PERTH (miningweekly.com) – ASX-listed Black Rock Mining has signed a binding offtake agreement with strategic alliance partner POSCO covering all of the planned life-of-mine graphite fines for Module 1 of the Mahenge project, in Tanzania.
The agreement includes a $10-million pre-payment commitment which is linked to an industry pricing benchmark, with the funding to be used as part of the construction financing for the Mahenge project.
“This is a significant milestone outcome for all stakeholders as we confirm a major component of our market entry strategy is now in place. The binding agreements with POSCO provide critical customer validation that we have a commercial and high value graphite product that will be sold as a qualified production to consumer markets under a long term contracted offtake,” said Black Rock CEO John de Vries on Monday.
“Mahenge is the only large-scale ex China graphite project to achieve this outcome,” he added.
“Secondly, this cornerstones Mahenge’s robust forecast economics, providing a runway to finalising the debt finance process. The company continues to progress its project debt financing process through advisors ICA Partners with credit-approved term sheets anticipated in the second quarter of 2023.”
Black Rock recently signed a memorandum of understanding with POSCO over the natural large flake graphite concentrate expected from the Module 1 operation at Mahenge.
A recent independent review of the front-end engineering design and an updated definitive feasibility study (eDFS) for the Mahenge graphite project have increased the project’s costs from the $116-million considered in the 2019 definitive feasibility study to $182-million.
The eDFS has increased the estimated Phase 1 production from 83 000 t/y of graphite to 89 000 t/y, with the mine life remaining unchanged at 26 years. Steady-state production has increased from an expected 340 000 t/y of graphite to 347 000 t/y, with the all-in sustaining cost now estimated at $518/t, up from the $494/t estimated in 2019, with throughput rates increasing from 1-million tonnes a year to 1.15-million tonnes year.