Lindi Jumbo Project
Walkabout (WKT) holds 70% of the prospecting rights over 325km2 on four contiguous exploration licenses within the highly prospective Mozambique belt, a region that hosts some of the world’s highest grade, coarse flake graphite deposits. Walkabout’s Lindi Jumbo Graphite Project is situated in south-eastern Tanzania, approximately 200km from the export port of Mtwara. The company has taken the project from discovery in October 2015 to the completion of a highly robust Definitive Feasibility Study within 16 months.
The very high grade and exceptional distribution of large graphite flakes within the Lindi Jumbo Project area provides significant competitive advantage in capital and operating cost reduction and also in metallurgical performance through the potential production of a sought after, premium natural graphite flake product. The company is fast-tracking the development of this project to capitalise on the predicted high demand for premium flake concentrate.
The Project includes a JORC 2012 compliant Proven and Probable Ore Reserve and a Measured, Indicated and Inferred Mineral Resource.
Definitive Feasibility Study
A Definitive Feasibility Study (DFS) completed in February 2017 confirms the project to be technically sound with excellent economic returns even at potential softening price regimes for premium graphite flake material. Payback period for the project is less than two years. The DFS was based on an annual production of 40,000 tonnes of graphite concentrate with a high grade feed to the plant of < 300,000 tonnes per annum. Mining studies were based on a Measured and Indicated Mineral Resource only.
The following are highlights of the findings of the feasibility study.
- Lowest operating costs in Tanzania of US$352/t in concentrate FOB at the port of Mtwara.
- Lowest upfront Capex in Tanzania of US$38.7 million.
- Highest Ore Reserve grade in Tanzania at 16.1%TGC
- Ore reserve based only on 42% of the Measured and Indicated portion of the Mineral Resource
- Very short development timeframe of seven months from financing.
|Financial Metric||LOM Total|
|Revenue||$ 1,259 million|
|Project Operating Cost||$ 268 million|
|Project Capital Cost||$ 38.7 million|
|Ongoing Capital Cost||$ 5.6 million|
|Pre-Tax NPV (10%)||$ 323 million|
|Pre-Tax IRR||96 %|
|Post-Tax NPV (10%)||$ 230 million|
|Post-Tax IRR||$ 86 %|
|Peak Funding Requirement||-$ 39.9 million|
|Operating Cost (FOB Mtwara)||$ 352 ($/t conc)|
|Operating Margin (before Royalties)||79%|
|Average Annual Free Cashflow||$ 35.8 million|
|Annual Average EBITDA||$ 50.2 million|
|Life of Mine||20 years|
Ore Reserve and Mineral Resource
Walkabout declared a global Mineral Resource of 29.8 million tonnes (Mt) at an estimated grade of 10.9 % Total Graphitic Carbon (TGC), and is reported in accordance to the 2012 JORC code.
The high grade Measured, Indicated and Inferred Mineral Resource contains a super high grade core of 4.7 million tonnes at 22.8% TGC for 1,076,500 tonnes of contained graphite making this the highest mineable graphite resource in Tanzania. The Proven and Probable Ore Reserve of 5 Mt @ 16.1% TGC is based on 42% of the Measured and Indicated Resource only with the mining plan utilising high grade (>17% TGC) plant feed in the first three years and +16% TGC over the Life of Mine (LOM). The Ore Reserve has resulted in a Life of Mine of approximately 20 years to produce 40,000 tonnes of graphite concentrate per annum. The LOM can possibly be extended through upgrading of the high grade portions of the Inferred Resource of the deposit or treatment of the lower grade stockpiles (<16 % TGC).
Lindi Jumbo Ore Reserve and Mineral Resource
|Category||Tonnes (million)||TGC %||TGC (t million)|
|Proven Ore Reserves||3.2||16.6||529,423|
|Probable Ore Reserves||1.8||15.4||279,580|
|Total Ore Reserves||5.0||16.1||809,081|
|Resource Category||Tonnes (millions)||TGC %||Contained TGC (tonnes)|
|Total Excluding Domain 4||29.6||11.0||3,256,000|
* Appropriate Rounding applied.
Illustrating the progression of the pit by year. It illustrates the focus on the shallower, high grade material in the early years with the deepening of the pit taking place later in the life of mine.
Extensive metallurgical testwork indicate that the Lindi Jumbo Project can produce concentrate that contains a “best in class” flake distribution of up to 85% above 180 microns (µm) of high purity (>95% TGC) through an industry standard floatation flowsheet. This includes up to 25% of the graphite flakes above 500 µm (+35 mesh).
Product specifications determined from metallurgical testwork and associated predicted basket prices.
|Product Type||Mesh||Mass Dist. %||Grade %TGC||Sales Price (US$/t)||Annual Sales|
|% Contribution to revenue|
|Super Jumbo (+500µm)||+35||19.6%||>95||3,500||8,000||40.7%|
|The Rest (-180µm)||-80||26.4%||>95||750||10,500||11.7%|
* Source: Stormcrow, Benchmark Mineral Intelligence, Industrial Minerals and market sources.
+500 µm flakes (+35 mesh) in concentrate
Further independent testwork done on Lindi Jumbo Concentrate indicate that the flakes are highly suitable for the production of expandable graphite and graphite foils with expansion ratios of up 590 cm3/g achieved i.e. an expansion ratio of 590 times. This compares very well to the average expansion ratio of 250 times of China sourced graphite.
Expansion ratios achieved of the +180 µm flakes at 800 and 1000 °C
|Flake size||+ 500 µm||+ 300 µm||+ 180 µm|
|Temperature||800 °C||590 cm³/g||485 cm³/g||410 cm³/g|
|1000 °C||500 cm³/g||500 cm³/g||475 cm³/|
Expanded graphite and specialty graphite products made from graphite foil
The Gilbert Arc Deposit remains open along strike and at depth with further mineralised zones intersected through drilling and surface sampling to the west. There are also numerous undercover VTEM conductors of which the majority remain untested through reconnaissance drilling. Notable mineralised drilling intersects of other VTEM targets within 3km from the Gilbert Arc deposit include:
LJRC003 (VTEM Target 1): 5m @ 8.8% TGC from 63m
LJRC012 (VTEM Target 6): 33m @ 4.3% TGC from 3m
LJRC014 (VTEM Target 7): 15m @ 14.1% TGC from 14m including 3m @ 30.9% TGC
More than 17 line-kilometres of conductive zones have been modeled on two areas covered by VTEM surveys on PL9992 and PL9993, with many of the conductive zones coinciding with sporadic in-situ graphitic outcrops with surface grades up to 38.4% TGC. A combined Exploration Target for the two VTEM areas only has been estimated at 44 to 171 million tonnes.
Exploration Targets over two VTEM areas on PL9992 and PL9993
The potential quantity outside of the Gilbert Arc Mineral Resource Area is conceptual in nature as there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource over any of the additional target areas.
It should not be expected that the quality of the Exploration Targets is equivalent to that of Mineral Resources. Exploration Targets could be tested with future exploration activities in alignment with company’s exploration and business strategy.