ONE OFF THE WOOD: Walkabout Resources (ASX: WKT) managing director Allan Mulligan called into The Roadhouse to explain what the company has been up to.
Allan, Walkabout Resources reverse-listed into Nimrodel Resources on the ASX in 2011; Walkabout is a generic Australian term so can you explain how it fits the company’s African focus?
When working in Africa it is good to have an Australian connection. Australian companies operating in Africa are generally well-received so we felt it was important to establish an Australian identity moving into that space.
Is being an Australian company a good thing when working in Africa?
Yes, especially if, like us, you are an exploration junior company and you are operating in the areas we do, which is out in the regions where we work with local people and local companies.
Bringing Australian capital into the young mining regions of central and southern Africa is encouraged and welcomed warmly.
How does the new Walkabout Resources entity differ from its predecessor?
Nimrodel was a single-commodity company, focusing on coal in Botswana.
As Walkabout Resources we decided we to adopt a more diversified strategy and to have a broader portfolio, upon which we could create more value for our shareholders.
We have developed the Takatokwane coal project to be the largest Inferred coal Resource in Botswana at seven billion tonnes, with an Indicated Resource of 748 million tonnes.
That project is now going through a pre-feasibility study.
So, coal is one branch of you diversity tree, what are your other projects?
All together we have three, high-quality projects we are building the company on.
The first is, obviously the Takatokwane coal project and we also have an exciting copper project at Kigoma in Tanzania, which we secured earlier this year.
We also have a very interesting Platinum Group Element (PGE) project – the Makete platinum project – in Southern Tanzania, which has high PGE tenor grade and size.
Is that the order of priority you have placed on each of these projects?
Yes and no. That may sound strange, but the coal project is further developed, which gives it some seniority I suppose.
At this stage it doesn’t really require much of what we specialise in, which is greenfield and brownfield exploration.
We are a junior exploration company. That’s what we do best – acquiring projects and developing them.
Because the Takatokwane coal project is now in pre-feasibility our main focus is on the Kigoma copper project to move that up.
The thing with coal is its reliance on infrastructure development, which – along with other projects in the area – we are waiting on.
We have a very good deposit in a very good area and we don’t want to sit and wait too long.
We will look for solutions to commercialise that project – even in a moderate fashion – with a view to move it into the South African coal market.
How far have you managed to progress the Kigoma copper project?
We currently have a team on the ground at Kigoma and they are working at identifying what type of ore body we have there.
So far it appears we have two projects evolving – an oxide copper project with grades up to 25 per cent and there is also potential for a sulphide project.
At the moment we are looking at using a model similar to that being used by Tiger Resources where we can extract the oxide and create an early cash flow, which we can then use to develop the sulphide aspect of the project.
The scale we are seeing at this stage is quite large – similar to projects located in the copper belt of the Democratic Republic of Congo (DRC) and of Zambia – in that it demonstrates the geological elements required to have deposited, and concentrated the copper.
That leaves the Makete PGE project.
I have worked on PGE projects for 20 years and I consider the Makete project to be a very good project.
Having said that, to enter into PGE exploration – as a junior company of our size – you do need a Joint Venture partner, so we are going to be looking for mid-cap, or major, company which may be interested in helping us do that.
What have you learnt about the project to date?
Some exploration work was conducted there in the early 2000s, which recorded encouraging results, such as 17.6 metres at 4.9 grams per tonne PGE and gold, which included 1.7 metres at 26.8 grams per tonne.
Seven holes recorded intersections over one metre at plus 3.5 grams per tonne PGE and gold.
They were looking for a Bushveld complex-type deposit; however the current thinking on Makete is that it is not a Bushveld-complex deposit, rather it might be of ophiolite origin.
That means the geological model and the exploration techniques required will be different, so we are now going to have a look at it from that perspective.
We have all the data from the previous work – over 40 holes were drilled – once we have packaged that together we will start making enquiries to the PGE companies and see if anybody is interested in assisting us with its development.
Is it ready to present as such or will you need to conduct further work to bring it up to a level to create that interest?
We already have 10 intersections that are within an economically viable range, which were drilled across three separate areas within the project.
Our program will involve connecting those areas together and to gain an understanding of the project’s geological fluid dynamics.
When will you be commencing your drilling program at Kigoma?
We anticipate starting to drill at Kigoma by the end of May after conducting some trenching, which we are about to commence.
There are four types of mineralisation that have been identified at Kigoma and we will be trying to gain an understanding of the scale and tenor these in order to determine which ones we will be targeting.
The project compares favourably with the Michigan copper district near Lake Superior in North America.
It is quite an eclectic portfolio – what is the reasoning behind that?
That comes about from Walkabout Resources compiling a collection of quality projects and moving from a single-commodity focus into other commodities.
We felt that if, as a company, we were going to diversify then we needed to do it over a range of products that the market is quite keen on.
The coal project is too good to let go, the copper is very exciting – the early signs are that we may be able to grow something very substantial there, and PGE deposits are now moving back into exploration vogue.
The market can see there will be shortfalls, especially with copper and PGE, in the future.
It is a portfolio of commodities that, while they are not market-darlings, they are ones that are always in reasonable demand.
They are also not co-dependent on each other. So there is always the chance one will have some substance to it while the others may be experiencing a pause.