AUSTRALIA-listed Walkabout Resources has said that shipments of equipment from China for its Lindi Jumbo graphite project, in Tanzania, have been suspended, pending the completion of the drawdown of $20-million in debt.
The company explained that one of the conditions precedents (CP) for the drawdown of the debt was the provision of a standby letter of credit (SBLC).
The SBLC submitted had not been confirmed as per the loan requirements and Lindi Jumbo had been informed that the bank had to issue a replacement SBLC.
While Walkabout was confident that a replacement SBLC would be sourced, it said that the process would require time to complete.
Lindi Jumbo had received short-term commitment from its major contractors to continue construction works, however, further shipments of equipment from China had been suspended until the final CP had been completed and the drawdown occurred.
Walkabout said it was in discussions with various contractors about the delay and how it might impact on their activities. The company noted that the shipping suspension would have a negative impact on the project schedule and that the full extent would only be determined once shipments resumed.
“The unexpected issues associated with finalizing the standby letter of credit required for initial debt drawdown and the consequent shipment suspension are enormously disappointing as the development of Lindi Jumbo is proceeding remarkably well and we were quite advanced in preparing for commissioning,” said CEO Andrew Cunningham.
Walkabout’s 100 percent-owned Lindi Jumbo Graphite Mine is funded to production and will contribute 40,000 tonnes of premium natural flake graphite to international markets at a time of unprecedented demand driven predominantly by the energy storage and the electrical vehicle sectors.
The exceptional high-grade orebody (lower capex & opex costs), the highly amenable metallurgical characteristics, and its sought-after distribution of large flakes within final concentrate (higher basket price) provides significant competitive advantage in capital and operating costs and is forecasted to be the second-highest margin natural flake graphite project globally (Benchmark Mineral Intelligence, 2019).
Situated in south-eastern Tanzania, some 200km from the Port of Mtwara and 460km from Dar es Salaam Tanzania’s Capital, the mining licence is set within the highly prospective Mozambique belt, known for its world-class, coarse flake graphite deposits.
Walkabout Resources commenced construction of the Lindi Jumbo graphite mine in September of 2021 and the first production is anticipated by Q3, 2022.
“Site works are progressing rapidly, with most recent activity consisting of a contract being executed to connect Lindi Jumbo to grid power, which will be implemented in time for the construction of the processing plant,” says Walkabout.
The company says has taken the project from drilling discovery in October 2015 to the completion of a highly robust Definitive Feasibility Study within 16 months and has been granted a mining lease over the deposit.
A Definitive Feasibility Study (DFS) was completed in February 2017, updated in August 2017 in response to changing Tanzanian Government Legislation, and again in March 2019 incorporating the updated 2018 Resource and Reserve.
The DFS confirms the project to be technically sound with excellent economic returns even at potential softening price regimes for premium graphite flake material.
VICE President Dr Philip Mpango.
MINISTER for Education, Science and Technology, Prof Adolf Mkenda
In Tanzania still about 70 to 80 per cent labour is absorbed in this sector. Agricultural progress permits the shift of manpower from agricultural to non-agricultural sector.
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