PERTH (minigweekly.com) – Junior graphite developer Black Rock Mining has converted two existing Chinese pricing and volume agreements into binding term sheets for offtake at its Mahenge project, in Tanzania.

The ASX-listed company on Friday said that the term sheets had been inked with existing offtake customers Taihe Soar Supply Chain Management and Qingdao Yujinxi New Material Company for the supply of large flake graphite concentrate.

Under the terms of the agreement, Taihe Soar would take 20 000 t/y of concentrate over a three-year term, with the option to extend the offtake agreement by a further two years. The offtaker will also have the option of taking a further 10 000 t of un-contracted concentrate.

New Materials will take 10 000 t/y over a three-year term, also with the option to extend the offtake period by a further two years. New Materials also has the option of taking an additional 5 000 t of un-contracted concentrate.

“Converting our offtake agreements to a binding status delivers a higher level of confidence for our business model and is fundamental to our financing strategy. The company has been progressing these offtake agreements in parallel to activities with respect to resolving the Tanzanian government’s Free Carried Interest provisions,” said MD and CEO John de Vries.

“We continue to receive strong offtake interest for large flake concentrate, subject to the ability to complete qualification. Access to adequate quantities of sample available for qualification supports our view that our entire planned production from module one will be subject to binding offtake before completion of construction. “

Black Rock said on Friday that the conversion to binding status now confirms the majority of large flake concentrate from Mahenge module one is now allocated and provides for a higher level of contractual stability prior to commencing a debt finance process. The remaining 23 000 t/y un-contracted tonnage is subject to a qualification process which is underway.

Meanwhile, Black Rock noted that offtake and prepayment negotiations with Korean major POSCO for 100% of fines from Mahenge module one are progressing. POSCO recently took a 15% stake in Black Rock Mining, by investing A$7.5-million in the company.