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Walkabout Resources advances graphite project funding

Published: 09:00 06 Jun 2017 AEST

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The company opens an underwritten share purchase plan tomorrow

Walkabout Resources (ASX:WKT) is continuing its negotiating for a funding pathway under its fast-track methodology for its Lindi Jumbo Graphite Mine located in Tanzania.

Discussions are underway with several parties in Europe and China and it is expected a staged funding approach will be adopted.

The company was recently granted its environmental impact assessment certificate for Lindi, which is an important pre-requisite to the mining licence application, to be submitted shortly.

Trevor Benson, chairman, commented: “Finalising our funding pathway remains the top priority for the Lindi Jumbo executive team.

“Ongoing discussions, although not finalised, are progressing with interest having been received across Europe and China.”


Background

Walkabout is fast tracking the 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 flow-sheet used elsewhere in Africa and which 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.

Walkabout currently holds 70% of four licences at Lindi Jumbo with an option to acquire the remaining 30% share.


Project details

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.

Lindi’s definitive feasibility study (DFS) demonstrated:

- Highest grade mineable resource in Tanzania leading to mill feed grade of >17% TGC;
- Lowest unit operating cost of US$292 per tonne in concentrate at mine gate;
- Lowest start-up capital at US$38.7 million;
- Highest ratio of Large, Jumbo and Super Jumbo (+180µm) flakes in concentrate;
- High weighted average basket price ($1,687) due to flake size distribution; and
- The manageable and realistic start up production rate reduces technical and market risk.


Off-take discussions

During May, Walkabout concluded a non-binding strategic sales and purchase memorandum of understanding (MoU) with a European based strategic graphite trading house.

Follow up meetings have been held with the German based specialist graphite trader, Georg H. Luh GhmB.

Meetings have been with regard to the timing, product price mechanisms and specialist market information relating to the next level of agreement that will be finalised.


Project work continues

Ongoing project management, initial design and scope definition work continues in Cape Town and China.

In Cape Town, South Africa, front end engineering and design work is proceeding.

Engineers from Walkabout’s metallurgical consultant have travelled to BGrimm in China and participated in workshops to finalise large equipment supply options.

BGrimm is a highly respected metallurgical and graphite flotation research laboratory and has designed many previous graphite flotation plants across China and elsewhere. 
A bulk sample of 1.7 tonnes taken from two surface outcrop areas at Lindi was sent to BGrimm in China for independent process validation.

The sample has been crushed, homogenised and has assayed at 32% TGC and the test work is expected to be complete by the end of June.


Share purchase plan

Walkabout will tomorrow open a fully underwritten share purchase plan (SPP) to raise $1.25 million primarily to advance the Lindi Jumbo Graphite Project located in Tanzania.

The new shares will be issued at a 20% discount to the 5 day volume weighted average price at the time of issue.

The proposed timetable for the SPP is set out below:

- Record date: 2 June, 2017;
- Opening date: 7 June, 2017;
- Closing date: 23 June, 2017; and
- Quotation of new shares: 29 June, 2017.

The directors of the company will participate in the SPP.

Additionally, Walkabout has agreed to grant the underwriter a right to facilitate a placement of new shares to be issued at the same price as those under the SPP.

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