Group 6 Metals (ASX:G6M) has secured an $8 million bridge finance facility from 4 major shareholders to support production activities at its Dolphin Tungsten Mine in Tasmania.
The 4 parties involved in the bridge finance facility include Abex, CJRE Maritime, Elphinstone Holdings, and D.A.CH.S Capital.
As previously announced, the $110.37 million market capitalisation company’s site team has been working to increase production rates from ‘higher-grade’ ore and ramp up production from the Dolphin mine to capitalise on the rising demand for tungsten.
The company says the fresh support from major shareholders comes at an ‘important’ time as its site team works through challenges encountered by lower-than-expected plant utilisation during the September quarter — impacting average monthly production.
Group 6 Metals Chief Executive Officer (CEO) and Managing Director Keith McKnight says: “While the ramp-up activities have been slower than forecast for the September quarter, the site team has made significant progress in establishing mining in the Dolphin pit, stabilising the process plant operation, resulting in more consistent production of concentrate.
This facility will provide support for the company’s cash flow while we work with ATO to finalise our R&D cash refund.”
“The site team has made significant progress in establishing mining in the Dolphin pit, stabilising the process plant operation, resulting in more consistent production of concentrate”
Group 6 Metals Chairman Johann Jacobs expressed his gratitude for the ongoing support of its major shareholders.
“Their commitment has been demonstrated from the beginning and continues despite the initial challenges faced in ramping up a recently commissioned project.
We have confidence in our executive team in developing and executing a pathway to steady state operations.”
As operations improve, the bridge finance facility will support the company’s cashflow requirements pending receipt of a government Research and Development (R&D) cash refund.
On 17 August, Group 6 Metals submitted a R&D tax incentive application for the 2023 financial year with AusIndustry. As the company is in a tax loss position, the refundable offset will take the form of a cash refund, which will be realised through the lodgement of the Consolidated Income Tax Return (ITR).
The ITR was lodged on 8 September 2023.
Group 6 Metals notes a cash refund of $14.1 million is expected to be received following satisfactory completion of the pre-issue review.
Group 6 Metals is an Australian explorer, developer, and producer. The company is focused on its wholly owned Dolphin Tungsten Mine in the King Islands, Tasmania.
As of 30 September 2023, the company had $3.05 million cash at hand and $1.95 million in undrawn debt facilities, according to its latest quarterly report.
Write to Aaliyah Rogan at Mining.com.au
Images: Group 6 Metals
