ASX-listed Black Rock Mining has received firm commitments to raise A$5-million – before costs – at A$0.023 a share for a placement to new and existing institutional and sophisticated investors.

The company says proceeds from the placement will be applied to general corporate costs and working capital while the company follows up promising recent discussions regarding securing the remaining balance of funding to develop the Mahenge graphite project, in Tanzania.

Petra Capital is acting as sole lead manager and sole bookrunner to the placement.

“We are pleased with the results of the placement bookbuild. On behalf of the board of directors I would like to thank participants, including some existing shareholders, for their support.

“The company is following up promising recent discussions regarding securing the remaining balance of funding for Mahenge. The funds to be raised under the placement will provide us with time to diligently work through this process in the best interests of all shareholders. We look forward to continuing to update the market with our progress,” says Black Rock CEO John de Vries.

The placement comprises the issue of 217.39-million ordinary shares and will be completed using the company’s existing capacity.

The placement is expected to settle on March 10, with the new shares to be issued on, or around, March 11. Black Rock says the new shares will rank equally with the company’s existing fully paid ordinary shares on issue.

The placement issue price of A$0.023 per new share represents a 17.9% discount to the last closing price of Black Rock shares of A$0.028 on February 28; and 22.6% discount to the 15-day volume weighted average market price of A$0.03 to February 28.

Subject to shareholder approval, the company says it intends to offer participants under the placement one free unquoted option, each with an exercise price of A$0.035 and an expiry date of three years from the date of issue, for every two new shares subscribed for and issued under the placement.

The option offer will comprise the issue of a total of 108.7-million new options, subject to shareholder approval which is to be sought at a general meeting of the company planned to be held in late April.

Pursuant to the Umbrella Deed entered between steelmaker Posco and the company on February 10 2021, Black Rock says Posco has the right to participate in the placement, subject to shareholder approval, and the final size of the placement and option offer may increase to accommodate any such election.

Such election is to be made within ten business days of notification.