Junior minerals developer Walkabout Resources (ASX: WKT) has cleared the final legislative hurdle in its transition to graphite producer after receiving confirmation that a mining licence will be granted for its high-grade Lindi Jumbo project in south-east Tanzania.
The confirmation was received this week from Tanzania’s Ministry of Minerals and is subject to payment of the licence fee and acceptance of technical details.
Once these conditions have been met, Walkabout will be able to further progress advanced project funding options which were put on hold pending mining licence approval.
The company will then proceed to final construction plans for the Lindi Jumbo minesite and confirm the engineering, procurement and construction agreement with construction partner and cornerstone investor, Yantai Jinpeng Mining & Machinery Co.
Walkabout will also work with the Tanzanian government to finalise Lindi Jumbo’s onsite Relocation Assistance Program, which is in advanced valuation draft from the chief government valuer.
The RAP is a Tanzanian legislative process which assesses, defines and determines compensation terms between mining companies and local land users affected by proposed developments.
In the case of Lindi Jumbo, most of the current land users are engaged in the farming of cashew nuts from trees and other micro-agricultural endeavours in the region.
The Lindi Jumbo project is located within Africa’s highly-prospective Mozambique belt, believed to host some of the world’s highest grade, coarse flake graphite deposits.
A definitive feasibility study updated in mid-2017 – based on an annual production of 40,000 tonnes of graphite concentrate and a high-grade feed to the plant of around 300,000 tonnes per annum – confirmed the proposed Lindi Jumbo mine to be “technically-sound with excellent economic returns” even with potentially softened price regimes for premium graphite flake material.
Walkabout is now fast-tracking development to capitalise on the predicted high market demand for the premium flake.
“Securing the mining licence means Walkabout can now fast-track Lindi Jumbo and we anticipate first shipments of large flake graphite concentrate within nine to 12 months.” said Walkabout executive director Allan Mulligan.
The Lindi Jumbo mining licence was granted to previous joint holders Ally Mbarak Mohammed (30% equity) and Lindi Jumbo Limited (70%) however following Walkabout’s US$1 million acquisition of Mohammed’s shareholding in May, the licence will be adjusted to reflect Walkabout’s 100% ownership.
At midday, shares in Walkabout Resources were trading 17.86% higher at $0.165.