Dolphin Mine King Island: Why share price spiked by 50 per cent

The owner of a previously decommissioned mine, which is in the process of being rebuilt ahead of production commencing early next year, has received an unexpected fillip.

SHARES in the company of a shuttered Bass Strait mine have spiked nearly 55 per cent in the space of a week after the project was featured on an ABC TV program.

Group 6 Metals Ltd – previously King Island Scheelite Ltd – is rebuilding the Dolphin Tungsten Mine on King Island after it previously closed in 1992 because of low tungsten prices.

The mine featured in an episode of Four Corners, titled ‘Digging in: Why powering a green future means more mines’, on May 9. That night, shares in the company closed at $0.175. Just over a week later they had increased in value by nearly 55 per cent, trading at $0.27 at the time of publication.

The mine is in the process of being restarted with its first shipment due early next year.

In the two days after G6M’s appearance on the program, its shares were traded 14 million times – in the two days prior, not even a million shares traded hands.

Such was the interest in the company, its board published an announcement to the ASX on May 11.

“Following the broadcast of the program, there was a notable increase in the company’s share price and volume of shares traded on the market,” the announcement said.

The announcement also reiterated G6M’s “indicative timeline to achieving plant commissioning in early 2023 ahead of its first shipment of tungsten concentrate in Q1 2023”.

In the ABC TV program, executive chairman Johann Jacobs said the world’s “geopolitical situation” provided opportunities for companies involved in mining “critical minerals” such as G6M.+

According to a previous ASX notice, published on April 27, prices for scheelite derivative ammonium paratungstate – the base ingredient for tungsten products – were at an eight-year high.

That same notice said G6M is currently in the process of constructing FIFO accommodation on-site, undertaking bulk earthworks on the future tailings storage area, and performing civil works on the future processing plant.

Speaking to The Mercury, chief executive Keith McKnight said G6M was buoyant about its prospects, with the current reserve set to underwrite 14 years of production with plans afoot to explore several other suspected deposits later this year.

“We’re pretty confident on demand moving forward,” he said.

“We’re fortunate it’s a high-grade deposit, there’s developed pit so we don’t have to spend a lot of capital opening up the pit and we’ve got a very efficient and optimised plant to maximise recovery.

“We think we can weather any downturn in price, there’s a lot more higher-cost producers who would have to come out of the market (if prices dropped), and then if supply comes out of the market it stabilises price.

“We’re excited where this is going.”

Mr McKnight said the Dolphin mine would support 65–70 full-time jobs once fully operational.

Tungsten is known for its heat resistance and electrical conduction, making it a key input for products such as computer chips.