Walkabout Resources says it can have Africa’s highest reserve grade graphite mine into maiden production as early as 2020.
This period would coincide with a widely anticipated high demand globally for premium flake graphite concentrate.
Addressing the Paydirt 2019 Battery Minerals Conference in Perth, Walkabout Resources’ Executive Director, Trevor Benson, said the company’s Lindi jumbo graphite project in southern Tanzania is now ‘shovel ready’, buoyed by the highly positive and just released updated DFS.
This confirmed Lindi’s very high average Reserve grade of 17.9%, sufficient to extend the operating life for the proposed mine by another four years out to 24 years.
Walkabout is currently in the market to raise the project’s A$40 million of development capital – a capex figure Benson hailed as “being on the very low side for a graphite project of this calibre”.
Lindi already has initial concentrate offtake agreements with Chinese and German customers and has concentrate batches for battery anode material currently under tests with a large Japanese company.
Benson said this potential opening was in detailed discussions and he was confident Binding Offtake Agreements would be finalised in the next quarter for around 75% of Lindi’s anode category product.
“The new DFS confirmed the quality of the Lindi graphite and we are now looking at an increased
"Life of Mine of 24 years producing 40,000 tpa of concentrate,” Benson said.
Other findings included:
- Life of Mine revenue of US$1.445 billion (a 21.6% increase on previous estimates)
- very high cash margins of >US$1,000 per tonne FOB
- a post-tax NPV10 of US$197 million
- post-tax IRR10 of 119%
- a less than two year payback period; average free cash of US$28 million p.a.
- and a production profile delivering an average EBITDA per year of US$44.3 million over the full 24 year mine life.
“We have reduced the project’s execution risk by reducing capex to US$27.8 million,” Benson said, “while substantially upgrading Ore Reserve to 5.5 Mt @ 17.9% Total Graphitic Carbon (TGC) in what is a project with super grade and flake size distribution and a resource that has been lifted 41% from 29.6 Mt to 41.8 Mt.”
Walkabout has also intercepted ‘spectacular’ high grade mineralisation in trenches to the immediate north of the proposed first mine site, including 54m at 22.4% TGC from surface.
“While we have reduced capital costs by a further six percent, our operational costs will remain very low at around US$347/tonne free on board into the port of Mtwara,” Benson said.
Walkabout plans to focus on Lindi’s shallower, high grade (>20% TGC) material in the mine’s early open-pit years with the deepening of the pit taking place later in the life of mine.