King Island Scheelite unveils 18% increase to tungsten resources at Dolphin

Advanced tungsten explorer King Island Scheelite (ASX: KIS) has unveiled an 18% increase to tungsten resources at its wholly-owned Dolphin project on King Island near Tasmania.

Combined inferred and indicated resources for the project now total 11.36 million tonnes at 0.90% tungsten.

Within that resource is an estimate for the Bold Head satellite deposit of 1.76Mt at 0.91% tungsten.

King Island executive chairman Johann Jacobs said the increase was an “exceptional” result for the company, with the larger resources potentially boosting the project’s mine life.

“This positive result builds on our recently released feasibility study and revised mineral reserve estimate and forms a significant part of our road map to recommencing production at Dolphin – targeted for 2021,” he added.

Bold Head satellite deposit

Bold Head was previously mined between 1974 and 1986 where it produced 1.1Mt at 0.71% tungsten before it was closed due to languishing prices at the time.

Ore from Bold Head was treated at the Grassy scheelite concentration plant about 3km to the south of the deposit.

The plant also processed ore from the larger Dolphin deposit.

Dolphin tungsten project

According to King Island, Dolphin hosts one of the world’s highest-grade tungsten deposits with low estimated operating costs and capital expenditure compared to its peers.

The project hosts an open cut reserve of 3Mt at 0.73% tungsten and historically produced 10Mt at 0.67% tungsten.

An initial evaluation of the project indicates an eight-year underground mine operation could be developed once open cut reserves have been depleted.

The updated feasibility study released in June revealed the project had a capital expenditure of $65 million and operating costs of $129 per metric tonne unit of tungsten produced.

Annual production is forecast at 215,000mtu of tungsten for the first eight years.

With production targeted for 2021, King Island has in place an extendable mining lease that is valid till 2029 in addition to all environmental approvals.

Additionally, Wolfram Bergbau and Hutten AG has agreed to purchase 140,000mtu of tungsten over four years – equating to 20% of proposed annual production.

The feasibility study anticipates King Island will receive US$280/mtu of tungsten sold from the mine.

As King Island advances Dolphin to production, it expects to finalised offtake and financing arrangements in the coming months.

Tungsten market

China consumes about 60% of all tungsten produced, while accounting for 83% of the world’s production.

With US and European end-users looking to reduce their reliance on Chinese tungsten, King Island’s Dolphin project represents an attractive alternative, with high-grade deposits above 0.50% tungsten believed rare.

The market was valued at US$3.46 billion in 2017 and this is expected to expand rapidly to US$6.71 billion by 2026.

At midday, shares in King Island were steady at $0.078.