Walkabout Resources (ASX: WKT) operates in the metals and mining sector. Development of high-grade Lindi Jumbo Graphite Project is the present focal point of the organization which is located in South East Tanzania, roughly 200kms from the Port of Mtwara. For the Lindi Project, the organization has procured 100% of a Mining License (ML579/2018).
The organization is in Joint Venture (JV) with Tyrone for the exploration of cobalt, copper and silver. WKT had likewise gained an exploration permit for gold and base metals in Northern Ireland and Scotland. Apart from the Lindi Project, it is additionally investigating at Eureka Lithium Project in southern Namibia.
On 7th March 2019, the company notified the results of enhanced Definitive Feasibility Study (DFS), for the high-grade, Lindi Jumbo Graphite Project in Tanzania. According to the updated DFS, the present mine life, has been extended by 4 years. In 2017 DFS, Life of mine was modelled for 20 years and in 2019 DFS, it extended to 24 years. It has consequently increased the life of mine revenue, from US$1.18 million to US$1.44 million. Much of the increase in revenue was accounted for, in the later years, and the benefit thereof, is discounted in the cash flow.
The post-tax net present value (NPV) of the project also increased by 9.4% from US$180 million in 2017 DFS to US$197 million in 2019 DFS. According to the sensitivity analysis, which was performed to determine the economic robustness, it was found that the project was most sensitive to changes revenue for both NPV (Pre-tax and post-tax). However, a 30% reduction in Revenue, representing a basket price of US$1,000 per tonne, well below current prices, still returns a post-tax NPV of over US$100 million.
Changes in Operating cost on all fronts are as follows:
All current numbers of 2019 DFS are being compared to 2017 DFS.
- Operating cost (life of mine) rose from US$267.5 million to US$334 million.
- Operating Costs (ex-transport) decreased from US$289 million/t con to US$282 million/t con.
- Operating Costs FOB Mtwara decreased from US$349 million/t con to US$347 million/t con.
The company stated that all the changes that have taken place in the operating cost, was due to the additional years of production, and no material changes had been made. The improvements in the modelled operating costs were the result, by higher grade material which was offset by some additional costs, associated with mining and stockpiling the low-grade material. The real benefits of the high-grade mill feed on working costs, and it would be realised through increased flexibility and mill performance.
Capital costs have been determined through a combination of fixed tender pricing, firm quotations and database references based on similar operations. The pre-production capital cost decreased, by 6.4% from US$29.7 million in 2017 DFS to US$27.8 million in 2019 DFS. An upfront saving of around US$2.5 million, has been achieved through vendor funding of a large portion of the camp infrastructure costs.
On 2nd January 2019, the company released a consolidated performance report for the CY18.
As of 7th March 2019 (AEST: 3:52 PM), the stock is currently trading 3.704% higher, at the price of A$0.140 compared to the previous close of A$0.135. The stock is on fire from the last five days, giving the return of more than 22.7% (excluding today’s gain).
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