Walkabout Resources Ltd has made an early start to procurement, manufacturing and site works activity for the development of its Lindi Jumbo Graphite Project in Tanzania. The ‘early start’ project is taking place in China, Tanzania and Western Australia.
Simultaneously with the ‘early-start’ program, the company has finalised a placement of A $3.1 million at a price of 23 cents which is a 10% discount to the 5-day Volume Weighted Average Price (VWAP) determined at the ASX trading halt on May 3, 2019.
The placement from sophisticated investors and shareholders will help fund the early-start program which has already involved a start to earthworks by Tanzanian clearing, site works and roads contractor TNR Ltd.
Walkabout has set an A$3.95 million budget for the early-start construction advancement program, with US$800,000 of funds already spent.
US$1 million has been set aside for Jinpeng Procurement and Manufacturing in Yantai, China, for an engineering, procurement and construction (EPC) contract while resettlement action plan (RAP) agreements for Ruangwa in Tanzania would attract US$2.25 million of payments for three phases. TNR’s total earthworking bill is set to be US$500,000.
Selected construction equipment, surveyors and management have been mobilised to the site in the country’s southwest.
Walkabout has estimated that between two and three months would be saved on procurement and long-lead items for two consignments.
The company updated its Lindi definitive feasibility study (DFS) for the project in March 2019, extending mine life by 20% to 24 years and increasing its after-tax net present value (NPV10) by 9.4% to US$197 million after a 10% discount was applied.
Lindi Jumbo project is 200 kilometres from Mtwara port and was awarded a mining licence in 2017.
The company has booked up to 75% of its planned production of high-purity large flake graphite concentrate for the first three years after the start of Lindi Jumbo operations, with a variety of offtake-style agreements.
Last month the company signed a five-year global sales, purchase and marketing agreement with international commodities trading house Wogen Pacific Limited.
Wogen was to buy and market an initial minimum of 10,000 tonnes of concentrate a year up to a maximum of 30,000 tonnes a year in a deal that came with a US$8 million working capital finance facility.
The facility is to be extended with 80% advance payments on consignment concentrates after shipping documents are received.