Shares in tungsten miner King Island Scheelite Ltd (ASX: KIS) are gaining ground today and are now trading 21% higher at 17 cents apiece. The King Island Scheelite share price made the jump early on in the session, following a company announcement on the Dolphin Tungsten Mine.
For decades the mine produced scheelite, a form of tungsten, until it was mothballed in 1992 when the price of the rare metal began to crash.
At its peak, the mine employed more than 500 people and produced a tidy income for the economy of King Island, off Tasmania, where the project is located.
Now, following shareholder approval, King Island Scheelite is set to redevelop the project and subsequently restart mining and processing of tungsten at the site.
Here are the details seemingly driving the King Island Scheelite share price today.
What did King Island Scheelite announce?
In addition to confirming the redevelopment of the mine, the company also advised it is "committed to long lead-time items by paying deposits, ensuring that the project will be completed as rapidly as possible".
It is set to commence the work program in the coming weeks. Earthworks are due to begin in December after the company ordered a heavy-duty Caterpillar D8 bulldozer.
According to King Island, the Dolphin project contains a JORC (2012) compliant indicated resource reserve of 4.43 million tonnes (Mt) at a grade of 0.92% tungsten oxide (WO3).
It also contains "probable mineral resources" and reserves of 9.6Mt at a grade of 0.90% WO3, plus another inferred resource of 1.76Mt @0.91% WO3.
The company also reckons it can produce average annual production of 400,000 tonnes of ore per annum, yielding 200,000 metric tonne units (mtu) of tungsten – with 1 mtu equal to 10kg.
It also has a mining lease on the site that is valid until 2029, according to the company's website.
What is tungsten, you might ask?
Tungsten is a rare metal that is found naturally on Earth. It is known as boasting the highest melting point of all known metals at 3,422ºC. It also has the highest tensile strength of any metal.
To put it short, tungsten is super tough and almost impossible to melt, making it perfect for high-stress environments.
For instance, given its durability, density, and hardness, it is often used in military applications – such as projectiles that need to pierce tank or aircraft armour.
However, it is also extensively used in applications like electrodes and heating elements, as well as in filaments for lights and cathodes due to its properties.
As of 10 November 2021, the Europe Tungsten APT 88.5% in Warehouse Rotterdam index, was up at US$315/tonne, having gained 43% in a single year.
What is management saying?
Speaking on the announcement fuelling the King Island Scheelite share price, executive chair Johann Jacobs said:
As we move into the next stage of the company's growth with the commencement of the redevelopment of the Dolphin Tungsten Mine, on behalf of all the board and management I wish to thank all of those who have assisted the company in reaching this pivotal moment. The company has worked tirelessly to progress to this stage, at which it is fully funded to commence its future trajectory to becoming a significant tungsten producer, and for all of those who have supported us on this journey, we thank you.
The Dolphin Tungsten Mine is host to the highest grade tungsten deposit of significant size in the Western world, and we look forward to the recommencement of mining from this fantastic asset.
The King Island Scheelite share price has gained 64% over the past 12 months.
It has also rallied 72% this year to date, well ahead of the S&P/ASX 200 Index (ASX: XJO)'s return of almost 15% in the last year.