King Island Scheelite - High grade tungsten

Mark Gordon

Independent Investment Research

King Island Scheelite is advancing towards the redevelopment of its 100% owned Dolphin Tungsten Project, located on King Island in Bass Strait. Historically the mine produced around 9.7 Mt @ 0.64% WO3 from both open cut and underground, with it operating in various periods between 1917 and 1990.

The proposed high grade open cut operation has Probable Reserves of 3.16 Mt @ 0.73% WO3, and in addition there are underground Indicated Resources of 4.16 Mt @ 1.20% WO3, making it the highest grade tungsten development project globally. The underground Resources provide significant upside to the planned initial eight year, 400,000tpa open cut operation, which will produce an average of 195,095 mtu per annum of WO3.

The Project is fully permitted, with development now contingent upon offtake and financing. In addition KIS holds the freehold rights for all land requirements for the proposed operation. 

The estimated up front capex is $A60 million (with this including 90 days working capital), and combined with an AISC of A$176/mtu WO3 provides for a robust project with estimated revenues of A$363/mtu WO3. 

The fundamentals for tungsten are forecast to remain strong for the foreseeable future, with a number of forecasters seeing the APT price remaining around US$320-US$350 in coming years. APT (ammonium paratungstate) is an intermediate product on which tungsten prices are generally quoted, and which has seen an average price rise of ~11% pa since 2001. APT generally trades at a premium of around 20% to 25% to concentrates, reflecting the cost of conversion.

Subsequent to the completion of our report the Company has raised A$1.375 million through an oversubscribed placement - this, and existing cash is expected to meet all requirements until the raising of development capital.

To download our report on King Island Scheelite please follow the link below.

 


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Senior Analyst
Independent Investment Research

Mark is a Senior Resources Analyst for Independent Investment Research, with a focus on junior and mid-cap listed resources stocks. With over 10 years as an analyst, following on from 17 years as a geologist, he has a good insight into the sector.

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