AMN - TANZANIA: Sales deals for Lindi Jumbo graphite

Walkabout Resources has concluded a series of agreements that permit it sell up to 75% of its annual production from the Lindi Jumbo Flake Graphite Mine in Tanzania. This means that 30,000 tonnes of the initial annual production target of 40,000 tonnes is now under agreements with European and Chinese traders and end-users.

Negotiations for sales of the remaining 10,000 tonnes per annum of production are continuing.

Walkabout’s chairman Trevor Benson said, “These agreements are a significant step forward in providing evidence as to the demand for Lindi Jumbo project premium high-grade and large flake graphite products, and are key to finalising the current funding proposal for development of our project.

“Having just returned from China, where company executives finalised these agreements, I am confident that all the quality product from Lindi will be produced and contracted for sale.”

The agreements include:

• Heads of agreement (HOA) for the sale of 7500 tonnes annually to large Chinese graphite and expandable products mining and processing company, Jixi Puxiang New Material Co Ltd;
• HOA for the annual sale of 10,000 tonnes of premium concentrate products to a Chinese-European Trading House, which prefers to not have its identity disclosed at this time and with a particular focus on the expandable graphite markets; and
• MoU with a strategic alliance for the sale of 12,500 tonnes annually to Georg H Luh GmbH, a German-based, specialist graphite trading house with access to European expandable graphite markets.

The agreements make provision for the negotiation of binding sales and purchase agreements, including certain exclusivity arrangements, to be finalised before the end of 2017 and for deliveries to commence during 2018. All agreements call for firm sales terms with pricing mechanisms and specifications to be finalised by the end of 2017.

Walkabout’s stated intention for the target market of Lindi Jumbo graphite is the expandable graphite market, which is expected to grow significantly as the global economy emerges from low growth rates and the electric battery storage market sees increased demand.

For this reason, the company has sought first to align itself with existing operators in the expandable graphite market and form strategic, long-term marketing alliances.

These commercial relationships will leverage existing market networks and contribute to improved product development and expansion opportunities.

Walkabout is fast-tracking development of the Lindi Jumbo project to take advantage of forecast market conditions for flake graphite deposits with high ratios of large and jumbo flakes.

The company has developed a proprietary processing technique based on an existing and proven flowsheet used elsewhere in Africa, and that yields exceptionally high ratios of large, jumbo and super jumbo flakes into concentrate. This premium product will allow higher than average revenues to be achieved.

Lindi has a mineral resource of 3.24 million tonnes graphite grading 10.9% TGC and ore reserve of 809,081 tonnes graphite grading 16.13% TGC.

www.wkt.com.au