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Lindi Jumbo Graphite Project

 Lindi Jumbo Project

Walkabout’s Lindi Jumbo Graphite Project is situated in south-eastern Tanzania, approximately 200km from the port of Mtwara. The Company holds 100% of Mining Licence M579/2018 formerly part of prospecting licence PL9992/2014 which hosts the Lindi Jumbo Graphite Deposit, and 70% of PL9993/2014. The licences are within the highly prospective Mozambique belt, a region that hosts some of the world’s highest grade, coarse flake graphite deposits.   The company has taken the project from discovery in October 2015 to the completion of a highly robust Definitive Feasibility Study within 16 months and has been granted a mining lease over the deposit.

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) was completed in February 2017, updated in August 2017 in response to changing Tanzanian Government Legislation, and again in March 2019 incorporating the updated 2018 Resource and Reserve.

The DFS 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 at an average of 230,000 tonnes per annum of the Life-Of-Mine (LOM) of 24 years.

The following are highlights of the findings of the feasibility study.

  • Lowest operating costs in Tanzania of US$347/t in concentrate FOB at the port of Mtwara.
  • Lowest upfront Capex in Tanzania of US$27.8 million.
  • Highest Ore Reserve grade in Tanzania at 17.9%TGC
  • Ore reserve based only on 37% of the Measured and Indicated portion of the Mineral Resource
  • Very short development timeframe of seven months from financing.

 

Financial Metrics

Financial Metric LOM Total
Revenue $ 1,445 million
Project Operating Cost $ 334.1 million
Project Capital Cost $ 27.8 million
Ongoing Capital Cost $ 0.87 million
Pre-Tax NPV (10%) $ 335 million
Pre-Tax IRR 142 %
Post-Tax NPV (10%) $ 197 million
Post-Tax IRR  119 %
Payback Period  22 Months
Peak Funding Requirement -$ 28.7 million
Operating Cost (FOB Mtwara) $ 347 ($/t conc)
Operating Margin (before Royalties) 77.5 %
Average Annual Free Cashflow $ 28.8 million
Annual Average EBITDA $ 44.1 million
Life of Mine 24 years

 

 

Ore Reserve and Mineral Resource

Walkabout declared a 2018 global Mineral Resource of 41.8 million tonnes (Mt) at an estimated grade of 10.8 % 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 5.0 million tonnes at 22.5% TGC for 1,127,800 tonnes of contained graphite.

The stated Proven and Probable Ore Reserve of 5.5 Mt @ 17.9% TGC is based on 37% of the Measured and Indicated Resource of the 2019 JORC estimate only, making this the higest grade reported Ore Reserve within Africa.  The Ore Reserve estimated a LOM of approximately 24 years to produce 40,000 tonnes of graphite concentrate per annum.  The LOM will possibly be extended through upgrading the Inferred Resources or treatment of the lower grade stockpiles (<17 % TGC). 

 

Lindi Jumbo Ore Reserve and Mineral Resource

Ore Reserves
Category Tonnes (million) TGC % TGC (t million)
Proven Ore Reserves 2.54 19.3 489,000
Probable Ore Reserves 2.97 16.7 498,000
Total Ore Reserves 5.5 17.9 987,000
Mineral Resource
Resource Category Tonnes (millions) TGC % Contained TGC (tonnes)
Measured 6.5 12.1 781,800
Indicated 8.4 10.5 887,300
Inferred 26.9 10.5 2,837,600
Total 41.8 10.8 4,506,700

* Appropriate Rounding applied.

 

Illustrating the progression of the pit by stages.  It demonstrates 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.

 

Metallurgical Results

Extensive metallurgical testwork indicate that the Lindi Jumbo Project can produce concentrate that contains a “best in class” flake distribution of up to 75% 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

(tonnes)

Super Jumbo (+500µm) +35 14.8% >95 2,350 6,000
Jumbo (+300µm) +50 34.5% >95 1,850 13,000
Large(+180µm) +80 25.0% >95 1,200 10,500
The Rest (-180µm) -80 25.7% >95 890 10,500
Total   100% >95 1,515 40,000

* Source: Industry Actuals, 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

 

Exploration Potential

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 50 to 171 million tonnes of graphite bearing material (grade unknown).

Exploration Targets over two VTEM areas on ML579/2018, PL13376/2018 and PL9993/2014

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.