Walkabout Resources (ASX:WKT) has signed a Memorandum of Agreement (MoA) with technology company Coalswana to complete integrated Pre-Feasibility and Bankable Feasibility studies at its Takatokwane thermal coal project in Botswana.
Coalswana will jointly fund the studies for an integrated mine and ultra clean coal energy fuel beneficiation facility at an estimated cost of US$10 million.
The parties are to formalise a long term off-take agreement by 31 May 2014, with Walkabout to retain sole export rights after satisfying off-take requirements.
Notably, Walkabout will remain immune to beneficiation, technical and financial risk.
Walkabout will issue Coalswana a 5-year convertible note, at a strike price of 125% of the average daily VWAP during 20 days prior to conversion date, at a rate of 4/5ths of actual expenditure incurred by Coalswana.
Walkabout has Botswana’s largest coal asset and previously announced a 6.8 billion tonne JORC inferred resource and a 748 million tonne indicated resource at of good quality thermal coal at Takatokwane.
While studies still need to confirm optimal commercial and technical viability, the multiple development options for Takatokwane coal significantly reduces risk and enhances project economics.
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