Black Rock Mining : Quarterly Activities Report & Cashflow

ASX ANNOUNCEMENT

26 July 2021

JUNE 2021 QUARTERLY ACTIVITIES REPORT

HIGHLIGHTS

• POSCO completes its US$7.5M 15% equity stake in Black Rock
• Black Rock signs Memorandum of Understanding with US clean tech graphite processing company, Urbix
• Technical and project delivery capability bolstered with the appointment of Mr Daniel Pantany as General Manager Engineering & Technical
• Project development works commenced and are ongoing including, front-end engineering and final design
• Discussions continue with Government of Tanzania on Free Carry Interest Agreement
• Positive negotiation is ongoing with POSCO for an Offtake & Prepayment Agreement
• A$11.3M cash at bank as at 30 June 2021

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 30 June 2021.

POSCO Equity Investment Agreement

During the quarter, Black Rock confirmed the completion of the Investment Agreement with POSCO Ltd (POSCO) for its strategic US$7.5M, 15% equity stake in Black Rock (ASX Announcements 17 December 2020 and 11 February 2021). This followed resolution of all conditions precedent including the Australian Foreign Investment Review Board, and the Tanzanian Government Fair Competition Commission, (ASX Announcements 4 March 2021 and 12 May 2021 respectively).

Black Rock received shareholder approval for the placement of 126,020,001 shares to POSCO at an Extraordinary General Meeting held on 15 April 2021. Subject to POSCO maintaining a minimum of 10% equity interest in Black Rock, POSCO will have the right to nominate a director to the board of Black Rock.

Both parties continue to progress discussions on an Offtake Agreement which includes a prepayment facility of up to US$20m.

Black Rock will use the funds from the POSCO transaction for the following purposes:

• front-endengineering work and final design of the Mahenge Graphite Project;
• conducting a pilot scale test for further commercial qualification;
• third party technical due diligence; and
• project development, site works, early stage construction and general corporate costs associated with the development of the Mahenge Graphite Project.

ASX ANNOUNCEMENT

26 July 2021

URBIX Partnership

The Company signed a Memorandum of Understanding (MoU) with United States of America CleanTech Graphite Processing company Urbix, Inc (Urbix), for an innovative supply chain partnership collaboration on battery anode processing.

Urbix is an advanced materials technology company specialising in all aspects of the graphite value chain including manufacturing the most environmentally viable graphite and energy storage products in the world. Patented purification techniques deliver lower production costs with a low environmental footprint by avoiding the traditional need for Hydrofluoric Acid (HF) and high power consumption.

The MoU with Urbix is designed as a whole of supply chain collaboration that will drive commercial benefits for Black Rock and its customers. Under the MoU, Black Rock and Urbix will examine the potential to provide current and potential offtakers with an alternative Western supply chain option that is not only competitive, but delivers strongly differentiated environmental and sustainable battery anode materials.

Urbix has produced battery anode material from Mahenge graphite concentrates, with an initial batch submitted to Black Rock's shareholder and development partner, POSCO, for qualification testing. Further samples will be prepared for ongoing testing.

Both parties will also work to validate and verify scaled up performance of the processing technology at a technical and commercial level. Following construction of a dedicated processing facility by Urbix to access US markets, the companies will seek to examine a North Asia opportunity for toll processing or Joint Venture.

Urbix's graphite processing technology has several advantages that has the potential to transform the global processing of natural graphite products for battery and energy storage applications. Urbix graphite processing technology can deliver significant advantages to Black Rock and its customers through:

• Much lower energy consumption;
• Eliminating the need for hydrofluoric acid use;
• Significantly higher product yield (70% to 80% versus current industry standard of 35%); and
• Reduced reliance on co-product credit (re-carburiser sales to monetise waste streams).

Management Appointment

General Manager, Engineering & Technical

Mr Daniel Pantany was appointed as General Manager Engineering & Technical, effective 21 June 2021. Daniel graduated with a Bachelor of Engineering (Civil) from the University of Western Australia in 1998, and has over 22 years' experience in the resources sector, working across a broad range of commodities including gold, nickel, mineral sands, copper, uranium, graphite, sulphate of potash and iron ore, including haematite and magnetite within Africa and Australia. His experience extends across a broad range of overall project delivery roles including EPCM, EP, and lump sum EPC contracts. Daniel's most recent position was with CPC Engineering which included secondment as Project Engineering Manager for Syrah's Balama project in Mozambique.

