Walkabout Resources Ltd (ASX:WKT) has welcomed resolution of the dispute between Barrick Gold Corp (NYSE:GOLD) and the Government of Tanzania, believing this new partnership will transform the country's mining industry.
The company states that the partnership will re-energise foreign direct capital into Tanzania following a signing ceremony with the President of the United Republic of Tanzania, Dr John Pombe Magufuli.
During the extended dispute initially involving Acacia Mining and then resolved by Barrick Gold and the government, Walkabout said it had been difficult to close financial transactions for projects in the country.
Walkabout chairman Trevor Benson:
"For Walkabout, and other companies operating in Tanzania, the Barrick settlement is a significant positive step in once again attracting investment back into the country.”
Barrick's CEO Mark Bristow said the joint venture, which will give the government visibility of and participation in operating decisions made for and by the North Mara, Bulyanhulu and Buzwagi mines was a pioneering move that would take Barrick’s policy of partnership to a new level.
In addition, through its new partnership company Twiga Minerals Corporation, Barrick will invest US$10 million in building mining skills capacity in the industry and US$50 million in brown and green-fields exploration in Tanzania.
"Partnership philosophy"
Walkabout's chairman Trevor Benson said: “The partnership philosophy of which Mr Bristow speaks is identical to that upheld by Walkabout Resources in developing the Lindi Jumbo Project.
"The commitments agreed by Barrick highlight the confidence they have in continuing to invest in Tanzania and these will be significant in underpinning the transformational changes implemented by the Government of Tanzania some years ago.
"For Walkabout, and other companies operating in Tanzania, the Barrick settlement is a significant positive step in once again attracting investment back into the country.”
Lindo Jumbo Graphite Project development
During the December quarter, Walkabout representatives travelled to Yantai, China to sign off on major plant construction items nearing completion prior to shipping once funding has been secured.
Buy-out items such as motors and bearings have been ordered and advance payments have been made by Yinpeng.
These items will undergo further workshop testing and be packed into containers for shipment to Lindi in line with the construction schedule.
Early works earthmoving and levelling on site has been completed and civils construction can commence immediately after final funding has been secured.
The pre-manufacture of these major long lead items and early start site works has worked toward de-risking the project timetable and positioning the Lindi Jumbo project ahead of the expected international graphite market rebound anticipated during 2020.
Walkabout believes that this progress demonstrates that Lindi Jumbo is the most advanced graphite project in East Africa with the shortest timeframe to full production.
Senior secured loan note
During the quarter, Walkabout launched a Senior Secured US$40 million Loan Note Issue in the international debt capital markets.
The company continues to engage with interested parties to secure a suitable funding solution for the Lindi Jumbo project.
Several potential funding institutions have expressed interest in providing partial funding and efforts to secure a cornerstone loan-note holder.
New potential loan note subscribers have opened discussions during 2020 after the close of the quarterly period.
Walkabout engaged international investment bank Pareto Securities to advise on procuring the development funding for the Lindi Jumbo Project.