Black Rock Mining Limited (ASX: BKT) is focused on Tanzanian Graphite Projects from natural resources. The company announced that it had adopted a binding price framework to determine the price in its offtake agreements, which would enable buyers and sellers to determine the price of the graphite product based on type and quality.
This follows the successful pilot plant testwork that was completed by Black Rock in April this year. The plant testwork included the processing of 18.5 dry tonne of ore in a China-based facility which proved Black Rock’s capability to produce Mahenge brand premium flake graphite. This has led to a determination of pricing framework which is now agreed by four of five offtake partners. The terms of pricing outlined below –
The CIF pricing in China considers ocean freight and is in line with the Definitive Feasibility Study (DFS). DFS includes rise and fall clause; therefore, buyers and sellers remain protected with the help of benchmark pricing. The jurisdictions of many customers are in duty-exempt import/export zones, so import duties are waived off.
Additionally, the company has secured two new offtake customers for its 100% owned Mahenge Graphite Project.
John de Vris, CEO of Black Rock, said that securing price transparency is challenging while developing new graphite projects. However, it helps the investment market to assess the value of the project.
He further added that the Mahenge’s large flake concentrates is continuously branding the company as a premium supplier to the global market. The exceptional financial metrics of the Mahenge plant will secure financing for the project and the company is committed to delivering Optimised Definitive Feasibility Study
New third-party contracts signed by the company:
A binding offtake agreement has been signed between Qingdao Yujinxi New Energy Materials and Black Rock Mining Limited for the supply of up to 20,000 tonnes per annum by year three. The Chinese government has initiated to have a dedicated industrial graphite park in central Qingdao province with the view to reduce industry environmental footprint. This move has led Qingdao to establish as a new processor.
The next contract includes a fifth binding offtake term sheet agreement, the company inked with Yantai Jinyuan Mining Machinery Co Ltd to supply up to 20,000 tonnes per annum by year three. Yantai Jinyuan holds 36,000 square metres of area out of which 20,000 square meters is utilised for construction. Moreover, facilities are capable of associated support equipment, dryers, thickeners, flotation circuits, thickeners etc.
Black Rock updated maximum combined and offtake volumes with the two new offtake agreements taken into consideration as stated below.
The total tonnage of all offtakes has reached to 255k tonnes per year of the product by year three. However, the binding offtake agreements depend upon financing and Black Rock finishing construction and infrastructure work at Mahenge plant.
BKT last traded at $0.085, up 2.41%, on 9 May 2019. Over the past 12 months, the stock has gone up by 69.39% including a positive price change of 22.06% as recorded in the past three months.