GROUP 6 METALS LIMITED ASX ANNOUNCEMENT
28 JULY 2022
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Quarterly Activities and Cash Flow Report to 30 June 2022
Highlights
- Construction activities at the Dolphin Tungsten Mine progress steadily against project schedule, with production on track to begin in Q1 2023
- Deliveries of OEM equipment and materials are ramping up ahead of process plant installation works
- Collaboration with University of Tasmania, to commence late 2022, will focus on research and development in environmentally sustainable production of critical minerals including tungsten
- Ammonium Paratungstate (APT) prices remain high, with prices holding steady at US$344-$350 per mtu.
- $4.6 million in cash, and $41.2 million in undrawn debt facilities as at 30 June 2022, in line with forecasted Company cashflow.
- No lost-time injuries (LTIs) or reportable environmental incidents were recorded during the quarter
Group 6 Metals Limited (ASX: G6M, "Group 6 Metals" or the "Company") is pleased to report on its activities and cashflow for the quarter ending 30 June 2022.
Dolphin Tungsten Mine Activities Update
The Dolphin Tungsten Mine is one of the highest-grade tungsten deposits outside of China and remains on target to produce first concentrate in Q1 2023. The project has direct private access to the Port of Grassy, King Island, through which it will export high grade tungsten concentrate to its major offtake partners in Europe.
Construction activities at the Dolphin Tungsten Mine ramped up during the June quarter with the completion of the process plant earthworks, which was handed over for installation of major civil structures, required to support the process plant equipment and buildings.
The Run of Mine ("ROM") haul road re-alignment and re-sheeting was also completed during the quarter. This is used to haul ore from the open pit to the ROM ore stockpile at the western end of the process plant area. Significant progress was also made on the installation of the internal roads providing crane access for the major mechanical installation works.
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Major Civil works for the crushing circuit were completed towards the end of quarter and the area was handed over to Gekko at the beginning of July, to commence mechanical installation of the primary crusher. Civil works for the main process building have commenced and it is expected that handover for the construction of the building will occur in late-July.
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Figure 1 - Process Plant Construction Activities
Figure 2 - Recovering Road Base Material at Dolphin Tungsten Mine
Electrical installation works are ongoing with installation of the pits and conduits for distribution of power to the process plant, workshop and site office buildings. The overhead HV power line from
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the King Island grid has been installed and was connected to the site electrical distribution board, in early July, making power available to the site for construction. The provision of permanent power requires an upgrade to the HV feeder from the King Island Power to meet the power capacity requirements.
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Figure 3 - Installation of Electrical Pits and Conduits for | Figure 4 - Overhead Site Power Connection from King |
Process Plant | Island Grid |
Major mechanical equipment started arriving at the beginning of June and most of the remaining OEM deliveries are expected on site by early August. Unlike many other similar projects, the Dolphin Tungsten Mine has not suffered significant delays in the delivery of OEM equipment as orders on long lead time items were placed in August 2021.
Figure 5 - Secondary Cone Crusher Delivered | Figure 6 - Derrick Screen Delivered |
Single Person Quarter (SPQ) accommodation modular buildings have been delivered to site and installation of SPQ West (Campus Village) is complete except for services and final permitting. It is expected to be available for accommodating construction staff in August.
Approval for the Tailings Storage Facility (TSF) was received during the quarter. By locating the new TSF at the historic site, disturbance to native vegetation is minimised, in line with the Company's policy to redevelop the Dolphin Tungsten Mine in an environmentally sustainable and responsible manner.
Covid-19 Update
As advised during the quarter, there were several positive cases of Covid-19 cases on the project. Adherence to the previously implemented strict Covid Safe measures across its local team and
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worksite, to contain the spread and mitigate delays to the ongoing construction activities. The first members of the Group 6 Metals staff to contract Covid-19 are local residents who had not been off the Island prior to testing positive.
The Company is pleased to report that with all Covid Safe Procedures in place, there has been no significant spread of Covid 19 and little impact on the schedule to date as a result.
