Black Rock Mining : Quarterly Report & Cashflow

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ASX ANNOUNCEMENT

26 April 2022

MARCH 2022 QUARTERLY ACTIVITIES REPORT

HIGHLIGHTS

• • Engineering Design Contract awarded for Mahenge Graphite Mine

• • 25% increase in Measured Resources making Mahenge the largest Measured graphite mineral resource globally

• • Corporate capability bolstered with key appointments:

  • - Mr Greg Wheeler - Chief Commercial Officer

  • - Mr Paul Sims - Chief Financial Officer

  • - Mr James Doyle - Company Secretary

• • Project development and debt financing activities ongoing

• • Market update on graphite prices for Mahenge's products

• • A$6.8M cash at bank as at 31 March 2022

Tanzanian graphite developer Black Rock Mining Limited (BKT: ASX) (Black Rock or the Company) is pleased to provide an update on activities at its Mahenge Graphite Mine in Tanzania for the quarter ending 31 March 2022.

Engineering Design Contract

Following a robust process, Black Rock has awarded its Engineering Design contract to highly experienced engineering design, construction and maintenance company, CPC Engineering (CPC). CPC has detailed knowledge of the Mahenge Graphite Mine, having completed Black Rock's Enhanced Definitive Feasibility Study in July 2019. Since then, CPC have provided ongoing technical support to Black Rock leveraging their extensive knowledge in the sector having previously designed Syrah Resources Ltd's (ASX: SYR) Balama graphite project, the largest producing graphite mine in East Africa.

An Integrated Project Management Team has been established responsible for the FEED process in parallel with detailed engineering, with particular focus on earthworks as the initial priority to ensure the Company can be construction ready in the coming months. Global demand for graphite continues to grow, with positive market tailwinds providing Black Rock with an exceptional opportunity to become a major producer of graphite into the clean energy supply chain. Graphite prices have also begun to move and are up ~60% over the last 12-months.

FEED Key Objectives

The objective of the FEED process is to ensure the project is construction ready (subject to completion of finance) in time for the start of the dry season in Tanzania. Key deliverables of the FEED phase include:

• • Optimisation of the process plant design by incorporating results of the variability testwork program, pilot plant programs and CPC's expertise in the design of graphite process plants;

• • Tender long lead equipment items;

• • Provide updated CAPEX and OPEX for project cost and schedule certainty; and

• • Enable finalisation of the debt finance process.

Black Rock Mining Ltd	Australian Office	Tanzanian Office	Directors
ACN 094 551 336	Level 1, 1 Walker Ave	Mahenge Resources Ltd	Richard Crookes	Chairman
ASX: BKT	West Perth WA 6005	Msasani Towers	John de Vries	Managing Director & CEO
Ph: [phone]	Second floor Wing B	Gabriel Chiappini	Non-Executive Director
E:[e-mail]	Dar es Salaam	Ian Murray	Non-Executive Director
Ph [phone]

www.blackrockmining.com.au

ASX ANNOUNCEMENT

26 April 2022

Black Rock continues to expand its project delivery and operations teams largely focused on in-country roles that will ultimately deliver the Mahenge Graphite Mine into production. Tender of other critical contracts has also commenced which includes Mining Services, Earthworks and Concrete works packages.

For personal use only

Mahenge Graphite Mineral Resource Update

As part of the Company's ramp up on Project execution activities, Black Rock has completed an update of its

Mahenge Mineral Resource designed to provide high confidence to customers and financiers on the planned production output over the first 10 years of operation from the Ulanzi open pit. The 25% increase in Measured Mineral Resource effectively confirms that 100% of the likely loan life is now underpinned by Measured Resource.

Drilling and bulk sampling was completed on the Ulanzi orebody in 2019 but held in storage for final customer qualification. This material was only recently assayed and used as an ore feed and processed in China and Canada as part of Black Rock's 500 tonne qualification processing plant campaign, refer ASX announcement 6th

December 2021.

The complete report on the updated Mineral Resource Estimate can be found in Appendix 1 of ASX Announcement:BKT Confirms 25% increase in Measured Resources,3 February 2022.

