Walkabout Resources (ASX:WKT) has delivered a Definitive Feasibility Study (DFS) for a proposed open pit mine and graphite processing plant at its Lindi Jumbo Graphite Project in south eastern Tanzania.
The DFS shows a payback period of just 22 months.
Allan Mulligan, managing director, commented:
"The finalisation of this DFS is a milestone event for our company and allows us to actively pursue funding options for the fast tracked development of this fine, high grade project.
"Importantly, this study reduces risk and increases confidence for our current and future investors."
Walkabout currently holds 70% of the project with the option to acquire 100%.
DFS highlights
- Mining plan utilises exceptional high grade (>17% TGC) plant feed in first three years and +16% TGC over Life of Mine (LOM).
- DFS to accuracy of 10%-15% confirms exceptionally robust economics and returns even at potential softening price regimes for premium material.
- On mine cash cost of US$292/t in concentrate delivered at mine gate. Cost for concentrate to FOB Port of Mtwara included in off-site costs.
- Upfront Capex of US$38.7m the lowest capital intensity amongst peer group. Ongoing sustaining and deferred capital of US$5.6m.
- Weighted average product basket price of US$1,687/t intentionally modelled conservative against peers.
- Pre-tax NPV10 of US$323m with Pre-tax IRR of 97% highly robust.
- Project Pre-tax NPV10 of US$133m and Pre-tax IRR of 50% at current 10 year low prices.
- Project almost completely de-risked with built in capacity optimisation and expansion opportunities in the resource and the process plant.
- Operating model of “Fully Outsourced – Build, Own, Operate” (BOO) well underway with full scope under current negotiations.
- Front End Engineering Design (FEED) currently being discussed with different Work Breakdown Scope (WBS) scope Preferred Partners for various areas of design.
Next steps
The project is currently being assessed for Environmental Impact certification by the National Environmental Management Council of Tanzania.
Following award of this certificate, the Mining Licence application (ML) valid for 10 years, renewable, will be submitted.