Australian mining firm Black Rock Mining has received approval for a $59.6 million (A$92.58) loan from the Development Bank of Southern Africa (DBSA) to support its Mahenge graphite project in Tanzania.
The approval of the loan is pending legal documentation and will be finalized in line with the specified conditions.
The DBSA funding is part of a more extensive project debt financing package that various potential lenders from Africa are set to provide.
These lenders include development finance institutions and Tanzanian commercial banks, which have already completed substantial due diligence.
Black Rock expects to obtain board approvals from these potential lenders in the last quarter of this year. Following approval, the company will initiate discussions, sign agreements with the selected lenders, and confirm the funding structure.
In a statement, the company noted that the conditions and terms of the approvals and facilities are expected to be typical for such arrangements.
However, it emphasized that there is no guarantee regarding the conditions that potential lenders may impose or whether facility agreements will ultimately be reached.
The Mahenge graphite project, fully owned by Black Rock, is situated in Tanzania’s Ulanga district, approximately 250km from the Mozambique border.
The project covers 324km² of exploration tenements and holds significant graphite resources, with 212 million tonnes (mt) at 7.8% total graphitic carbon (TGC) and a reserve of 70mt at 8.5% TGC.
A definitive feasibility study conducted by Black Rock suggests that a four-stage construction plan could yield up to 340,000 tonnes per annum of 98.5% graphite concentrate over 26 years.
The project is noted for its low capital expenditure, with an estimated A$115 million per annual tonne of production, making it one of the most cost-effective graphite projects in development.
The net present value for the project is estimated at $1.16 billion, boasting an internal rate of return of 44.8% and a margin of 63.1%.
