Black Rock Mining : Quarterly Report & Cashflow
BKT.AX
ASX ANNOUNCEMENT
27 January 2022
DECEMBER 2021 QUARTERLY ACTIVITIES REPORT
HIGHLIGHTS
only • Framework Agreement Signed with the Government of Tanzania
• Term Sheet Signed with POSCO for Offtake & US$10M Prepayment
• Black Rock Delivers Largest Customer Qualification Works with the Completion of a 500
Tonne Qualification Campaign
• Project development activities ongoing
• Debt financing activities in train
• A$8.65M cash at bank as at 31 December 2021
useTanzanian graphite developer Black Rock Mining Limited (BKT: ASX) (Black Rock or the Company) is pleased to provide an update on activities at its Mahenge Graphite Mine in Tanzania for the quarter ending 31 December 2021.
personalFramework Agreement Signed with the Government of Tanzania
At the signing ceremony held on 13th December 2021, attended by the President of Tanzania, Her Excellency Samia Suluhu Hassan, the Minister of Minerals Hon. Doto Biteko (MP) signed the Framework Agreement (Agreement) with Black Rock, confirming the Government's commitment to jointly develop the Mahenge Graphite Mine. The Agreement includes the provision for a Free Carried Interest (FCI) which is required by law under Section 10 of the Mining Act whereby a 16% non-dilutable shareholding in the capital of all mining c mpanies is held by the Tanzanian Government.
Under the Agreement, the following structure was agreed:
• A Joint Venture (JV) Company, Faru Graphite Corporation (Faru), has been established to develop the Mahenge Graphite Mine. Faru is the Swahili word for Rhinoceros. The Tanzanian Government will own a 16% undiluted free-carried interest shareholding in Faru, with 84% owned by Black Rock via its wholly
owned UK subsidiary company, Mahenge Resources Limited;
• A Special Mining Licence (SML) will be granted to unify existing Mining Licences ML 611/2019 and ML
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612/2019 and a part of Prospecting Licence PL 13752/2019;
• Existing approved Environmental Permits and Resettlement Action Plans granted to ML's 611 and 612
will be grandfathered to the SML; and
• An exemption will be issued to Black Rock from the provisions of the Mines Act 2017 requiring SML
developers to issue 5% of stock to local interests and listing of 30% of stock on the Dar es Salaam Stock
Exchange.
Black Rock's Enhanced Definitive Feasibility Study (eDFS) (ASX Announcement 25 July 2019) for the Mahenge Graphite Mine already includes the 16% FCI provision, which forecasts a post-tax, unlevered NPV10 of US$1.16 billion for the Mahenge Graphite Mine.
Black Rock Mining Ltd
Australian Office
Tanzanian Office
Directors
ACN 094 551 336
Level 1, 1 Walker Ave
Mahenge Resources Ltd
Richard Crookes
Chairman
ASX: BKT
West Perth WA 6005
Msasani Towers
John de Vries
Managing Director & CEO
Ph: +61 8 6383 6200
Second floor Wing B
Gabriel Chiappini
Non-Executive Director/Company Secretary
Dar es Salaam
Ian Murray
Non-Executive Director
Ph +255 719 382 631
www.blackrockmining.com.au
ASX ANNOUNCEMENT
27 January 2022
Key Term
Ownership
onlyStructure Investing entity Shareholder loans
Banking
Governing law
useTaxation Debt
Board
Table 1 - Framework Agreement Key Terms Summary
Detail
Tanzanian Government 16% FCI undiluted / Black Rock 84%. Each share is entitled to 1 vote in accordance with the constitution
Mahenge Resources Limited (UK) - 100% owned Black Rock subsidiary
Not subject to FCI where not interest bearing and registered with Bank of Tanzania
JV Co to hold all proceeds from sale on mineral products in local and foreign currency accounts in Tanzania
Tanzanian law. Arbitration by UNCITRAL rules. Arbitration seat East African Court of Justice
Tanzanian corporate tax rate (30%)
Mahenge Resources Limited (UK) able to pledge equity in JV Co to support third party financing for the purposes of mine development and operations
Initial board with 5 directors with Black Rock appointing 3 directors and Tanzanian Government appointing 2 directors
Partnership Benefits to Tanzania
The Mahenge Graphite Mine has the potential to provide significant economic and social benefits to Tanzania, s outlined in Black Rock's eDFS, including:
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• 970 full-time jobs principally located at Mahenge;
• US$6.5bn contribution to the Tanzanian economy over a 26 year mine life (based on eDFS prices); and
• Significant new opportunities for Tanzanian businesses including ports, rail and power supply.
