Walkabout to review Lindi DFS

PERTH (miningweekly.com) – Graphite developer Walkabout Resources on Thursday told shareholders that it would review the definitive feasibility study (DFS) results for its Lindi Jumbo project, to assess the impact of the Tanzanian government’s legislative changes on the project economics.

The Tanzanian Parliament earlier this week enacted the Natural Wealth and Resources Bill 2017 and the Natural Wealth and Resources Contracts Bill 2017, allowing the government to force mining companies to renegotiate contracts.

The Bills cover natural resource contracts and sovereignty and would amend existing laws to allow the government to renegotiate or dissolve contracts with multinational companies.

The country also amended mining and tax laws, which will make it mandatory for the state to own at least 16% of mining projects, while also raising export royalties for certain metals, like gold, copper, silver and platinum, as well as uranium.

Walkabout previously told shareholders that the company was not subject to any material agreements in Tanzania that could be defined as having "unconscionable terms", with the new legislation to have little impact in this regard.

The miner on Thursday also moved to allay investor fears about a number of other clauses included in the Bills, including the use of local content, the return of income into Tanzania and the requirement to beneficiate all mined materials within Tanzania, saying that these were unlikely to affect the operation.

However, Walkabout noted that it would review the Lindi Jumbo economics to assess the impact of the 16% free-carried interest clause. The company was also seeking advice regarding the possible impact to insurance and funding requirements for the project around an amendment that denies a miner the right to seek relief regarding any natural wealth and resources matter in a foreign court or tribunal.

“The board is of the view that the impacts of the amendments upon the project, while undesirable and in some cases onerous, are still workable and that the project should proceed during the phase of legislative clarification which will now occur,” Walkabout executive chairperson Trevor Benson said.

He noted that the current DFS economics were such that continued development and realisation of value for the company remained a priority, and that none of the legislative changes would cause the company to halt or suspend investment in the Lindi Jumbo project.

Meanwhile, ASX-listed Tanga Resources and Peak Resources have both suspended share trading on the ASX while they consider the implications of the legislative changes.

A number of other Australian miners, including Kibaran Resources, Volt Resources, Strandline Resources and Magnis Resources have previously suspended trading.