Energy minerals developer Walkabout Resources (ASX:WKT) has entered into a contract variation with its engineering, procurement, and construction (EPC) contractor Jinpeng for the Lindi Jumbo Graphite Project in Tanzania.
Under this contract variation the company says the remainder of the EPC contract excluding performance milestones can be paid for through shares and options.
Through the agreement, Jinpeng can be issued up to more than 25.97 million shares at $0.11 per share if approved by shareholders at an upcoming general meeting. Up to 30 million unlisted options at a price of $0.25 with a tenor of 18 months can also be issued, subject to shareholder approval.
Commenting on the contract variation, Walkabout Resources Chief Executive Officer (CEO) Andrew Cunningham says: “The owners of Jinpeng are already Top 5 shareholders of Walkabout reflecting their long-term support for Lindi Jumbo. This agreement to issue shares and options to ship the remaining equipment and install it on site to reach practical completion of the project demonstrates further commitment of our EPC contractor.
“We highly appreciate the continued support and the confidence this displays in Lindi Jumbo by one of our major shareholders”
We highly appreciate the continued support and the confidence this displays in Lindi Jumbo by one of our major shareholders.”
Walkabout reports the remaining plant and machinery have been in storage awaiting the recommencement of shipping and related contractual milestone payments.
Shipment of this equipment is expected to commence in the coming weeks and will allow for the continued construction of the Processing Plant at the Lindi Jumbo Graphite Mine in Tanzania at full pace.
Post construction functional and final completion milestone performance payments of US$713,674 will still be payable to Jinpeng as per the EPC contract. Walkabout will also have the option to pay the completion milestone fees in shares at its own discretion.
Major items of plant and machinery being dispatched in the shipments include the drum scrubber, attritioning mills, the rotary dryer, packing machines, vibrating feeders, and bag filters, as well as steel, pipe, and platework for the installation and erection of the various equipment and buildings.
Together with the recent announcements of TNR Vendor Finance and the Bridge Loan, this EPC payment covers US$4.4 million of the remaining Lindi Jumbo construction costs.
The company reports 4 funding term sheets received to date are currently being evaluated by the company and its advisors. Walkabout maintains existing guidance of announcing the preferred funding this current quarter.
Drawdown against any successful funding option does not need to occur until after at least 3 months of continued full paced construction given announced interim funding measures will be in place.
In the event these preferred project funding options are not finalised in time for project completion, the recently announced BMCG standby facility is available to be used to complete the project.
The impact of this rescheduling of shipments on the project schedule will be incorporated into the overall construction schedule and will be communicated accordingly.
Walkabout Resources is an energy minerals development company focused on the Lindi Jumbo Graphite Project in Southeast Tanzania. The company currently holds 100% of a mining licence and between 70% to 100% of adjacent graphite prospecting licences at Lindi Jumbo with an enduring option to acquire the remaining 30% share.
In addition to the Lindi Jumbo Project, Walkabout is also exploring in southwest Tanzania at the Amani Hard Rock Gold Project. The company has also acquired a portfolio of gold and base metal assets in Scotland and Northern Ireland, and is conducting ongoing mineral exploration in these areas.
Images: Walkabout Resources Ltd
