In a statement, Walkabout which is the parent company of Lindi Jumbo Limited said the binding global sales, purchase and marketing agreement between its 100 percent owned subsidiary, Lindi Jumbo Limited and international commodities trading house, Wogen Pacific Limited will last five years.
Wogen is a leading international trader and long-established marketer of off-exchange speciality-metals and minerals with a particularly strong presence in Asia, Europe and the USA which includes significant logistics infrastructure, buying networks and industry relationships.
Within the agreement, an advanced payment based on 80 percent of the value for each consignment of concentrate contracted by Wogen, will be paid following receipt of shipping documents.
“The Wogen agreement perfectly complements the company’s strategy to outsource the major components of the Lindi Jumbo Project. As a result, Lindi Jumbo will not need to establish large and expensive marketing offices across several jurisdictions to manage its sales, customer relations and global logistics,” said Executive Chairman, Trevor Benson.
“The company will be able to leverage the marketing expertise of Wogen across the globe for sales at favourable prices, and to secure additional off-take agreements. The agreement is a key element in de-risking the Lindi Jumbo Graphite Project and attracting development capital leading up to construction and the first period of production,” Benson added.
His Wigon peer, Alex Williams was also full of excitement following the deal saying his company is happy to play a significant role in Walkabout’s Lindi Jumbo graphite project promising to deploy extensive capabilities on the pre-marketing, sales, financing and transactional side of this business.
“We have been highly impressed by the Walkabout management team over the course of the many interactions we have had with them to date, which bodes well for a successful and mutually beneficial working relationship over the coming years,” Williams noted.
“As such we have agreed to exclusively source graphite from Walkabout. This agreement further strengthens our position as a leading international trading house for speciality metals, as well as giving us an increased presence in the modern battery sector,” Williams added.
Pursuant to the agreement, Wogen will act as the marketer and buyer of the product and on-sell the concentrates on a commission basis to customers in Asia and other international markets as required.
Upon commencement of commercial production at the Lindi Jumbo Graphite Mine, the company shall make available to Wogen for purchase, on an exclusive basis, a minimum of 10,000 tonnes up to 30,000 tonnes of concentrate per annum for a period of 5 years.
Further to this agreement with Wogen, other terms include: within three working days of a consignment being loaded onto a shipping vessel in Tanzania and Wogen receiving the shipping documents, the company will immediately advance 80 percent of the deemed value of the consignment to Lindi Jumbo as working capital financing.
The remaining 20 percent less Wogen commission less agreed on-costs will be remitted to the company upon receipt of payment in full by Wogen, which currently is typically 2-3 weeks after shipment from Mtwara port. The maximum allowable aggregate of the working capital finance at any time is U$8m.