PERTH (miningweekly.com) – The Tasmanian government will provide ASX-listed King Island Scheelite with a A$10-million funding package, over a ten-year term, to support the development of the Dolphin tungsten project.
A previously completed economic analysis of the Dolphin project estimated that some A$65-million would need to be invested to bring the opencut operation into production to produce 20 t/y of tungsten over an eight-year mine life.
The updated feasibility study has estimated a startup capital cost of A$72.1-million to develop the Dolphin project, with life-of-mine capital estimated at A$129.2-million, placing capital cost for the operation at A$40/t of tungsten produced.
Tasmanian Minister for State Growth, Michael Ferguson, said on Tuesday that the project could create up to 90 full-time jobs during construction and a further 55 ongoing full-time jobs on King Island.
“While the project is still contingent on a number of other requirements, which the company is progressing, this is an important step in moving it forward. This will allow the company to continue the additional capital-raising necessary to bring it to fruition," said Ferguson.
The loan remains subject to formal loan and security documentation being agreed and executed, and includes a number of conditions that must be satisfied prior to the release of funds, which is consistent with finance facilities of this nature, including all other capital raising necessary to deliver the project, the Minister added.
“It would be great to see a clever, job-creating mine up and running again under this proposal, producing significant social and economic benefits for the King Island community.
“The Tasmanian government supports and promotes investment in our regional areas, and there is a significant economic growth opportunity in this project for King Island and the state as a whole.
“It is fantastic that mining interests have regained confidence to invest in Tasmania under this pro-jobs government. This is exactly the sort of project and investment we need to boost confidence and business activity in Tasmania as we recover and rebuild after the pandemic.”
King Island Scheelite executive chairperson Johann Jacobs welcomed the funding support, saying it would significantly enhance the company’s financial strength and flexibility.
“Tungsten is a strategically significant metal and a key input to industries that are vital to national security. We note that several Western governments have recently identified a crisis in the supply chain for critical minerals, particularly tungsten, for which North America currently has no mines in production.
“Therefore, we see a close alignment between the company’s development objectives, the Tasmanian government’s interest in maintaining and growing both Tasmanian jobs and export revenue, and the strategic objectives of the Australian government as implemented by Austrade and the Critical Mineral Facilitation Office.”
Jacobs said that the funding empowered King Island Scheelite to continue with the development programme at Dolphin.