Walkabout is seeking to raise a minimum of A$16.5 million and up to circa A$33.17 million through a Rights Issue to enable it to fully fund construction and commissioning of the Lindi Jumbo Graphite Mine in Q1 2023 ahead of ramp up of graphite production.
Walkabout currently also has several active parallel funding initiatives including the continuation of the negotiations towards drawdown of the US$20M CRDB debt facility. Lindi Jumbo received a commitment from CRDB to allow for a 1 for 1 drawdown on the posting of cash as collateral.
According to a statement seen by The Business Wiz, depending on the success of other parallel funding initiatives, Walkabout may not require the full amount to be raised through this Rights Issue and the Board reserves its right to scale back applications under the Rights Issue.
The statement noted that the proceeds from the Rights Issue will be used to provide, collateral for the CRDB debt drawdown, settle outstanding debt with all current creditors, shipment of equipment currently in storage from China and Australia, complete the construction activities at Lindi Jumbo, pay regular suppliers in accordance with normal terms for the remainder of the contract among other activities.
Walkabout has also secured commitments from shareholders for A$1,000,000 in the form of limited recourse loans to fund short-term working capital.
“The repayment date of these loans is 31 December, 2023 but the lender may offset the repayment of the loans against any money due to them against any future capital raising by Walkabout. The lenders receive options at A$0.25 cents for the value of the loans and the 6.67 million options expire on 30 April 2023,” the statement said.
The statement noted that approximately 65 per cent of the mechanical equipment is on site in Tanzania and in the process of being installed. The vast majority of the remaining mechanical equipment has been manufactured by the Company’s EPC Contractor, Jinpeng, and is in storage in China (approximately US$2.0 million worth of equipment).
Approximately 77 per cent of the costs of the EPC contract has already been incurred. Shipping of the equipment will commence upon the continuation of payments, the statement added.