Black Rock Signs term sheet with POSCO for offtake and US$10M prepayment

Tanzanian graphite developer Black Rock Mining Limited has announced it has agreed a Term Sheet with POSCO Ltd for offtake and product prepayment commitments that support the development of the Mahenge Graphite Mine (the Project or Mahenge).

Black Rock has signed a Term Sheet with POSCO which 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 agreed Term Sheet forms the basis to negotiate a binding Offtake Agreement which is expected to be finalised in early CY22. With the POSCO Term Sheet now in place, further prepayment opportunities with Export Credit Agencies can now be explored.

Key terms outlined in the Term Sheet include:
• Expected volume of -#100 mesh concentrate under offtake to POSCO from planned Mahenge Module
One is approximately 30 ktpa;
• Outlining minimum product specifications, in line with industry standard (commercial in confidence);
• A clear product pricing mechanism including an uplift for superior value-in-use compared to industry
benchmarks, to be shared between both parties (commercial in confidence);
• US$10M prepayment, repayable via delivery of product over an eight year period.

Commenting on the Offtake and Prepayment commitment, Black Rock MD and CEO, John de Vries, said: “We are very pleased to have reached agreement with our strategic alliance partner, POSCO, with this Term Sheet for both the US$10M prepayment and offtake for 100% of the planned fines production for Mahenge Module One. This 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”.

Black Rock and its debt finance advisor, ICA Partners, continue to progress positive discussions with respect to the Project’s debt finance. Recent milestones, including this POSCO Term Sheet, the signed Framework
Agreement with the Government of Tanzania, and the completion of the sector’s largest customer qualification program by Black Rock, all provide a strong platform for robust discussions with potential lenders, and a growing
confidence in securing competitively priced Project debt.

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