Walkabout signs EPCM Heads of Agreement with deferred payment funding

Emerging African graphite producer Walkabout Resources has signed a Heads of Agreement (HOA) with a private mid-sized engineering company, Yantai Jinpeng Mining Machinery Co in China to engineer, manage and build the Lindi Jumbo process plant and shared infrastructure package on-site in south eastern Tanzania.

The EPCM service contract will include a deferred payment option by means of a fast-track application already underway, which provides access to funding provided through the Chinese Governments’ new $1 trillion “Silk Road – One Belt, One Road” initiative.

Executive Chairman of Walkabout Resources, Trevor Benson commented: “Jinpeng is a highly competent and experienced engineering Company. This EPCM and deferred payment funding is an optimal outcome for our fast-tracked development strategy. This funding model should significantly reduce the project capital required by the company.”

A DFS completed in February 2017 confirms the project to be technically sound with excellent economic returns even at potential softening price regimes for premium graphite flake material. Payback period for the project is less than two years.  The DFS was based on an annual production of 40,000 t of graphite concentrate with a high grade feed to the plant of < 300,000 t/y.  Mining studies were based on a Measured and Indicated Mineral Resource only.

The following are highlights of the findings of the feasibility study:

  • Lowest operating costs in Tanzania of $352/t in concentrate FOB at the port of Mtwara
  • Lowest upfront Capex in Tanzania of $38.7 million
  • Highest Ore Reserve grade in Tanzania at 16.1%TGC
  • Ore reserve based only on 42% of the Measured and Indicated portion of the Mineral Resource
  • Very short development timeframe of seven months from financing.