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Interview with Trevor Benson, Executive Chairman, Walkabout Resources Ltd (ASX: WKT): Fast-Tracking the Development of the High-Grade Lindi Jumbo Graphite Project

on 7/3/2018
Walkabout Resources Ltd (ASX: WKT) is fast-tracking the development of the high-grade Lindi Jumbo Graphite Project, situated in south-eastern Tanzania, to take advantage of forecast market conditions for Flake Graphite demand, with high ratios of Large and Jumbo flakes. We learned from Trevor Benson, Executive Chairman of Walkabout Resources, that they expect to get the mining license in the near term, and the project will be in production within 12 months, supplying high-grade graphite to China and to Germany. We learned from Mr. Benson that the Lindi Jumbo Graphite Project has the highest reserve grade in Tanzania of 16.1 % TGC and a 20 year mine life. They we will be producing 40,000 tonnes per annum of concentrate grade, between 95 to 97 % TGC, with very low capex and operating cost. Additionally, Walkabout Resources has very exciting early stage exploration programs, in Namibia, for lithium and in Northern Ireland for copper, cobalt, gold and silver.

Walkabout Resources Ltd.

Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, interviewing Trevor Benson, executive chairman of Walkabout Resources Limited. Could you give our readers/investors an overview of your company, your focus and current activities?

Trevor Benson: Walkabout Resources is a resource company, listed in Australia, and traded on the Australian Stock Exchange.

Our primary focus is to develop the Lindi Jumbo Graphite Project in Southern Tanzania. We're currently waiting for a mining license, which we're expecting soon. Once we get the mining license, the project will be in production within 12 months, and will be supplying high grade graphite to China and to Germany.

In addition, we have two other projects. We have an exploration project in Southern Namibia, where we have 2,000 square kilometers, which we're currently exploring for lithium. We have mapped 90 km of outcropping pegmatites, and are currently conducting surface exploration to establish drill targets for potential Lithium. In Northern Ireland, we have several exploration licenses where we are exploring for base metals, Cobalt and Gold.

Dr. Allen Alper: Excellent! Those are great sounding projects. Could you elaborate a bit on your graphite project and I understand you have some off take agreements too?

Trevor Benson: We have a graphite project in Southern Tanzania, about 200 kilometers by road to a very good port, Mtwara. So logistics are very good. We have the highest reserve grade in Tanzania of 16.1 % TGC. We have a 20 year mine life. We will be producing 40,000 tonnes per annum of concentrate grade between 95 to 97 % TGC. Because we have a very high grade, the operation is very profitable and scalable. But in the beginning it's quite small. We're only moving 260,000 tonnes of ore per annum through the mill. We have a very low capex. Our capex is just under US$30 million. We have a very low operating cost. It costs US$ 292 per tonne at the mine gate. And US$352 per tonne at the port. So, our project is able to be fast tracked and completed quickly within 12 months. There have been some changes to the Tanzanian Mining Act and the new Mining Commission has just been reformed. We're hopeful that in the near term we'll receive our mining license, which will allow us to start earth moving and building the plant.

All the engineering work is being completed in China, with our major engineering partner, who is also our largest shareholder. They are manufacturing all the equipment. We have funding out of China, structured as a deferred loan on all the equipment that's required. We also have off-take partners in China. We currently have 75 %, of our 40,000 tonnes, under contract to sell into China and Germany.

Dr. Allen Alper: Sounds very good! Sounds like you're in an excellent position, and you are going to fast-track production, which will start generating cash flow. Sounds excellent!

Trevor Benson: We're very, very happy with the way things are going. Graphite prices, for the large flake graphite, are increasing substantially. So, we're hoping that it'll be a good time in the next 3 to 5 years for us.

Dr. Allen Alper: That's excellent. Could you tell us a bit about what your products will be used for? Applications?

Trevor Benson: As you know, the market for electric vehicle and battery materials has gone ballistic in the last few years. Most people hear about the lithium ion battery. Graphite is used in the battery for the anode. So there's a very large market in terms of batteries that's driving graphite demand. But generally speaking, that graphite can be very small flake, low grade graphite. China has a lot of this graphite. Our product is different as it has an excellent life of mine grade of 16.1% TGC, and very large flake size distribution, which is unique. 75 % of our resource is above 180 micron. Large flake graphite receives a higher basket price and is suitable for the expandable market, such as fire retardant products. Our product was tested in 3 different laboratories in Beijing, Germany, and in Australia, and has proven expandable qualities. It expands up to 590 times, which is exceptional.

Our graphite will be used in a growing market for fire retardant material and specialty products. China, for example, is changing their building codes and they'll be using it in buildings as a fire retardant. Because of the unique properties of graphite, it can be used in very high temperatures, very high pressure, and also it's very light.

