Group 6 Metals has reported a sharp FY2026 turnaround, backed by stronger tungsten sales, improved plant performance and A$55.7 million in operating cash flow. The result also carries substantial accounting benefits, while the next test is whether underground mining can make the improvement durable.
- Revenue rose 508.5% to A$129.0 million
- Net profit included a A$74.6 million impairment reversal
- Operating cash flow reached A$55.7 million
- Dolphin opened FY2027 with 295kt of stockpiled ore
- Underground development began under the HMR Drilling contract
Group 6 Metals Limited (ASX:G6M) has emerged from a difficult period with a balance sheet that looks markedly different from a year earlier: revenue surged to A$129.0 million, operating cash flow reached A$55.7 million and net assets swung from negative A$5.1 million to positive A$155.1 million. The company’s shares were also readmitted to ASX trading on 30 July, removing one of the most visible overhangs on its Dolphin tungsten operation.
Financial turnaround rests on sales and accounting reversals
FY2026 net profit attributable to shareholders was A$148.2 million, compared with a A$32.1 million loss the previous year. The improvement was not purely operational: Group 6 recorded a A$74.6 million reversal of earlier impairment charges, a A$12.2 million income tax benefit and a A$6.1 million fair-value gain on warrants. Those items sit alongside the underlying improvement in tungsten concentrate sales, pricing and cash generation, rather than being interchangeable with recurring mine earnings.
Cash and cash equivalents rose to A$49.3 million at 30 June, while borrowings fell to A$21.2 million from A$26.3 million. The company still identifies financing as a risk if production targets are missed, with its outstanding facilities scheduled to mature on 30 April 2027. That makes the conversion of operating performance into sustained free cash flow more important than the headline profit figure.
Dolphin shifts from stockpiles to underground ore
The Dolphin Tungsten Mine processed 272,421 tonnes during the year and produced 88,911 metric tonne units of WO3, while recoveries reached around 60% in recent periods. The final open-cut sequence was completed in the first quarter, leaving a stockpile of approximately 295,000 tonnes at an average grade of 0.26% WO3 at the start of FY2027. That stockpile provides continuity, but its depletion also raises the importance of the next mining phase.
Underground development and production services began at the end of June under a contract with HMR Drilling. Group 6 says underground ore is expected to provide access to higher grades and improve the feed profile in coming months. The company is also pursuing ore sorting, fine-tungsten recovery, plant upgrades and additional power infrastructure, although the annual report makes clear that these initiatives remain part of the work required to lift reliability, recovery and unit costs.
Execution risks return with the relisting
The annual report’s forward case depends on several estimates: a long-term plant recovery assumption of 70%, feed grades ranging from 0.32% to 1.35% WO3, long-term APT pricing between US$1,000 and US$1,800 per metric tonne unit, and successful underground development. The company remains unhedged against both commodity-price and foreign-exchange movements, while it also flags geotechnical, permitting, logistics and plant-reliability risks.
For shareholders, the relisting changes the company’s visibility but not the operational task. FY2027 will show whether the improved plant performance and tungsten pricing can withstand the transition from a stockpile-fed operation to underground production, and whether Dolphin can generate enough cash before the next major debt deadline arrives.
Bottom Line?
The turnaround is substantial, but FY2027 must convert a stockpile-supported recovery and accounting gains into repeatable underground production and cash flow.
Questions in the middle?
- Can underground development deliver the higher-grade ore and production improvement expected during FY2027?
- Will plant recovery and throughput remain consistent as the ore feed changes?
- Can operating cash flow cover underground development, maintenance and debt obligations before April 2027?