Walkabout Resources Commenced Its Early-Start Program In China, Tanzania And Perth

  • May 07, 2019 AEST
  • Team Kalkine
Walkabout Resources Commenced Its Early-Start Program In China, Tanzania And Perth

Emerging African graphite producer Walkabout Resources (ASX: WKT) witnessed an uplift of over 11% in its share prices during the intraday trade, owing to the news regarding the commencement of the company's “early-start” program in China, Tanzania and Perth.

In an update provided on 7 May 2019, the company announced that it has commenced with an integrated international project “early-start” to commence procurement, manufacturing and siteworks for the Lindi Jumbo Graphite Project in south eastern Tanzania.

Further, the company has finalized the placement of $3.1 million which will be used to fund the “early-start” program at the Lind Jumbo Graphite Project. While commenting on the placement, Executive Chairman of Walkabout told that the Company is in a very strong position to implement the Early Start strategy, which involves procuring initial equipment from Jinpeng and secure funding to finalise its Resettlement Action Plan RAP payments. This will allow the company to gain access to the ground, and finally start civil work on site.

Early-Start Program is going to advance the project construction process along its critical path while project funding is being finalised and negotiated. The primary benefits should include a reduction of the project construction timeline due to the period of manufacture of equipment in China.

The Company has implemented its funding strategy to run simultaneously with two options

  1. A high-yield short term quasi-debt instrument (High Yield Note) offered to wholesale and sophisticated investor and shareholder groups
  2. A high-yield short term debt provided by one or more institution/s under similar but not identical terms as above

Both these options are currently in advanced stages of preparation and negotiation and the debt to equity ratio of both these options is as yet unknown. The company intends to maximise the debt portion within the servicing capacity of the Project.

The company has executed an agreement with Yantai Jinpeng Mining and Machinery Co to commence with primary and long lead equipment procurement and manufacture for a down payment of US$0.5 million and a final payment of US$0.5 million upon delivery and approved ready for shipping.

With regards to the company’s Resettlement Action Plan, the company has advised that it has made payments to a select group of land-holders and has attained access to areas of the “foot-print affected” site for the purposes of commencing with early start works at the mine site.

The company has also started the early-start site works by signing a contract Tanzanian earthworks and mining contract partner TNR ltd to prepare the plant and associated infrastructure site for civil works.

In the past six months, the share price of the company increased by 136.36% as on 2 May 2019. At the time of writing, i.e., on 7 May 2019 AEST 3:14 PM, the stock of the company was trading at a price of A$0.295, up by 13.462% during the day’s trade with the market capitalisation of ~A$79.1 Mn. It has 52 weeks high of $0.340 and 52 weeks low of $0.081 with an average volume of ~904,633.


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