Summary of the Mahenge Project JORC Mineral Resource update:

• • The global Mineral Resource Estimate for the Mahenge Graphite Project is 213.1M tonnes at 7.8% TGC (Previously 211.9 Mt @ 7.8% TGC). This makes it the fourth largest JORC Mineral Resource globally and it is still open along strike;

• • Mineral Resource in the Measured category is now 31.8Mt and Indicated at 84.6Mt, combined representing 55% of the total Mineral Resource;

• • 25% increase in the Measured Mineral Resource at Mahenge resulting in the largest Measured Mineral Resource of any graphite developer globally;

• • Within this Mineral Resource is a higher grade portion of 43.8Mt @ 10.8% TGC;

• • Project de-risking achieved by:

  • i. Delivering the highest grade zones to date and further increasing mineral resource category quality;

  • ii. Metallurgical test work indicates that 99% TGC concentrates can be processed through a relatively simple flotation process for a low energy, and low risk operation;

  • iii. Test work supported by real world data through commercial scale processing of over 600 tonnes of graphite ore through three pilot plant and customer qualification programs; and

  • iv. End-product validation. Independent testing by the Company's offtake partners confirmed that battery grade spherical graphite and high quality expandable graphite can be made from Mahenge concentrates for commercial sale.

Black Rock Mining Ltd	Australian Office	Tanzanian Office	Directors
ACN 094 551 336	Level 1, 1 Walker Ave	Mahenge Resources Ltd	Richard Crookes	Chairman
ASX: BKT	West Perth WA 6005	Msasani Towers	John de Vries	Managing Director & CEO
Ph: [phone]	Second floor Wing B	Gabriel Chiappini	Non-Executive Director
E:[e-mail]	Dar es Salaam	Ian Murray	Non-Executive Director
Ph [phone]

www.blackrockmining.com.au

ASX ANNOUNCEMENT

26 April 2022

Table 1 - Comparison between the eDFS July 2019 and February 2022

Updated JORC Compliant Mineral Resource Estimate and Ore Reserve

eDFS July 2019

Resource Update February 2022

For personal use only

Inferred

98.3

7.6

7.4

96.7

7.4

7.2

TOTAL

211.9

7.8

16.6

213.1

7.8

16.6

The Company is not aware of any new information or data that materially affects the information included in ASX Announcement:BKT Confirms 25% increase in Measured Resources,3 February 2022, and all material assumptions and technical parameters underpinning the updated Mineral Resources estimate continue to apply and have not changed.

Corporate

The Company made a number of key appointments that will bolster corporate capability. These included:

• - Mr Greg Wheeler - Chief Commercial Officer

  -

  Mr Wheeler started his career within PwC before spending 10 years with ship manufacturer Austal, where he was ultimately responsible for managing a team of more than 50 people. He subsequently joined privately owned global trading and shipping player Wellard during a period of significant growth (including public listing) and responding to challenging market conditions, whilst building robust financial systems and processes. Mr Wheeler's initial focus will be on product marketing and logistics as well as assisting with commercial negotiations with key third parties and stakeholders and supporting the construction of the Mahenge Graphite Project through contract execution.

• - Mr Paul Sims - Chief Financial Officer

-

Mr Sims is a highly credentialled finance resources executive with over 25 years of executive experience in the resources industry, with previous exposure to zinc, iron ore, cobalt, nickel, and uranium commodities spanning finance and commercial roles at BHP, WMC Resources, Minara Resources, and Karara Mining. He has a Bachelor of Business degree from Curtin University and is a Fellow of CPA Australia.

Mr Sims initial focus will be on activities supporting the engagement and structure of project development financing with finance groups currently in train. The Company is currently engaged in discussions with a number of parties with respect to securing project financing for the Mahenge Graphite Mine. Mr Sims will commence his role with Black Rock on 26 April 2022.

The appointment fills the role on a permanent basis, which up to now has been a part-time consulting role provided by Mr Dale Hanna since August 2019. Mr Hanna will continue to support the Company to enable a smooth transition. The Board would also like to thank Mr Hanna for his valuable contribution during his tenure as CFO.

