Modern Mining September 2023

GRAPHITE

$20 million debt facility helps Lindi Jumbo advance to production With the finalisation in July of the $20 million loan agreement with Gemcorp, energy miner als developer, Walkabout Resources, remains on-track to deliver first production from its Lindi Jumbo graphite project in southeast Tanzania, early in 2024, CEO Andrew Cunningham tells Modern Mining’s Nelendhre Moodley.

W alkabout Resources’ 100%-owned high grade Lindi Jumbo Graphite Mine is located some 460 km from Dar es Salaam, Tanzania’s capital, within the highly pro spective Mozambique belt, known for its world-class, coarse flake graphite deposits. “After the changes to Tanzania’s mining laws in 2017, investors lost their desire to fund projects in that country,” Cunningham explains, adding that the deal has been a massive windfall for the company. To date about 50% of the project has been funded through equity. “The $20 million deal with Gemcorp positions Lindi Jumbo as the first graphite project in the west ern world to be funded, in part, through debt. So far, all other graphite projects we know of that have been built or that are currently under construction, have been funded through equity,” says Cunningham, who adds that even though demand for graphite remains strong, funding graphite projects remains a huge challenge. Having inked the deal, Walkabout Resources is cognisant that both investors and project developers alike will be keeping a close eye as the ASX-listed company develops its flagship project. “We believe the debt funding deal is also good for our peers in the graphite space as it paves the

Walkabout Resources CEO Andrew Cunningham.

way for them to access debt funding. However, it is important to note that the due diligence process is extremely intense.” Investment firm, Gemcorp Capital, targets emerging market opportunities, particularly projects that are close to cashflow. The funding institution approached Walkabout Resources in February this year to negotiate a funding agreement. “As a near-term, high-demand minerals producer, the Lindi Jumbo project fit the bill for Gemcorp. The project is economically viable, has significant upside and a fairly short timeline to production and cash flow, which was essentially the attraction for the investor. Further to this, our decision more than a year ago to continue with construction meant that when we were approached, project construction was well advanced – over 60% complete – which added to its attractiveness.” According to Cunningham, the company was not deterred by the funding challenges and had plans in place that ensured project construction continued unabated. However, finalisation of the debt facility provides the company and its shareholders with much comfort and peace of mind. Walkabout Resources initiated the first draw down on its debt-funding in mid-July, which it is using to fully fund the project to production, make

Loading and hauling underway at the Lindi Jumbo project.

14  MODERN MINING  September 2023