The King Island Scheelite Limited (ASX: KIS) share price is roaring 58% higher this morning at 24 cents after the company announced a $10 million loan funding package.
King Island Scheelite's predominant focus is the redevelopment of the company's 100% owned Dolphin Tungsten mine located on King Island, Tasmania.
Tasmanian government puts up $10 million, King Island Scheelite share price leaps
In support of the Dolphin Tungsten Project, King Island Scheelite has secured a $10 million loan funding package over a 10-year period from the Tasmanian government.
Loan repayments will be on a monthly basis starting off as interest only. On the first day of the month following the second anniversary of the initial loan drawdown, fixed principal plus interest will be paid.
The loan terms also stipulate that all other capital raising necessary to deliver the project must be successful.
According the Australian Financial Review, the $10 million loan is part of $85 million in funding necessary to reopen the project. An additional $15 million will be sought from the federal government, and the remaining funds raised from the equity and debt markets.
During his National Press Club address earlier this week, Prime Minister Scott Morrison mentioned that the processing of critical minerals will fall under the federal government's $1.5 billion manufacturing strategy.
What is tungsten used for and why is it valuable?
Tungsten is the second-hardest mineral known to man following diamonds and has a variety of commercial, industrial and military applications. It's widely used in the construction, mining and transport industries, amongst others.
It is the heaviest engineering material and has the highest melting point of all metals. Approximately 83% of the world's tungsten supply currently comes from China.
Due to economic importance, supply risk (considering the dominance of China in the market) and its inability to be substituted, Australia ranks tungsten as a 'critical mineral'.
The British Geological Surveys, US Department of Defence, European Commission, Japan and Russia also rank tungsten the same.
Comments from the King Island Scheelite chair
Responding to China's current stronghold in the in industry, executive chair Johann Jacobs said:
Tungsten is a strategically significant metal and a key input to industries that are vital to national security. We note that several Western governments have recently identified a crisis in the supply chain for critical minerals, particularly tungsten, for which North America currently has no mines in production.
Regarding future financing activities, he further stated that:
We will continue to engage closely with agencies across all levels of Government, both State and Federal, as the Company gathers the financial and technical resources that will underpin the success of the Dolphin Project.
The King Island Scheelite share price has risen 55% in the past month.
