Black Rock Mining Inks Third Offtake Agreement With Taihe Soar, Stock Zooms Over 5%

Black Rock Mining Ltd (ASX: BKT) engages in the drilling of diamond core and reverse circulation drill holes. Green Rock Energy operates in Tanzania. On January 07, 2019, the company informed that it has inked an offtake pact for natural flake graphite from its Graphite Mine in Tanzania. The offtake agreement has been entered with Taihe Soar of Dalian, Liaoning Province. Following this announcement, the share price of the company increased by 5.263% on January 07, 2019.

This offtake agreement adds to the earlier signed Black Rock’s first and second agreements executed with Heilongjiang Bohao and Qingdao Fujin. Combinedly taken all the offtake agreements could represent approximately 85% of proposed annual steady-state production of approximately 240,000 Tonnes/year. The offtake agreements have been signed through Black Rock’s 100% owned Tanzanian subsidiary, Mahenge Resources Limited.

The offtake agreement has been signed with Taihe Soar for a period of 3 years to supply up to 100,000 tonnes per annum, of the required graphite concentrate.

the total tonnage of all the three offtakes is up to 205k tonnes per year of the product by year three.

  • Taihe Soar has an annual turnover of over USD$400m that specializes in imports and exports and providing trade credit for smaller entities.
  • the pricing is slated to be decided as per the terms of a formal agreement which is to be entered within 12 months of execution of the offtake agreement and will be revised on a quarterly basis in accordance to the prevailing market price for flake size and grade.
  • Black Rock has commenced work on optimizing its mine plan to compress its development schedule and increase ultimate production by adding a fourth self-funding module in the light of strong market demand for Mahenge Premium and Ultraproducts.

The Company’s CEO, John de Vries, has said that the Company is excited to announce a third offtake agreement and effectively having sold out production from their modules 1 and 2. He reiterated that this offtake agreement is effectively having sold out production from modules 1 and 2, clearly demonstrates that strong market demand exists for Mahenge’s unique Premium and Ultra products. This offtake would not have been possible, without access to concentrate from Black Rock’s study staged pilot plant.

This agreement has opened a third sales channel to the company through the use of a distributor model to access smaller volume consumers that would normally not have access to international markets. Taihe Soar’s capacity to deploy over USD$200m in trading assets and turn over in excess of USD$400m per annum positions Black Rock with a strong financial partner.

The salient terms of the Offtake Agreement are summarised as follows:

  • Up to three years of an offtake agreement to supply up to 37,500 tonnes per annum in year one, 80,000 tonnes per annum for year two, rising to 100,000 tonnes per annum in year three.
  • Pricing to be agreed under the terms of a formal agreement to be entered into by the parties within 12 months of execution of the offtake agreement and will be set quarterly with reference to the market price for flake size and concentrate grade.
  • Any of the party into the contract may terminate the offtake agreement by the giving of 60 days written notice to the other party.

Meanwhile, the stock price of the company has fallen by 13.64 percent in the past six months as on 4 January 2019. BKT’s shares traded at $0.04 with the market capitalization of circa $20.46 million as on 7 January 2019. (AEST 2:04 PM).


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