PERTH (miningweekly.com) – Korean major POSCO has completed its final internal approval process for a $7.5-million investment in ASX-listed graphite developer Black Rock Mining.
The two companies in December last year struck an agreement under which POSCO would acquire a 15% interest in the Tanzania-focused Black Rock Mining for a $7.5-million investment.
Under the terms of the agreement, Black Rock would issue more than 126-million shares, at an issue price of 8.2c each, representing a 23% premium to the company’s 30-day volume weighted average share price.
The companies said at the time that they would negotiate an offtake and prepayment agreement under which POSCO would acquire between 20 000 t/y and 40 000 t/y of graphite over the life-of-mile production from the Module 1 plant to be constructed at the Mahenge project, in Tanzania.
The terms of the purchase would be negotiated as part of the long-for offtake and prepayment agreement.
In addition, POSCO also indicated its preparedness to provide between $10-million and $20-million as a prepayment facility, which can be used to fund the Mahenge project.
Black Rock told shareholders on Monday that positive discussions with POSCO were ongoing in relation to the offtake agreement, including the prepayment facility.
POSCO’s investment into Black Rock is still subject to a number of conditions, including Foreign Investment Review Board and Tanzanian government approvals.