Black Rock Mining Ltd
Australian Office
Tanzanian Office
Directors
ACN 094 551 336
Level 1, 1 Walker Ave
Mahenge Resources Ltd
Richard Crookes
Chairman
ASX: BKT
West Perth WA 6005
Msasani Towers
John de Vries
Managing Director & CEO
Ph: +61 8 6383 6200
Second floor Wing B
Gabriel Chiappini
Non-Executive Director/Company Secretary
Dar es Salaam
Ian Murray
Non-Executive Director
Ph +255 719 382 631
www.blackrockmining.com.au
ASX ANNOUNCEMENT
27 January 2022
For personal use only
Figure 1 - Community members from Mahenge arrive
Figure 2 - Faru Graphite Corporation company
for the signing ceremony
branding
Figure 3 - Black Rock CEO John de Vries delivers a
Figure 4 - Signing of the Framework Agreement,
speech recognising the positive partnership with the
Minister of Minerals Hon. Doto Biteko (left),
Tanzanian Government and achievement to jointly
Her Excellency Samia Suluhu Hassan (centre), and
develop the Mahenge Graphite Mine
Black Rock CEO John de Vries (right)
Figure 5 - Completed signing of the Framework Agreement
Black Rock Mining Ltd
Australian Office
Tanzanian Office
Directors
ACN 094 551 336
Level 1, 1 Walker Ave
Mahenge Resources Ltd
Richard Crookes
Chairman
ASX: BKT
West Perth WA 6005
Msasani Towers
John de Vries
Managing Director & CEO
Ph: +61 8 6383 6200
Second floor Wing B
Gabriel Chiappini
Non-Executive Director/Company Secretary
Dar es Salaam
Ian Murray
Non-Executive Director
Ph +255 719 382 631
www.blackrockmining.com.au
ASX ANNOUNCEMENT
27 January 2022
Mahenge Graphite Mine and Market Outlook
Graphite is recognised and listed as a critical mineral in countries all around the world, and is playing a key
role in the path to global decarbonization. The World Bank predicts that annual demand growth for graphite
will top 500% by 20502 (an additional annual supply of 3.5M tonnes over 2018 global production), the highest
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of all minerals required for clean energy storage technologies.
personal
Figure 6: Share of Mineral Demand from Energy
Figure 7: Projected Annual Mineral Demand Under 2DS Only from
Storage Under IEA 2DS Through 2050 - World Bank
Energy Technologies in 2050, Compared to 2018 Production Levels -
Report "Minerals for Climate Action: The Mineral
World Bank Report "Minerals for Climate Action: The Mineral Intensity
Intensity of the Clean Energy Transition, 2020"
of the Clean Energy Transition, 2020"
The Mahenge Graphite deposit hosts the 2nd largest graphite ore reserve, and the 4th largest JORC-compliant graphite mineral resource globally. The mineral resource has industry leading high-grade purity, a large flake size distribution, low strip ratios, and very low deleterious elements. This means lower capital and operating costs, less environmental impact, and ultimately a highly differentiated green high-margin product.
