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The Viva Leisure Ltd (ASX: VVA) share price has been going gangbusters this morning following its Pinnacle clubs acquisition, and membership update.

Shares in the health club operator raced up 10.1% to an intraday high of $3.05 in mid-morning trade before retreating slightly to $3 at the time of writing.

Acquisition and membership update

The Viva Leisure share price is among the top performers on the ASX market today after the company reported two positive updates.

Firstly, the company advised it has completed the acquisition of 6 Pinnacle health clubs earlier than expected. With all conditions relating to the sale satisfactorily met, the formal takeover was brought forward from its original 10 March timeframe.

Viva Leisure said the early acquisition will enable it to focus on bringing the new clubs in line with its hub and spoke strategy. The company seeks to penetrate the Melbourne suburban-metro market with its latest offering. The group currently operates a total of 101 health clubs across Australia’s eastern seaboard.

In addition, Viva Leisure reported that its membership base has grown to 115,000 members in the past 3 months. The record milestone reflects the growing trend of people leading more active and healthy lifestyles. The company’s membership base stood at 96,404 members in the prior corresponding period.

Viva Leisure will release its half-year results for the 2021 financial year on 25 February.

What did management say?

Commenting on the early acquisition, Viva Leisure CEO and managing director Harry Konstantinou, said:

We are pleased to have completed the acquisition of the Pinnacle clubs, a high-quality and complementary business to the Viva Brands. The transaction will significantly expand our reach and penetration throughout the Melbourne suburban-metro market.

We look forward to welcoming our new team members, integrating the operations, and serving our new and expanded Victorian membership base.

About the Viva Leisure share price

The Viva Leisure share price is up 4% over the past 12 months. Its shares plunged in March last year to a low of 66 cents due to COVID-19 government restrictions. However, the company’s shares have since rebounded.

Based on the current share price, Viva Leisure commands a market capitalisation of roughly $248 million.

More reading

• Viva (ASX:VVA) share price moves on acquisition news

Motley Fool contributor Aaron Teboneras 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 Bruce Jackson.

The post Why the Viva Leisure (ASX:VVA) share price has stormed 10% higher appeared first on The Motley Fool Australia.

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There are some ASX dividend shares out there that are paying large dividends and have consistent payouts.

Nick Scali Limited (ASX: NCK)

At the current Nick Scali share price it now has a grossed-up dividend yield of 8.4%. The company has grown its dividend every year since 2013.

The furniture business just reported its FY21 half-year result.

The company said that its sales revenue went up 24.4% to $171.1 million. The gross profit margin increased by 180 basis points to 64%.

Nick Scali’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 94.2% to $60.2 million and underlying earnings before interest and tax (EBIT) went up by 100.3% to $57.7 million. The underlying EBIT margin increased by 1,270 basis points to 33.6%.

The ASX dividend share reported that its operating cash flow before interest and tax rose by 222.3% to $53.5 million and underlying net profit after tax (NPAT) grew by 99.5% to $40.5 million.

The company said that sales order growth for January 2021 was 47%, representing the largest month of written sales orders in the company’s history. January is traditionally the company’s largest trading month and the sales order book at the end of January was at an all time high, which was a further increase on December 2020.

For the half-year result, the Nick Scali board decided to increase the interim dividend from 25 cents per share to 40 cents per share.  

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi is another ASX dividend share that is experiencing elevated levels of demand at its stores (and online) during this period.

At the current JB Hi-Fi share price it has a grossed-up dividend yield of 5.2%.

A couple of weeks ago the ASX dividend share released an update for its expected FY21 half-year result.

It’s expecting to report that sales grew by 23.7% to $4.94 billion. It also expects to show that for the six-month period the EBIT went up by 75.9% to $462.7 million and net profit after tax (NPAT) rose by 86.2% to $317.7 million.

JB Hi-Fi said that there has been continued elevated customer demand for consumer electronics and home appliance products. This, combined with “exceptional” growth in online sales and a Black Friday promotional period, more than offset the impact of the government mandated temporary store closures during the half. Online sales were up 161.7% to $678.8 million, which represented 13.7% of total sales.

JB Hi Fi said that its disciplined cost control combined with strong sales growth drove significant operating leverage.

Brickworks Limited (ASX: BKW)

Brickworks has one of the longest dividend records on the ASX in terms of consistency. It hasn’t cut its dividend for over 40 years.  

This ASX dividend share currently has a grossed-up dividend yield of 4.3%.

