Tasmanian Government set to own 12 per cent of King Island mine

The Tasmanian Government will own 12 per cent of the King Island scheelite mine (Group 6 Metals) is a sweeping recapitalisation if approved by shareholders.

In a detailed Notice of Meeting released to shareholders, the company outlined a proposed debt-to-equity swap and capital restructure that would see over $81 million of debt converted into shares, dramatically diluting existing shareholders but potentially securing the mine's future.

This includes conversion of $10 million State Government loan to equity.

According to the company, the recapitalisation is necessary to address unsustainable debt levels, resume full-scale operations, and allow the company to finalise its long-delayed 2024 financial statements.

“This recapitalisation offers the only viable option to preserve residual value for the Company and its stakeholders,” the statement reads.

If approved, the transaction will result in current shareholders owning just 4.6% of the company on an undiluted basis—or 3.4% on a fully diluted basis, assuming all warrants and options are exercised.

If approved, the largest new shareholders would include:

• Abex Limited (up to 28.3% ownership)
• The Ellis Entities (up to 28.9%)
• Elphinstone Group (up to 23.2%)
• State of Tasmania (approx. 12%)

If the recapitalisation is voted down, Group 6 Metals has warned it will have no choice but to enter administration, likely resulting in a total wipeout for shareholders and significant disruption to the King Island mine.

The outcome of the vote will not only determine the future of Group 6 Metals but also have ripple effects for the King Island community.

The General Meeting to vote on the plan will be held on Wednesday, 23 April 2025.