Critical Minerals Collaboration with University of Tasmania
Group 6 Metals announced its collaboration with the University of Tasmania ("UTAS") on their "Environmentally Sustainable Production of Critical Minerals" project which is expected to benefit the Company's tungsten's assets on King Island, Tasmania.
Potential benefits for the Dolphin Tungsten Project include1:
- Improved exploration techniques and information which may increase the project resource base with ongoing exploration
- Enhanced recovery of tungsten metal from geo-metallurgical research projects
- Potential to recover additional tungsten resources from low grade and historic mine waste through processing and mining innovation
- Potential for value adding through downstream processing of scheelite concentrates to other saleable tungsten products
The University of Tasmania's world-renowned Centre for Ore Deposit and Earth Sciences (CODES) has been granted $3.5m to investigate environmentally sustainable production of critical metals in partnership with regional industry partners. Group 6 Metals is one of several companies operating Tasmanian mining projects that will collaborate with the University of Tasmania on this project. The project is expected to commence towards the end of 2022.
Tungsten is recognised by the Australian and other international governments as one of several critical minerals that will be essential for sustainable economic growth and development in the future.
As part of the project, Group 6 Metals is providing the University of Tasmania with access to its world-class tungsten assets on King Island, including the under-construction Dolphin Mine, the historic Bold Head Mine and its exploration tenements. University staff will work with Group 6 Metal's staff on research projects, with the Company to provide in-kind support, logistics, information and access to drill core, mining and processing activities.
Activity in Share Trading following ABC Four Corners Program
On Monday 9 May at 8.40pm AEST, the Australian Broadcasting Corporation's ("ABC") Four Corners program broadcast an investigative story which featured, amongst others, the Company and its operations, including its recent commencement of construction of the Dolphin Tungsten Mine on King Island, Tasmania.
Following broadcast of the program, there was a notable increase in the Company's share price and volume of shares traded on the market. The investigative piece, titled "Digging In: Why powering a green future means more mines", focused on the new critical minerals mining boom and examined Australia's capability to meet an expected surge in global demand.
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During the program, Group 6 Metals Executive Chairman Johann Jacobs and King Island Mayor Julie Arnold were both interviewed, respectively highlighting the geopolitical significance of the Dolphin Tungsten Mine and its importance to the economic and social prosperity of King Island.
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Tungsten Market
The ammonium paratungstate (APT) price has held up strongly despite a reduction in demand from China due to COVID restrictions impacting economic activity. With restrictions easing and the downstream process industry recovering, Chinese demand is expected to increase again in the second half of CY 2022.
One of the key issues in China is that mines located in COVID-unaffected areas have continued production; however, the end users, mostly located in COVID-affected areas, suspended operations causing an oversupply of concentrate in China. It is anticipated that this oversupply will correct itself in the near-term. Chinese concentrate producers are not permitted to export their production
Demand for concentrate material in Europe and USA remains strong, with APT producers looking to secure more concentrate than is currently available. Therefore, the Company expects that medium to longer term demand will remain strong.
On the supply side several tungsten concentrate producers announced that they are suspending operations or delaying development activities due to high energy costs in Europe and increasing project development costs. With increasing demand for Tungsten products, this is expected to result in a material deficit for concentrates in 2023.
It is interesting to note further advances in technology, especially relating to the use of tungsten in the next generation of lithium batteries, which may result in a significant increase in the demand for tungsten internationally. Some of these developments are posted regularly on the company's Twitter and Linkedin updates.
The value of tungsten, as referenced by the price of ammonium paratungstate (APT) traded on international markets, has continued to hold firm. As of June 2022, industry sources indicate that the Tungsten APT Price CIF Rotterdam is US$344-$350/mtu (metric tonne unit).
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Figure 7 - APT Pricing Chart - June 2022
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Group 6 Metals Ltd. published this content on 27 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 July 2022 23:07:06 UTC.
