Walkabout Resources Ltd (ASX:WKT) has signed its first binding term sheet for a significant amount of future production from its Lindi Jumbo Graphite Project in Tanzania.
The offtake agreement secures sale of up to 50% of planned annual production for the first three years from the project.
Importantly, the agreement signifies positive recognition from the graphite market of Walkabout’s premium product and development timeline.
Advanced offtake discussions with other parties are also continuing.
The binding terms are to deliver a minimum of 10,000 tonnes and a maximum of 20,000 tonnes per annum of flake graphite for three years.
READ: Walkabout Resources a grade king with Lindi Jumbo in Tanzania
Walkabout’s executive chairman Trevor Benson said: “Signing the first binding offtake term sheet is a significant milestone for Walkabout.
“It’s clear that end-users and upgrade facilities who have recognised our premium product, can now see a more definite timeline to production.
“This has prompted them to take action to secure supply from what is Africa’s standout large-flake graphite deposit.
“The agreement is the result of months of testwork and discussions and we are delighted to be able to make this announcement so quickly after releasing the upgraded Reserve and the improved DFS.
“Securing the sale of up to 50% of planned production also reduces financing risk.
“We look forward to being able to share updates with the market as we continue to advance discussion on both additional offtake agreements and financing.”
READ: Walkabout Resources reveals updated graphite project DFS, shares up
Last month, Walkabout released an updated definitive feasibility study (DFS) for its Lindi Jumbo Graphite Project.
The mine life increased 20% to 24 years and the project’s post-tax net present valuation (NPV) increased 9.4% to US$197 million.