Page 63 - pd289-Dec20-mag-web_Neat

Walkabout stays on course

o amount of market disruption or in- and industry.
Ncountry policy shifts will throw Walka- “We think the process has gone full
bout Resources Ltd off the development cycle and it has settled down and foreign
path for its Lindi Jumbo graphite project in investment is starting to come back. The
Tanzania, according to executive director range of investment rules have now be-
Allan Mulligan. come palatable again.”
Like its peers in the East African coun- He believes Tanzania’s heavy gold en-
try, Walkabout has suffered setbacks on dowment will be of particular interest to
several fronts in the last five years as a foreign companies, Walkabout included.
result of poorly performing graphite fun- The company picked up the Amani gold
damentals and Tanzanian President John project in the country’s south-west earlier
Magafuli’s amendments to the Mining Act in 2020. A first round of soil sampling in
which frightened foreign investors. How- October produced gold-in-soil anomalies
ever, Mulligan believes the prize at Lindi up to 2.4km in strike and 900m in width.
Jumbo is large enough to withstand the The field programme also identified addi-
knocks. tional artisanal diggings up to 10km out-
“It is one of the highest grade graphite Allan Mulligan side known historical areas at Amani.
projects in the world and one of the best “This is a long-term gold producing, al-
flake size distributions in the world and it should also please debt providers, ac- luvial goldfield but it has never been prop-
has been verified by Benchmark Minerals cording to Mulligan. erly explored,” Mulligan said. “The Ger-
Intelligence as being the second highest The company has binding offtakes man Geological Survey recorded hard
margin graphite project in the world,” Mul- with two Chinese graphite companies for rock gold occurrences in the 1920s, but
ligan told Paydirt. 10,000 tpa and 10-20,000 tpa respec- that work was never followed up.”
Walkabout’s execution strategy has tively as well as a 10-30,000 tpa binding
been all about simplicity with capex kept offtake agreement with Hong Kong mar- – Dominic Piper
to $US29.7 million and production ini- keting company Wogen Pacific Ltd.
tially held at a relatively small 40,000 tpa “They prepay us
of graphite concentrate. The size was when the product
designed to make project financing an is loaded onto the
easier proposition, but the company con- ships,” Mulligan
tinues to seek willing funders. said. “This is of
Mulligan said the company was mind- huge benefit be-
ful of investor frustration with the lack of cause the invest- ACQUISITION OF THE
progress. ment market right MORILA GOLD MINE: A
“We are aware the process is taking a now is a little bit TRANSFORMATIONAL
long time,” he admitted. “The appetite in cautious about
the international bond market was not up graphite market TRANSACTION
to scratch because, we think, of Tanza- which they consid-
nia’s mining policies shifts and graphite is er to be opaque.”
an unknown entity. And there hasn’t been If the Wogen
a graphite project debt funded to date. deal adds clarity to
“So, we have shifted to debt funding the market equa-
from African development banks. We are tion, recent devel-
currently pursuing a very interesting deal opments in Tan-
and it is progressing well but can’t give zania have added
too much information to the market yet.” stability to the in-
Walkabout’s bid for African develop- vestment climate.
ment bank financing appears to fit well In October, Bar-
with its in-country approach where it has rick Gold Corp
given local content primacy over foreign announced it had
influence. applied for new
“We have structured Lindi Jumbo as licences in the
a wholly Tanzanian company,” Mulligan country after fi-
explained. “It will be operated out of Tan- nally settling its
zanian by Tanzanians with Tanzanians in- grievances with
volved in the construction and operation. the Tanzanian
The only involvement out of Australia will Government. Mul-
be the supply of funding, some technical ligan sees it as a
expertise and the reaping of its share of positive develop-
dividends when they come.” ment for country
Lindi Jumbo’s marketing arrangements

aUSTRaLIa’S PaYDIRT DeCeMBeR 2020 - JaNUaRY 2021 Page 63