DY6’s Cost Cuts and Sampling Success Highlight Risks and Rewards in Malawi Exploration
DY6 Metals reports encouraging metallurgical sampling results at its Tundulu rare earths project alongside strategic cost reductions and a successful loyalty options offer, positioning the company for focused exploration in Malawi.
- Tundulu trench sampling returns up to 3.35% TREO and 27.5% P2O5 with 13% heavy rare earth oxides
- Phosphate samples show exceptional solubility, exceeding industry benchmarks for direct fertiliser use
- Ngala Hill reconnaissance sampling reveals promising PGE, copper, nickel, and zinc mineralisation
- Cost-saving measures reduce director fees by up to 26% and corporate costs by 12.5%
- Fully underwritten loyalty options entitlement offer raises approximately $204,750
Strong Metallurgical Results at Tundulu
DY6 Metals Ltd (ASX: DY6) has delivered a robust quarterly update for the period ending 31 December 2024, highlighting significant progress at its Tundulu rare earth elements (REE) and niobium project in Malawi. The company collected 63 metallurgical samples from 37 locations along the historic high-grade trench TUTR10, returning up to 3.35% total rare earth oxides (TREO) and 27.5% phosphorus pentoxide (P2O5) over an 83-metre trench length. Notably, the heavy rare earth oxide (HREO) component averaged 13% of the TREO basket, with dysprosium and terbium contributing 2.5%, underscoring the project's potential for critical rare earths.
Complementing these findings, phosphate-rich rock samples demonstrated exceptional bioavailability, with phosphorus solubility exceeding 40% in most cases and peaking at 81%, well above the industry threshold of 9.4% P2O5 solubility. This suggests promising prospects for direct fertiliser applications, a valuable by-product stream alongside REE concentrates.
Expanding Exploration at Ngala Hill and Regional Projects
Beyond Tundulu, DY6 undertook reconnaissance soil and rock chip sampling at the Ngala Hill project, targeting platinum group elements (PGEs), copper, and nickel. Assays revealed a standout pyroxenite sample grading 2.5 g/t 2PGE+Au, with 23% of samples exceeding 0.2 g/t 2PGE+Au. Elevated zinc (3.5%) and copper (0.7%) grades were also identified, indicating a polymetallic system worthy of further investigation.
Meanwhile, initial geological mapping and sampling commenced at the Mzimba and Karonga projects, expanding DY6’s footprint in Malawi’s mineral-rich terrain. These early-stage activities aim to identify new targets to complement the company’s existing portfolio.
Financial Discipline and Capital Management
In response to challenging market conditions for junior explorers, DY6 implemented cost-saving measures effective from 1 January 2025, reducing director fees by approximately 17-26% and cutting corporate administration expenses by 12.5%. These efficiencies are designed to maximise capital allocation towards exploration and new project evaluation.
Additionally, the company successfully completed a fully underwritten loyalty options entitlement offer, raising around $204,750. This capital injection supports ongoing exploration and operational activities while maintaining a lean cost structure.
Outlook and Strategic Positioning
DY6’s metallurgical test work at Tundulu is progressing, with composite samples dispatched to Perth laboratories and results expected in the March quarter. The company aims to validate historical beneficiation studies and assess the feasibility of producing separate REE and phosphate concentrates, potentially unlocking multiple revenue streams.
With cash reserves of approximately $1.7 million and an estimated 5.6 quarters of funding available at current expenditure rates, DY6 is positioned to advance its exploration agenda prudently. The integration of historical data with new sampling results will guide future drilling campaigns, particularly at Tundulu and Ngala Hill, where early indications of high-grade mineralisation are encouraging.
As DY6 continues to evaluate new project opportunities and manage costs tightly, the company’s focus remains on unlocking value from Malawi’s emerging critical minerals landscape.
Bottom Line?
DY6 Metals’ strong sampling results and disciplined cost management set the stage for focused exploration and potential product diversification in 2025.
Questions in the middle?
- Will metallurgical test results confirm the commercial viability of separate REE and phosphate concentrates at Tundulu?
- How will DY6 prioritise drilling targets across its expanding Malawi portfolio amid capital constraints?
- What impact will global rare earth and fertiliser market dynamics have on DY6’s project economics and funding options?