King Island Scheelite Ltd (ASX:KIS) has revealed positive results from its updated feasibility study and reserve estimate for the Dolphin Tungsten Project on the southeast coast of King Island in Bass Strait.
The study outlines that the Dolphin open‐cut project is planned to mine and process about 400,000 tonnes per annum of ore for eight years to produce about 3,500 tonnes of tungsten trioxide concentrate per year.
This concentrate will be selling into a market with strong growing demand and constrained supply.
2019 feasibility study summary of key outcomes
King Island Scheelite chairman Johann Jacobs said: “Having recently secured the first of a number of multi‐year offtake agreements, together with the flexibility in the operating site and supportive local community, we now look forward to achieving frequent operational milestones as we proceed to tungsten production, anticipated in 2021.
“The King Island Scheelite team has actively progressed and de‐risked the 100% owned Dolphin tungsten project, both technically and commercially.
“As part of this process, we commissioned independent consultants to provide inputs into a financial model to prepare scenario analysis to assist in interpreting the net present value ranges, potential returns and expected payback period, associated with the Dolphin Open‐cut Project.
“The impressive indicative economics reiterate that we have chosen to develop the right project with the right commodity in the right place and time.”
The Dolphin processing plant has been substantially modified since the 2015 reserve estimation.
King Island Scheelite has carried out further site infrastructure engineering works, resulting in significant capital and operating cost savings from the previous estimation.
Processing will now be conducted through, primarily, a gravity circuit followed by a small flotation circuit to which some of the gravity tails will report.
READ: King Island Scheelite secures 4-year tungsten offtake, shares up 30%
The company recently signed an offtake agreement with a world leading European tungsten powder provider Wolfram Bergbau und Hutten AG for 140,000 tonnes of tungsten oxide over four years.
King Island Scheelite is also in negotiations with various additional offtake partners.
The company is currently exploring possible joint venture partnerships as well as being in discussions with suppliers and financial institutions for project funding.
On the basis of the relatively advanced engineering studies and the proposed methodology based on a modular design, the engineering consultants have determined that detailed design, procurement, construction and commissioning could be achieved within a fifteen‐month period after financial close.
Given the above, the company is confident that once financial close has been reached, commissioning of the mine and processing plant can be achieved within fifteen months.
Thus, if financial close can be achieved in the second half of 2019 then first shipment of product can be achieved in the first quarter of 2021.