Its dividend is supported by two assets.

Brickworks has had an investment in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares for quite a few decades. Soul Patts is an investment conglomerate with a diversified portfolio of industries like telecommunications, resources and pharmacies. Brickworks owns around 40% of the company. 

Soul Patts has been steadily growing its dividend to shareholders, like Brickworks, for two decades. The investment conglomerate provides a steady stream of earnings and dividends during times when Brickworks’ building products earnings go through cyclical times.

Brickworks also owns a 50% stake in an industrial property trust. This trust is steadily generating higher rental profit each year as organic rental increases occur and more properties are finished. The next project scheduled for completion is a huge warehouse for Amazon in Sydney.  

More reading

• 2 ASX dividend shares offering big yields today
• Why the Nick Scali (ASX:NCK) share price is lifting today
• 2 ASX 200 shares to buy for dividends
• 3 ASX dividend shares with yields above 5%
• Here’s why dividend investors should be interested in Brickworks (ASX:BKW) shares

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is under pressure and dropping lower. At the time of writing, the benchmark index is down 0.65% to 6,780.4 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping lower:

AGL Energy Limited (ASX: AGL)

The AGL share price has fallen 5.5% to $11.22. The catalyst for this decline was the release of an update on asset impairments this morning. According to the update, the energy company plans to recognise charges of $2,686 million (post-tax) in its first half results for FY 2021. Approximately $1,920 million of these charges relate to provisions for onerous contracts for legacy wind farm offtake agreements. Sustained weakness in wholesale electricity prices has also impacted the company.

Bubs Australia Ltd (ASX: BUB)

The Bubs share price has dropped 3% to 65 cents. Investors continue to sell the infant formula company’s shares after analysts at Citi reiterated their sell rating and 51 cents price target last week. The broker was disappointed with its second quarter update and doesn’t appear to believe things will improve in the near term. Citi’s price target implies potential downside of almost 22%.

BWP Trust (ASX: BWP)

The BWP share price is down 3.5% to $4.07. This appears to have been driven by a broker note out of UBS this morning. According to the note, the Bunnings landlord’s first half results were a touch softer than it was expecting. In light of this and its premium valuation, it sees no reason to change its sell rating and $3.86 price target any time soon.

Origin Energy Ltd (ASX: ORG)

The Origin share price is down over 6.5% to $4.63. Investors have been selling the energy company’s shares after it downgraded its Energy Markets guidance for FY 2021. Management advised that this was driven by the continued impacts of COVID-19 on energy demand and milder weather. Origin now expects its Energy Markets underlying EBITDA to be in the range of $1,000 million to $1,140 million. This compares to its previous guidance of $1,150 million to $1,300 million.

More reading

• ASX 200 down 0.7%: AGL & Origin sink lower, Qantas pushes higher
• Why the AGL Energy (ASX:AGL) share price is sinking lower
• ASX 200 up 0.9%, Afterpay drops, CBA rises
• Here’s why the BWP (ASX:BWP) share price is heading higher today
• Got cash to invest? Here are 3 ASX shares to buy

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BUBS AUST FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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With the Reserve Bank of Australia (RBA) indicating interest rates will stay at near-zero level until 2024 this week, the importance of ASX dividend shares has rarely been more obvious.

The RBA’s announcement strongly signals that savings accounts, term deposits, and government bonds will be offered next to nothing in real returns for the foreseeable future.

That means if you’re looking for something to give you a decent return on your money every year, ASX dividend shares are one of the only options left. Of course, some dividend shares offer yields even greater than this, especially if you include the beautiful benefits of franking.

So here are 2 ASX dividend shares in this vein to consider today.

2 ASX dividend shares offering decent yields today

Brickworks Ltd (ASX: BKW)

Brickworks is an ASX company that, well, makes bricks (as well as other construction materials). It’s one of the oldest companies on the ASX, having been founded way back in 1934.

Construction materials is normally a highly cyclical business. Everyone wants to build buildings when the economy is going well, and no one does when the economy is struggling. Fortunately, Brickworks seems to have figured out how to nullify this inherent cyclicality in its business.

It has built out a sturdy earnings base from leasing properties and land that it owns for various purposes. This gives it a source of revenue that is far more reliable. Brickworks also owns a large stake of Washington Soul Pattinson & Co Ltd (ASX: SOL). Washington Soul Pattinson & Co have one of the most stable track records of delivering dividend growth.

