The share price for Walkabout Resources Ltd [ASX:WKT] currently stands at 19 cents after the announcement of a second offtake agreement this morning.
Walkabout’s share price has doubled over the past year, thanks in large part to its highly regarded graphite endeavours at the Lindi Jumbo Graphite project in Tanzania.
They currently have a market value of $50 million.
A great start to April
This secondary agreement with Qingdao Risingdawn Graphite Technology Ltd (QRGT) is to deliver 10,000 tonnes of graphite flakes concentrate into the Chinese market for a three–year period once production commences.
This comes straight after Walkabout’s initial agreement with Inner Mongolia Qianxin Graphite Co, to meet 50% of production for the next three years. The agreement will secure the sale of an extra 25% planned production, making 75% of planned production through these binding terms.
As part of the arrangement, QRGT also intend to construct an additional expandable graphite plant in order to accommodate the planned 40,000 tonnes the Lindi Jumbo project will offer.
Walkabout believes the new agreements ‘substantially reduces the demand-side risk of the Project’, and they are the first points in their long-term marketing plan.
A finalised version of the offtake agreement will take place in the second half of 2019.
Walkabout’s future potential
Unsurprisingly, the Lindi Jumbo project is only a small part of Walkabout’s overall expansion in order to take advantage of market forecasts.
The company is exploring opportunities at the Eureka Project in Namibia. They have also acquired the rights for gold and base metal exploration in the UK, including cobalt, copper and silver exploration in County Tyrone, Ireland.
Walkabout says they will continue to bring their plan forward and ‘build key relationships in target markets where there is increasing demand for Lindi Jumbo Graphite products.’
For Money Morning
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