Group 6 Metals Reports 14,955 mtu Tungsten Production and $24.3M Debt Reduction
Group 6 Metals reported steady production at its Dolphin Tungsten Mine in Q1 2025, alongside significant progress in its recapitalisation plan and a strengthened financial position amid a tightening global tungsten market.
- 112kt ore mined with 14,955 mtu tungsten concentrate produced
- Two lost time injuries recorded, safety improvements ongoing
- Received $3.8M in loans and $4.0M in advanced payments under recapitalisation
- Debt reduced to $24.3M following shareholder approval of recapitalisation plan
- Executed $7.5M debt facility with Tasmanian government, drawdown pending
Operational Overview and Safety
Group 6 Metals Limited (ASX: G6M) delivered a solid operational performance in the March 2025 quarter at its Dolphin Tungsten Mine on King Island, Tasmania. The mine produced 112,201 tonnes of ore, a slight decrease from the previous quarter as mining transitioned to the final sections of the open cut operation. Despite this, tungsten concentrate production reached 14,955 metric ton units (mtu) at an average grade of 55% WO3, marking the highest output in the past year.
Safety remains a focal point for the company, with two lost time injuries (LTIs) recorded during the quarter. Management attributes these incidents primarily to early production ramp-up challenges and high employee turnover. In response, the company has intensified recruitment of experienced supervisors and implemented a fitness-for-work campaign, including random drug testing, which yielded no positive results.
Process Plant Improvements and Production Dynamics
Investments in process plant remediation and upgrades have begun to bear fruit, with throughput increasing to 45,124 tonnes and feed grades holding steady around 0.71% WO3. While metal recovery rates showed mixed results, the company noted improvements during steady-state operations. Legacy issues with plant component breakdowns and maintenance are being systematically addressed, aiming to stabilize and incrementally improve production run-rates.
Ore stockpiles grew to 429kt at an average grade of 0.56% WO3, positioning the company well for the upcoming underground mining phase, which is expected to unlock approximately 1.5 million tonnes of high-grade ore.
Financial Recapitalisation and Liquidity
Financially, Group 6 Metals made significant strides in strengthening its balance sheet. The company received $3.8 million in loans and $4.0 million in advanced payments under its recapitalisation plan during the quarter. Following shareholder approval at the April 23 general meeting, the company reduced its debt to $24.3 million, with $17.8 million of principal convertible into ordinary shares at lenders’ option.
Additionally, the company executed a $7.5 million debt facility agreement with the State of Tasmania post-quarter, although no funds have yet been drawn. Cash on hand at quarter-end stood at $0.7 million, supplemented by unused financing facilities totaling approximately $10.7 million, providing a runway of about seven quarters based on current cash outflows.
Market Context and Strategic Outlook
The tungsten market backdrop is notably favorable, with spot prices rising sharply amid reported shortages linked to Chinese export restrictions. Group 6 Metals is well positioned to benefit from strategic stockpiling initiatives by Western governments, enhancing the strategic importance of its tungsten concentrate production.
Looking ahead, the company plans to accelerate development of the underground mining phase and is exploring investments in ore sorting and downstream processing technologies to add value. Executive Chairman Kevin Pallas emphasised the company’s commitment to operational improvements and capitalising on positive market conditions while acknowledging the work still required to unlock the project’s full potential.
Bottom Line?
With recapitalisation secured and production momentum building, Group 6 Metals aims to turn operational gains into sustained cash flow amid a tightening tungsten market.
Questions in the middle?
- When will the company draw down funds from the $7.5 million Tasmanian government loan facility?
- How quickly can process plant reliability and metal recovery rates be improved to support higher production?
- What is the timeline and expected impact of the planned underground mining phase on overall output and cash flow?