As such, Brickworks has managed to hold steady or increase its own dividend payments every year since 1976. On current pricing, this dividend is worth a yield of 3% and comes fully franked as well.

Altium Limited (ASX: ALU)

Altium has built itself a name of being one of the ASX’s most sought after growth shares of the past few years (although its share price growth has stalled of late). It’s even a member of the WAAAX club.

This company operates a Software-as-a-Service (SaaS) business model by selling its Altium Design software on a subscription basis. Altium Design helps electrical engineers design printed circuit boards, which are unique and essential components of almost every electronic device.

What many investors don’t realise is that Altium also pays a substantial dividend. That dividend is worth 1.25% on current prices. That might not sound like much, but consider this: in 2016, Altium paid investors dividends worth 20 cents a share.

Last year, Altium paid out 39 cents per share in dividends. If Altium’s pay out continues to more or less double every 4 years, it will prove to be a very substantial income investment very quickly.

More reading

• 3 ASX dividend shares with large yields and consistent payouts
• 3 compelling ASX tech shares to buy
• Got money to invest for dividends? Here are 3 ASX shares
• 2 ASX dividend shares for steady income in retirement
• 2 fantastic ASX shares to buy this month

Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Altium. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Altium. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post 2 ASX dividend shares offering big yields today appeared first on The Motley Fool Australia.

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With the Reserve Bank of Australia (RBA) indicating interest rates will stay at near-zero level until 2024 this week, the importance of ASX dividend shares has rarely been more obvious.

The RBA’s announcement strongly signals that savings accounts, term deposits, and government bonds will be offered next to nothing in real returns for the foreseeable future.

That means if you’re looking for something to give you a decent return on your money every year, ASX dividend shares are one of the only options left. Of course, some dividend shares offer yields even greater than this, especially if you include the beautiful benefits of franking.

So here are 2 ASX dividend shares in this vein to consider today.

2 ASX dividend shares offering decent yields today

Brickworks Ltd (ASX: BKW)

Brickworks is an ASX company that, well, makes bricks (as well as other construction materials). It’s one of the oldest companies on the ASX, having been founded way back in 1934.

Construction materials is normally a highly cyclical business. Everyone wants to build buildings when the economy is going well, and no one does when the economy is struggling. Fortunately, Brickworks seems to have figured out how to nullify this inherent cyclicality in its business.

It has built out a sturdy earnings base from leasing properties and land that it owns for various purposes. This gives it a source of revenue that is far more reliable. Brickworks also owns a large stake of Washington Soul Pattinson & Co Ltd (ASX: SOL). Washington Soul Pattinson & Co have one of the most stable track records of delivering dividend growth.

As such, Brickworks has managed to hold steady or increase its own dividend payments every year since 1976. On current pricing, this dividend is worth a yield of 3% and comes fully franked as well.

Altium Limited (ASX: ALU)

Altium has built itself a name of being one of the ASX’s most sought after growth shares of the past few years (although its share price growth has stalled of late). It’s even a member of the WAAAX club.

This company operates a Software-as-a-Service (SaaS) business model by selling its Altium Design software on a subscription basis. Altium Design helps electrical engineers design printed circuit boards, which are unique and essential components of almost every electronic device.

What many investors don’t realise is that Altium also pays a substantial dividend. That dividend is worth 1.25% on current prices. That might not sound like much, but consider this: in 2016, Altium paid investors dividends worth 20 cents a share.

Last year, Altium paid out 39 cents per share in dividends. If Altium’s pay out continues to more or less double every 4 years, it will prove to be a very substantial income investment very quickly.

More reading

• 3 compelling ASX tech shares to buy
• Got money to invest for dividends? Here are 3 ASX shares
• 2 ASX dividend shares for steady income in retirement
• 2 fantastic ASX shares to buy this month
• 2 ASX 200 shares to buy for dividends

Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Altium. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Altium. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) is on course to end its winning run. The benchmark index is currently down 0.7% to 6,779.8 points.

Here’s what is happening today:

AGL’s asset impairments

The AGL Energy Limited (ASX: AGL) share price is sinking lower following the release of an update on asset impairments. According to the release, the energy company intends to recognise charges of $2,686 million (post-tax) in its financial statements for the first half of FY 2021. A large portion of these charges come from $1,920 million in provisions for onerous contracts relating primarily to legacy wind farm offtake agreements.

