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Black Rock Mining is targeting first production from its Mahenge graphite project, in Tanzania, in the 2024 calendar year.

Speaking at the second day of the Paydirt Battery Minerals conference, Black Rock MD and CEO John de Vries said the debt process for Mahenge was well advanced, with the company aiming to have term sheets in place by the second quarter of this year.

De Vries told delegates that the company was also hoping to firm up its agreement with Korean major POSCO, which in late 2021 inked a term sheet consisting of a $10-million pre-payment commitment and an offtake agreement for all of the planned fines produced from the first module at Mahenge.

“We see POSCO moving to full form agreement. POSCO has massive ambitions in this space and we see them as a fantastic partner,” he added.

In terms of debt financing, De Vries said that it had been an “interesting journey” to date with the company currently working with credit committees.

A recent independent review of the front-end engineering design and an updated definitive feasibility study (eDFS) for the Mahenge graphite project increased the project’s costs from the $116-million considered in the 2019 definitive feasibility study to $182-million.

The eDFS has increased the estimated Phase 1 production from 83 000 t/y of graphite to 89 000 t/y, with the mine life remaining unchanged at 26 years. Steady-state production has increased from an expected 340 000 t/y of graphite to 347 000 t/y, with the all-in sustaining cost now estimated at $518/t, up from the $494/t estimated in 2019, with throughput rates increasing from one-million tonnes a year to 1.15-million tonnes year.

The project’s estimated net present value has declined from the $1.5-billion estimated in 2019 to $1.4-billion, while the expected post-tax internal rate of return has declined from 45% to 36%.