons Bloom Lake Iron Mine
TSX: BKI

Forbes & Manhattan Involvement

World class 8Mtpa iron ore concentrate mine in Quebec Advanced from exploration stage through development to construction
8 mtpa capacity (66% Fe concentrate) expanding to 16 mtpa Completed scoping study, 3 feasibility studies, secured off-take with Chinas third largest steel producer (WISCO)
First F&M involvement

Recently acquired for $4.9 billion

Raised over Cdn$1 bn in capital Attracted and put in place a qualified management team

$1 mm market cap
2005 Today

A Track Record of Iron Ore Success


TSX: BKI

Management & Board have a history of creating value for shareholders of iron ore projects Consolidated Thompson Iron Mines, Rio Tintos Iron Ore Company of Canada and Ferrexpo Respected Ukraine professionals and former Government Advisors
Key Management Board of Directors

Matt Simpson President & CEO


George Mover COO Paul Bozoki CFO Nikolay Bairak VP Gov. & Community

Bruce Humphrey - Chairman


Jaroslav Kinach Chris Westdal Pierre Pettigrew

Aaron Wolfe VP Corp Development


Christine Gallo Corporate Secretary
Ukraine Advisory Board

John Detmold
Dave Porter Matt Simpson President & CEO

Daniel Bilak Jaroslav Kinach Igor Buchatskiy


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Deposits In Mining Friendly Region


Adjacent to existing Iron Ore Producers
TSX: BKI
ArcelorMittals Kryviy Rih Iron Ore Complex

M&I: 345Mt @ 31.83% Inferred: 469Mt @ 31.05%

Black Irons Shymanivske Project

Two mining and exploration permits covering 5.92 km2


Mining permit at Shymanivske, which has been extensively explored, covering 2.56 km2 valid until 2024 Exploration permit at Zelenivske covering 3.36 km2 valid until 2014

Railway lines

Black Irons Zelenivske Project

Adjacent to ArcelorMittals Kryviy Rih iron ore complex and Smart & Evrazs YuGOK iron ore mine Plan to acquire a plot of land from Ukraine Government adjacent to the Shymanivske deposit for project waste dumps, concentrator and tailings

Smart & Evrazs YuGOK Iron Ore Mine

Large Ore Deposit with Growth Potential


TSX: BKI

Banded iron formation consisting primarily of magnetite with some hematite


Iron band thickness ranges from 40-80 m Only 9.7-21.2 m of overburden Very clean ore body low in phosphorus, manganese and aluminum

The resource is defined by ~37,000 metres of historical drilling


Black Iron recently completed 5,882 meters of twin hole drilling

Shymanivske Resource* Measured Indicated Total Measured and Indicated Inferred

Tonnage (Mt) 306.3 66.4 372.7 480.3

Fe Tot (%) 31.3 31.9 31.4 30.2

Fe Mag (%) 18.9 20.3 19.1 17.4

Total iron grade and band width align very well with historical data

Potential for total combined resource expansion of 1.1 to 1.8BT


Additional drilling of Shymanivske at North end of deposit and to depth Exploration of the Zelenivske project

Tonnage and grade rounded to first decimals. Cut-off grade of 15% Fe Tot

* Resource estimate compiled using historic Soviet data by Hugues de Corta, who is an independent qualified person as defined by NI 43-101

Potential Resource Extension at Shymanivske


Ground Gravity Shows Iron Ore Mineralization at North End
TSX: BKI

Potential resource upside to be drilled

Ground gravity and magnetic surveys show potential extension of iron ore mineralization at North end of property as circled in red
This area has not been included in the NI 43-101 resource as it has not yet been sufficiently drilled The identified area will be a target of a future drill program

Property boundary

Very likely Iron in ground

Drill hole

Likely just dirt in ground

Excellent Infrastructure
Key to a Successful Iron Ore Project
TSX: BKI

Paved roads to site, located 35km away from the major city of Kryviy Rih which has a skilled work force
Surplus electricity readily accessible from high voltage power lines that run beside property ~2 km from main state-owned rail line Confirmation in July 2010 from Ukrainian Government that there is sufficient capacity to haul at least an additional 10 million tonnes of iron ore per annum

5 deep water ports accessible by rail with iron ore facilities available Preferred port option is Yuzhny located ~390 km away and providing access to the Black Sea and global seaborne iron ore markets
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Strategic Global Location


Close Proximity to Target Markets with Abundant Port and Rail Access
TSX: BKI

River barge & rail access to Western Europe and port access via Black Sea to global seaborne iron ore markets
Target markets include Asia, Western Europe, Turkey, and Middle East

Several dry bulk tonnage ports accessible using railway running beside properties
Approximately 20% to 25% shorter transport distance to China compared to North and South American producers1
Major Rail Line

Power, port and rail access, combined with local highly skilled workforce, provide potential to accelerate development and reduce the amount of capital investment
Europe

Russia

Middle East India

South Korea and Japan China

1 Based on approximate nautical miles distances of Odessa (Ukraine), Vitoria (Brazil) and Montreal (Canada) to Tianjin (China) as disclosed at searates.com

