Black Rock Mining (BKT) Investor Presentation summary

Project overview and strategy

• Mahenge graphite project in Tanzania holds the world's second largest graphite reserve, targeting Tier 1 scale and first quartile costs with a low carbon footprint due to hydro-dominated power supply.

• POSCO, the largest ex-China anode producer, is a strategic partner with a 10.1% stake, cornerstone offtake agreements, and $50m in approved funding.

• All key government agreements and permits are secured, with $153m in debt approvals from DBSA, IDC, and CRDB; loan documentation is nearing completion.

• Mahenge's NPV (10%, post-tax) is estimated at $1.4bn, with a 36% IRR and a 26-year initial operating life.

• The project is pursuing a simple, lower-risk mine-only strategy, focusing on high-value large flake production and leveraging existing infrastructure.

Market dynamics and demand outlook

• Graphite is essential for lithium-ion batteries, with batteries containing 7–10x more graphite than lithium; LFP batteries are expected to reach 50% of global EV sales within two years.

• Natural graphite's share in battery anodes is forecast to rise from 30% in 2023 to 50% by 2030, requiring significant new supply and likely leading to supply deficits and higher prices.

• Over 50% of global natural graphite mine supply is currently breakeven or loss-making, with ex-China fines commanding premium prices due to new US/EU restrictions and tariffs.

• The graphite supply chain is highly dependent on China, making alternative sources like Mahenge strategically important.

• Energy transition trends and growing EV sales are driving robust long-term demand for graphite.

Financials and cost structure

• Mahenge's forecast all-in sustaining cost (AISC) is $518/t, supporting healthy margins at current spot prices.

• Adjusted C1 costs are forecast at $359/t, placing Mahenge in the first quartile of the global cost curve.

• Initial capex for Module 1 is $231m, with subsequent modules planned to scale production to 347ktpa.

• Market capitalization stands at A$66m (undiluted), with A$9.1m cash and no debt as of June 2024.

• Sensitivity analysis shows a 10% increase in basket price results in a 20% increase in unlevered NPV.