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The stock of this tungsten miner shines on ASX. This is why
The share price of Tungsten Miner King Island Scheelite Ltd (ASX: KIS) rose today and is currently up 21% at a price of 17 cents per share. After the company issued an announcement about Dolphin Tungsten Mine, Jindao Scheelite's share price rose early in the session.
For decades, the mine produced scheelite, a type of tungsten, which was not sealed until 1992 when the price of rare metals began to plummet.
At its peak, the mine employed more than 500 employees and brought considerable income to the economy of Kings Island near Tasmania, where the project is located.
Now, with shareholder approval, King Island Scheelite will redevelop the project and then restart the mining and processing of tungsten at the site.
The following are the details that seem to drive the share price of King Island Scheelite today.
In addition to confirming the reconstruction of the mine, the company also expressed its "commitment to extend the project lead time by paying a deposit to ensure that the project is completed as soon as possible."
It will begin work planning in the next few weeks. After the company ordered a heavy-duty Caterpillar D8 bulldozer, the earthwork will begin in December.
According to King Island, the Dolphin project contains an indicated resource reserve of 4.43 million tons (Mt) in compliance with JORC (2012), and a grade of tungsten oxide (WO3) of 0.92%.
It also contains "possible mineral resources" and reserves of 9.6Mt with a grade of 0.90% WO3, in addition to inferred resources of 1.76Mt @0.91% WO3.
The company also estimates that its annual average ore output can reach 400,000 tons, and it can produce 200,000 metric tons (mtu) of tungsten-1 mtu equals 10 kilograms.
According to the company's website, it has also signed a mining lease on the website that is valid until 2029.
Tungsten is a rare metal naturally occurring on the earth. It is known for the highest melting point of all known metals at 3,422ºC. It also has the highest tensile strength of any metal.
In short, tungsten is very tough and almost impossible to melt, so it is very suitable for high pressure environments.
For example, due to its durability, density and hardness, it is often used in military applications-such as projectiles that need to penetrate the armor of tanks or aircraft.
However, due to its characteristics, it is also widely used in applications such as electrodes and heating elements, as well as filaments for lamps and cathodes.
As of November 10, 2021, the European Tungsten APT 88.5% in the Rotterdam Warehouse Index has risen to US$315/ton, an increase of 43% in a single year.
When announcing the increase in the share price of King Island Scheelite, Executive Chairman Johann Jacobs said:
With the start of the reconstruction of the Dolphin Tungsten Mine, we have entered the next stage of the company's development. On behalf of the board of directors and management, I would like to thank all those who helped the company through this critical moment. The company has worked tirelessly to advance to this stage. At this stage, it has obtained sufficient funds to begin its future trajectory as an important tungsten producer. To all those who support us in this process, we thank you.
Dolphin Tungsten Mine has the largest and highest grade tungsten deposit in the Western world, and we look forward to restarting mining from this wonderful asset.
In the past 12 months, Jindao Scheelite's share price has risen 64%.
So far this year, it has also risen 72%, far ahead of the S&P/ASX 200 Index (ASX: XJO) last year's return of nearly 15%.
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