Black Rock (ASX:BKT) share price falls on FIRB outcome

The Black Rock Mining Ltd (ASX: BKT) share price has fallen today on the news of its POSCO equity investment. Here's all the details.

| More on:
A hand moves a building block from green arrow to red, indicating negative interest rates

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Black Rock Mining Ltd (ASX: BKT) share price has fallen in late afternoon trade. This comes after the company received news from the Commonwealth Treasurer on the POSCO equity investment. At the time of writing, the graphite developer's shares are down to 14 cents.

Established in 2000, Black Rock is an Australian mining company focused on developing its Mahenge Graphite Project in Tanzania. It is known to be the world's fourth-largest graphite resource. Thus, indicating huge potential for the future. Indeed, demand for graphite has grown considerably and is expected to double in the next decade. This is due to the strong adoption by consumers for batteries in electric vehicles and other emerging applications.

So let's take a closer look at what was in the announcement.

FIRB outcome

Black Rock has received a positive outcome from the Foreign Investment Review Board (FIRB) decision. According to its release, Black Rock advised that the Commonwealth Treasurer, acting on the advice of the FIRB, has approved POSCO for a 15% interest in Black Rock. Nevertheless, the Black Rock share price is in negative territory. 

Consequently, POSCO will invest US$7.5 million as part of its Subscription & Umbrella agreements. The successful result will enable both companies to form a strategic alliance for the development of the Mahenge Graphite Project.

Currently, Black Rock and POSCO are continuing to work together to satisfy the remaining conditions for Tanzanian Government Fair Competition Commission approval. It is expected that this will be procedural and routine.

In the near future, Black Rock will hold a general meeting to obtain shareholder approval for the POSCO transaction. Should the company get the green light, it will issue over 126 million shares to POSCO at a placement price of 8.2 cents apiece.

What did management say?

Black Rock managing director and CEO John de Vries commented:

Access to POSCO's equity contribution of US$7.5m enables Black Rock and our 100% owned Tanzanian subsidiary Mahenge Resources Ltd, to complete detailed engineering, early site clearance planning and commercial scale product qualification. With this, the Mahenge Graphite Project will be positioned to complete required financing in an efficient and timely manner.

The Company anticipates site works in the second half of CY2021, pending resolution of the Government of Tanzania Free Carry Interest Agreement.

About the Black Rock share price

The Black Rock share price has gained close to 250% in the past 12 months, and 45% year-to-date. Interestingly, the company's shares have raced higher on the back of renewed investor confidence in the materials sector.

Based on the current share price, Black Rock commands a market capitalisation of around $100 million.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Ten smiling business people wave to the camera after receiving some winning company news.
Share Gainers

Here are the top 10 ASX 200 shares today

It was an historic day for the ASX, with the market setting a new record.

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Broker Notes

Bell Potter says this ASX 200 stock can rise 100%+

Let's see which stock the broker is tipping as a buy to clients.

Read more »

Man sitting in a plane looking through a window and working on a laptop.
Broker Notes

Macquarie tips 28% upside for this ASX All Ords tech stock

Let's see what the broker is saying about this growth stock.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why Fletcher Building, Johns Lyng, Pilbara Minerals, and Zip shares are charging higher

These shares are having a strong session on hump day. But why?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Austal, Beach Energy, Perseus, and Platinum shares are falling today

These shares are having a tough time on hump day. But why?

Read more »

A man looking at his laptop and thinking.
Broker Notes

Up 17% in 2025, how much more upside does Macquarie tip for Metcash shares?

Following Tuesday’s merger and earnings news, Macquarie changed its rating for Metcash shares.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Record Highs

Breaking: The ASX 200 just hit a new all-time high

Australian shares have exploded 16.8% higher in two months.

Read more »