Walkabout Resources Ltd (ASX:WKT) added 14% to its share price by lunchtime today on making an early start to procurement, manufacturing and siteworks activity for its Lindi Jumbo Graphite Project in southeast Tanzania.
The company also accepted a $3.1 million placement from sophisticated investors and shareholders to help fund its early-start program which has already involved a start to earthworks by Tanzanian clearing, siteworks and roads contractor TNR Ltd.
Walkabout has set a US$2.75 million ($3.95 million) budget for its early-start construction advancement program, with US$800,000 of funds already spent.
A US$1 million has been set aside for Jinpeng Procurement and Manufacturing in Yantai, China for a Jinpeng engineering, procurement and construction (EPC) contract while resettlement action plan agreements for Ruangwa in Tanzania would attract US$2.25 million of payments for three phases.
RAP spending so far has totalled US$300,000 while TNR’s total earthworking bill is set to be US$500,000.
Walkabout estimated between two and three months would be saved on procurement and long-lead items for two consignments.
The company updated its Lindi definitive fesiblity study (DFS) for the project in March 2019, extended mine life by 20% to 24 yeasr and increasing its after-tax net present value (NPV10) by 9.4% to US$197 million after a 10% discount was applied.
Lindi Jumbo project is 200 kilometres from Mtwara port and was awarded a mining licence (ML 579/2018) in 2017.
The company has booked up to 75% of its planned production of high-purity large flake graphite concentrate for the first three years after the start of Lindi operations, with a variety of offtake-style agreements.
Last month the company signed a five-year global sales, purchase and marketing agreement with international commodities trading house Wogen Pacific Limited.
Wogen was to buy and market an initial minimum of 10,000 tonnes of concentrate a year up to a maximum of 30,000 tonnes a year in a deal that came with a US$8 million working capital finance facility.
The facility is to be extended with 80% advance payments on consignment concentrates after shipping documents are received.
Walkabout added 0.35 cents, or 13.46%, to its share price by 12.53pm to rest at 30 cents by lunchtime.