WWW.RESOURCEGLOBALNETWORK.COM
MINING | Black Rock Mining
Resource Global Network
BLACK ROCK MINING Ready to develop one of the world’s largest graphite resources
MINING | Black Rock Mining
Black Rock Mining’s Mahenge Project in Tanzania hosts a long life graphite resource and is one of the largest JORC-compliant natural flake graphite resources in the world, with a mineral resource estimate of 212 million tonnes (Mt) at 7.8% total graphitic carbon (TGC) content and a reserve of 70 Mt at 8.5% TGC. The ASX-listed company started down the road to production back in 2016 with a scoping study and metallurgical testing at Mahenge, which delivered world first graphite purity results above 99%. A prefeasibility study was published in the following year before a 2018 pilot plant run on graphite concentrate from Mahenge replicated the firm’s previous TGC purity results on a larger scale.
2019 the company was handed two mining licences by the Tanzanian government for the development of the project. Most recently, Black Rock completed an additional pilot plant run in China and published an enhanced definitive feasibility study (eDFS). The eDFS was completed in response to increased product demand and feedback from customers for a more aggressive production schedule. The study incorporates a fourth 85,000 tonne production module taking total steady state production up to 340-350,000 tonnes per year (tpy). The addition of a fourth production module has no material change to the forecast capex for the first three phases. However, it will lift the overall revenues with a revised project NPV10 of US$1.16 billion, an increase of 30% over the original three module DFS.
Altering the approach The eDFS also necessitates a slight alteration to Black Rock’s phased development strategy, which is now called ‘crawl, walk, run, sprint’. Under this strategy, each module will come
The company then released its definitive
online annually after the first module, rather
feasibility study (DFS) in October 2018
than every two years as stated in the original
which envisaged a three module production
DFS.
schedule generating unlevered NPV10 (posttax and post free carried interest) of US$895
Black Rock’s managing director and CEO
million and 42.80% IRR from a forecast
John de Vries explains how the foundations
capex on module one of $115 million.
of the eDFS were laid by the success of the pilot plant runs in Canada and China, which
The pilot plant results and DFS helped Black
demonstrated to customers the quality of
Rock secure its first offtake customers
Mahenge graphite.
by the end of the year, and at the start of
Resource Global Network
MINING | Black Rock Mining
“When we distributed samples from the pilot
four modules into the known orebody, with
plant to customers, two things happened:
the additional mill feed to be sourced from
They fell over themselves because they
the development of a third pit at the Epanko
hadn’t seen natural flake graphite anywhere
deposit.”
near as good as this previously. Secondly, nobody quite believed that we produced it by
At this point, it’s important to note that Black
flotation.
Rock has only included 5 km of the 60 km strike at Mahenge in the resource, and the
“We wanted to show further transparency
company is confident that further exploration
in the Chinese market, with regards to our
will result in the discovery of more graphite.
product. So, we shipped a second 18 tonnes sample to run through a pilot plant in China,
“There’s no shortage of graphite and
which turned into a real game-changer. Once
importantly the stuff is particularly unique
we got through that, customers began to sign
because of its purity and the flake size. That
up to our pricing framework.
was the context behind the enhanced DFS,” says de Vries.
“We then went and did the eDFS, asking the questions how big can we go and how quickly
The focus of the eDFS also evolved into
can we get there? We found we could get
discussions with financiers about a de-
Resource Global Network
risked start-up and commissioning plan,
a binding pricing framework with four of its
specifically in relation to power supply and
five offtake partners, two of which were new
the decoupling of the project development
agreements made in May.
schedule from the 220 kV high voltage lateral from Ifakara to Mahenge.
The new commitments were signed with Qingdao Yujinxi New Energy Materials and
The power line is currently being developed
Yantai Jinyuan Mining Machinery Co for three
by state-owned utility Tanesco and it should
years to supply up to a combined 50,000
be available for the second module, but
tonnes, taking the total amount of committed
Black Rock concluded that a decoupled
volumes to 255,000 tonnes per annum.
power supply schedule via short-term onsite generation would allow it to control all
Re-confirming the premium quality of
elements of the project start-up.
Mahenge concentrate to the heavily
Offtake pricing agreements
contested Chinese graphite market was fundamental to tying in pricing frameworks with offtake partners, according to de Vries.
