Black Rock Mining has entered into a strategic alliance agreement with South Korean industrial company Posco to develop its flagship graphite project in Tanzania.
Black Rock says the agreement will provide more financial certainty and access to early works funding for its wholly owned Mahenge project, which has an estimated mineral resource of 212 million tonnes of graphite.
The company has signed a memorandum of understanding with Posco, which will subscribe for up to an initial $US10 million ($A14.3 million) Black Rock shares and/or convertible notes.
The funds will be applied to an early works program, including engineering and design works, as well as provision of all-weather site access, Black Rock says.
Posco will make a second investment, with the amount yet to be determined, which Black Rock will use to complete construction works at the Mahenge site.
Managing director John de Vries said the proposed alliance de-risked the project.
“Our ability to deliver Mahenge concentrate into Posco's existing China based supply chain supports Black Rock’s existing relationships with Chinese construction and mining partners, China Seventh Railway Group and Yantai Jinyuan,” he said.
“Ultimately, we are miners, not a downstream processor, and we now look forward to advancing the Posco relationship towards a final investment agreement for development of the world-class Mahenge graphite project.”
An enhanced definitive feasibility study on the project, released mid-last year, revealed a 30 per cent increased project value to $US1.16 billion ($A1.65 billion).
The DFS considers a four-stage construction schedule to deliver up to 340,000t per annum of 98.5 per cent graphite concentrate over 26 years.
Black Rock was trading 11 per cent higher at 3:05pm AEST to 6 cents per share.