Group 6 Metals (ASX:G6M) has orchestrated a binding contract valued up to $120 million for HMR Drilling Services to conduct underground mining development and production services at the Dolphin Tungsten Mine in Tasmania.
HMR Drilling will conduct services at the mine over an initial three-year term, which will begin within 60 days of contract execution. The agreement is valued between $110 and $120 million.
Group 6 has the option to extend this contract by another 12 months.
Executive Chairman Kevin Pallas says the contract is a “significant step forward” as the company focuses on de-risking the project’s development pathway toward underground operations.
“HMR Drilling Services is a highly experienced underground mining contractor with a strong safety and operational track record,” Pallas says.
“Their appointment provides Group 6 Metals with capable execution strength as we transition into the next phase of mine development.
“The commercial structure of the contract appropriately balances operational accountability with robust payment security arrangements, reflecting our disciplined approach to risk management while maintaining flexibility.
“As we transition to underground mining, we will continue to process our still significant ore stockpiles, which will begin to be supplemented with high-grade underground ore in coming months.”
Group 6 is currently preparing for the beginning of underground mining, with long-lead-time capital and consumable items already ordered or on site.
HMR Managing Director Dave Hunter says the company is expected to employ up to 95 people for the height of operations at the Dolphin Tungsten Mine.
“We are very excited to be part of this project, bringing the Dolphin Underground Mine back into production with Group 6 Metals,” Hunter says.
As reported by Mining.com.au, Group 6 recently extended its offtake agreement with Traxys Europe, a global commodities trading firm, to deliver a minimum of 10,000 tonnes of tungsten trioxide in scheelite concentrates over several years.
Group 6 Metals is an Australian resources explorer and developer focused on its Dolphin Tungsten Mine on King Island, Tasmania.
Write to Maddison Elliott at Mining.com.au
Images: Group 6 Metals
