Walkabout Resources (ASX:WKT) (Company), is pleased to announce another major milestone in its progress towards construction of the Lindi Jumbo Graphite Mine in Tanzania securing a US$20 million Debt Funding Facility (Facility) with Tanzanian Bank CRDB.

HIGHLIGHTS

• Lindi Jumbo Limited, a wholly owned subsidiary of the Company, and CRDB Bank of Tanzania have signed a Project Finance Facility Letter (Agreement) for a debt facility of US$20m for the construction of the mine.
• The debt facility will be executed between Lindi Jumbo Limited and CRDB with Walkabout providing necessary guarantees and equity loans to support the full funding package.
• Lindi Jumbo has an estimated capital cost of US$32m (including working capital and financing costs) meaning the facility will meet 62.5% of the project cost. Lindi Jumbo has already expended US$3.6m on construction activities at the site and on long-lead manufacturing items.
• CRDB Bank PLC is a leading financial services provider in Tanzania. CRDB is the largest, wholly owned private bank in Tanzania and is listed on the Dar es Salaam Stock Exchange.
• The Facility, remains subject to finalisation of all finance documents and conditions precedent.
• Lindi Jumbo will be the first non-Chinese graphite mine to receive debt funding.
• The Company has suspended the negotiation of a debt facility with Afreximbank, previously announced to the ASX, 27 November 2020.
• The Government of Tanzania continues to show its full support for the commercialisation of the Lindi Jumbo Graphite Project.

During 2020, CRDB conducted detailed due diligence of technical, financial, market, legal and environmental elements of the Lindi Jumbo Project resulting in the provision of the offer of this debt facility. Key terms for the Facility are described in Schedule 1.

Managing Director of Walkabout Allan Mulligan commented;

“We are delighted to have CRDB Bank as the Lindi Jumbo project financing partner. We were very keen to meet not just the requirements of local content but the spirit as well and the CRDB facility accomplishes this. We have persisted with negotiating this funding facility for more than a year. The relationship benefits Tanzania in growing its services sector and benefits our company, as the cost of funding reduces significantly in terms of sovereign risk premiums.

The provision of this significant debt package for Lindi unlocks the final milestone in project development and construction efforts at the mine site can commence as soon as formal documents have been executed. The Project has assessed any potential Covid delays and we have introduced suitable travel and safety systems to mitigate risk.

This will represent the first serious construction effort of a mining project in Tanzania since the 2017 Mining Act amendments.”

Schedule 1: Key terms of CRDB Debt Finance Facility Letter of Offer