After years of anticipation, Group 6 Metals have finally re-awakened the sleeping giant and begun production at its wholly-owned Dolphin Tungsten Mine (DTM), with the Company having produced its first tungsten concentrate from the historic mine on Tasmania’s King Island.
The processing plant has been operating non-stop for the past week, processing lower-grade ore. With this milestone reached, the team at G6M will now prioritise completing the remaining commissioning activities for the Mine’s processing plant, as construction on the plant nears completion.
Performance testing is now underway to ramp up throughout and tune performance to maximise concentrate grade and recovery, with the Company on track to achieve the Mine’s 400 thousand tonnes per annum processing capacity as it looks to capitalise on the growing hunger for tungsten as the critical metals demand continues to grow for a variety of sectors.
The Company has already secured a number of offtake deals for DTM’s product, with just under 60 per cent of the Mine’s production for the first four years already set for offtake, which based on recent Tungsten prices could net the Company approx. A$181 million over 4 years.
Concentrating on Tungsten
After a long-awaited period, the resumption of operations at the DTM is finally underway. This mine has seen intermittent operation since 1916, but was completely shut down in 1992 due to exceedingly low tungsten prices. Interestingly, despite its closure, approximately 50% of the known mineral resource remains untapped.
After multiple unsuccessful attempts to resume production, the DTM mine with its 4.43 million tonnes deposit at a grade of 0.92% WO3 remained dormant. However, a change in management at what is now Group 6 Metals in late 2013 brought about a renewed assessment of the Project’s potential, coinciding with the rising price of tungsten.
And this forethought is set to pay off for G6M, kicking off production just as global demand for the metal from the construction, mining, defence, battery and technology sectors are set to soar, with a number of countries including Australia recently classifying tungsten as a critical metal.
The Company said that the commencement of production at DTM has positioned it to take advantage of the increasing demand for tungsten and become a leading producer of tungsten concentrate.
“Production of the first concentrate at the Dolphin Tungsten Mine is another significant milestone for Group 6 Metals and is a credit to the hard work and dedication of our site team and contractors. The process plant has been running 24hrs a day for the past week, processing lower-grade commissioning ore. The team will now turn their focus to performance testing to increase throughput, grade and recovery,” Managing Director and Chief Executive Keith McKnight said.
“The tungsten price has remained strong over the past 12 months supported by increased demand, supply disruptions from two of the largest producers in China and Russia and global inflationary pressures which has led to higher prices for raw materials, including tungsten.”
G6M’s Australian Stock Exchange-listed share price is currently trading at 13 cents (2:11 pm UTC+ 8 hours).