Walkabout Resources (ASX:WKT) is continuing to progress development on all fronts of its Lindi Jumbo graphite project as it aims to fast-track into production the high-grade zone of the deposit.
Walkabout has now satisfied the earn-in requirements for 70% of the licences, has environmental permitting and planning processes underway while the fast-track project philosophy is being adopted and implemented.
A share purchase plan to raise additional funds at $0.0032 (a discount to current share price of $0.004) for the Lindi development closes on February 29 as key share price accretive milestones are ahead.
Walkabout has a strategy to mine the high-grade envelope at Lindi as it seeks to attract a cornerstone investor and path to early project development.
It is a discrete, very high-grade zone of 2.6 million tonnes at 20.6 total graphitic carbon (TGC) that the company intends to fast-track into production.
The resource at Lindi is 15.3 million tonnes at 10.1% TGC for contained flake graphite of 1,542,000 tonnes.
Recent metallurgical testwork has confirmed target recoveries and improved flake size retention with flake size ratios of Jumbo flakes (+300μ) now up to 40% and large flakes (+180μ) between 60% and 74% in concentrate. This saw consistently high recoveries of between 95% and 97%.
“We’re a very small organisation but with sound project management and some smart appointments in key areas, we will get Lindi Jumbo developed. We encourage shareholders to participate in the share purchase plan since the provision of operational funds will ensure continued momentum,” Mulligan said.
Key attributes of Lindi project
- Located right next to Magnis’ Nachu Project
- Grade is substantially higher than Nachu – lower input costs
- Early results confirm that the Jumbo flake ratios will be similar to Nachu
- Walkabout can apply for a Mining Licence not Special Mining Licence – substantially easier and quicker
Early production
With these key project attributes the potential for fast tracking a mining project at Lindi in 2017 become higher.
The company is aiming to produce a high-grade jumbo and large flake concentrate product. The strategy should assist to introduce an end-user market partner which will secure product off-take.
Analysis
Tanzania is one of the prime country addresses for graphite exploration, project development and to attract funding.
Walkabout will aim to fast track a smaller scale, high grade project at Lindi should provide a platform for development. The use of a modular, pre-assembled construction would avoid long lead times for key equipment.
News flow pipeline has key milestones including:
- environmental permitting and planning process underway
- in-fill drilling within the Resource zone is planned
- metallurgical test work on samples are currently underway with results to follow
- discussions with investor groups at due diligence stage
- share purchase plan underway
- high grade zone will be the focus of the mining study
- appointment of a Johannesburg-based design and construction specialist to work begin on the project’s process plant
The exploration upside at Lindi is significant as is potential to increase the high grade portions of the resource. The very high grade mineable envelope near surface is suitable open cut mining widths providing cost advantages.
Lindi ticks all the right boxes and with the highest grade accessible resource in Tanzania and market cap. of circa $7M v $125M for Magnis Nachu project provides a runway to share price growth.
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