Black Rock Mining
Primary ticker: ASX:BKT
Stage of development: Development, Production
Primary minerals: Graphite
Project to promote: Mahenge Graphite Project
Project location: Tanzania
Website: www.blackrockmining.com.au
Black Rock Mining (ASX:BKT) is developing the Mahenge graphite project in Tanzania and has 4 key competitive advantages over most of its peers:
1) Tier 1 Scale: The Mahenge graphite project is very large… with a resource of over 200mt and the 2nd largest reserve in the world
2) More large flake: Mahenge has a higher proportion of higher-value large flake than most of the mines in production – this is the equivalent of having a byproduct credit BKT’s peers don’t have.
3) 1st Quartile Costs: Mahenge is expected to a very low-cost mine due to our access to competitively-priced hydro-dominated grid power at around 8USc/kWh, which also means low-carbon footprint graphite products
4) Backed by POSCO: POSCO is the largest global anode producer outside China and is BKT’s major shareholder, offtake partner and has signed agreements to provide US$50m in funding (US$10m prepay + US$40m of equity)
The Company also has US$179m of debt in place with DBSA, IDC and CRDB. Mahenge is shovel ready subject to securing the balance of finance and has all key Govt agreements and permits in place.
There is substantial upside potential if the Company can execute as Mahenge has an NPV10 of A$2.1bn at Expert Consensus prices.
Cash: AUD $5.4M
Debt: NIL
Major shareholders:
POSCO – 10%
Copulos Group – 10%
Larium Capital 4.5%
Dalton Investments – 3.9%
Amati Global – 2.3%
Management ownership – 5.1% fully diluted
Financials
Management Profile
John de Vries – Managing Director and CEO
Mr. de Vries in a Mining Engineer with ~40 years’ experience in the resources sector. He started his career in 1984 working for WMC Resources and held operational roles such as Underground Manager, Senior Mining Engineer and Manager Mining. In 1998, he moved to AMC Consultants to become a Principal Mining Engineer responsible for Mine Optimisation. In 2003, he joined Orica Mining Services as Global Business Manager, Advanced Mining Solutions before moving to BHP Billiton in 2007 as Manager Strategic Mine Planning.
What is your rationale for taking part in 121 Mining Investment?
Black Rock is strongly differentiated through orebody quality and execution strategy. High quality concentrate coupled with class leading logistics and environmental controls positions Mahenge to supply clean green graphite into the burgeoning renewables and energy conservations markets.
Black Rock has completed extensive product development work with ~610t of testwork and as a consequence has qualified our products in a number of important Western and Chinese markets, including securing direct investment and offtake from one of the world’s largest Anode producers, POSCO.
Black Rock also has US$229m of funding in place and is shovel ready
subject to securing the balance of finance.
What recent news would you like to highlight to investors attending?
Black Rock has made significant recent progress in developing the Mahenge Project. Key recent announcements are:
– Sept 2024: POSCO of Korea signed binding agreement to invest up to US$40m in equity in Black Rock in exchange for the rights to the fines offtake for Module 2
– Sept 2024: Facilities agreement signed for US$179m in funding with DBSA, IDC and CRDB
What are your key goals for the next 3, 6 and 12 months?
3 Months:
Finalise Project funding package ASAP and begin construction
6 Months:
Finalise Project funding package within the next 3 months and begin construction
12 Months:
Finalise Project funding package within the next 3 months and begin construction
What do you see as the key risks and challenges facing your company at the moment and how are you overcoming these?
The key near-term risk is securing the balance of funding to commence construction.
What do you think makes your company such a compelling investment?
• Black Rock’s owns the Tier 1 scale Mahenge graphite project (2nd largest reserve globally)
• Innovative modular development approach via 4x 1mtpa modules reduces project risk, market risk and enhances value-per-share
• Only graphite developer globally with an alliance with a large scale anode producer (POSCO) providing crucial customer validation of the quality of Mahenge’s products
• POSCO is a major shareholder holding 10% of BKT, has an agreement to take life of mine fines production from Module 1 & 2 and is also providing US$50m in funding to assist with project development
• The Company also has US$179m of debt in place with DBSA, IDC and CRDB
• Mcap of A$61m compared to NPV (10 nominal) of A$2.1bn – very substantial upside if the company can execute, supported by a very strong macro tail wind in graphite over the next few years
• The first graphite development company to arrange publicly index linked product pricing
• Mahenge has advantageous geology – 60-70% of the deposit comprises high value large flake, it is very low strip and has low deleterious and intersticial gangue material.
• Mahenge is blessed with excellent infrastructure – close proximity to rail, competitively-priced hyrdo grid power and export through the 16mtpa container port in Dar es Salaam
• Mahenge has all key Tanzania Govt agreements in place with Free Carried Interest Agreement signed with Govt in Dec 2021, Special Mining Licence granted Sept 2022.
• Offtake agreements, MOU and options in place for ~95% of production for Module 1
What are the top 3 key investor takeaways?
• Only graphite developer globally with an alliance with a largest ex China anode producer (POSCO) providing crucial customer validation of the quality of Mahenge’s products. POSCO is also providing US$50m in funding to assist with project development.
• One of very few listed graphite exposures globally which is forecast to make healthy margins at current prices
• Mcap of A$60m compared to NPV (10 nominal) of A$2.1bn – very substantial upside if the company can execute, supported by a very strong macro tail wind in graphite over the next few years