Walkabout publishes Lindi scoping study, to fast-track project

PERTH (miningweekly.com) – A scoping study into the Lindi jumbo graphite project, in Tanzania, has revealed that it could produce between 25 000 t/y and 40 000 t/y of graphite concentrate over a mine life of more than 20 years.

ASX-listed Walkabout Resources on Tuesday revealed that the project would require a capital investment of between $35-million and $40-million, with operating costs estimated at between $290/t and $350/t, making the Lindi project the second-lowest-cost producer amongst its peer group, and the lowest-cost producer in Tanzania.

The scoping study estimated that the project would have a net present value of some $169-million, based on a 25 000 t/y production, increasing to $304-million on the 40 000 t/y production case.

The estimated pre-tax internal rate of return was pegged at 63% for the base case production scenario, and at 97% for the upside case.

The Lindi project was estimated to deliver an average yearly free cash flow of between $24-million and $43-million, while earnings before interest, taxes, depreciation and amortisation varied between $26-million and $45-million.

The company said that the very high-grade nature of the mineral resource provided a competitive advantage in cost reduction and in metallurgical performance, enabling the production of a premium graphite product able to secure premium sales prices in a highly competitive market.

Walkabout is currently in discussions with a number of parties regarding potential offtake agreements or funding opportunities for the project.

Given the forecast high growth in demand for natural large-flake graphite and the nature of the product produced at Lindi during the testwork, the Walkabout directors have elected to fast-track the project to production.

A definitive feasibility study is now under way and due for publication in the first quarter of this year.