Australian graphite developer Black Rock Mining Limited (ASX:BKT) recently announced the successful completion of an AUD 10.0 million placement to institutional and sophisticated investors for critical final preparations related to the Mahenge Graphite Project in Tanzania.
The Placement, priced at AUD 0.065 per share, received firm commitments from both new and existing investors, reflecting robust support for the venture. Approximately 154 million shares will be issued under the Placement, with the issuance expected around April 4, 2024. The issue price of AUD 0.065 per share represents a 20.7% discount to the closing price of BKT shares on March 22, 2024, and a 17.8% discount to the 10-day volume-weighted average price (VWAP).
These preparations, ahead of the Final Investment Decision (FID), encompass various essential activities such as loan and contract documentation, detailed design, equipment specification, and general corporate purposes.
The Placement was facilitated by Petra Capital, acting as the Sole Lead Manager and Sole Bookrunner to the Offer.
Black Rock’s CEO, John de Vries, expressed satisfaction with the level of support from existing shareholders and welcomed several new institutional investors. He emphasized the significance of the Placement in achieving key de-risking milestones and ensuring adequate cash reserves for upcoming operational phases. Additionally, de Vries highlighted the strategic intent to sell a stake in the project, aiming for a premium, as a less dilutive pathway to cash flow.
The Mahenge Graphite Project
Black Rock Mining holds an 84% interest in the project, while the Government of Tanzania has a 16% Free Carried Interest shareholding.
The project hosts a multi-generational graphite resource and is one of the largest JORC-compliant flake graphite resources globally, with 213 million tonnes @ 7.8% TGC and a reserve of 70 million tonnes @ 8.5% TGC.
The Mahenge Project is spread across 324 square kilometers of exploration tenements in Tanzania’s Ulanga district, approximately 250 km north of the border with Mozambique, 250 km west of the coastal port city of Mtwara on the Indian Ocean, and 300 km southwest of Tanzania’s largest city, Dar es Salaam.
Black Rock’s Definitive Feasibility Study for the project considers a four-stage construction schedule to deliver up to 340,000 tonnes per annum of 98.5% graphite concentrate for 26 years of 98.5% LOI premium graphite flake concentrate with the ability to produce Ultra Purity flake of 99% LOI.
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