BASE METALS

Dolphin delivers first tungsten production

WITH first tungsten concentrate production achieved at Group 6 Metals’ Dolphin project on King Island, shareholders will looking for a smooth commissioning phase and thereafter a stock price re-rate somewhere along the lines promoted by company supporter and “capital markets provider” PAC Partners.

 King Island is located between Tasmania and the Australian mainland

King Island is located between Tasmania and the Australian mainland

Research by the Melbourne-headquartered PAC last December - published on Group 6's website - valued the tungsten developer's shares at 32c versus its-then trading price of 17c, though last month the ASX-listed company unveiled a major dilution event with a A$30 million equity raise.

The raising was very heavily backed by the company's top four shareholders who committed to subscribe for 69% of the equity on offer, with the $3 million share purchase plan (that is part of the overall raising), closing later this month.

Canaccord Genuity and Ord Minnett are involved in the raising.

Group 6 had $48 million of debt drawn at the end of March, with a further $5.4 million on offer at that time. Cash at the end of March totalled just over $3 million.

The geopolitically-advantaged Dolphin is said to be the highest grade tungsten mine outside of China with a 13-year mine life.

Tungsten is described as a "critical industrial metal" with a "material deficit" looming on the supply front.

At recent tungsten pricing, average annual revenue of about $100 million is "implied" over the life of mine, while estimated all-in costs of $246 per metric tonne unit imply margins of circa 37%, Group 6 said last month.

Shares in Group 6 were up 4% to 13.5c in morning trade today, capitalising the company at $126 million.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining News Intelligence team.

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