The scoping study returned pre-production capital costs of $US35-40 million and a payback period of just two years for a mine life of more than 20 years, based on measured and indicated resources of 1.38 million tonnes of contained graphite.

Annual production would be 25,000-40,000 tonnes per annum graphite in concentrate at operating costs of $290-350 per tonne, which Walkabout said would be the lowest costs in Tanzania.

The project has a base case net present value (at a 10% discount rate) of $169 million for production of 25,000tpa, and $304 million for a 40,000tpa operation.

The internal rate of return is estimated at 63% for 25,000tpa, and 97% for 40,000tpa.

The study was completed using a basket price of $1563/t.

Walkabout said that even at lower graphite prices, the NPV and IRR would be positive.

The results of the study have encouraged the company to move to a fast-tracked definitive feasibility study, due for release next month.

Offtake discussions are already underway and Walkabout is confident of being able to fund the proposed development.

Walkabout had $A510,000 cash at the end of September.

Funding would have to be obtained by the end of April to meet the schedule of first production in early 2018.

The company owns 70% of the project, but has an option to acquire the remaining 30% for $US1 million for each of the four licenses.

The Lindi Jumbo project is contained within one of the licenses and Walkabout plans to exercise the option over that license.

Shares in Walkabout rose by 8% to A9.4c.