Australian (ASX) Stock Market Forum

G6M - Group 6 Metals

Jump to new
D

Donga

Joined
16 June 2009
Posts
212
Reactions
0
As KIS isn't being discussed and as a long suffering holder, thought this would suit as my intro new thread:

KIS graph.gif

The company has secured development approvals, signed up with a large Chinese partner and is currently preparing for production once again. The SP declined with the small cap miners and seems to have been overlooked in the recent recovery. With the Chinese economy on the front foot again, apparent decreased reserves of tungsten globally, sound financials with their JV partner/customer in place, KIS may be worth a look. Does anyone have any thoughts? I'm holding at average 31.5c after buying them on the way down. The following from their website:

Its redevelopment of the original King Island Scheelite Mine is being carried out through the Dolphin Joint Venture (DJV) with joint venture partner Hunan Nonferrous Metals Corporation Limited (HNC).

This resource comprises 8,576,000mtu (contained WO3) and its proposed redevelopment involves substantially extending the original pit to create a mine with a seven year mining life and mill facility with an eleven year processing life and annual production of approximately 3,000 t of W03 in concentrate

With the necessary approvals granted and funding arrangements in place through the joint venture and loan agreements with HNC, the project team is focussed on finalising the design aspects of the mine and mill using the best sustainable practices available.
 
Donga said:
As KIS isn't being discussed and as a long suffering holder, thought this would suit as my intro new thread:

View attachment 32021

The company has secured development approvals, signed up with a large Chinese partner and is currently preparing for production once again. The SP declined with the small cap miners and seems to have been overlooked in the recent recovery. With the Chinese economy on the front foot again, apparent decreased reserves of tungsten globally, sound financials with their JV partner/customer in place, KIS may be worth a look. Does anyone have any thoughts? I'm holding at average 31.5c after buying them on the way down. The following from their website:

Its redevelopment of the original King Island Scheelite Mine is being carried out through the Dolphin Joint Venture (DJV) with joint venture partner Hunan Nonferrous Metals Corporation Limited (HNC).

This resource comprises 8,576,000mtu (contained WO3) and its proposed redevelopment involves substantially extending the original pit to create a mine with a seven year mining life and mill facility with an eleven year processing life and annual production of approximately 3,000 t of W03 in concentrate

With the necessary approvals granted and funding arrangements in place through the joint venture and loan agreements with HNC, the project team is focussed on finalising the design aspects of the mine and mill using the best sustainable practices available.
Click to expand...

Personally I think KIS looks pretty good, esp the grade and long mine life. Funding in place through JV partner is another big plus. But lots of infrastructure needed (mill, power plant, accomodation, port, airstrip?, sea wall etc), and their target production seems small (600,000tpa throughput, 50% ownership). I would consider entering at current price if the price stays but there seems to be no sellers. I currently do not hold. Are you still holding? Would be intereted to hear your thoughts on management.
 
lazyfish said:
Personally I think KIS looks pretty good, esp the grade and long mine life. Funding in place through JV partner is another big plus. But lots of infrastructure needed (mill, power plant, accomodation, port, airstrip?, sea wall etc), and their target production seems small (600,000tpa throughput, 50% ownership). I would consider entering at current price if the price stays but there seems to be no sellers. I currently do not hold. Are you still holding? Would be intereted to hear your thoughts on management.
Click to expand...

Hi Lazyfish - I ran out of patience! Started looking at a lot of other miners, many from this site, especially those about to drill or ink an agreement. Been kicking lots of goals with the likes of PRU, FMS, KGL, EKM, RAU and TAM. Didn't do so well with PRW but it was an early one and lessons learned.

Still holding my performers and have recently added IMA, NWE, PEN, ORD, RNG, ROG, CTP amongst others. Having a ball and hopeful that my biggest plays of MMR and BLY still have a lot of backend potential.

I know one of the directors of KIS and have refrained from bugging him. You nailed it with the work they have to do, and the price of tungsten will be higher as the western economies recover, especially US. So I've decided to keep KIS on the watchlist and get back into it, probably sometime next year.

Hope you're winning and that we finish 2009 higher than we are now, doesn't have to be too much as don't wanna be greedy :)
 
I'm back into KIS. Some keen interest with ttungsten players recently, especially VMS and saw that sellers in KIS were quickly evaporating. Suspect some folk are looking ahead and deciding to buy now pending further recovery.
 
What are people thinking about KIS? I've been hearing it could be hte next LYC.. but far from it at this stage... nayone think otherwise?
 
