Walkabout Resources’ enhanced Lindi graphite DFS cuts costs, boosts revenue

Walkabout Resources ASX WKT DFS Lindi jumbo graphite flake
Under an updated DFS, Lindi is expected to generate life of mine revenue of US$1.445 billion for Walkabout Resources.

Walkabout Resources (ASX: WKT) has released an enhanced definitive feasibility study (DFS) for its Lindi jumbo graphite project in Tanzania that cuts capital expenditure costs by 6%, while boosting life of mine revenue more than 20%.

The optimised DFS follows an updated reserve for Lindi of 5.5 million tonnes grading 17.9% total graphitic carbon.

As a result of the boosted ore reserve, contained graphitic content at the project grew by 22% to 987,000t, with an 11% grade increase from 16.1% to 17.9% expected to deliver greater operational efficiencies.

“In the mining industry grade is king and we have successfully delivered our objective to validate Lindi jumbo as the highest-grade graphite project in our peer group,” Walkabout executive director Allan Mulligan said.

“The super high-grade mill feed means that Lindi jumbo is an incredibly robust project and positions the company to deliver the largest margins in the industry,” Mr Mulligan added.

‘Compelling’ economics at Lindi

Due to the updated ore reserve, the optimised DFS estimates capital costs will sit at US$27.8 million to generate life of mine revenue of US$1.445 billion over 24 years.

The project now has a post-tax net present value of US$197 million – a 9.4% increase on the original DFS.

Additionally, cash margins are predicted to attract about US$1,000 per tonne free on board.

Mr Mulligan said although DFS was based on conservative sales assumptions, its economics were “compelling” with a payback period of less than two years.

The economics would be underpinned by a 230,000t per annum throughput to generate 40,000tpa of flake graphite.

Located in Tanzania’s south-east, Lindi is about 200km from the region’s Mtwara port.

Walkabout owns 100% of the mining licence and a surrounding prospecting licence. The company also has a 70% interest in two neighbouring prospecting licences and has the option to secure 100%.

The next steps for Walkabout will be to lock-in pre-production funding so it can begin developing the project, with construction estimated to take about 10 months.

Walkabout’s share price gained more than 7% to reach $0.145 in early morning trade.

Lorna has more than 10 years' experience as a finance journalist and editor. She has written for numerous industry publications reporting on various sectors, including: resources, energy, construction, biotech, pharma, science and technology, agriculture, and chemicals. Specialising in resources, Lorna has also covered a myriad of small and large cap ASX and dual-listed stocks.