The Group 6 Metals Ltd (ASX: G6M) share price has soared in the past month.
Group 6 Metals shares have gained 24% since market close on 26 April to close at 25 cents apiece on Tuesday. In contrast, the S&P/ASX 200 Index (ASX: XJO) has fallen about 2% over the same time frame.
Let’s take a look at what has impacted the Group 6 Metals share price.
Tungsten explorer
Group 6 Metals shares had a major boost between market close on 9 May and 17 May. The company’s shares surged 50% to a peak of 27 cents before pulling back slightly.
Investors appeared to buy up Group 6 shares following the company’s appearance on the ABC’s flagship ‘Four Corners’ program.
The company is redeveloping the Dolphin Tungsten Mine on King Island, Tasmania. Tungsten is a critical rare metal that can be used in lithium-ion batteries for Electric Vehicles (EV). Electric vehicle sales doubled in 2021 from the previous year to 6.6 million units, an International Energy Agency report released yesterday states.
In an interview with the ABC, aired on 9 May, Group 6 Metals chairman Johann Jacobs revealed the company has fielded interest from the United States. The US government has reportedly approached the Australian company in the face of China’s dominance of the tungsten market. Asked how often he had met with the US Embassy, Jacobs said:
Probably three over the last 12 months, and those discussions are continuing.
At this stage, they don’t have any financial interest, but they certainly are very keen to see us progress and develop the mine because it’s another supply chain…from a friendly nation.
Construction at the Dolphin Tungsten Mine started in late January, with first concentrate sales earmarked for early 2023.
On 11 May, Group 6 addressed activity in its shares following the company’s appearance in the media. In a statement approved by the board, Group 6 Metals noted the recent share price rises.
Following the broadcast of the program, there was a notable increase in the Company’s share price and volume of shares traded on the market.
…the company reiterates its indicative timeline to achieving plant commissioning in early 2023 ahead of first shipment of tungsten concentrate in Q1 2023.
Share price snapshot
The Group 6 Metals share price has rocketed more than 74% year to date while it has climbed around 5% in the past year.
For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned more than 1% in the past year.
Group 6 Metals has a market capitalisation of about $159 million based on today’s share price.
The post Why has the Group 6 Metals share price surged 24% in a month? appeared first on The Motley Fool Australia.
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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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