Walkabout Resources Ltd’s [ASX:WKT] share price has climbed 9.6% higher after the company announced an ‘early start’ for site works at their Lindi Jumbo Graphite project. Shares for WKT are valued at 28 cents, at time of writing.
Walkabout recently completed an agreement with Chinese enterprise Yantai Jinpeng Mining and Machinery Co to fund initial and long-lead equipment, procurement and manufacturing needed for the project, which is based in southeast Tanzania.
Two steps closer to success
The company has been anything but idle, with a second statement released this morning outlining a placement from shareholders to raise $3.1 million to assist with the continued funding of the ‘early start’ initiative. The commitments come to 13,484,956 shares in all, with an expected price of 23 cents.
No doubt this will go some way towards the costs involved in their Resettlement Action Plan (RAP) as well their agreement with Tanzanian earthworks contractor TNR Ltd to prep the site and surrounding areas.
The EPC contract has been signed off for an initial US$1 million, while the RAP and TNR agreements will cost an extra US$2.55 million.
In today’s ASX announcement, Executive Chairman Trevor Benson highlighted the positives, saying:
‘The company is in a very strong position to now implement the Early Start strategy, which involves procuring initial equipment from Jinpeng, our EPC partner, secure funding to finalise our RAP payments, allowing us to gain access to the ground, and finally start civil work on site.’
But is it sustainable?
A ‘penny’ exploration stock compared to other graphite players, Walkabout has built key relationships with many contributors by making time well-timed deals — including a recent offtake agreement which secures the sale of 75% of its flake graphite concentrate to Qingdao Rising Dawn Graphite Technology (QRGT), a private manufacturer of graphite construction materials.
At time of writing, Walkabout has a market capitalisation of $79 million, with their March quarter results showing a TGC (total graphite content) grade increase of 11% to 17.9% for the area — making it the highest grade area in East Africa so far.
For Money Morning
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