Mr Pantany has detailed knowledge of the Mahenge Graphite Project having been Study Manager for Black Rock's Definitive Feasibility studies (DFS) since 2018, and has been providing ongoing technical support throughout product qualification and due diligence. He brings significant project development experience encompassing all stages from concept through to execution, commissioning and ramp up.

ASX ANNOUNCEMENT

26 July 2021

Tanzanian Activities

Free Carry Interest Agreement

The Company continues to progress negotiations with the Government of Tanzania on the mechanics of implementing a Framework Agreement to implement the Free Carried Interest (FCI) provisions of the 2017 Mining Act. The Company is of a view that good progress is being made and remains confident that a timely and appropriate achievement will be delivered.

Community Engagement

In anticipation of commencement of onsite activities, the Company has commenced a front end loading process for resettlement of affected persons impacted by the project development. At this stage, the process is one of change management with compensation and physical resettlement commencing only after a FCI Framework Agreement with the Government of Tanzania has been reached.

Engineering and Project Development

Black Rock has commenced program of works targeted at establishing construction readiness. This includes:

• Operation of a large-scale pilot plant to generate bulk concentrate samples to complete customer qualification for POSCO and selected large flake customers;
• Updating capital and operating costs estimates from the 2018 Definitive Feasibility Study;
• Development of an Early Works Program to facilitate the rapid ramp up of site activities;
• Progressing offtake agreements from Pricing and Volume Framework Agreements to a form suitable for financing; and
• Engagement of the equipment vendor and construction management syndicate to generate Gross Maximum Price (GMP) estimates for project execution.

Capital Management

The Company had cash reserves of A$11.3M as at 30 June 2021.

Payments to, or to an associate of, a related party of the entity during quarter

During the quarter A$179,000 was paid to related parties of the Company relating to executive director salary, non- executive director fees and company secretary fee of which A$51,000 relates to back payments of fees.

Summary of the exploration expenditure incurred during the quarter

ASX ANNOUNCEMENT

26 July 2021

About Black Rock

Black Rock Mining Limited is an Australian based company listed on the Australian Securities Exchange (ASX:BKT). The Company has a 100% interest in the Mahenge Graphite Project (the Project) located in Tanzania. The Project has a JORC compliant Mineral Resource Estimate of 212m tonnes at 7.8% TGC. It also has Ore Reserves of 70m tonnes at 8.5% TGC. The Ore Reserves support a mine life of up to 350k tonnes of graphite per annum for a reserve life of 16 years. Since the release of the Mineral Resource Estimate, the Company confirms that it is not aware of any new information or data that materially affects the mineral resources estimate.

In October 2018, the Company released a Definitive Feasibility Study (DFS) for the Project, which was based on strong customer demand. This was enhanced in July 2019 (ASX Announcement 25 July 2019), and demonstrates exceptional financial metrics including:

• Low Capex: Lowest peak capital expenditure of US$116M for phase one*;
• High Margin: AISC margin of 63.1%;
• Low Technical Risk: Substantial pilot plant operations run of 110 tonnes; and
• Superior Economics: IRR of 44.8% with NPV10 of US$1.16bn (A$1.65bn**)

In February 2019, the Company announced receipt of its mining licence for the DFS project.

In May 2019, the Company announced it had substantially allocated planned production with up to 255k tonnes per annum of graphite committed to sale by year three of production, through Pricing Framework Agreements (ASX Announcement 8 May 2019). The Company is progressing these agreements into binding offtake commitments.

Following release of the enhanced DFS (eDFS) in July 2019, the Company confirms that it is not aware of any new data or information that materially affects the results of the eDFS and that all material assumptions and, in the case of estimates of Mineral Resources or Ore Reserves, technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed.

The estimated Ore Reserves and Mineral Resources underpinning the production target has been prepared by competent persons in accordance with the requirements in Appendix 5A (JORC Code).

The Company is currently progressing financing discussions and detailed engineering with a view to commencing construction of the mine.

For further information on Black Rock Mining Ltd, please visit www.blackrockmining.com.au

• Forecast Capex has been classified as a Class 3 estimate with accuracy of ±10% as defined by AACE
• $AU/US 0.70
• Resource and Ore Reserve Estimates as released to ASX on 8 August 2017 Optimised PFS

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