Group 6 Metals ramps up production at Dolphin as share purchase plan raises $4.3 million

Group 6 Metals (ASX:G6M) is running hard and fast at its Dolphin Tungsten Mine in Tasmania, with the start of drilling and blasting operations set to provide a steady supply of high-grade ore from mid-August.

In July, the Sydney-based producer was focused largely on the preparation of drilling and blasting materials as well as the optimisation of its process plant, which processed 12,500 tonnes of low-grade remnant ore at 0.28% tungsten oxide.

Although Group 6 says the ramp-up of the crushing circuit to target levels has been “challenging” due to the clay content of that ore, the plant is able to exceed its nameplate production rate when supplied with fresh feedstock.

More recently, the company completed its first production blast following a seed trial blast program at the end of July. As a result, Group 6 is now focusing on increasing and maintaining concentrate production over the next 3 months, using higher grade ore from the Dolphin open cut mine.

Shares in Group 6 Metals were up 4.55% to $0.12 as of 1:30pm AEST, representing a market capitalisation of just under $111 million.

“Up to now the process plant has been processing lower grade remnant ore, but as production blasting has commenced, we will start supplying significantly higher-grade ore which is expected to see a big improvement in plant performance and concentrate production,” Managing Director and CEO Keith McKnight says.

“It is very pleasing that we have now successfully achieved our first production blast…”

“Setting up the project to receive and use explosives on a remote island location has been a complex process which required diligent engagement with regulators, logistics service providers and our site contractors. It is very pleasing that we have now successfully achieved our first production blast, and we can now progress our open pit mining plan producing high-grade ore almost immediately.”

Located near the township of Grassy on Tasmania’s King Island, the Dolphin Tungsten Mine contains a mineral reserve of 4.43 million tonnes grading 0.92% tungsten oxide. A critical mineral with a variety of applications, global demand for tungsten is expected to grow substantially over the coming years as pressure from the construction, mining and defence sectors continues to grow.

In addition to the ramp-up at Dolphin, Group 6 has finalised a share purchase plan, netting a total of $4.3 million through the issuance of 30.8 million shares at $0.14 each. Valid applications under the plan came to $3.7 million, with the additional $600,000 raised through allocations to professional and sophisticated investors.

It follows a separate placement completed in May this year, which raised roughly $27 million.

Write to Oliver Gray at Mining.com.au

Images: Group 6 Metals Ltd
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Written By Oliver Gray
Originally from Perth, Oliver has a keen interest long-form journalism. He has written for a number of publications and was most recently Contributing Editor of The Market Herald’s opinion section, Art of the Essay.