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Group 6 Metals To Receive $14.1M Cash Injection From ATO

22 December 2023 09:49
ASX: G6M

Group 6 Metals‘ (ASX:G6M) inches closer to receiving a $14.1 million R&D Tax Incentive refund from the ATO as the Company ramps up Tungsten output from its Dolphin Tungsten Mine, located on King Island in Tasmania, Australia.

R&D Refund

The Company applied for a Research & Development (R&D) tax incentive application for the financial year ending June 30, 2023.

The refund will equate to $14.1 million and is anticipated to be received in mid-January.

Group 6 Metals Managing Director & Chief Executive Officer, Keith McKnight, commented in the successful application for the R&D Tax Incentive refund.

“The R&D Tax Incentive scheme is a powerful tool for Australian companies to drive innovation, gain a competitive edge, attract talent, and ultimately contribute to our nation’s economic prosperity and global reputation,” he said.

“The refund provides a timely injection of cash as production ramp at DTM gathers pace.”

New Daily Ore Processing Record

The research and development incentive refund from the ATO could not have come at a better time for Group 6 Metals, as it announces it reached a new daily ore processing record at the Dolphin Tungsten Mine (DTM).

The DTM new daily ore processing record now stands at 1,000t of high-grade ore over 24 hours, marking a steady climb towards its nameplate production capacity.

Processing at this rate equates to an hourly throughput of 44 tph or 73% of the design nameplate capacity. This increase in production demonstrates a 112% increase month on month, resulting in 60 dry tonnes (dt) of concentrate.

The new record is evidence of the Company’s ongoing optimisation efforts and demonstrates the plant’s dedication to improving efficiency.

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Figure 1: Actual (green) and Forecast (blue) Concentrate Bagged Tonnes for the Dolphin Tungsten Project

The rapid progress of the DTM was enabled through a $8 million bridge finance facility, received in November, providing vital funding to the Company at a crucial stage of its exploration whilst playing a crucial role in meeting cash flow needs while Group 6 Metals awaited the R&D refund.

In November its reported the DTM reached 70% utilisation, enabled through economies of learning and increased knowledge of the plant operators. The plant processed 17,050 dt of ore in November, representing a 20% increase from the previous month and exceeding the previous best month achieved in August 2023 by 13.5%.

Group 6 Metals believes as processing capabilities continue to improve, the DTM is well-positioned to consistently deliver larger volumes in the future, solidifying its role as a reliable supplier of tungsten concentrate.

The current focus of the Company is to maintain, and continue to increase, plant efficiency whilst improving recovery, and head grade of ore produced.

It’s forecast the DTM, targeting the high-grade ore body, should steadily increase head grade to an average of 1.1% WO3 by June 2024.

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Figure 2: Actual (green) and Forecast (blue) Mill Feed Grade for the Dolphin Tungsten Process Plant

The DTM and Plant will close for 5–6 days during early January to allow for several mechanical enhancements and repairs, enabling performance to continue to improve.

Company Comments

Keith McKnight additionally commented on the progress of the Dolphin Tungsten Mine.

“While June saw a promising start following the commissioning of the process plant, September proved challenging with unexpected mechanical issues in the process plant,” he said.

“The team’s dedication to stabilising operations in October led to significant improvement in November. Plant utilisation is approaching the assumed 75%, and the recent daily ore processing record of 44 tph in early December indicates that the process plant is on the right track.”

“Meanwhile, the mining team has identified opportunities to accelerate the extraction of ultra-highgrade open-cut ore. This ore will be available for processing starting in March, leading to a significant increase in concentrate volumes while requiring less ore to be processed. This change will lower operating unit costs and mitigate potential risks to the concentrate production forecast for the next 12 months.”

“The continued improvement in October and November across mining and process plant operations is encouraging. This progress speaks volumes about the dedication and unwavering commitment of the G6M team. As we enter 2024, we are excited for the project to capitalise on this momentum and looking to achieve stable economic production by April and unlock the full potential of this exceptional high-grade ore body.”

G6M’s Australian Stock Exchange-listed share price has risen 19.05% and is currently trading at $0.075today (9:40am UTC+ 8 hours).

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