In full production, Black Rock has the capacity to contribute meaningful Graphite concentrate supply of 340,000 tonnes per annum, close to 5% of the expected additional global demand2 for Graphite. In addition, the Company expects to do this with a sensible ESG (Environmental, Social, and Governance) footprint given Mahenge's mineral resource quality advantages, logistics (hydro power, dry tailing, close road-rail-port), clean concentrate processing (no acid), and downstream partnerships to deliver a green product to end customers.
Mahenge Graphite Project Development Activities
Black Rock continues to progress project execution activities in parallel which includes:
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• Securing binding term sheets with all existing and new offtake customers, leveraging the large-scale
customer qualification program recently completed;
• Early engagement activities with respect to the Resettlement Action Plan;
• Integration activities with existing partners POSCO and URBIX;
• Engineering work;
• Updating of capital and operating costs; and
• Engagement with finance groups on project debt finance.
Black Rock Mining Ltd
Australian Office
Tanzanian Office
Directors
ACN 094 551 336
Level 1, 1 Walker Ave
Mahenge Resources Ltd
Richard Crookes
Chairman
ASX: BKT
West Perth WA 6005
Msasani Towers
John de Vries
Managing Director & CEO
Ph: +61 8 6383 6200
Second floor Wing B
Gabriel Chiappini
Non-Executive Director/Company Secretary
Dar es Salaam
Ian Murray
Non-Executive Director
Ph +255 719 382 631
www.blackrockmining.com.au
ASX ANNOUNCEMENT
27 January 2022
Black Rock Mahenge Graphite Mine Economics - Enhanced Definitive Feasibility Study July 20191
onlyuse1 Following release of the Enhanced Definitive Feasibility Study (DFS) on the Mahenge Graphite Project in July 2019 (see Black Rock ASX release dated 25 July 2019, Mahenge Enhanced DFS with Executive Summary), Black Rock confirms that it is not aware of any new data or information that materially affects the results of the Enhanced DFS. All material assumptions and technical parameters, including in the estimation of Mineral Resources or Ore Reserves, underpinning the estimates in the Enhanced DFS continue to apply and have not materially changed. The estimated Ore Reserves and Mineral Resources underpinning the production and financial forecasts in the Enhanced DFS were prepared by Competent Persons in accordance with the requirements in Appendix 5A (JORC Code).
Term Sheet Signed with POSCO for Offtake & US$10M Prepayment
personalBlack Rock signed a Term Sheet with POSCO which outlines the indicative terms for a US$10M prepayment nd an offtake agreement for 100% of the planned fines production (-100#) from Mahenge's Module One. The
agreed Term Sheet forms the basis to negotiate a binding Offtake Agreement which is expected to be finalised in early CY22. With the POSCO Term Sheet now in place, further prepayment opportunities with Export Credit Agencies can now be explored.
Key terms outlined in the Term Sheet include:
A strong platform for Project Debt discussions
ForBlack Rock and its debt finance advisor, ICA Partners, continue to progress positive discussions with respect to the Project's debt finance. Recent milestones, including this POSCO Term Sheet, the signed Framework Agreement with the Government of Tanzania, and the completion of the sector's largest customer qualification program by Black Rock, all provide a strong platform for robust discussions with potential lenders, and a growing confidence in securing competitively priced Project debt.
A number of finance related milestones are expected over the coming months, including:
Black Rock Mining Ltd
Australian Office
Tanzanian Office
Directors
ACN 094 551 336
Level 1, 1 Walker Ave
Mahenge Resources Ltd
Richard Crookes
Chairman
ASX: BKT
West Perth WA 6005
Msasani Towers
John de Vries
Managing Director & CEO
Ph: +61 8 6383 6200
Second floor Wing B
Gabriel Chiappini
Non-Executive Director/Company Secretary
Dar es Salaam
Ian Murray
Non-Executive Director
Ph +255 719 382 631
www.blackrockmining.com.au
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Disclaimer
Black Rock Mining Ltd. published this content on 26 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 January 2022 21:33:05 UTC.