Doubts over mines future

FOR embattled King Island miner Group 6 Metals Limited, the latest quarterly report provides little comfort. 

The September quarterly report released to ASX showed little positive movement from the previous quarterly report and previous market announcements around recapitilisation. 

The company’s Annual General Meeting is scheduled for Friday, November 29.

The Dolphin Tungsten Mine owner resumed production in 2023 but reports of ongoing cash flow issues and limited investor interest in its recent attempt to raise equity have raised doubts over its future. 

The company engaged two brokers during the September quarter to conduct the equity raise, though initial feedback from potential investors high lighted concerns with market conditions and the company’s capital structure. 

King Island Courier “However, initial feedback from potential investors was that market conditions, together with the capital structure of the company, made the offer unattractive,” G6M said in its September quarter report released on October 31.

G6M engaged Moelis Australia in September for a strategic review aimed at optimising the capital structure and exploring partnerships with strategic investors.

Following the quarter’s close, the company’s senior lenders began negotiations for a recapitalisation plan, including a potential debt restructure. 

The company reports that it anticipates reaching an agreement within 14 days. 

Locally it is reported that payment schedule dates have been missed or delayed as occurred earlier this year. 

The company has not responded to requests for comment to confirm or dismiss as rumour that the crane has been removed from site and is clamped at Grassy Harbour. 

Group 6 ended the quarter with about $600,000 in cash and access to $7.6 million in undrawn debt facilities.

However, the quarter’s net operating cash flow was negative $6.2 million due to production, staffing, and other expenses, which exceeded customer receipts of around $5 million. 

Trading of Group 6’s shares on the ASX has been halted since September 27, pending an outcome on the recapitalisation effort, which the company describes as essential for addressing its financial difficulties. 

The G6M ASX report remains cautiously optimistic about continued operations, contingent on meeting production targets and securing additional funding currently under negotiation. 

While production in the recent quarter fell short of forecasts, Group 6 Metals CEO Keith McKnight expressed optimism about progress in production, cost management, and plant optimisation. 

He also dispelled local rumours that the mine was planning a complete shutdown.