Walkabout Resources Ltd (ASX:WKT) has signed an exclusive sales, purchase and marketing agreement with Wogen Pacific for the supply of all of the 40,000 tonnes per annum graphite production from its Lindi Jumbo Graphite project in the southeast of Tanzania.
Under the amended agreement, all of Lindi Jumbo’s export production will be sold to Wogen for a minimum term of five years.
This will allow Lindi Jumbo to leverage the skills and resources of an established international commodity marketing organization across its full production capacity.
Walkabout CEO Andrew Cunningham said, “The signing of the exclusive sales agreement with Wogen Pacific is a major milestone in the development of the Lindi Jumbo Graphite project.
“Wogen brings extensive global sales and marketing experience to the Lindi Jumbo fold and has worked diligently for over two years to market Lindi Jumbo Graphite Concentrate to pre-qualified end users.”
The original agreement authorized the sale to Wogen of a production volume that had not yet been committed to other customers.
Under the amended terms, the agreement is for the full nameplate capacity of the Lindi Jumbo mine.
Wogen will distribute the product in the global market, leveraging its substantial expertise and resources in specialty product marketing.
Existing direct debit agreements with other customers will be renegotiated to reflect this new arrangement. Existing customers are in favor of this approach.
Benefits of the deal
Lindi Jumbo will build on the considerable market knowledge and relationships Wogen has established in the graphite market since partnering with Walkabout Resources and Lindi Jumbo in 2019.
It is expected that Lindi Jumbo’s sales portfolio will be more diversified and more exposed to short-term prices than before due to the new agreement.
The average realized price of graphite concentrate will be more influenced by short-term market movements while having a longer duration.
The agreement also provides Lindi Jumbo with improved access to supply chain finance, supporting the goal of operating a capital efficient balance sheet.
About Wogen Pacific
Wogen Pacific is part of the Wogen Group, a trading company specializing in the management of a wide range of specialty metals and minerals including ores and concentrates, metals and oxides, ferroalloys, mineral sands and rare earths .
The company has 50 years of experience in trading, selling, supplying and serving customers around the world. Wogen brings particular strengths to Europe and China, key locations in the graphite market.
Wogen Chairman Alex Williams said, “We are delighted to expand the scope of our agreement with Lindi Jumbo as we continue to develop our expertise in the important area of forward-looking metals and minerals.
“We have enjoyed working with the folks at Lindi Jumbo over the past few years and look forward to continuing this in a mutually beneficial and transparent manner.”