POSCO is set to acquire a 15% stake in Black Rock Mining Ltd., which owns the Mahenge graphite project in Tanzania, for $7.5 million.

Black Rock said Dec. 17 that it will issue a total of 126,020,001 shares at 8.2 Australian cents per share, representing a 23% premium to the 30-day VWAP and a 15% premium to the 15-day VWAP prior to the agreed share price standstill date of Nov. 20.

POSCO has the right to nominate a director to the board of Black Rock, subject to maintaining a minimum of 10% equity interest in the company.

The parties intend to negotiate an off-take and prepayment agreement, wherein POSCO will acquire 20,000 tonnes to 40,000 tonnes per annum of minus 195 flake graphite, equivalent to 100%, for the life of mine production from Module 1 of the plant to be constructed at Mahenge.

POSCO has also indicated its preparedness to provide a $10 million to $20 million prepayment facility, which will be used for the development of Mahenge.

The acquisition agreement is expected to receive approval on or before Jan. 15, 2021, while the long-form off-take and prepayment agreement is set to be signed by March 31, 2021.