ASX-listed graphite junior Walkabout Resources has delivered a "robust" set of results from a scoping study conducted at its 70% held Lindi Jumbo Graphite project.The scoping study for the south eastern Tanzania-based project includes a proposed open pit mine and graphite processing plant.
According to Walkabout Resources, project economics are highly robust as a result of the high grade nature of the project and the expected premium natural flake graphite product.
The scoping study has revealed that the project is economically viable, even at current “10 year low” prices. The elective annual production target is between 25 000 and 40 000 t of graphite in concentrate.
The operating cost per tonne in concentrate is estimated at US$290 - $350 – second lowest amongst its peer groups and the lowest in Tanzania.
The pre-production capex is approximately $35 million - $40 million, with a payback period of less than two years. The base case pre-tax NPV10 is estimated to be $169 million for the 25 000 tpa production option while the upside case pre-tax NPV10 is estimated to be $304 million for the 40 000 tpa production option.
A pre-tax IRR estimate is 63% for the base case and a pre-tax IRR estimate of 97% for the upside case.
Lindi Jumbo's mine life will be in excess of 20 years and its production rate of only between 150 000 tpa for the 25 000 t option and 250 000 tpa for the 40 000 t option.
Further prjoect highlights
- Product basket price of $1 563/t in concentrate using reasonable assumptions for future pricing
- Mill head feed projected at 16.7% TGC leading to low working costs and capital requirements
- Product highly suitable for expandable graphite with test results of up to 590 times expandability
- Capital estimates have been subject to stringent independent verification
- Rapid and cost effective production expansion options available in response to market dynamics
Walkabout Resources also says that a definitive feasibility study is well advanced and due for release in February 2017.