A quick oversight and review of KIS operations as there has been no update for over a year.

Dolphin Project
The Definitive Feasibility Study to redevelop the tungsten mine on King Island was finalised during the March quarter based on producing an industry-standard 65% tungsten concentrate.
This study confirms the world class, high-grade, tungsten deposit on King Island is set for redevelopment, with a robust development plan supported by strong market fundamentals that will generate acceptable economic returns.
The development plan is based on reopening the former Dolphin underground mine to produce up to 350,000 tonnes of ore per annum, at an average grade of 1.04% WO3 over a 10 year mine life. Recoveries of 91% using well understood flotation techniques will see this mine supply a significant portion of the world’s tungsten outside China.
Key Outcomes of the Definitive Feasibility Study (DFS) include:
● A 10 year mine life from underground mining and retreated tailings.
● Potential for additional high-grade ore immediately down-plunge from the current ore blocks.
● Average production of 3,500 tonnes per annum of contained tungsten trioxide (WO3) in a 65% concentrate.
● Project NPV range of A$69 million to A$116 million (un-geared, post-tax).
● Project IRR range of 21% to 29% (un-geared, post-tax).
● Cash cost in the first four years of A$169 / metric tonne unit (mtu = 10 kg WO3).
● An initial capital expenditure requirement of A$133 million.

KIS, the 100% owner of the project, has completed the outright freehold purchase of key mine-related land (240.9ha) from the King Island Council, as announced on 13th February 2012.
KIS has also reached agreement for all project permits and approvals with the Tasmanian Environment Protection Authority, Minerals Resources Tasmania and King Island Council.
The Dolphin Project is within a retention licence that has adjacent exploration licences. A mining licence would be activated upon payment of the agreed environmental bond.
The Company has advanced discussions with key tungsten consumers, financiers and potential equity partners and investors to establish the optimal funding structure for this project. Discussions with consumers indicate a strong interest for life of mine production.
Once the necessary funding is secured, with all other components already in place, the Dolphin Project is development ready.

From todays announcement
http://www.asx.com.au/asxpdf/20120705/pdf/4277v7hy5lshgf.pdf
King Island Scheelite Limited (ASX: KIS) is conducting a review of its business with a view to implementing a range of significant cost-cutting measures in the near term. This review is being undertaken as a result of a decline in financial market conditions and delays in funding its Dolphin Project.
The Company remains confident it can secure the funding required to progress the Dolphin Project and continues to actively source project funding through ongoing discussions with off-takers, bankers and potential equity partners. However, given current market conditions, this is likely to take time. In the interim it is prudent to look at reducing costs on a range of fronts.
Once development funding is secured the Dolphin Project can be brought into production within two years, with the potential to supply up to 25% of non-Chinese global tungsten production.

Balfour Joint Venture (BJV)
KIS has a 70% interest in the BJV with Pleiades Resources Pty Ltd (30%) to explore tin tungsten and copper-gold targets within BJV tenements in North West Tasmania.
A future exploration programme has been developed for both tenements held by the joint venture and expressions of interest are being sought to farm-into this project.

Would it be safe to say the Dolphin Project is starting to look a little shaky?

2 of the directors were involved with Excel Coal at the time it was taken over by Peabody (in 2006) for $9.50 per share.
 
This from KIS latest quarterly.

Financial
As at 30th June 2012 the cash balance was $1.02 million (March 2012 $1.61 million). Until market conditions improve, initiatives to reduce corporate and other costs to less than $1 million per annum are being implemented.

Outlook
The company is well placed to finalise Dolphin Project funding arrangements and to commence development.


KIS currently have $1.02m to their name. Until any kind of funding is secure this is in a holding (even a declining) pattern. Cash preservation usually doesn't lend itself to SP increases.
 
While KIS has been moving north for the last week and a half, quietly making higher highs and higher lows, the last couple of trading sessions have seen much more significant share price gains and it is currently trading at 11.5c, up 27.78% on Friday's close.

There is no news or other obvious catalyst for the recent share price gains, so I assume that someone is getting set in anticipation of some upcoming news?

Time will tell.

big.chart-KIS.gif
 
King Island mine has been closed for 30 years. Now Tungsten prices are rebounding, and Chinese hold 83% of the production, there is talk the mine may reopen. Tas Govt to kick in some $$s?
 
and another good day (20% up on no news today, but yesterday trading resumed).

