Emerging African graphite producer Walkabout Resources has commenced with an integrated international project “early-start” to commence procurement, manufacturing and site works for the Lindi Jumbo graphite project.
Tanzania - Simultaneously with “early-start”, the company has finalised a placement of US$3.1 million at a price of A$0.23c which is a 10% discount to the 5-day Volume Weighted Average Price (VWAP) determined at trading halt 3 May 2019.
Walkabout Resources has implemented its funding strategy to run simultaneously with two options, at least one of which is expected (not definitively), to prevail:
1. A high-yield short term quasi-debt instrument (High Yield Note) offered to wholesale and sophisticated investor and shareholder groups. This Note will be underpinned by elective equity conversions or loan redemption and ultimately secured by the mineral asset; and/or
2. A high-yield short term debt provided by one or more institution/s under similar but not identical terms as above. The debt to equity ratio of both these options is as yet unknown but it is the intention of the Company to maximise the debt portion within the servicing capacity of the project.
Both these options are currently in advanced stages of preparation and negotiation, however definitive timelines and terms cannot be announced at this time.
The objective of the early-start programme is 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. Initial RAP payments of approximately US$300 000 have already been made to community stakeholders and initial access to site for the purposes of construction activities has been achieved.
Summarised critical path schedule of project development
The two comparative indicative schedules below highlight the potential time saving of between 2 to 3 months through the early procurement and manufacturing of long lead items.
Commencement of manufacturing in China
An agreement has been executed between Walkabout and Yantai Jinpeng Mining and Machinery Co. Pty Ltd (Jinpeng) 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.
The project schedule has determined that the manufacturing of the milling and float plant amounts to significant periods of time within the project’s critical path, so the early start process of manufacturing these items directly affects the end date of the project.
Resettlement Action Plan (RAP)
In agreement with stakeholders and local authorities for the area, the Company 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.
Early start site works
Tanzanian earthworks and mining contract partner TNR Ltd has been contracted to commence an early start site works programme. The intention of the site early-start works are to prepare the plant and associated infrastructure site for civil works and also demonstrate the company’s readiness to commence with construction.
The Initial earthworks programme has commenced without incident and includes clearing construction site areas as well as building and enhancing the required on-site road network.
The on-site early-start programme has several advantages;
- Early preparation of civil works sites for plant construction;
- In country demonstration of company readiness to engage in construction and development;
- Easy and staged site activity build up facilitating good-practice;
- Slow start induction to the local communities and stakeholders;
- Timely development of operating, health, safety and control systems for project management;
- Orderly deployment of equipment, quality control and payment systems; and
- Preparation of roads and levelled terraces for improved access and preparation for civil works and construction.