Photo by: Bloomberg
ASX-listed graphite developer Black Rock Mining has received approval from the Development Bank of Southern Africa (DBSA) for project debt of up to $59.6-million, which is expected to form part of the project debt facilities for the Mahenge graphite project, in Tanzania.
Several potential lenders, including development finance institutions and Tanzanian commercial banks, have progressed through the substantive part of the due diligence process, including site visits, and are progressing indicative term sheets based on their due diligence and the enhanced definitive feasibility study update outcomes.
In an update on the debt process for the Mahenge project, published on November 2, Black Rock said it expects lender board approvals from several potential lenders to be notified to the company during the fourth quarter. Once those board approvals are received, Black Rock will then seek to negotiate and execute full form facility agreements with successful lenders, and confirm the structuring of the project financing package.
Terms and Conditions Such approvals and facilities are expected to contain terms and conditions usual for facilities of this type, but there is no guarantee of the conditions potential lenders may seek to impose, or that facility agreements will ultimately be entered into.
Ultimately, funding for the project to reach production will require a combined debt and equity project finance package, with Black Rock saying it is targeting up to 50% debt through traditional project finance.
Korean steelmaking company Posco has entered into a memorandum of understanding with Black Rock for a potential cornerstone equity position of up to $40-million and the debt component is expected to require a combination of lenders. This follows the June 2020 announcement by Black Rock MNining of a strategic alliance with Posco for the development of Mahenge.