We're receiving a high basket price for our graphite, due to the demand for large flakes going into expandable markets, where you manufacture fire retardant products. There are a lot of other uses for our graphite. There're specialty parts, and foils. The German’s are leaders in graphite technology and the multiple uses, including molds and foils.

Dr. Allen Alper: That sounds excellent. It sounds like you have very exceptional graphite flakes and high grade. It's good to be able to serve a high-end market.

Trevor Benson: Yes, it's a unique deposit, we're very lucky.

Dr. Allen Alper: That sound excellent. Tell us a bit more about your lithium project in Namibia.

Trevor Benson: We have been working on early stage exploration projects for 2 years, which involve a number of licenses in southern Namibia, near the border, and close to the Orange River. These licenses were selected based on the Namibian and South African government’s recent mapping survey. We were lucky enough to be able to pick up and patch together these licenses. It's about 2000 square kilometers and we have outcropping pegmatite over about 90 line kilometers. There are lithium occurrences in the pegmatites in that region. So we're currently conducting ground and soil work and exploring the outcropping pegmatites, trying to find lithium baring rocks and reducing the area in which we will explore by establishing a series of drill targets. It’s an exciting exploration project.

Dr. Allen Alper: Sounds very good! Could you tell us a bit more about your Cobalt Northern Ireland joint venture?

Trevor Benson: We acquired Lonmin's Northern Ireland exploration portfolio, including all their assets. We then started an exploration campaign on these tenements. Our licenses are north and west of Belfast, in Northern Ireland. We have conducted early stage exploration on one of the licenses known as Tyrone, which is very close to some large known gold deposits. We’re 20 kilometers from a 6 million ounce deposit and there are another half a million ounces to the west. This Tyrone tenement was acquired through a joint venture and we can earn a 75 % interest by spending money in the ground. Early soil work and assays have indications of gold, cobalt and also copper. So the early stage work included 0.13 % cobalt and 2.7 % copper and 58 grams per tonne gold, which is only in rock chips, but we are now completing soil geochem work.

We also just concluded a SkyTEM electromagnetic survey, over the Tyrone License. That's very exciting, with some nice early stage indications from soil and ground work.

Dr. Allen Alper: That sounds excellent. That's very good. Could you tell our readers/investors a bit about your background, your team and your Board?

Trevor Benson: We're a small team to keep our expenses manageable, and we focus on shareholder returns. We have a very small management team and Board, and I'm the Chairman. I have been predominately in investment banking over 30 years. The Executive Director Allan Mulligan is a mining engineer. He has 30 years’ experience in Africa. Our Technical Director Andrew Cunningham is Namibian. He also has 30 years experience working in Africa. Our 4th Director Tom Murrell is involved in marketing. The only common thread is we live in Perth, Australia.

However, we know Africa very well. We have geologists that are contracted in Tanzania. We have an office in Dar es Salaam. We have a contracted geologist in Namibia and we have two contract geologists in Northern Ireland. For our graphite project in Tanzania, we have just employed a new project manager, who's been in Africa for years, based in Johannesburg. He's been overseeing all of the project management. We'll be going to China next week, with our project manager and mining engineer, to talk to our engineering partners and go over all the plans for building the plant. All the engineering work and all the drawings have been completed and we're in the final stage of having all the equipment financed.

So we’re a small operation at present. Our market capitalization is about $A40 million. We have about $A7 million in the bank, so we're in a good position in terms of finance. So yes we're in a nice position.

Dr. Allen Alper: That's excellent. What are the primary reasons our high-net-worth readers/investors should consider investing in Walkabout Resources?

Trevor Benson: Well, the primary reason is that we are a mining development company and we're about to press the button on developing our high-grade, large flake graphite deposit in Southern Tanzania. That product is very profitable. We should have a very positive cash flow and profitable operation over the next 20 years. The potential for expansion is enormous. To enable that development to occur, we hope to receive our mining license in the near term to be able to move forward over the next few months. That will be a major milestone for us and allow us to start building the mine.

Because of all those factors, we believe shareholders will see a very significant increase in value, once we receive the mining license, start building the mine, and go into production within the next 12 months. In addition to that, we have very exciting exploration programs in Namibia and Northern Ireland. Early days, but potentially very large upside. We're very focused on shareholder returns. We have a small team. We conserve shareholder funds and we believe that there is potentially great upside for shareholders in what we have at present.

Dr. Allen Alper: That sounds excellent. Is there anything else you'd like to add Trevor?

Trevor Benson: Thank you very much for your time and your interest in Walkabout Resources.

Dr. Allen Alper: I'm very impressed with your company.

Trevor Benson: Thank you.

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West Perth, WA 6872
P.O. Box 263,
West Perth WA 6005

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