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COVER

The proposed locations for the pit (top), process plant (middle) and tailings dam (bottom) “Being on site and being able to see
the high-grade chips directly and trans-
ferring that to instant decisions on site, as
opposed to waiting for assays, unlocked
that strategy of being able to high-grade
the deposit and keep it to a modest size.

“When we went to infill and upgrade
drilling we knew exactly what we were
looking for and structurally where it
should go, so we were able to focus on
delineating three or four discreet high-
grade zones that will actually provide a
very high mill [head-grade] feed and give
the project a huge advantage in its early
years.”

Most graphite companies have typi-
cally built up large resources at their pro-
jects, but Mulligan knew that approach
would only see Walkabout fall further
behind in the race to become a producer.

A simple strategy was proposed – de-
velop the project around a high-grade,
premium product that could be one of
the first to market. To achieve that, the
company had to constrain the initial mine
development to something that was both
manageable and reasonable in size.

“By far the most significant risk as-
sociated with this project is the market,
but that is something associated with all
graphite projects,” Mulligan said. “We
wanted to bullet-proof this project against
that risk through executing a three-tier
strategy of grade, product and time.”

Completion of the drilling programme
led to a maiden inferred resource of
15.3mt @ 10.1% TGC for 1.542mt con-
tained flake graphite in January 2016. A
scoping study was to be released mid-
year, but ASIC changes to reporting reg-
ulations dictated a higher resource clas-
sification was required before the results
of the study could be made public.

It turned out to be a blessing in disguise
for Walkabout, which after punching
more holes into the project, announced
an upgraded resource of 29.8mt @
10.9% TGC for 3.25mt contained graph-
ite, including a higher-grade domain of
4.7mt @ 22.8% TGC for 1.073mt con-
tained graphite.

“We ended up with a 165% larger re-
source, a higher grade and the entire
scoping study and DFS calculated or
modelled on measured and indicated re-
sources only,” Mulligan said.

“In terms of the drilling, the entire
measured, indicated and inferred re-
source of 29mt has been defined off
3,500m of drilling, whereas some of our
peers have done up to 20,000m. It’s not
necessary to do that, in our view.

“When you compare our quarterly
cash flow expenditures against our peer
group, we are the cheapest by a long
way for the last two and a half years and

PAGE 22 APRIL 2017 AUSTRALIA’S PAYDIRT