With Group 6 Metals (G6M) poised for its first tungsten shipment in June, the company has raised at least $30 million to advance the Dolphin mine to positive cash flow.
Group 6 said it has received firm commitments for $27 million as part of a placement, with three major shareholders sub-underwriting $3 million as part of a share purchase plan (SPP) targeting up to $5 million.
“Securing the backing of our existing and new investors, who have participated in this minimum $30 million equity raise, assists the company in fulfilling the commitment to recommence tungsten production at the Dolphin tungsten mine,” Group 6 managing director and chief executive officer Keith McKnight said.
“As we move into the production phase at Dolphin, this equity raising provides a funding runway to progress operations through to positive cash flow at a critical time in our development.”
McKnight said Dolphin production arrives at the right time, with Group 6 receiving strong interest for its product.
“The market fundamentals for tungsten continue to be very positive for G6M, and we look set to become a significant supplier of tungsten at a very favourable time,” he said.
“We have secured nearly 60 per cent of estimated production for the first four years through offtake agreements with Traxys and Wolfram (Sandvik) and have received additional solid demand for our product.
“Beyond the Dolphin tungsten mine, this financing provides G6M with the capacity to add value through the development of Bold Head mine operations, exploration at the Investigator prospect, renewable energy deployment and potential downstream processing to increase WO3 (tungsten oxide) recovery.”
The $30 million has been raised at $0.14 per share, representing a 15.2 per cent discount to Group 6’s closing share price on April 28 and a 16.6 per cent discount to the five-day volume-weighted average price (VWAP).