Walkabout Resources Ltd (ASX:WKT) has signed an exclusive sales, purchase, and marketing agreement with Wogen Pacific for the supply of the entire graphite production of 40,000 tonnes per annum from its Lindi Jumbo Graphite Project in southeast Tanzania.
Under the amended agreement, the full export production of Lindi Jumbo will be sold to Wogen for a minimum term of five years.
This will allow Lindi Jumbo to harness the skills and resources of an established international commodities marketing organisation across its full production capacity.
“Major milestone”
Walkabout CEO Andrew Cunningham said: “The signing of the exclusive sales agreement with Wogen Pacific is a major milestone in the development of the Lindi Jumbo Graphite Project.
“Wogen brings a wealth of global sales and marketing experience into the Lindi Jumbo fold and has been working diligently for more than two years marketing the Lindi Jumbo graphite concentrate to pre-selected end-users.”
Key terms
The original agreement allowed for a volume of production not already committed to other customers to be sold to Wogen.
Under the amended terms, the agreement is for the full nameplate capacity of the Lindi Jumbo Mine.
Wogen will distribute the product into the global market, drawing on its substantial expertise and resources in speciality commodities marketing.
Existing offtake agreements with other customers will be renegotiated to reflect this new arrangement. The existing customers are supportive of this approach.
Benefits of the agreement
Lindi Jumbo will draw on the considerable market knowledge and relationships Wogen has established in the graphite market since partnering with Walkabout Resources and Lindi Jumbo in 2019.
It is anticipated that Lindi Jumbo’s sales book will be more diversified and have greater exposure to shorter-term pricing than previously as a result of the new arrangement.
The average realised pricing of graphite concentrate will be more influenced by short-term market movements while still having some longer duration.
The agreement also provides Lindi Jumbo enhanced access to supply chain financing, supporting the objective of operating a capital-efficient balance sheet.
About Wogen Pacific
Wogen Pacific is part of the Wogen group, a specialist trading company handling a wide array of speciality metals and minerals including ores and concentrates, metals and oxides, ferro-alloys, mineral sands and rare earths.
The company has a 50-year history of trading, selling, procuring and servicing customers across the globe. Wogen brings particular strengths in Europe and China, key locations in the graphite marketplace.
Wogen chairman Alex Williams said: “We are delighted to be enlarging the scope of our agreement with Lindi Jumbo as we continue to develop our expertise in the important area of future-focused metals and minerals.
“We have enjoyed working with the people at Lindi Jumbo over the past few years and look forward to continuing this in a mutually beneficial and transparent way.”