The Australian company looking to build and operate the highest grade of graphite reserves in Africa says it will continue to carefully assess and not be rushed on all funding options for the base case US$27.8 million mine - as there is considerable variance in the options available.

And Perth-based Walkabout Resources noted today that of the past 12 months of funding negotiations for its Lindi Jumbo graphite project now under construction in Tanzania, some proposals submitted were little more than “low ball attempts to take over the company”.

Speaking on the first day of the three day Paydirt 2019 Africa Downunder mining conference in Perth, Walkabout Director, Mr Andrew Cunningham, said funding negotiations were continuing and had been enhanced by the binding and other offtake agreements secured this year for Lindi.

These now include binding agreements covering the nameplate capacity of the processing plant of 40,000 tonnes of concentrate per year with partners, Hong Kong’s Wogen Pacific, Shandong’s Qingdao Rising Dawn and Inner Mongolia’s Qianxin Graphite.

Non-binding agreements for additional offtake concentrate are still in play with customers in Germany, Shandong and Heilongjiang.

“Our shareholders want Lindi’s funding structure to be maximum debt with the Top 40 keen to participate where possible through private equity and debt arrangements,” Mr Cunningham said.

“Some potential financiers see the mine’s low capital cost of US$30 million as too little for them but are keen to look at something around the US$50 million requirement. This compares to the smaller potential funding players who can appreciate Lindi’s upside and have a reasonable approach to project risk – so we are just working through all of that.”

Site works for Lindi have commenced and long-lead items are being sourced for the 41.8Mt deposit with an estimated grade of 10.8% TGC including a super high grade core of 4.7Mt at 22.8% TGC for 1.1Mt of contained graphite.

The deposit exhibits abundant large flake from surface and remains open along strike and down dip – a possible pointer, Mr Cunningham said, to future expansion potential.

Feasibilities studies found Lindi would have a mine life of 24 years at a production rate of 40,000 tonnes of concentrate per year.

”This is a small, fit for purpose, simple operation,” Mr Cunningham said, “that is low risk, low capex and opex and easy to manage.

“Critically, Walkabout has continued to set and meet milestones despite a very competitive graphite marketplace globally. This has driven the real offtake and funding interest from established producers, end-users and graphite marketers.

“However, the Company in the past year has rejected at least three funding proposals that were nothing more than low-ball takeover attempts - but we continue to make significant progress in working through the funding options.”