Black Rock Mining says it is “construction ready” to build the first US$116 million stage of a new Tanzanian graphite mine once financing negotiations are finalised for what is regarded as the world’s fourth largest graphite resource.
Black Rock Mining MD, John de Vries, says the company is looking at a blended finance model for its proposed high purity Mahenge graphite mine to ensure full leverage of its advantages.
Read more about mining in East Africa
“Our approach is to match the financing risks for Mahenge with those best placed to manage it. Those current options include bonds, offshore debt, vendor bids, Tanzanian debt, offtake customer participation or a part sell down,” says de Vries.
“This position is enhanced by the fact the construction protocols are already underwritten by pricing framework agreements, but the focus remains on identifying the least dilutive option for our shareholders and to act on their desires to ramp up our maiden start schedule.”
The 100%-owned Mahenge deposit has a JORC compliant resource estimate of 212 million tonnes at 7.8% TGC, enabling a mine life of up to 350,000 tonnes of high spec graphite concentrate a year for a 26 year mine life.
De Vries says Mahenge will come to market at a time of growing demand for energy storage and expanded graphite consumption – a demand curve likely to double graphite consumption volumes over the next decade.
The company’s road to commercial production includes the largest pilot plant of any graphite mine globally and other innovative on-site engineering and development schedules.
Black Rock has appointed Ironstone Capital as advisors to accelerate the financing choices including assessing what de Vries says are a solid number of inbound financing proposals and structures.
“A key strength of our business model is scalability. Being able to add capacity incrementally at Mahenge ensures we do not over capitalise the asset with excessive redundant capacity but can respond to changes in market demand.
“This will ensure the asset is not developed unless market demand is present.
“Critically, given Mahenge’s concentrate purity and flake size, we have multiple market segments where demand for higher specification product exceeds available supply.
“Fundamentally therefore, we are not directly competing with existing producers or trying to place product in highly contested lower specification markets.”