King Island Retracts Dolphin Project Analysis; Stock Resumes Trade on ASX

  • May 10, 2019 AEST
  • Team Kalkine
King Island Retracts Dolphin Project Analysis; Stock Resumes Trade on ASX

King Island Scheelite Limited (ASX: KIS) is an ASX listed metals and mining company. King Island is the largest western island in the Bass Strait and hosts the Dolphin project on the south-east coast of the Island near Grassy town. The company is currently focusing on Dolphin Tungsten Project, containing a JORC 2012 compliant mineral reserves of 3.14 million tonnes at a grade of 0.73% WO3 (at 0.2% cut-off).

Retraction of Dolphin Analysis

On 10th May 2019, the company released a statement with respect to the project economics analysis of Dolphin Tungsten and its timeline, details of which were announced earlier on 7th May 2019.

The economic analysis report on Dolphin Projects included several forward-looking statements:

  • Reporting of the potential net present value (NPV), capital payback period and internal rate of return (IRR).
  • Potential benefits from the successful redevelopment of the Project.

The company has fully retracted the Dolphin Analysis, which was released earlier on ASX’s request. According to ASX, the reported information needs additional disclosure of the company’s assumptions, with more supporting detail.

The company affirms that all this data is readily available and will be summarised in a format according to the ASX compliance and release it as soon as possible.

Trading Halt

On 8th May 2019, the company announced that it had requested ASX for the halt in trading of its securities (shares and options) due to a pending release of the statement. The ASX had requested the company to fully retract its previous announcement on Dolphin project due to the absence of some additional important disclosures.

The trading halt was to be lifted on the release of the pending statement to the market or on the commencement of trading session on 10th May 2019. Now, the halt has been lifted as the company released the statement and the normal trading of securities has been resumed.

Analysis of the Dolphin project

On the economic analysis front, the net present value (NPV) on the pre-tax and gearing basis at discount rate of 8% came in at $153 million, with the highest value of $205 million and lowest being $98 million. Pre-tax internal rate of return (IRR) came in at a base rate of 46%, with 56% and 34% being the highest and the lowest rates. Capital payback period was stated to be 2.75 years (Base) with 2.5 years and 3 years defining the range.

The total operating cost was $127 per mtu of WO3 produced, and the capital cost determined by independent consultants was reported at $36.00 per metric tonne unit of WO3 produced. Both of the figures are calculated for the average life of mine.

The detailed design, construction, procurement and commissioning could be achieved within 12 months after financial close according to the modular design methodology and relatively advanced engineering studies.

The company is confident that if financial close can be achieved in the second half of 2019, it would be able to achieve its first product shipment in the last quarter of 2020 or first quarter of 2021.

On 8th April 2019, the company announced an off-take agreement Wolfram Bergbau.

Stock Performance

The company has a market capitalisation of $22.27 million. The 52-week high and low of the stock is $0.135 and $0.037, respectively. The stock touched an intraday low of $0.08 and currently trading at $0.081 at market close on 10th May 2019. In the last one year, the stock has delivered a good return of 79.89%, and the YTD return stands at 13.33%.


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