Group 6 Metals has announced a 24 per cent increase in the net present value (NPV) of its Dolphin tungsten mine in King Island, Tasmania.
Dolphin’s value has increased from $241 million to $300 million when compared to prior economics from December 2020.
This came despite the life-of-mine capital expenditure for the mine increasing from $129.2 million to $153.9 million amid soaring inflation and design enhancements to improve the construction, operation and reliability of the mine and processing plant.
Dolphin’s value boost reflects increasing tungsten concentrate prices and favourable foreign exchange conditions.
“Despite the challenges faced by many mining projects under construction over the last 12 months, primarily due to escalating capital and operating costs, logistical challenges and labour shortages, we are very happy with the progress achieved at Dolphin to date and with the updated project financial metrics,” Group 6 managing director and chief executive officer Keith McKnight said.
“The project is tracking well against schedule, with commissioning of the process plant still expected to be completed by the end of March 2023, as all the major OEM equipment has now been delivered to site to complete the construction of the process plant.
“In parallel, the mine infrastructure is also progressing well, with construction of the tailings storage facility underway and expected to be available in March 2023 when needed for commissioning.”
McKnight said there is an anticipated tungsten shortage in 2023 due to increasing demand and limited supply coming online. The price for ammonium paratungstate (APT) – the benchmark for tungsten – has remained stable at $US335–340 per mtu (metric tonne units) WO3 (tungsten oxide) for much of the last six months.
Given the current Australian–US exchange rate, this is the highest APT price in Australian dollar terms since the Dolphin tungsten mine last operated in 1992.
Group 6 expects to commence production of tungsten concentrate for sale to its offtake partners in the second quarter of 2023.