A placement of 28 million shares at $0.20 per share, raising $5.6 million. The shares have been issued pursuant to Section 708A of the Corporations Act and ASX Listing Rule 7.1. The Lead Manager was MAC Equity Partners.
The placement was corner stoned by Swiss investment company D.A.CH.S. Capital AG, which subscribed for 20 million shares. The balance of the shares, which was oversubscribed have been allocated to Australian professional investors introduced by MAC Equity Partners.
The Company will apply funds raised to paying off term debt of $4.7 million, plus accrued interest, which the Company had previously incurred in acquiring fixed property adjacent to the Dolphin mine site and working capital to advance the Dolphin Project. The remaining $0.5 million debt will be converted to equity following FIRB approval.
Click to expand...
With a significantly strengthened balance sheet post-placement, the Company looks forward to negotiating from a much better position the debt component required to fund the recommencement of operations at the Dolphin tungsten mine.

I wish I could be corner stoned
1615967429761.png
 
and that was about as good as it got, back in mid March .... KIS now 23c a share

Interest piqued by the imminent listing of a Canadian Tungsten player Almonty on the ASX (Code : AII). Almonty specialises in acquiring distressed and underperforming operations and assets in tungsten markets.

Recent announcement shows things are progressing.
Highlights:
  • Tasmanian Environmental Protection Authority approves further Management Plan for Dolphin
  • Gekko Systems has been selected as the preferred engineering company to design and build the Dolphin Processing Plant
  • Detailed design and contract documentation advancing
  • Appointment of additional key managerial staff
Development Plan
  • A detailed mine plan and schedule ... details an 8 year open cut mine, with average annual production of 400,000 tonnes of ore per annum, yielding 200,000 mtu of WO3 (1mtu = 10kg)
  • Ore to be crushed and processed, primarily through a gravity circuit, with dressing of the gravity concentrates using flotation and magnetic separation.
  • Plan to increase mine life on completion of the open pit by continued mining of the remaining resource external to the 8 year open pit

Grade and Tonnage of Comparable Tungsten Deposits​

KIS reserves and resource sits at the highest grade, and contained Tonnage of WO3, compared to other projects
www.kingislandscheelite.com.au

Dolphin Project - Group 6 Metals

www.kingislandscheelite.com.au www.kingislandscheelite.com.au

So, what are the challenges? A quick look around
  • Tungsten is largely not smelted to form metal due to its high melting point and is instead extracted from crushed ore using a series of chemical reactions.
  • Due to the high-capital cost associated with the construction of a chemical processing plant to produce APT, the most commonly traded form of tungsten, most junior miners produce a tungsten concentrate. Price received is dependent on grade.
  • As a result of high Chinese influence, tungsten prices have experienced considerable turbulence over the last several years (Roskill)
  • There is stock overhang from mothballed mines and also a failed Chinese metal exchange releasing metal to market
  • With a greater uptake of electric vehicles over internal combustion engines, tungsten consumption in the automotive sector may never recover to 2017 levels.
  • Strong growth in superalloys and other alloys is set to drive steel and alloys demand, whilst in the chemicals sector, the use of semiconductors and demand for consumer electronics is expected to lift.
All in all, is KIS a good proposition? Possibly, but earnings seem very dependent on China's effect/ control on the market. There are opportunities further up the supply chain for new mine projects to come online. Several large mines in China and Russia are reaching their end of life and will need to be replaced for the market to remain adequately supplied (Roskill). Interesting that Almonty (AII) is looking to list on ASX? (Is that good or bad, or the basis of future corporate actions?)




 
Tungsten explorer King Island Scheelite is raising $31 million to fund the redevelopment of its Dolphin Tungsten Project.

The company is looking to restart the project, which historically operated between 1917 and 1990, but closed due to depressed prices.

The company has appointed PAC Partners and Canaccord Genuity to manage the capital raising.

The offer is priced at 14¢ per share; KIS last traded at 17c
 
King Island Scheelite still bouncing along the bottom. ..... trading around 14c

There was a bit of publicity in the media recently, as plans progress to reopen.

King Island Scheelite project off Tasmania cleared a key development hurdle this week. A group of shareholders put in $10.2 million to enable the mine to begin acquiring heavy machinery that it will use to resume operations once a $45 million processing plant is finished in early 2023.

Mining is set to begin in about six months, CEO Johann Jacobs said in an interview, so the plant will be ready to process ore the moment the plant is ready.

