Walkabout taps offtake partner for Tanzania project

20th June 2017 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH (miningweekly.com) – Graphite developer Walkabout Resources has signed a number of agreements covering about 75%, or 30 000 t/y, of the initial production target for its Lindi Jumbo project, in Tanzania.

The agreements make provision for the negotiation of binding sales and purchase agreements, which will be finalised by the end of 2017, with deliveries of graphite product to start in 2018.

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

The company has signed a heads of agreement (HoA) with China’s Jixi Puxiang New Materials Company for some 7 500 t/y of graphite and a HoA with a Chinese-European trading house for 10 000 t/y of premium concentrate products.

The third agreement is a memorandum of understanding with a strategic alliance for 12 500 t/y of product that will be sold into the European market.

A definitive feasibility study into the Lindi project estimated the project will cost $38.7-million to support production of 40 000 t/y of graphite concentrate over a 20-year period.

The project is expected to generate a life-of-mine revenue of some $1.25-billion and average earnings before interest, taxes, depreciation and amortisation of $47.7-million, with the pretax net present value estimated at $323-million and the pretax internal rate of return estimated at 96.4%.

Walkabout was recently granted environmental approval for the development of the mine, and the company is now finalising a funding pathway to develop the project.