HomeBattery metalsEPC contract begins at Walkabout Resources’ Lindi Jumbo

EPC contract begins at Walkabout Resources’ Lindi Jumbo

Walkabout Resources has announced that its mine construction schedule is on track, and has provided a project development update on activities supporting the development of its 100% owned Lindi Jumbo Graphite Mine in south eastern Tanzania.

Engineering, Procurement and Construction Contract

Lindi Jumbo, a company incorporated in the Republic of Tanzania and a 100%-owned subsidiary of WKT, has executed the EPC for the Lindi Jumbo Graphite Process Plant with Yantai Jinpeng Mining and Machinery Co. in China.

The execution of the second material contract is part of the Conditions Precedent (CP) for drawdown of the US$20 million debt facility by CRDB Bank in Tanzania. The project capex is substantially de-risked with this contract being for a fixed price. Together with the previously announced earthmoving and civils contract with TNR more than two-thirds of the project is now contracted.

The EPC contract sum including the plant enhancement scope change is US$11.9 million. $0.5 million of this had already been paid as part of the early start program & a further $1.6 million paid on mobilisation. The contract allows for additional separable portions for power, mobile equipment & shipping.

Lindi Jumbo has indicated it will source the mobile equipment from Jinpeng for $0.6 million that includes a telehandler, front-end loaders and mobile crane. Mine power is subject to a separate contracting process with alternative vendors.

The EPC contract costs have been revised to current market prices predominantly for steel and labour. An estimated escalation of 150% in shipping costs to the original budget has arisen due to the global Covid pandemic influenced shortage of shipping containers. The resulting increase in fixed cost from the original budget is currently not seen as material and negotiations are underway in the various remaining areas of the Project to likely offset these increases.

Walkabout Resources’ CEO, Andrew Cunningham commented:

“The formal signing of the EPC contract is another major milestone for the Project as we work towards satisfying all of the CP’s towards the drawdown of the debt and keeping the project development to schedule. Construction progress on site and in China has been impressive and I look forward to the delivery of the plant equipment to Tanzania and further development on site over the coming months”.

Highlights:

  • Commencement of EPC Contract with Yantai Jinpeng Mining Machinery
  • EPC contract signed with Yantai Jinpeng Mining and Machinery Co
  • The Company has exercised an option to upgrade the scope of the screening and bagging section of the Processing Plant
  • Electricity rationing in China has not impacted the Processing Plant manufacture and procurement activities at Jinpeng
  • Axis Group International actively involved at the EPC contractor in Yantai, China reports progress is steady and to schedule
  • Bulk Earthworks at the Processing Plant, ROM pad and associated infrastructure on track for concrete works to commence shortly
  • Erection All Risks project owners’ insurance package approved by CRDB and implemented by the Company

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