Australia-listed Walkabout Resources said on Monday that shipments of equipment from China for its Lindi Jumbo graphite project, in Tanzania, have been suspended, pending the completion of the drawdown of $20-million in debt.
The company explained that one of the conditions precedent (CP) for the drawdown of the debt was the provision of a standby letter of credit (SBLC). The SBLC submitted had not been confirmed as per the loan requirements and Lindi Jumbo had been informed that the bank had to issue a replacement SBLC.
While Walkabout was confident that a replacement SBLC would be sourced, it said that the process would require time to complete.
Lindi Jumbo had received short-term commitment from its major contractors to continue construction works, however, further shipments of equipment from China had been suspended until the final CP had been completed and the drawdown occurred.
Walkabout said it was in discussions with various contractors about the delay and how it might impact on their activities. The company noted that the shipping suspension would have a negative impact on the project schedule and that the full extent would only be determined once shipments resumed.
“The unexpected issues associated with finalizing the standby letter of credit required for initial debt drawdown and the consequent shipment suspension are enormously disappointing as the development of Lindi Jumbo is proceeding remarkably well and we were quite advanced in preparing for commissioning,” said CEO Andrew Cunningham.