Black Rock Mining Ltd (ASX:BKT) has made progress with formal negotiations to resolve the structure and nature of the Government of the Republic of Tanzania's Free Carried Interest (FCI) for Mahenge Graphite Project.
Formal negotiations have begun and a Draft Framework Agreement (DFA) prepared by the Tanzanian Government, has been received by Black Rock.
The DFA is being reviewed while the company continues to work constructively with the government and is pleased with the progress made to date although it is unable to provide any indication as to if or when these negotiations will be successfully concluded.
Shares are up 8% to 5.3 cents and have risen from 2.7 cents at the close on April 22.
This development follows other recent milestones achieved with the completion of the Resettlement Action Plan (RAP) field activities, initiation of due diligence by TIB Development Bank and the signing of a Strategic Alliance and Development MOU with POSCO Group.
Development of the Mahenge Graphite Project will provide significant economic and social benefits for Tanzania driven by the creation of fulltime jobs, direct contribution to the Tanzanian economy and new opportunities for Tanzanian businesses including ports, rail and power supply.
Black Rock is focused on resolving the FCI agreement with the Tanzanian Government, which is a critical step in achieving financing conditions precedent.
Only July 7 managing director John de Vries issued a letter to shareholders seeking support for the proposed capital raising of up to A$1.65 million.
He said: “Black Rock is undertaking a pro-rata non-renounceable entitlement issue to eligible shareholders of ordinary fully paid shares in the company on the basis of one new share for every 16 shares held at the record date on June 9, 2020, at an issue price of 4.2 cents per share to raise up to around A$1.65 million.
“Subscribers to the offer will also receive one free option for every one new share subscribed for and issued, exercisable at 8.4 cents per option on or before the date which is three years from the date of issue.”
The entitlement offer is available to all Black Rock shareholders registered on the record date whose registered address is in Australia (or subject to certain restrictions described in Section 4.9 of the prospectus), New Zealand, Singapore and Hong Kong.
Funding from the offer will be used to progress development of the Mahenge Graphite Project.