Black Rock Mining Ltd	Australian Office	Tanzanian Office	Directors
ACN 094 551 336	Level 1, 1 Walker Ave	Mahenge Resources Ltd	Richard Crookes	Chairman
ASX: BKT	West Perth WA 6005	Msasani Towers	John de Vries	Managing Director & CEO
Ph: [phone]	Second floor Wing B	Gabriel Chiappini	Non-Executive Director
E:[e-mail]	Dar es Salaam	Ian Murray	Non-Executive Director
Ph [phone]

www.blackrockmining.com.au

For personal use only

ASX ANNOUNCEMENT

26 April 2022

-

Mr James Doyle - Company Secretary

-

Mr Doyle is an experienced advisory and governance professional specialising in the provision of company secretarial and corporate advisory services to public and private companies across a range of sectors including resources, industrials and information technology. Mr Doyle replaces Mr Gabriel Chiappini who will continue to serve as a Non-Executive Director.

During the quarter, the Company changed its registered office and principal place of business to:

Black Rock Mining Limited

Level 1, 1 Walker Ave West Perth WA 6005 Ph: [phone]

Project Development and Debt Financing Activities

The Company made significant progress on its debt financing activities during the quarter with Independent Expert site visits completed and reporting underway. Black Rock is targeting 50-60% debt via traditional project finance which it is aiming to finalise over the next few months.

Major construction activities are expected to commence in Q3 CY22 and based on a 15-month construction period, the Company is targeting first production from Module 1 in Q4 CY23.

Market update on graphite prices for Mahenge's products

The markets for Mahenge's graphite products continue to be well supported, with prices across all types of graphite up 22% year-on-year according to Benchmark Mineral Intelligence (BMI). Fines prices have been particularly strong, rallying 30% to over US$800/t.

BMI reports spot prices have been exacerbated by short term supply disruption of the European market due to a loss of supply from the Ukraine and Ural Graphite's Taginka mine in Russia..

Cyclones in Madagascar and Covid cases in China have also caused logistical disruptions, combined with low stock builds into last years' winter shutdown.

Demand from the EV sector remains strong, BMI said in its latest graphite price update for February.

"Meanwhile, near-term demand for flake graphite continued to increase, with robust electric vehicle (EV) sales and production figures globally indicating heightened consumer acceptance and sustained demand for EVs, despite a reduction in subsidies at the beginning of the calendar year within China, the world's largest EV market," analysts from BMI wrote.

"As a result, anode producers worldwide, especially Chinese majors such as BTR New Energy and Shinzoom, continued to accelerate project expansions and plan significant new production facilities in order to meet the appetite of cell manufacturers, improving the mid-term demand outlook for flake graphite from the battery market."

Black Rock Mining Ltd	Australian Office	Tanzanian Office	Directors
ACN 094 551 336	Level 1, 1 Walker Ave	Mahenge Resources Ltd	Richard Crookes	Chairman
ASX: BKT	West Perth WA 6005	Msasani Towers	John de Vries	Managing Director & CEO
Ph: [phone]	Second floor Wing B	Gabriel Chiappini	Non-Executive Director
E:[e-mail]	Dar es Salaam	Ian Murray	Non-Executive Director
Ph [phone]

www.blackrockmining.com.au

For personal use only

Graphite prices over past 12-months for Mahenge's 5 products

ASX ANNOUNCEMENT

26 April 2022

US$/t 2,000 1,750

1,500

1,250 1,000

750 500

22/04/21	22/07/21	22/01/22
-195	+195	+895	+595	+3295
Split in Mahenge basket:	32%	9%	36%	18%	5%

22/10/21

22/04/22

Source: RefWin, Asian Metals, ICC Sino, Black Rock MiningUS$/t 1,300

Graphite prices over past 12-months for Mahenge's basket

1,200

1,100

1,000

900

800 22/04/21

22/07/21

22/10/21

Mahenge Basket at 95% conc grade

22/01/22

Mahenge Basket at 97% conc grade (estimated)

22/04/22

Source: RefWin, Asian Metals, ICC Sino, Black Rock Mining

Black Rock Mining Ltd ACN 094 551 336

ASX: BKT

Australian Office	Tanzanian Office	Directors
Level 1, 1 Walker Ave	Mahenge Resources Ltd	Richard Crookes	Chairman
West Perth WA 6005	Msasani Towers	John de Vries	Managing Director & CEO
Ph: [phone]	Second floor Wing B	Gabriel Chiappini	Non-Executive Director
E:[e-mail]	Dar es Salaam	Ian Murray	Non-Executive Director
Ph [phone]

www.blackrockmining.com.au