In its quarterly activities report dated September 2020, the Australian based company said in June it received a letter from the TIB Development Bank Limited advising that it was undertaking due diligence on its Mahenge Graphite Project.
“The collaborative objective of TIB due diligence is to determine its position and appetite for providing and arranging a syndicated loan facility for the development of the Mahenge Graphite Project,” the company said in its report.
The report further noted that Black Rock provided TIB and its banking partners access to the Mahenge Graphite Project data room as well as site access. “Discussions and due diligence activities are on-going,” the Australian Securities Exchange listed company noted.
Black Rock further added that the TIB initiative forms part of its wider project funding strategy of de-risking the finance process by matching potential financiers across the capital structure to offset unique project risks.
“This includes options for performance warranties through deferred capital from China Seventh Railway Group and Yantai Jinyuan, potential for cornerstone offtake with the POSCO Group and a strong and visible demonstration of local content with the inclusion of the TIB,” the miner stated.
Meanwhile, Black Rock announced in June that it had entered into a strategic alliance and development memorandum of understanding with the POSCO Group for the development of the Mahenge Graphite Project.
“The MOU was subject to a 90-day due diligence period, which included production and testing of SPG (Spherical Purified Graphite), and third party technical due diligence within their value chain. Subject to POSCO satisfactorily completing their due diligence, the parties would negotiate to enter into an investment agreement, which anticipates an initial investment of up to US$10m by way of a subscription for shares and/or convertible notes in Black Rock,” the third quarter report explained.
The company said due diligence is being conducted by POSCO, supported by external subject matter experts, including SRK Consulting for technical aspects. COVID-19 related travel restrictions and logistics constraints have impacted the ability for POSCO to achieve timely site access and delayed sample logistics.
“As a result, Black Rock agreed with POSCO on a sensible revised timeframe for the completion of due diligence work, including POSCO board approval which is now scheduled to be completed by 20th November 2020,” the report noted.
On relations with the government, Black Rock said, “Govt of Tanzania free carry interest agreement formal negotiations commenced and a draft framework agreement, as prepared by the Tanzanian Government, was received by Black Rock.”
The DFA is being reviewed and the company continues to work constructively with the Tanzanian Government and is pleased with the progress made to date. Development of the Mahenge Graphite Project will provide significant economic and social benefits for Tanzania driven by the creation of full-time jobs, direct contribution to the Tanzanian economy, and new opportunities for businesses including ports, rail and power supply.