Friday , July 12 2024

Lindi Jumbo project look to commence production before the end of 2023

With a low capex and the highest-grade graphite reserve of any undeveloped graphite project in Africa, ASX-listed Walkabout Resources’ Lindi Jumbo project has all the makings of being a game changer for the Tanzanian mining sector. CEO Andrew Cunningham says despite a few delays, it is all systems go to commence production before the end of 2023.

Lindi Jumbo is situated in south-eastern Tanzania in the highly prospective Mozambique belt, known for its world-class, coarse flake graphite deposits. It contains a mineral resource of 41.8 Mt at 10.8% total graphitic carbon (TGC).

“Our strategy from the outset was to find a high-grade resource which we were fortunate enough to get. However, what makes Lindi Jumbo unique is that most of the flakes in the ground, and in the concentrate, are large flakes – and the bigger the flake, the higher the sales price,” states Cunningham.

Walkabout Resources aims to produce 40 000 tpa over a 24-year life of mine. The company’s interest in Lindi Jumbo began in 2015 and since then has remained keenly focused on delivering what it had initially set out to do.

“This is a unique deposit with a very high-grade running throughout from north to south. As such, our intention was never to chase net present value (NPV) but rather margins. Our strategy hasn’t changed: our aim is to get the mine into production, produce 40 000 tpa and run it profitably. After that, we can look at other growth opportunities,” Cunningham explains.

He adds that the company has been constructing Lindi Jumbo since late 2021, however, there have been some delays due to a lack of funding over the past year. As a result, Walkabout Resources is focused on raising equity to keep the project going. Cunningham says that the project is highly geared towards debt funding and therefore the company does not want to fund the entire project through raising equity.

Subsequently earlier this year, the company signed a term sheet for a debt facility of up to US$25 million with Gemcorp, a UK-based investment management fund, that will allow it to fund the project and bring it into production before the end of 2023.

Construction progressing well at Lindi Jumbo

While waiting for the debt facility, Walkabout Resources has been hard at work on the construction of the mine and has reached an agreement with a Tanzanian construction company to develop the tailings storage facility (TSF) as well as complete civils on site.

The company has also secured a deal with its Chinese EPC contractor which has allowed it to it ship equipment (that has been in storage for a few months) to Tanzania. In March, four containers of prefabricated steel and other equipment were delivered to the mine. These materials enabled the continued installation of the equipment already on site such as the floatation cells, filter presses, apron feeder and working platforms.

Meanwhile, the TSF is 68% complete. The bulk earthworks are 85% complete, of which topsoil removal and stockpiling, bulk excavation, in situ preparation and compaction, fill pre-depositional embankment and localised fill areas are 100% complete. Fill from waste rock mining is 82% complete and the clay fill over the embankment footprint is progressing well in preparation for the installation of the HDPE lining before commissioning and the deposit of the first tailings.

Cunningham explains that mining at Lindi Jumbo will be a relatively simple process and is considered the lowest risk factor of the entire project. “The resource is very predictable in its nature and mining will comprise drill and blast with a certain portion that will be free dig, which will happen from the surface, so the stripping is minimal. We will use a few trucks to transport ore to the ROM pad and a relatively small excavator. All our waste rock goes to the tailings dam and used in the bulk of the retaining walls. As such, there will not be any waste dumps.”

He adds that operations at Lindi Jumbo will be small in comparison to other graphite sites but will potentially have a lower carbon footprint. “Due to the high-grade deposit, we only need to treat about 250 000 tonnes of ore per year of which 40 000 tonnes is concentrate; the rest will go to the tailings dam.”

A milestone for Tanzanian mining

While Lindi Jumbo is a small operation, there is already keen interest in its product. Walkabout Resources has already signed an off-take agreement with Wogan, a mineral trading company that specialises in doing business in Asia.

“We’ve got an exclusivity agreement with Wogan for the entire production of 40 000 tpa. It’s an extremely transparent relationship and one that we have been working on for years to get our preferred clients in place. For example, we recently produced a bulk sample of concentrate with Wogan and they are actively talking to preferred customers that we are interested in dealing with,” says Cunningham.

Upon loading of graphite on ships in Tanzania, Wogan pays 80% of the value to Walkabout Resources that allows the company to have a working capital facility. Meanwhile, Wogan takes care of all the logistics and pays Walkabout Resources the remaining 20% after considering costs for shipping and marketing of the product. “It’s a good fit for us and we are very happy with the deal,” adds Cunningham.

The site is the first major mine development in Tanzania in the past 15 years and while Cunningham admits it has been challenging in securing funds for the project, he believes that Lindi Jumbo will be the catalyst for other investors who may be interested in the country’s mining sector.

“For a long time, Tanzania was seen as a high-risk mining jurisdiction and interest in the country was minimal, but now, under the leadership of the new president, this is rapidly changing. The government wants to see our project succeed and I think we will also be able to help our mining peers in the country get their funding in place,” he concludes.

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