Previously operated between 1917 and 1992, the Dolphin Tungsten Mine was closed due to extremely low tungsten prices with approximately 50% of the known mineral resource yet to be mined.
Today, the Dolphin Tungsten Mine hosts the highest-grade tungsten deposit of significant size in the western world. Tungsten prices have also increased significantly, with it now classified as a critical mineral by the Australian Government, as well as others around the world.
In recent years, G6M has optimised a redevelopment strategy for the Dolphin Tungsten Mine, which contains a JORC 2012 compliant Mineral Reserve of 4.43Mt at a grade of 0.92% WO3 (at 0.2% WO3 cut-off for the opencut and 0.7% WO3 for the underground). Mineral Resources, including the Mineral Reserves, total 9.6Mt at a grade of 0.90% WO3 (at 0.2% WO3 cut-off).
The redevelopment plan envisages an eight-year open cut mine followed by a six-year underground operation, producing a 63% WO3 concentrate for supply into the Ammonium Paratungstate (APT) tungsten market.
The Dolphin Tungsten Mine is located near the town of Grassy on the south-east coast of King Island, the most western large island in the Bass Strait between Victoria and Tasmania.
G6M is executing a plan to sustainably redevelop the Dolphin Tungsten Mine in a manner which preserves the environment around Grassy and the mine. Conservation on King Island is of high importance to Group 6 Metals and is central to the Company’s redevelopment activities.
The Company is prioritising local residential employment wherever practical and expects to create a significant number of jobs during construction and operation of the mine.
The Dolphin Project contains a 2012 JORC compliant reserve and resource which currently stands at:
- Dolphin Indicated Mineral Reserves of 4.43Mt at a grade of 0.92% WO3 (at 0.2% WO3 cut-off for open pit reserve, 0.7% WO3 for underground reserve)
- Dolphin Probable Mineral Resources, including the Mineral Reserves, of 9.6Mt at a grade of 0.90% WO3 (at 0.2% WO3 cut-off)
- The Bold Head Satellite deposit contains an Indicated and Inferred Resource of 1.76Mt @ 0.91% WO3 (0.4% WO3 cut off)
Grade and Tonnage of Comparable Tungsten Deposits
Group 6 Metals’ Dolphin Tungsten Mine has a long and distinguished history.
The deposit was first discovered in 1911 when a prospector named Tom Farrell searched the area for tin. He soon realised that the outcropping mineralisation found near the beach was in fact scheelite (tungsten), and that a significant deposit existed under shallow sand cover.
In 1917 the King Island Scheelite Development Company N.L. was incorporated, and a plant capable of treating 200 tonnes of ore per week was constructed. Operations were however closed in mid-1920, following a collapse in tungsten prices.
In 1937 King Island Scheelite N.L. was formed and a larger plant capable of treating 500 tonnes of ore per week was erected in 1938. This operation required ore to be mined essentially by hand, but with the onset of World War 2 things changed due to tungsten’s significance to the war effort. With Commonwealth Government assistance, power shovels and 6 tonne trucks were installed, together with a new mill that increased annual ore processing capacity to 129,038 tonnes in 1946.
In 1947 the company voluntarily wound up, and was reconstructed as King Island Scheelite (1947) Ltd. The Korean War of the early 1950s helped to maintain the price of tungsten at healthy levels, and the creation of strategic stockpiles in the US and other countries also meant that market conditions were good for producers. After the war and following the completion of building the stockpiles, the price of tungsten declined, ultimately forcing the King Island mine onto a care and maintenance basis in August 1958. The mine reopened on a limited basis in early 1960, with again the Vietnam War helping to support prices during the 1960s.
In 1969 King Island Scheelite (1947) Ltd was absorbed into the Peko-Wallsend group of companies, and milling capacity was subsequently increased to 300,000 tonnes per annum. Over time, capacity eventually rose to 420,000 tonnes.
Mining was undertaken solely by open cut methods until October 1972, when underground mining commenced at the Bold Head mine, located approximately 3 km north of the Dolphin open cut. In June 1973 underground mining commenced at Dolphin, and in October 1974 production ceased from the Dolphin open cut.
By this time the company-owned township of Grassy had become a thriving town, with a population of approximately 700 people. Facilities available included a picture theatre, tennis, basketball and badminton courts, a nine-hole golf course, squash courts and an indoor heated swimming pool. The town was entirely dependent on the mine.
Following a prolonged period of depressed prices in the 1980s, the King Island mine followed many western tungsten producers, and operations closed in 1990. The site was fully rehabilitated by North Limited (now part of Rio Tinto) who had acquired Peko-Wallsend, all processing facilities and much of the infrastructure was removed, the company owned town site was sold, and the open cut mine was allowed to flood.
As the mine was always expected to eventually re-open, North Limited lodged mine drawings, geological plans, drill core and other information with Mineral Resources Tasmania to facilitate this.
In May 2005, GTN Resources NL acquired the project, and subsequently changed its name to King Island Scheelite Limited (KIS). KIS carried out a feasibility study in 2005/6 based on redeveloping the project by extending the open pit with a sea wall to prevent any water ingress. This mine would feed a gravity-based mill processing 600,000 tonnes of ore per annum to produce approximately 3,000 tonnes of WO3 (tungsten trioxide) a year.
In December 2007 KIS entered a joint venture with Hunan Nonferrous Metals Co Ltd (HNC), a major Chinese tungsten producer and processing organisation to progress the Dolphin mine redevelopment. This transaction saw HNC subscribe for shares in KIS, enter an equal share, unincorporated joint venture to develop and operate the mine, as well as provide funding for the project. The development proposal was for an entirely underground mine and a complete Feasibility Study was conducted for this scenario.
This joint venture was terminated on 17th December 2010, following a take-over of HNC by MinMetals who regarded the Project as to small for them. Group 6 Metals now owns 100% of this project. The loan from HNC has been forgiven in exchange for a 2% royalty on future gross revenue (capped at $3.9million).
In 2009, as the price of tungsten was rising, the project was re-examined with underground mining proposed to extract high grade remnant scheelite ore at an average grade of over 1 percent WO3. The over 2 million tonne tailings resource was also examined for possible recovery of remaining scheelite values. The high costs of tailings recovery and of underground rehabilitation during a mining boom in Australia meant that the project was unable to attract funding at that time.
In late 2013, a change in management at KIS prompted a review of the approach to the project. Over the next few years with the tungsten price slowly rising, it was decided to look at a low capital project model. Further laboratory testing was conducted investigating methods of reducing capital and operating costs. These studies were completed in late 2019 after which a Revised Feasibility Study was prepared.
Funding for the redevelopment of the Project was secured in the third quarter of 2021 with the major contract for the processing plant executed with Gekko Systems in the next quarter.
November 2021 saw a change of the Company’s name from King Island Scheelite Limited to Group 6 Metals Limited. The new name reflects the potential for the Company’s operations to broaden beyond tungsten development on King Island. The aim of this branding is to allow for geographic diversity, encompassing a range of commodities while catering for both exploration and development projects.