PERTH (miningweekly.com) – Tungsten developer Group 6 Metals will raise A$30-million in a share placement and share purchase plan (SPP) to progress the construction and commissioning of the Dolphin tungsten project, in Tasmania.

The ASX-listed company on Monday said it had received binding commitments from professional, sophisticated and institutional investors for the placement of 156.9-million shares, priced at 14c each, to raise A$21.9-million under the company’s existing placement capacity.

A further 36.2-million shares will be issued to directors Chris Ellis, Johann Jacobs and Keith McKnight, raising a further A$5.1-million, subject to shareholder approval.

Additionally, Group 6 Metals will also undertake an SPP under which shareholders could apply for up to A$50 000 of additional shares in the company, also at a price of 14c each. The SPP could raise as much as A$5-million.

The placement price of 14c a share represents a discount of 15.2% to Group 6 Metals’ last closing price, and a 17.9% discount to its ten-day volume weighted average share price.

“Securing the backing of our existing and new investors, who have participated in this minimum A$30-million equity raise, assists the company in fulfilling the commitment to recommence tungsten production at the Dolphin tungsten mine. We are grateful for the commitments from investors, which underscores the progress achieved at the project and its imminent restart of operations. We also appreciate the ongoing support of our major shareholders who subscribed for the majority of this raising,” said Group 6 Metals MD and CEO Keith McKnight.

“As we move into the production phase at Dolphin, this equity raising provides a funding runway to progress operations through to positive cash flow at a critical time in our development. Despite several industry-wide challenges construction projects face, such as escalation in capital and operating costs, our team has worked diligently to minimise operating costs and safeguard against further equity requirements.

“While the project continues to have very attractive margins, the company will continue to evaluate opportunities to optimise mine and process plant productivity further to increase output and lower unit costs,” he added.

Funds raised will be applied towards progressing the commissioning and ramp-up of the mining and process plant operations at Dolphin, creditor payments, and to accelerate the feasibility studies for the Bold Head mine development, downstream processing and the integration of renewable energy to the current power supply for the mine.

Dolphin is expected to have an initial mine life of 14 years, with the project having a processing capacity of 450 000 t/y.