The backers say it is now up to the Australian government to help accelerate the development of a King Island port and renewable energy industry on the island to produce what would be the world’s first green tungsten .

The project is drawing attention, not only on King Island, where it will become a major driver of economic development, but also by the federal government and allies like the US, which are concerned that China currently dominates the market.

Mr Jacobs admitted that the company had difficulty obtaining funds from conventional lenders because of the nature of the tungsten market.

"You can not sell tungsten forward on metals exchanges, everything is priced at spot and the biggest issue is that China controls 82 per cent of the market", Mr Jacobs said.
Click to expand...

But the advantage King Island tungsten has, according to Mr Jacobs, is that the project should be able to produce the material at about $US100 ($135) per metric tonne, versus China’s $US220 production cost.

"They can obviously undercut us, but they will be losing money and any sensible person would only bleed to an extent they can weather it and of course they get government subsidies.
Click to expand...
"Those two issues really played against us getting conventional debt. [But] the shareholders came to the party with very commercial terms."
Click to expand...

.......... sounds messy.
 
On November 15th, 2021, King Island Scheelite Limited (KIS) changed its name and ASX code to Group 6 Metals Limited (G6M).
 
Current geopolitical status might bring some interest to this after reading between some lines. US government interested in securing ally based supply lines, but probably haven't put their money into it though, but have visited the King Island project 3 times according to this interesting 4 corners episode.
(Mentions many other companies also)

 
and again, raising money

...with a three-part cash call split into a $22 million placement, a $5 million conditional tranche to its executive director Chris Ellis, and a $5 million SPP for retail shareholders.

All would be priced at 14¢ a share, a 15.2 per cent discount to the last traded price or a 17.9 per cent discount to the 10-day volume weighted average price. The offer included an attaching option on a two-for-three basis at a 21¢ strike price and June 2025 expiry.

Group 6 would use the proceeds to boost working capital for initial ramp-up while it finalised additional funding, to pay for its renewable energy push and to fund technical feasibility studies for its tungsten concentrate’s downstream processing.

Investors were told existing major investors including Tassie richlister Dale Elphinstone, Chris Ellis and European family office DACHS supported the raise. Elphinstone, Ellis and Richard Chadwick had committed to take up $18 million of which $3 million was debt conversion. DACHS would take up $2.9 million.
 
well, they got the money at 14c from SPP but things sputtering along. Now 11.5c. Production has recommenced.
.
Key Highlights
• Second delivery of high-grade tungsten concentrate ready for shipment
• Drill and blast operations have commenced, providing a steady supply of high-grade ore to the process plant commencing in mid-August
• Production forecast indicates a steady increase in ore processing to reach the monthly nameplate production in Q4 2023.
• Share Purchase Plan has been finalised having successfully raised $4.3m
.
Managing Director & Chief Executive Officer, Keith McKnight, said:
“The site team has been working diligently on ramp up and stabilising the process plant operation in anticipation of receiving higher grade ore from the open pit following the commencement of production blasting. It is not unusual to encounter challenges when ramping up a new process plant, but it has demonstrated it can produce high grade concentrate at up to 70% of nameplate production which is a major positive for the project.

"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. 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.”

Screenshot_20230827-080702_CommSec.jpg
 
and again, needing money. now 8.8c , as low as it's been in 3 years
.
Key Highlights
• Major shareholders have committed to provide $8 million in bridge finance funding to progress ramp-up activities at Dolphin Tungsten Mine
• Bridge finance to support cashflow requirements pending receipt of the anticipated cash refund under the Research & Development Tax Incentive Scheme
• DTM is progressing towards steady-state operations as the Federal Government re-enforces its commitment to the production of critical minerals in Australia.
 
and , probably a relief rally. Relief that they're not broke yet. (that bridging finance likely to be burning a hole in their pockets). 7.8c

Key Highlights
• Dolphin Tungsten Mine sets new daily ore processing record
• Monthly concentrate production climbs to a new record high
• Finalising an optimised mine plan to bring tungsten production forward
• R&D Tax Incentive of $14.1M has proceeded to processing for refund by ATO

Screenshot_20231222-120457_CommSec.jpg
 

Similar threads

Dividend
Ultimate Acronym List (UAL)
Replies
0
Views
5K
Dividend
Dividend
springhill
LOT - Lotus Resources
4 5 6
Replies
100
Views
25K
brerwallabi
brerwallabi
YOUNG_TRADER
TSL - Titanium Sands
2
Replies
21
Views
11K
Sean K
Sean K
Top