Name of the Project
Dolphin tungsten project.

Location
King Island, Tasmania, Australia.

Project Owner/s
Tungsten developer Group 6 Metals.

Project Description
The project has a probable reserve of 4.43-million tons grading 0.92% tungsten trioxide.

Group 6 proposes to extend the historical Dolphin opencut mine eastward to a depth of –140 m RL to recover remnant ore from the historic underground operation using an eight-year opencut mine. On completion of the proposed Dolphin opencut, a further six years of underground mining is planned from ore resources between –140 m RL to –300 m RL, extending the total project life to 14 years.

It is planned that the opencut operation will mine and process about 400 000 t/y of ore for eight years to produce about 26 800 t of tungsten concentrate. The underground mine will be accessed from a portal established at –120 m RL and a new southern decline developed to re-access and rehabilitate historic mine infrastructure below –150 m RL, including production drives and ventilation return airways. 

The underground production schedule and mining equipment list have been calculated, based on the mine design and production rates of about 300 000 t/y of ore producing an additional 24 500 t/y of tungsten concentrate. The project also requires the construction of a 400 000 t/y gravity process plant, supplemented by a concentrate dressing circuit, together with mine infrastructure.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
A review has resulted in a 24% increase in the Dolphin project’s estimated net present value, increasing from A$241-million to A$300-million, while the internal rate of return has declined from 43% to 38%. The capital payback has increased slightly from 2.25 years to just under three years.

Capital Expenditure
Group 6 Metals flagged another cost increase at the mine in January 2023 that capital costs of the project have increased from A$129.2-million to A$153.9-million.

Planned Start/End Date
Group 6 is working to ensure that the project remains on schedule to come on line in the first quarter of 2023.

Latest Developments
Group 6 Metals has reported that construction of the processing plant for the Dolphin mine is continuing to progress on schedule, with commissioning and first concentrate production targeted for early this year.

However, the lead engineering, procurement and construction (EPC) contractor, Gekko Systems, has told the company that constraints have led to higher-than-expected costs in the execution of the EPC contract.

These constraints pertain to project-specific and market conditions impacting on logistics, materials and installation costs, including inflation, shipping and transport, foreign currency exchange rates and labour constraints.

The company has said that the extent of the newly anticipated construction costs is up to A$7.5-million, constituting about 14% of the value of the EPC contract the company signed with Gekko Systems in November 2021, or 8% of the overall project’s budget.

Group 6 Metals will conduct a detailed assessment of these costs as a matter of priority.

The two companies are taking joint action to mitigate these anticipated cost increases while optimising the safety, schedule and successful redevelopment of the Dolphin mine.

The companies are also in discussions regarding options to limit the impact of these anticipated cost increases on Group 6 Metals’ cash flow while the plant is being commissioned and ramping up to nameplate production.

Despite the cost increases, Group 6 Metals has assured shareholders that it remains committed to the completion and commissioning of the Dolphin mine.

Key Contracts, Suppliers and Consultants
Polberro Consulting (underground mine plan and schedule); Resource and Exploration Geology (required personnel, equipment and quarterly operating expenditure for contract underground mining estimate); Group 6 Metals (update of Xenith Consulting’s estimated opencut mining costs); and Gekko Systems (processing plant design, based on a flowsheet developed by ALS Laboratories).

Contact Details for Project Information
Group 6 Metals, email info@g6m.com.au.