- Rock Mining Limited (BKT) signs a framework agreement with the Government of Tanzania to jointly develop the Mahenge Graphite Mine
- Under the agreement, a joint venture company, Faru Graphite Corporation, has been established to develop the Mahenge Graphite Mine
- The Tanzanian government would possess a 16 per cent undiluted free-carried interest in Faru, with Black Rock owning 84 per cent through its subsidiary, Mahenge Resources
- Black Rock MD and CEO John de Vries says the agreement is a watershed moment for the company
- Shares in BKT last traded on December 13 at 23.5 cents
Black Rock Mining Limited (BKT), a Tanzanian graphite developer, has signed a framework agreement with the Government of Tanzania to jointly develop the Mahenge Graphite Mine.
The signing ceremony took place on December 13 and was attended by the President of Tanzania, Her Excellency Samia Suluhu Hassan, the Minister of Minerals Hon. Doto Biteko who both signed the agreement.
The agreement contains a provision for a Free Carried Interest (FCI), which is required by law under Section 10 of the Mining Act, in which the Tanzanian Government holds a 16 per cent non-dilutable interest in the capital of all mining firms.
Black Rock’s enhanced definitive feasibility study for the Mahenge Graphite Mine includes the 16 per cent FCI provision, which forecasts a post-tax, unlevered net present value of US$1.16 billion (A$1.6 billion).
Under the agreement, a joint venture company, Faru Graphite Corporation, has been established to develop the mine. (Faru is the Swahili word for rhinoceros.)
The Tanzanian government would possess a 16 per cent undiluted free-carried interest in Faru, with Black Rock owning the remaining 84 per cent through its fully owned UK subsidiary, Mahenge Resources.
A special mining licence (SML) will be given to integrate current mining licences ML 611/2019 and ML 612/2019, as well as a portion of Prospecting Licence PL 13752/2019, with the existing approved Environmental Permits and Resettlement Action Plans granted to ML’s 611 and 612 ill be grandfathered in under the SML.
Black Rock will be exempted from the terms of the Mines Act 2017 requiring SML developers to issue five per cent of their shares to local interests and list 30 per cent of their stock on the Dar es Salaam Stock Exchange.
Black Rock MD and CEO, John de Vries said the agreement is a watershed moment for the company.
“This enables the Company to rapidly move forward to deliver a new clean source of high-grade Graphite to a growing global market,” he said.
“We said from the start that aligning with the Government and people of Tanzania was absolutely the right approach to provide project certainty for all stakeholders.
“Under the Framework Agreement, the Government of Tanzania will secure project economics through a combination of dividends, taxes and duties.”
Shares in BKT last traded on December 13 at 23.5 cents.