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Thursday 21st April, 2016

Major Project Positions in both Graphite and Lithium – New Portfolio Stock

Walkabout Resources (ASX: WKT, Share Price: $0.007, Market Cap: $10m) is a company that I was

recently introduced to and which impressed me with its overall exploration, project appraisal and growth

strategies. It aims to fast-track production at its Lindi jumbo graphite project in Tanzania, whilst also filing

applications for Prospecting Licences in Tanzania and Namibia.

Walkabout’s move into lithium is complementary to its development strategy of securing, exploring and

developing raw materials required for the production of lithium-ion batteries. The applications complement

its high-grade Lindi graphite project, where a maiden JORC resource has just been announced.

Market Significance

Given the enormous volume of lithium projects hitting the market, it’s appropriate to question their

overall quality. Whilst it’s very much early days in terms of Walkabout’s lithium adventure, I was

fundamentally impressed by management’s measured approach and considerable achievements in a

relatively short space of time with regards to the company’s Tanzanian graphite assets, where a near-

term development strategy is being sought. The company’s biggest current advantages are its

relatively unknown status and its tiny market capitalisation compared with many of its sector peers.

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Lithium Project Developments

Namibia

Walkabout yesterday announced that it had filed applications for three Exclusive Prospecting Licences

(EPLs) in a known lithium-spodumene setting, 120km north of Walvis Bay in Namibia.

The Cape Cross - Uis pegmatites are situated in a northeast-trending zone up to 120km long and 25km

wide. Walkabout’s tenure applications comprise an area of 304 sq km and lie 40km to the northeast of the

coastal town of Henties Bay.

Pegmatites of up to 120 metres in length and 40 metres in width outcrop at surface within the Strathmore

swarm and have been mined intermittently for Sn-Nb-Ta and Li-Be – however the area has never been

subjected to modern exploration for lithium.

Recent regional mapping in the area revealed that the zoned pegmatites contain well-developed Li-rich

zones - including variably weathered spodumene, zinnwaldite and a host of other Li-bearing minerals. The

application area is extensively covered by a thin layer of unconsolidated sediments possibly covering

more pegmatites within the area.

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Pegmatites of up to 460 metres in length, with spodumene masses of up to 1 metres, have been reported

within the Cape Cross – Uis pegmatite belt. Assays of the spodumene-rich zones have returned values of

up to 7.5% Li2O. More recent exploration for uranium in the region has also intersected covered

pegmatites (beneath the uranium-rich calcrete) along strike of the Strathmore pegmatite swarm.

Interestingly, Namibia has a long history of lithium mining, with the bulk of the historical mining occurring in

the well-exposed Karibib pegmatite belt, situated150km to the southeast of the application area. The

Erongo Region of Namibia is also well known for the mining of, amongst others lithium, uranium, gold,

copper and tin.

Tanzania

Walkabout has also filed applications for three Prospecting Licences encompassing 475 sq km within the

Haneti area, in a known lithium-tantalum setting within Tanzania.

Initial reconnaissance mapping, sampling and trenching by others in the immediate vicinity have

uncovered pegmatites up to 700 metres in length with grades up to 5.2% Li2O and 0.18% Ta2O5.

They located close to existing infrastructure in a highly prospective lithium-tantalum corridor adjacent to

the Mohanga Project, owned by ASX-listed Liontown Resources (ASX: LTR).

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Technical Significance

The lithium exploration is complementary to the company’s development strategy of securing, exploring

and developing raw materials required for the production of lithium-ion batteries. Lithium is a high-value

product which is anticipated to be in supply tension as the demand for lithium-ion batteries continues to

experience transformational growth.

Walkabout has been actively reviewing suitable diversification and growth opportunities within the lithium-

tantalum sector to complement its high-grade Lindi Graphite Project. The applications for three tenements

The tenements are situated in a highly prospective lithium-tantalum corridor where historical mapping

reported pegmatite-hosted lithium occurrences found to be more widespread than previously recorded.

Graphite

Maiden Lindi JORC Resource

A maiden JORC Inferred Resource has been announced at Walkabout’s Lindi jumbo graphite project in

southeastern Tanzania. The JORC 2012 Inferred Resource was calculated by Trepanier Pty Ltd, an

independent geological consultancy.

The shallow, very high-grade nature of the mineralization; the high ratio of large and jumbo flakes reported

during the initial float test-work at a coarse grind (83.4 % @ 850μ); and the high recoveries (>98%) and a

concentrate grade of 95.7% TGC achieved through a standard and simple floatation regime – all support

the company’s view that the deposit has the potential for eventual economic extraction.

In terms of upgrade potential, the Mineral Resource has utilised less than 1% of the tenement package

area of 325 sq km and there is sizeable potential for further upgrades. Previous work across the tenement

package has returned several surface samples with graphite assays in excess of 10% TGC and up to 23%

TGC. These areas will be further explored, in conjunction with the VTEM data to source further high

grade, large flake deposits within the tenement package.

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The oxide zone capping the Gilbert Arc Resource is relatively thin (<10 metres) and shallow and initial

metallurgical work has not highlighted potential extraction issues of the oxide material.

The high grade core of Domain 2 at 20.6% TGC is enveloped inside a wide, shallow package of almost 7

million tonnes at a grade of 8.9% TGC. This infers that mining operations will be shallow, discrete and

possibly able to selectively produce a run of mine product at or near planning specification.

Technical Significance

The development strategy adopted by the Board envisages a focused, modest, low risk approach to

exploration and potential mine development. This is intended to prevent large expenditure incurred on

resource size at the expense of product quality. The international graphite market is limited in nature and

there is an ongoing surplus of graphite exploration. This would imply that quality is much more important

than quantity.

Summary

We are acquiring Walkabout Resources and introducing it to our Portfolio.

The Lindi graphite project is an interesting proposition, as the multiple and discrete domains of

the JORC Resource has the flexibility and robustness to support a potential mining operation.

Optionality is added by the potential for mining of substantially higher-grade zones during periods

of economic downturn, as opposed to being locked into a grade of around 5%. Technical studies

will now commence to examine a modular first-stage operation. It’s still very early days of course

with respect to lithium, but Walkabout’s market value is extremely modest and if it can implement

the same measured approach as it has on the graphite side, then it gives itself every chance of

success and associated share price upside. 

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Disclaimer:  Gavin Wendt, who is a director of Mine Life Pty Ltd ACN 140 028 799, compiled this document. It does not constitute investment 

advice. In preparing this report, no account was taken of the investment objectives, financial situation and particular needs of any particular 

person. Before making an investment decision on the basis of this report, investors and prospective investors need to consider, with or 

without the assistance of a securities adviser, whether the information is appropriate in light of the particular investment needs, objectives 

and financial circumstances of the investor or the prospective investor. Although the information contained in this publication has been 

obtained from sources considered and believed to be both reliable and accurate, no responsibility is accepted for any opinion expressed or 

for any error or omission in that information.