108.7 Million Placement Options Priced at $0.035 Each for Mahenge Funding
Black Rock Mining Limited has launched a prospectus offering over 108 million unquoted options to participants of a recent $5 million placement, aiming to support the development of its Mahenge Graphite Project in Tanzania.
- Offer of up to 108.7 million unquoted Placement Options
- Options exercisable at $0.035 each, expiring July 2028
- Placement raised approximately $5 million at $0.023 per share
- Funds from option exercise to support Mahenge Graphite Project development
- Risks include project delays, funding uncertainties, and geopolitical factors
Context of the Offer
Black Rock Mining Limited (ASX, BKT) has issued a detailed prospectus dated 24 July 2025, offering up to 108,695,652 unquoted Placement Options to investors who participated in a prior placement of 217,391,305 shares. This placement, completed in March 2025, raised approximately $5 million before costs at an issue price of $0.023 per share. The new options are being offered on a ratio of one option for every two shares subscribed under the placement.
The Placement Options carry an exercise price of $0.035 each and will expire at 5, 00pm (WST) on 29 July 2028. While the issue of these options will not raise immediate funds, the company stands to benefit financially if and when these options are exercised, with proceeds earmarked to advance the development of the Mahenge Graphite Project in Tanzania.
Strategic Importance of Mahenge Graphite Project
The Mahenge Graphite Project, where Black Rock holds an 84% interest through its subsidiary Faru Graphite Mining Corporation, remains central to the company’s growth strategy. The project is subject to Tanzanian mining regulations, including requirements to commence mining activities within 18 months of licence grant. Following a notice of default in early 2025 related to mining commencement, Black Rock has engaged with the Tanzanian Mining Commission and submitted a revised development schedule to maintain its Special Mining Licence (SML).
While the Tanzanian government has yet to formally endorse the revised schedule, the company remains optimistic about securing necessary extensions and support. However, the prospectus highlights the risk that failure to satisfy government requirements could lead to suspension or cancellation of the SML, posing a significant operational risk.
Funding and Financial Outlook
Black Rock has received indicative support from key lenders including the Development Bank of South Africa, Industrial Development Corporation of Africa, CRDB Bank, and POSCO Holdings Inc. POSCO has agreed to invest up to US$40 million subject to conditions precedent, including government approvals. Negotiations for extensions of funding agreements are ongoing but not yet finalized, underscoring uncertainty around the timing and certainty of project financing.
The proceeds from any exercise of the Placement Options will contribute to funding the development of Mahenge’s first module. The company cautions that there is no guarantee that all required funding will be secured or that financing will be obtained on favourable terms, which could impact project timelines and viability.
Investment Risks and Market Considerations
The prospectus provides a comprehensive overview of risks, including development delays, capital and operating cost overruns, geopolitical and regulatory risks associated with operating in Tanzania, commodity price volatility, and environmental compliance. Investors are reminded of the speculative nature of the investment, with the company emphasizing that the options are targeted exclusively at sophisticated and professional investors who participated in the placement.
Market factors such as graphite price fluctuations, currency exchange rates, and global economic conditions also pose risks to the company’s financial performance. The document advises potential investors to seek professional advice and carefully consider these risks before participating.
Corporate Governance and Directors’ Interests
Black Rock’s governance framework aligns with ASX Corporate Governance Council recommendations, with disclosures on directors’ shareholdings, options, and remuneration included in the prospectus. The board has authorized the issue of this prospectus, underscoring management’s commitment to transparency and regulatory compliance.
Notably, the company’s substantial shareholders include the Copulos Group, POSCO Holdings Inc., and the Turner Group, collectively holding a significant portion of shares, which may influence corporate decisions.
Bottom Line?
As Black Rock Mining advances its Mahenge project funding through these options, investors will be watching closely for progress on government approvals and financing milestones that will shape the company’s next phase.
Questions in the middle?
- Will the Tanzanian government formally approve the revised development schedule for Mahenge?
- Can Black Rock secure all necessary funding commitments to avoid project delays or suspension?
- What market conditions will influence the timing and likelihood of Placement Options being exercised?