Walkabout Resources Ltd (ASX:WKT, FRA:N6D)’s flagship Lindi Jumbo Graphite Project in Tanzania has further progressed into the construction phase, with the commencement of site mobilisation and the appointment of an independent project manager (IPM).
The CRDB-approved IPM has completed site visits and has been given the necessary approvals.
Also, bulk earthmoving contractor TNR, who was appointed to undertake site earthworks and civil engineering work, has commenced mobilisation to site.
The company has further completed stakeholder meetings and information sessions.
Walkabout also hosted two high-level government delegations, including the Prime Minister of Tanzania Kassim Majaliwa and the deputy minister of minerals Professor Shukrani Manya.
Kickstarts development activities
Walkabout Resources CEO Andrew Cunningham said: “The appointment of the Independent Project Manager by CRDB has kickstarted project development activities, with the mobilisation of bulk earthmoving equipment now underway.
“These activities coincided with the company hosting two high-level Government delegations to site over the past week through visits by the Honourable Prime Minister of Tanzania Kassim Majaliwa and Honourable Deputy Minister of Minerals Professor Shukrani Manya.
“Lindi Jumbo is now officially in construction and we look forward to updating our shareholders on the progress over the coming months."
Project debt agreement
Under the US$20 million project debt agreement, an IPM is required to be appointed to approve the payment of project funds from either the companion equity or the project debt.
A total of US$8 million of companion equity funds has already been deposited with CRDB in Tanzania.
The final US$4 million of companion equity is expected next week, subject to approval by shareholders today.
CRDB approved the appointment of the IPM in early August and mobilisation payments have been made to TNR.
PM visits
The start of the first major mine development activities in Tanzania over the last five years and the first in the wider region has resulted in active interest by the government stakeholders.
The company hosted two senior official government site visits over the past week.
Professor Manya was on site on August 13, 2021, and again accompanied the PM Majaliwa to site on August 20, 2021.
Both delegations were updated on the commencement of the project development activities and of the company’s environmental, social and governance (ESG) activities in the region.
Both delegations expressed their delight in seeing this happen and confirmed their ongoing support towards the company and the project
Finalising other development contracts
Walkabout continues to finalise its other important project development contracts.
The EPC contract is nearing finalisation, while the logistics, camp and power contracts have all been re-tendered with the award of these contracts expected shortly.
A current global container shortage is expected to significantly increase shipping costs of around 90 containers from China to Tanzania.
As the erection of the graphite plant is not scheduled until later in the year, these shipments will be sequenced to arrive according to the construction schedule to try and mitigate the higher costs.
Stakeholder activities
The Lindi Jumbo team has been very active in the local region, where numerous meetings and information sessions have been held to inform all relevant local stakeholders ahead of the start of construction activities on site.
Interactive information sessions will be conducted throughout the construction process, as it is of the utmost importance to the company that the 'Social Licence to Operate' is maintained.
Offtake enquiries every week
The existing binding offtake term sheets will be priced and converted to agreements much closer to production.
These offtake agreements are not required to be finalised before the project debt is available to draw down as they are not a condition precedent and are only required to be provided to CRDB as a condition subsequent. It is in the commercial interests of the company to enter those arrangements as late as possible.
Walkabout remains encouraged by the increasing demand outlook for Lindi Jumbo’s products.
With the mine under construction, the company receives new offtake enquiries from around the world virtually every week.
Its commitment is to deliver the 40,000 tonnes base case project and make active consideration of the growth possibilities.