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Walkabout Resources offshoots first project

The first international project “early-start” by the emerging African graphite producer Walkabout Resources has started to commence procurement, manufacturing and site works for the Lindi Jumbo graphite project.

Simultaneously with “early-start”, the company has finalised a placement of US$3.1 million at a price of A$0.23c which is a 10% discount to the 5-day Volume Weighted Average Price (VWAP) determined at trading halt 3 May 2019.

Walkabout Resources has implemented its funding strategy to run simultaneously with two options, at least one of which is expected (not definitively), to prevail.

The first being a high-yield short term quasi-debt instrument (High Yield Note) offered to wholesale and sophisticated investor and shareholder groups. This Note will be underpinned by elective equity conversions or loan redemption and ultimately secured by the mineral asset.

Whereas the second is a high-yield short term debt provided by one or more institution/s under similar but not identical terms as above. The debt to equity ratio of both these options is as yet unknown but it is the intention of the Company to maximise the debt portion within the servicing capacity of the project.

Both these options are currently in advanced stages of preparation and negotiation, however definitive timelines and terms cannot be announced at this time.

The objective of the early-start programme is to advance the project construction process along its critical path while project funding is being finalised and negotiated.

The primary benefits should include a reduction of the project construction timeline due to the period of manufacture of equipment in China. Initial Resettlement Action Plan (RAP) payments of approximately US$300 000 have already been made to community stakeholders and initial access to site for the purposes of construction activities has been achieved.

The two comparative indicative schedules below highlight the potential time saving of between two to three months through the early procurement and manufacturing of long lead items.

An agreement has been executed between Walkabout and Yantai Jinpeng Mining and Machinery Co. Pty Ltd (Jinpeng) to commence with primary and long lead equipment procurement and manufacture for a down payment of US$0.5 million and a final payment of US$0.5 million upon delivery and approved ready for shipping.

The project schedule has determined that the manufacturing of the milling and float plant amounts to significant periods of time within the project’s critical path, so the early start process of manufacturing these items directly affects the end date of the project.

And also,Tanzanian earthworks and mining contract partner TNR Ltd has been contracted to begin an early start site works programme. This is in order to prepare the plant and associated infrastructure site for civil works and also demonstrate the company’s readiness to commence with construction.

The Initial earthworks programme has commenced without incident and includes clearing construction site areas as well as building and enhancing the required on-site road network.

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