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Ukraine: A Mining Friendly Country


Strong Local and National Support
TSX: BKI
Democratic republic under a semi-presidential system with separate legislative, executive, and judicial branches Ongoing negotiations to sign the drafted Association Agreement with the European Union Potential key member of the Russia proposed Eurasian Trade Union Strong economic growth GDP growth of 4.2% in 2010; expected to increase to 4.5% in 2011

Steel production is Ukraines largest industry 40% of exports Large, highly skilled labour force Population of approximately 45 million GDP per capita only $6700/yr

ArcelorMittal and Ferrexpo plc have operated incountry for over 5 years Legislated corporate tax rate reductions from 21% in 2012 to 16% in 2014 Favourable mining royalties of $0.40 per tonne of ore mined (~2%) to the Government
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Globally Significant Iron Ore District


Ukraine: 6th largest iron ore producer & 4th largest reserve base
TSX: BKI 2010E Iron Ore Production
1000 800

Black Irons projects are located in the heart of Ukraines iron ore belt 35km from city of 750,000 people Iron ore district trends 300 km with sedimentary rock hosted banded iron formations (Dnenpovskog complex)

900

Only 3% of world production


600

Iron Ore (mt)

420 400 200 0

370 260 100 72 55 49

35 25
Sweden

Historically well explored resource base but substantially under-exploited due to historic Soviet policy
15 iron ore mines in Ukraine produced 72 million tonnes in 2010
Kirovograd Tarnavatskoye Poltavsky GOK Yeristovskoye Tsentralny Safonovskoye Ordzhonikize Gok Ingulestky GOK Yuzhny GOK Kuksunurskoye

Russia

United States

Ukraine

South Africa

Australia

Canada

China

Brazil

India

Global Distribution of Fe Reserves


United States 3% Sweden 3% India 5% China 8% Rest of World 20% Russia 16%

Liponevsky Novokonstantinovsky Kryviy Rih Iron Ore Complex Shymanivske Zelenivske Kryviv Rih

Brazil 18%

Ukraine 10%

Australia 17%

Source: USGS 2011 Iron Ore report and Metal Economics Group

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Shymanivske PEA Highlights


High Value, Low Net Cost Iron Ore Development Project
TSX: BKI

Production Case:
Annual Production: Iron Content: Estimated Capital Investment: Estimated Operating Expenses: (average initial 20 years) (avg ex. leasing costs years 8-20) Net Present Value (8%): IRR: Annual Average Cash Flow: Projected Payback (8%):

Pellet Plant Feed


7.3 Mt 67.0% US$896.0 million US$52.40/t US$48.22/t US$3.0 billion 42.1% US$382.8 million 2.2 years

Pellet
7.6 Mt 65.0% US$1,571.3 million US$64.15/t US$60.11/t US$4.1 billion 35.2% US$540.7 million 2.9 years

Estimated Mine Life:


Proj. Revenue Commencement

28 years
Q4 2015

28 years
Q4 2015

OPPORTUNITIES EXIST TO FURTHER IMPROVE ALREADY FAVOURABLE ECONOMICS


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Vale (Shimandou 1) African Minerals (phase2) Xstrata (Askaf) African Minerals (DSO) ArcelorMittal (Western
109 109 84 87 90 92

Fortescue (Expansion) Rio Tinto (IOC) Black Iron Alderon


122 123 124

Sundance
Kumba Ferrexpo (Yeristovo) IRC (Kuranakh) London Mining IRC (K&S) Auila (Hardey) Xstrata (Zanaga) Atlas Iron (Ridley) Rio Tinto (Pilbara) Gindalbie (Karara) Anglo Merican (Minas Rio) BHP (RGP5&6) Aquila (West Pilbara) ArcelorMittal (Western
134 135 141 142

Shymanivske Relative to Other Iron Ore Projects

Black Irons Capital Cost Advantage

Source: Company data; Renaissance Capital estimates

CAPEX Forecast (US$/t of capacity)

167 157 159 160 192 200 180 186 188 189 190

Average = 161

BHP (Samarco)
Atlas Iron (Balla Balla) CITIC Pacific (Sino) Baffinland Xstrata (Geulb el Aouj) Grange Resources

221 222 211 217 236 258

TSX: BKI

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Black Iron Compares Favourably


Black Iron to Other Iron Ore Developers
TSX: BKI

Pre-Tax & Royalty NPV8 (US$ billions)


7.3 1.5 0.3 0.5 1.1 Northland Iron Road Macarthur Centaurus 3.0 3.1 3.3 3.4

Tax Regime
30% 34% 29% 26%

Post-Tax & Royalty NPV8 (US$ billions)


4.9 1.0 0.2 0.3 0.7 Iron Road Northland Macarthur Centaurus 2.1 2.2 2.2 2.5

Alderon

Black Iron

Alderon

Black Iron

Gindalbie New Millenium

Brockman

Brockman

Gindalbie

16%

Pre-Tax & Royalty IRR (%)


