Black Rock Mining's (ASX:BKT) has secured an exclusive option to acquire a jumbo flake graphite discovery in Tanzania.
Consideration includes a non-refundable cash payment of USD$50,000 and, subject to compliance with ASX Listing Rules, the issue of 1 million shares, and other staged payments as outlined below.
The acquisition of the Bagamoyo Graphite Project represents a significant strategic milestone and establishes the company as a major graphite explorer and developer in the country. Additional staged payment terms below.
Bagamoyo covers over 1100 square kilometres, and hosts exceptionally coarse flake graphite - which Black Rock said was typically 2-7mm flake with >10mm flake observed.
The project is located 125 kilometres by road from Dar es Salaam export port.
The graphite is mapped in outcrop and float rock over a 1 kilometre strike area, with four additional outcrops uncovered over a 7 kilometre area.
Steve Tambanis, managing director, commented:
"The Mahenge Project remains our priority and is expected to deliver a significant resource by the end of 2015, however we see an opportunity to leverage our excellent exploration team into the Bagamoyo Graphite project whilst the Ulanzi drill-out is completed.
"In addition to being ideally located close to port, rail, power and water, we are particularly excited by the mineralisation observed at the project which includes the coarsest flake graphite the company has observed in Tanzania."
Full consideration details
Black Rock to be granted an exclusive option to acquire 100% of the permits in exchange for option fee consisting of:
- A non-refundable cash payment of USD$50,000 and, subject to compliance with ASX Listing Rules, the issue of 1,000,000 fully paid ordinary shares;
- Upon payment of the option fee, Black Rock to be provided an exclusive four month due diligence period to explore the permits with a commitment to spend a minimum of USD$100,000 on exploration during this period;
- In the event that Black Rock exercises the option, initial consideration payable to the vendors will include a cash payment of USD$200,000 and, subject to compliance with ASX Listing Rules, the issue of 4 million shares;
Black Rock is also committed to make the following milestone payments as required:
(i) USD$750,000 cash and, subject to compliance with ASX Listing Rules, the issue of 4 million shares upon announcement of a JORC compliant resource of greater than 250,000 tonnes of contained graphite at not less than 5% TGC; and
(ii) USD$750,000 cash and, subject to compliance with ASX Listing Rules, the issue of 10 million shares upon announcement of a JORC compliant resource of greater than 500,000 tonnes of contained graphite at not less than 5% TGC.
For a period of two years following the exercise of the option, the Black Rock will be required to incur a minimum exploration expenditure of $500,000 per annum.
Exploration at Bagamoyo
Initial exploration completed by Black Rock has identified a significant coarse flake graphite zone covering an area of around 1 kilometre x 200 metres of outcrop and extensive float rock.
The graphitic mineralisation is flat lying to shallow dipping on relatively flat ground and has an observed thickness of 30 metres.
The company said preliminary analysis indicates exceptionally coarse flake graphite mineralisation, with typical graphite flake size of 2-7mm and many occurrences >10mm.
The indicative graphite grade observed is 7% TGC which, whilst lower than Mahenge, has the potential to result in a premium product given the very coarse flake.
Outcrop samples have been dispatched to Australia for flake characterisation.
Exploration work is underway to assess the discovery outcrop area as well as conducting regional reconnaissance work with an additional team.
Analysis
The acquisition comes with a small price tag, and further enhances Black Rock as a pure east African graphite play.
Investors support this strategy, with Black Rock's shares climbing to $0.093, almost four-times higher than where they were trading in July.
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