Walkabout Resources Ltd. is confident that it can confirm binding off-take agreements for at least 75% of the graphite product from its Lindi Jumbo project in Tanzania in the first half.
Executive Chairman Trevor Benson said in a March 12 interview on the sidelines of the Battery Minerals Conference in Perth, Western Australia, that the company was also looking to South Korea, Japan, the U.S. and broader Europe for binding agreements.
Benson said Walkabout wants "geographical diversity" for its off-takes beyond the companies based in China and Germany, with which it now has three agreements for 75% of its product. The company is also confident that it will be able to raise the A$40 million needed in project finance by the end of the current half.
Walkabout had signed a heads of agreement for the sale of 7,500 tonnes per annum to Chinese graphite and expandable products mining and processing company Jixi Puxiang New Material Co. Ltd. and another for 10,000 tonnes per annum of premium concentrate products to a Chinese-European trading house.
Walkabout had also signed a memorandum of understanding for the sale of 12,500 tonnes per annum to German specialist graphite trading house Georg H. Luh GmbH.
While Walkabout had hoped to be in production by the second half when it was granted the critical and long-awaited mining license in August 2018, by the end of that year, Patersons Securities Resource analyst Cam Hardie was concerned about Lindi's startup timing as its off-take heads of agreements had expired.
Benson told conference delegates this week that Walkabout now hopes to have Africa's highest reserve-grade graphite mine into maiden production as early as 2020, which would coincide with widely anticipated high demand globally for premium flake graphite concentrate.
He said the project's attractiveness was boosted by the recently updated definitive feasibility study revealing the company had reduced Lindi's execution risk by cutting capital expenditure to US$27.8 million while substantially upgrading the ore reserve to 5.5 million tonnes at 17.9% total graphitic carbon.
He also praised the project's "super grade and flake size distribution" and a resource that has been lifted 41% from 29.6 million tonnes to 41.8 million tonnes.
Benson said in the interview that Walkabout was not interested in spending a further A$15 million producing a bankable feasibility study, believing that it would have "no problem" selling its product given the parties that had signed up for 75% of its product actually "wanted all of it."
Benson is similarly "pretty confident" in securing finance via a quasi-debt arrangement and some equity by the middle of the year.