Walkabout Resources Ltd (ASX:WKT) added 14% to its share price by lunchtime today on making an early start to procurement, manufacturing and siteworks activity for its Lindi Jumbo Graphite Project in southeast Tanzania.
The company also secured commitments to raise $3.1 million in a placement to sophisticated investors to help fund its early-start program which has already involved a start to earthworks by Tanzanian clearing, siteworks and roads contractor TNR Ltd.
DEEP DIVE: Walkabout Resources progresses Lindi Jumbo in Tanzania with offtake and marketing deals
Walkabout has set a US$2.75 million ($3.95 million) budget for its early-start construction advancement program, with US$800,000 of funds already spent.
A US$1 million has been set aside for Jinpeng Procurement and Manufacturing in Yantai, China for a Jinpeng engineering, procurement and construction (EPC) contract while resettlement action plan agreements for Ruangwa in Tanzania would attract US$2.25 million of payments for three phases.
RAP spending so far has totalled US$300,000 while TNR’s total earthworking bill is set to be US$500,000.
Walkabout estimated between two and three months would be saved on procurement and long-lead items for two consignments.
The company updated its Lindi definitive fesiblity study (DFS) for the project in March 2019, extended mine life by 20% to 24 yeasr and increasing its after-tax net present value (NPV10) by 9.4% to US$197 million after a 10% discount was applied.
Lindi Jumbo project is 200 kilometres from Mtwara port and was awarded a mining licence (ML 579/2018) in 2017.
The company has booked up to 75% of its planned production of high-purity large flake graphite concentrate for the first three years after the start of Lindi operations, with a variety of offtake-style agreements.
READ: Walkabout Resources signs binding agreement with metals trader
Last month the company signed a five-year global sales, purchase and marketing agreement with international commodities trading house Wogen Pacific Limited.
Wogen was to buy and market an initial minimum of 10,000 tonnes of concentrate a year up to a maximum of 30,000 tonnes a year in a deal that came with a US$8 million working capital finance facility.
The facility is to be extended with 80% advance payments on consignment concentrates after shipping documents are received.
Walkabout added 0.35 cents, or 13.46%, to its share price by 12.53pm to rest at 30 cents by lunchtime.