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Black Rock inks offtake term sheet with POSCO for Mahenge graphite

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(Kitco News) - Tanzanian graphite developer Black Rock Mining (ASX:BKT) announced Thursday that it has agreed a Term Sheet with POSCO for offtake and product prepayment commitments that support the development of the Mahenge graphite mine.

According to a press-release, a Term Sheet with POSCO outlines the indicative terms for a US$10M prepayment and an offtake agreement for 100% of the planned fines production (-100#) from Mahenge's Module One.

The company said that the agreed Term Sheet forms the basis to negotiate a binding Offtake Agreement which is expected to be finalized in early 2022.

CEO John de Vries added, "This agreement is another strong endorsement for the quality of Mahenge's graphite and serves as a key de-risking milestone for the debt financing process and project development. Ultimately, our strategic alliance with a blue-chip partner in POSCO is a key point of differentiation for Black Rock and one which we believe provides additional confidence to potential lenders and institutional investors."

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Black Rock Mining owns the Mahenge graphite mine located in Tanzania. The project has a JORC compliant Mineral Resource Estimate of 212m tonnes at 7.8% TGC. It also has Ore Reserves of 70m tonnes at 8.5% TGC, which support a mine life of up to 350k tonnes of graphite per annum for a reserve life of 16 years.

On 25 July 2019, the company released an enhanced Definitive Feasibility Study (eDFS) for the Project. The eDFS for the Mahenge graphite mine envisages a four-phase operation, ultimately producing 340,000 tpa of high-grade graphite, with exceptional financial metrics including IRR of 44.8% with NPV10 of US$1.16bn.

Black Rock indicated that a Framework Agreement was signed with the Government of Tanzania in December 2021, which includes the provision for Free Carried Interest, and that the Mahenge graphite mine is construction-ready, subject to financing.

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