Group 6 Metals reports 'major financial turnaround' for Dolphin Tungsten Mine

Group 6 Metals has reported a major financial turnaround at its Dolphin Tungsten Mine, with sharply higher revenue and cash flow as the King Island operation moves into underground mining.

The company reported revenue of $129 million for the year to June 30, up from $21.2 million, and a statutory net profit of $148.2 million, compared with a $32.1 million loss a year earlier.

The headline profit includes significant non-cash and accounting gains, including a $74.6 million reversal of an earlier impairment of the Dolphin mine, a $6.1 million gain on warrant liabilities and a $12.2 million income tax benefit.

The underlying cash result also improved substantially, with $55.7 million generated from operating activities and cash holdings rising from $7.6 million to $49.3 million.

Net assets increased from a $5.1 million deficit to $155.1 million, while total borrowings fell from $26.3 million to $21.2 million. 

Operationally, Dolphin processed 272,421 tonnes of ore during the year at an average feed grade of 0.57 per cent tungsten trioxide, producing 88,911 metric tonne units and selling 92,964 MTU. 

The current open-cut mining sequence has finished, with the mine entering 2026-27 with about 295,000 tonnes of stockpiled ore averaging 0.26 per cent tungsten trioxide.

Underground contractor HMR Drilling began work at the end of June. G6M expects access to higher-grade underground ore to improve feed grades, production and operating margins as development progresses. 

The move underground also brings additional risks. The annual report says delays in development could affect ore supply and production targets, while ground conditions, water ingress and the return to historic underground workings remain operational considerations.

Plant reliability and King Island's isolation are also identified as risks, with G6M noting equipment failures could cause unplanned shutdowns and delays bringing replacement parts to the island could extend outages. The mine also relies on third-party shipping and aviation for workers, equipment, consumables and product transport. 

Despite its stronger cash position, G6M also lists financing as an ongoing risk, saying additional funding could be required during 2026-27 if mining, processing and sales targets are not achieved. The company says several quarters of positive cash flow and its cash reserves reduce that risk. 

The Tasmanian Government remains both a lender and a substantial shareholder in Group 6 Metals.

As part of the earlier recapitalisation, the State converted $10 million in loan principal and about $491,000 in accrued interest into G6M shares. The annual report separately records a remaining State Government loan with a carrying value of about $6.45 million at June 30, carrying an effective interest rate of 12 per cent.

When G6M returned to ASX trading on July 30, Resources Minister Felix Ellis said the State's equity investment was worth “many, many millions more”, while the Tasmanian Liberals valued the holding at more than $70 million at the time. 

That increase was an unrealised gain in the market value of the shares, rather than money returned to the State, with the eventual result depending on the price at which the shares are sold.

The scale of the statutory profit also reflects a reassessment of Dolphin's value. G6M had recorded a $105.5 million impairment against the mine in 2023-24, but this year reversed $74.6 million of that write-down after citing stronger tungsten prices, improved plant performance and higher actual and forecast cash flows.

The company now estimates Dolphin's recoverable value at $561 million. Its independent auditor, SW Audit, identified the impairment reversal as a key audit matter because of its size and the judgement involved in forecasts for production, costs and tungsten prices.

The auditor nevertheless issued an unmodified opinion, finding the accounts gave a true and fair view of G6M's financial position and performance.

The annual report also records about $1.9 million in transactions with businesses associated with director Dale Elphinstone, mainly equipment leasing, parts, services and equipment purchases. G6M said the transactions were on arm's-length commercial terms and the transactions requiring ASX approval were approved by shareholders.

Looking ahead, G6M said it would continue underground development, plant improvements, ore-sorting work and exploration at Dolphin, Bold Head and other King Island targets during the year ahead. Group 6 Metals will hold its 2026 Annual General Meeting virtually at noon AEDT on Tuesday, November 17, using the Computershare Virtual Meeting Platform.