Mine Strife: Local creditors unpaid as G6m seeks finance

Article from The King Island Courier

Local King Island businesses forced to carry miner Group 6 Metals as the company fights for its financial survival have emphasised their support for the mine restart.

The company says it is undertaking sensitive negotiations to ensure the long-term viability of the company.

“This is a complex process, and we cannot disclose specific details due to our continuous disclosure obligations under the ASX Listing Rules,” managing director and CEO Keith Mc Knight said.

“We are working diligently with our stakeholders, including creditors and suppliers, to find solutions,” he said.

“We are committed to emerging from this restructure as a stronger company and will provide a comprehensive update to the market as soon as possible.”

Unpaid or partially paid bills with hardship payment terms have become commonplace for those doing business with G6M at the local level since the beginning of the year.

Local suppliers have increasingly contacted the Courier regarding their outstanding accounts.

All supliers have emphasised their support for G6M and believe that the mine restart has the potential for island growth and prosperity.

However as small businesses they say that they cannot carry a mine that works in the millions of dollars and wait for it to be profitable. This week a large supplier said they were intending to withdraw services unless missed progress payments were remitted.

A payment was made to the company. Another smaller supplier confirmed that they have withdrawn credit and will not supply until their overdue account is paid.

The supplier, as with others with complaints do not want to be named for fear of future repercussions. One creditor said that the company rather than addressing the issues uses phone tag team when the call is chasing money and “no longer returns phone calls”.

“I believe in the mine, what it can mean to the island, but I cannot carry them,” the creditor said.

“Besides being paid, I am most disappointed that not one single senior or management person has contacted me to discuss the accounts and it’s like if we don’t get involved it will go away, I am aware that local tradies are withdrawing their services.”

In November 2023 Group 6 Metals announced a temporary trading halt that was lifted two days later when the company announced to the Australian Stock Exchange that four of its major shareholders committed $8 million in bridge finance funding to progress ramp-up activities at the Dolphin Tungsten Mine in Grassy.

The bridge finance supported cashflow requirements pending receipt of the anticipated $14.3m cash refund under the Research and Development Tax Incentive Scheme.

The company reported lower-than-expected plant use through the September quarter which impacted average monthly production.

The cash injections in January 2024 “boosted efficiency and productivity and unlocked vital resources for innovation and technological advancements.”

It also cleared some overdue or unpaid accounts. Some bigger suppliers renegotiated terms and/or introduced progress payment schedules to ease cash flow pressures and support the company.