After successfully demonstrating the quality of its product in the pilot plant operations in
“The sub-100 market refers to graphite flakes
China, Black Rock announced it had agreed
with a mesh size of -100. In China, it’s a very
MINING | Black Rock Mining
John de Vries, Black Rock CEO contested market space and not a place you want to be if you can help it. Being able
“When we distributed samples from the pilot plant to customers, they fell over themselves because they hadn’t seen natural flake graphite anywhere near as good as this previously” John de Vries, managing director and CEO Black Rock Mining
to demonstrate we’re well above the 100mesh point, and able to deliver higher spec material of +98% TGC, was fundamental to securing a relationship with certain customers.” In terms of project financing, Black Rock is taking a blended approach through the consideration of several different avenues, including project level equity, conventional African-domiciled debt financing, convertible/ hybrid structures and offtake-related financing proposals. The company recently appointed Australiabased advisor Ironstone Capital to accelerate progress on financing for the Mahenge Project. Ironstone has been brought in to
Resource Global Network
MINING | Black Rock Mining
consolidate existing pathways and establish
which has a presence in Hong Kong,
new ones with relevant banks and other
Australia, Singapore and China. Black Rock
sources of debt and finance.
is benefitting from the firm’s significant experience in the Chinese graphite market.
Ironstone also possesses valuable experience particularly useful for Black Rock with China
Large-scale spheronising trial
set to remain a dominant force in the global
In August, Black Rock delivered outstanding
graphite space.
results from a large scale spheronising and
in the Chinese market, which will be
purification trial using 400 kg of concentrate “Ultimately, whatever you do in graphite,
from the preceding pilot plant run in China,
it’s going to revolve around China in some
with the trial demonstrating a yield to final
shape or form. Most of our hardware and
product of 48% and 53% and a final purity of
procurement is coming out of China and
99.98% TGC.
we’ve got offtake supply agreements with Chinese firms, so it makes sense to try and
Crucially, these results significantly exceed
align the finance process with China as well.”
Chinese industry benchmark yields of 35-45% for battery anode materials and demonstrate
Black Rock is also working with a boutique
to Black Rock’s customers that its product can
consultancy outfit called Oriental Link,
be integrated into existing facilities.
Resource Global Network
MINING | Black Rock Mining
“The spheronising trial has given us good direction as to whether the product will perform on a large scale, and it absolutely punched the lights out in terms of yield and chemistry”
reported spheronising results in some shape
Closing in on construction
or form. What we’ve done this time round,
Having routinely ticked off a long list of
“Everybody in the graphite sector has
rather than dealing with a cupful, we’ve done milestones over the last three years, Black it with a bathtub full. In this case about four
Rock claims it will be construction ready for
bathtubs full.
the first phase of the Mahenge Project once it finalises financing negotiations.
“When you test concentrate in a controlled lab environment, you should deliver good
Project financing and the subsequent
results. But in an industrial context, variables development schedule is now dependant on are harder to control. The reality is that we
confirmation of the Tanzanian Government’s
got very near to the results we attained in the 16% free carried interest in the project. lab in an industrial context.
Black Rock will be sitting down with the government imminently to discuss the
“This trial has given us good direction as to
terms and conditions associated with their
whether the product will perform on a large
investment.
scale, and it absolutely punched the lights out in terms of yield. When we refined it,
After a turbulent few years in the Tanzanian
it punched the lights out again in terms of
mining industry, de Vries believes the
chemistry,” says a delighted de Vries.
Resource Global Network
situation is becoming clearer for investors in
transport as a condition precedent to us
the sector, particularly as Barrick Gold and
having a business model. 60% of our material
Acacia Mining have resolved how they will
gets sold in the large flake market, which is
work together to arrive at a consensus with
fundamentally uncontested.
the government, after a long-running dispute. “That means that we can spend a bit more The firm’s boss also sees Black Rock as being
time and effort in securing our rightful place
well-positioned in the race to supply the
in that sub-100 mesh area for the EV market.
burgeoning battery tech and electric vehicle
That’s incredibly well supported by having the
(EV) markets, but in an unorthodox way.
highest grade natural flake graphite available on the planet.”
“At Mahenge, 60% of our material is large flake graphite, so we are not waiting for the EV revolution and the electrification of
ASX:BKT
a j
Published by Anderson Murray Media Ltd
To tell the resource market your story, contact: editorial@resourceglobalnetwork.com
WWW.RESOURCEGLOBALNETWORK.COM