The Walkabout Resources (ASX: WKT) share price is shooting up today after the company announced a US$20 million project debt facility.
The debt facility secured with CRDB Bank of Tanzania was the final step needed before beginning construction on the Lindi Jumbo Graphite Project.
At the time of writing, the Walkabout Resources share price is trading at 26 cents, up a monster 44% from yesterday's closing price of 18 cents.
Let's look closer at the company's announcement this morning.
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Lindi Jumbo Graphite Mine
Securing the debt facility was the final hurdle before construction of the Lindi Jumbo Graphite Project could begin. The Lindi Jumbo is owned by Walkabout's wholly-owned subsidiary, Lindi Jumbo Limited.
The company said Lindi Jumbo's high-grade resource outcropping at the surface was the highest reserve grade of any undeveloped graphite project in Africa.
Lindi Jumbo will cost an estimated US$32 million. Thus, the debt facility has provided the company with 62.5% of the project's costs.
According to this morning's release, the mine is the first non-Chinese mine to receive debt funding.
As a result of securing debt funding from CRDB Bank of Tanzania, Lindi Jumbo has stopped its negotiations with Afreximbank.
Commentary from management
Walkabout Resources managing director Allan Mulligan said the company was delighted about the new finance facility.
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.
Walkabout Resources share price snapshot
The Walkabout Resources share price has been flourishing on the ASX, with today's news giving it another boost. It's currently up by 85.7% year to date and has increased 100% over the last 12 months.
Walkabout Resources has a market capitalisation of around $62 million, with approximately 349 million shares outstanding.