25.0 32.0 35.0 38.0 40.2 42.1

Royalties
5%

Post-Tax & Royalty IRR (%)


16.9 22.7 23.3 25.3

2%
5-8%

27.1

35.4

Northland

Northland

New Millenium

New Millenium

Alderon

Black Iron

Alderon

n/a 2%

Source: Company data; Press Release; Research Estimates Disclaimer: Post-tax and royalty graphs are for illustrative purposes only using simple math. These numbers have not been reported, nor are they substantiated by a financial model

Black Iron

Gindalbie

Gindalbie

Brockman

Brockman

New Millenium
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Public Comparable Companies


Iron Ore Exploration/Development
TSX: BKI
Market Data as at 10-Jan-12 Market Price Cap (US$) (US$ mm) Enterprise Value (US$ mm) Fe Contained Reserve & Resource (mm t) Total Grade EV / Fe Reserve & Resource (C$/t) Total R&R

Company Africa Sundance Resources Zanaga Iron Ore Cape Lambert Resources Bellzone Mining Australia Gindalbie Metals Brockman Resources Iron Road Macarthur Minerals Brazil Centaurus Metals Canada New Millennium Iron Alderon Iron Ore Century Iron Mines Adriana Resources Champion Minerals Sweden Northland Resources

Stage

Total

DFS Complete PFS Complete FS Underway DFS Underway

$0.39 $1.57 $0.56 $0.49

1,140.0 439.7 362.2 352.7

1,077.9 391.7 238.5 177.7

1,200 1,432 207 2,542

42.2% 33.0% 29.2% 23.6%

0.90 0.27 1.15 0.07

Pre-Production DFS Complete PFS Complete PEA Complete

$0.56 $2.16 $0.57 $1.10

693.0 312.8 79.3 50.2

371.0 272.2 63.3 12.8

430 708 341 410

34.1% 43.4% 16.2% 30.5%

0.86 0.38 0.19 0.03

PFS Complete

$0.51

68.0

44.4

60

27.9%

0.74

PFS Complete PEA Complete PEA Underway PEA Complete PEA Complete

$1.72 $3.14 $1.63 $0.92 $1.62

303.1 266.0 151.3 137.3 142.6

215.3 246.9 51.1 126.5 118.9

1,634 329 64 752 484

30.4% 30.2% 24.5% 29.1% 26.4%

0.13 0.75 0.80 0.17 0.25

Construction

$1.50

338.3

222.9

147

32.1%

1.51 0.51 0.55

Adjusted Mean (Excludes Highest and Lowest Data Point) Mean Black Iron DFS Underway $0.71 99.0 67.0 262 30.7%

50% discount

0.26
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Sources: Bloomberg, Reuters, Macquarie equity research and company disclosure

Black Iron Continues to Deliver


Shymanivske Project Development Timeline
TSX: BKI

2011
H1 H2

2012
H1 H2

Future

Drill metallurgical holes Scoping Study/PEA Exploration & Definition Drilling Definitive Feasibility Study Environmental Studies Permitting Detailed Engineering Construction Production

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Solid Fundamentals for Success


A High-Quality Iron Ore Development Opportunity
TSX: BKI

Good access to skilled labour, power, rail & ports

Exceptional Infrastructure

35km from city of Kryviy Rih (pop. 750k); paved road to site 2 km from state-owned rail and power lines with surplus capacity & five deep water ports accessible by rail (140-515km)
Two properties held Shymanivske & Zelenivske Shymanivske - 373 Mt Measured & Indicated resource @ 31.3% iron; additional 480 Mt of Inferred resource @ 30.2% iron, which will be concentrated to ~65% iron Potential for resource expansion by further drilling of both deposits

Large iron ore deposit with NI 43-101 compliant resource*

Sizable Resource

Close to Target Markets Compelling Economics

Project located in Kryviy Rih, Ukraine; one of the worlds major iron ore districts
Close to target markets: W.Europe, Turkey, Russia, Asia and Middle East Surrounded by 7 other operating iron ore mines

High margins due to close proximity to multiple steel mills, relative labour cost advantage and favourable corporate tax rate of 16%
PEA for 7.3Mt Pellet Plant Feed NPV of US$3.0 billion and 42.1% IRR PEA for 7.6Mt Pellet NPV of US$4.1 billion and IRR of 35.2%

Skilled Management

Experienced management team with history of creating value for shareholders of Consolidated Thompson, RioTinto and Ferrexpo
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* Resource estimate compiled using historic Soviet data by Hugues de Corta, who is an independent qualified person as defined by NI 43-101

CONTACT INFORMATION
65 Queen Street West Suite 805, P.O. Box 71 Toronto, Ontario, Canada M5H 2M5

www.blackiron.com
Investor Relations
Investor Cubed Inc. Telephone: +1 (647) 258-3311 Toll-Free: +1 (888) 258-3323 Fax: +1 (416) 363-7977

TSX: BKI

info@blackiron.com