Graphite – POSCO Signs Binding Agreement for US$40m investment in Black Rock
- POSCO has signed a binding agreement for a US$40m equity investment in Black Rock, which is expected to take place via two tranches:
- Tranche 1: A$9.0m investment in 3m shares at a price of A5.8c, a 10% premium to the 10 day volume weighted average price, increasing POSCO’s stake in Black Rock from 10.1% to 19.99%
- Tranche 2: The balance of POSCO’s US$40m investment will be at the same price as other investors in the final equity raising to build Module 1 on the Final Investment Decision (FID), capped at a maximum stake in Black Rock of 19.99%
- POSCO’s investment to secure long-term fines offtake for Mahenge Module 2, with the proceeds to be used to fund the development of Module 1
- POSCO’s US$40m equity investment remains subject to regulatory approvals as well as confirmation all necessary funding to build Mahenge Module 1 is in place
Tanzanian graphite developer Black Rock Mining Limited (ASX: BKT) (Black Rock, BKT or the Company) is pleased to announce that is has signed several binding agreements (Agreements) with its Strategic Alliance Partner, POSCO International Corporation (POSCO), in relation to POSCO investing US$40m in Black Rock. In exchange, Faru Graphite Corporation Limited (Faru) (the 84% subsidiary of Black Rock and owner of the Mahenge Graphite Project (Mahenge or the Project) will grant POSCO the long-term fines offtake of graphite concentrate from Module 2.
Subscription Agreement for US$40m Investment
Under the Agreements POSCO will invest US$40m in Black Rock with the proceeds to be used to fund the development of Mahenge Module 1, from which POSCO has already secured the offtake contract for all the fines graphite produced. In return for the investment, Faru will grant POSCO the future offtake rights for the fines graphite production of Mahenge Module 2, when built.
The binding subscription agreement for POSCO’s US$40m equity investment (Subscription Agreement) remains subject to conditions precedent including FIRB approval, approval from the Fair Competition Commission of Tanzania and shareholder approvals as well as confirmation all necessary funding to build Mahenge Module 1 is in place. Annexure A summarises the material conditions precedent to the Subscription Agreement.
The Agreements build on the strategic partnership between Black Rock and POSCO which is working towards developing the Mahenge Graphite Project to provide a significant new source of natural graphite into a highly dependent global market driven by clean energy demand. Importantly, the Agreements also signals further de- risking of the Company’s funding strategy to develop Mahenge.
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Graphite – POSCO Signs Binding Agreement for US$40m investment in Black Rock, Source
