Walkabout Resources Ltd (ASX:WKT) continues to pursue an international funding process seeking to raise US$40 million to fund the development of the fully-permitted Lindi Jumbo Graphite Project in Southeast Tanzania.
This ongoing process, which is being carried out through Pareto Securities, has involved a series of management presentations to global investors and subsequent due diligence.
Secured loan note issue
Walkabout intends to raise the funds through a secured loan note issue in international capital markets.
These notes will be USD-denominated and will be senior secured obligations of the company, with a five-year term, unless earlier repurchased or redeemed, and bearing interest payable quarterly in arrears.
The loan notes will be guaranteed against the Lindi Jumbo project.
Pareto, an international investment bank, has been engaged to advise on procuring the development funding for the project.
The company expects to benefit from Pareto’s experience of funding greenfield mining projects and structuring emerging market transactions, especially when considering the regulatory and logistical aspects of lending to a project in Tanzania.
Due diligence process
In recent months Pareto has coordinated an extensive due diligence process including the engagement of independent third-party advisors to assist with legal and technical due diligence.
This work has also involved a review of the graphite market and the marketing of the Lindi Jumbo graphite concentrate.
In addition, the company has received alternate funding proposals which are being assessed on the basis they could potentially lower the total cost of finance.
Due to this ongoing process, the company is negotiating with lenders to amend the agreement in reference to the Shareholder Bridging Loan.