Origin downgrades guidance

It isn’t just AGL sinking lower, rival Origin Energy Ltd (ASX: ORG) has come under pressure today following the release of its own update. Origin’s update reveals that a number of factors have materially affected its Energy Markets’ near-term outlook. This includes the continued impacts of COVID-19 on energy demand and milder weather. In light of this, it has downgraded its Energy Markets underlying EBITDA guidance for FY 2021. It is now expected to be in the range of $1,000 million to $1,140 million compared to $1,150 million to $1,300 million.

Qantas higher on Alliance Aviation deal

The Qantas Airways Limited (ASX: QAN) share price is pushing higher today after announcing a deal with Alliance Aviation Services Ltd (ASX: AQZ). That deal will see Qantas lease up to 14 E190 aircraft with at least one crew member from Alliance. The agreement is initially for three aircraft and will be based in Adelaide and Darwin. It will be servicing the Adelaide–Alice Springs, Darwin–Alice Springs, and Darwin–Adelaide routes.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Thursday has been the Pro Medicus Limited (ASX: PME) share price with a 3.5% gain. This is despite there being no news out of the health imaging company. The worst performer has been the Origin share price with a 7% decline following its guidance downgrade.

More reading

• Why Alliance Aviation, REA Group, SEEK, & Vulcan shares are charging higher
• 4 most trusted ASX companies (and the 4 least trusted)
• Alliance Aviation (ASX:AQZ) share price surges 13% higher on Qantas (ASX:QAN) deal
• Why the AGL Energy (ASX:AGL) share price is sinking lower
• Commonwealth Bank (ASX:CBA) tipped to increase dividend by 50% next week

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Centuria Office REIT (ASX: COF) share price is gaining this morning, up 2.6% at the time of writing.

This comes after the real estate investment trust (REIT) released its first half of the 2021 Financial Year (HY21) results this morning, including an 8.5% dividend yield (based on yesterday’s closing price).

What did Centuria Office REIT (COF) report for HY21?

In an ASX release this morning, COF highlighted that its office assets have benefited from their locations in Australia’s better performing office markets. The Trust said that it has no office assets in Sydney’s CBD. This is due to Sydney’s CBD having the weakest domestic tenant demand.

Noting that the coronavirus had impacted the market over the half year, COF revealed it still managed an average rental collection of 96.7%. COF reinstated its 2021 financial year Funds from Operation (FFO) guidance of 19.4 – 19.9 cents per unit.

The Trust reiterated its FY21 distribution guidance of 16.5 cents per unit. At yesterday’s closing share price, that represents a yield of 8.5%.

During the half year, the Trust secured 31 new lease transactions, covering 28,300 square metres. This is equivalent to some 9.3% of its net leasable area (NLA). More than a third of the newly leased space was with new tenants.

COF said its relatively young average building age of 16.4 years helps attract tenants via greater adaptability to the current environment, like social distancing.  Newer buildings also require less maintenance and capital expenditure.

Comments from COF

Addressing the half year results, Grant Nichols, COF Fund Manager, said:

While working from home is still topical, we understand many workers want to be back in an office environment but not endure time consuming daily commutes, which compromise their work-life balance. Equally, many businesses, especially those affected by the pandemic, are conscious of cashflow and are actively seeking more affordable rents.

These complementing themes highlight the desirability of decentralised office markets and support COF’s robust half year performance, evidenced by its significant leasing activity and continuously strong rent collection.

COF’s Weighted Average Lease Expiry (WALE) is 4.5 years. The Trust has reduced its gearing to 33.2% over the half year. It has also increased its undrawn debt capacity to $175.7 million.

Centuria Office REIT share price snapshot

The COF share price has come back strongly from the 2020 March lows, up 36%. However, it still remains depressed from pre-pandemic levels as investors worry about the pace of the return of office workers.

With this morning’s 3% gains taken on board, the Centuria Office REIT share price is down 7% in 2021.

More reading

• 3 highest yielding ASX dividend shares

Motley Fool contributor Bernd Struben 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 Bruce Jackson.

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The SRG Global Ltd (ASX: SRG) share price is lifting higher today. This comes after the company advised the ASX market that it has received two contract awards.

In mid-morning trade, the SRG Global share price is up 2% to 50 cents.

SRG Global is an Australia-based international construction, maintenance and mining services company. The group helps build skyscrapers, bridges, dams, transport infrastructures, mining, and oil and gas projects for customers worldwide. In addition, the company offers drilling solutions, civil engineering, and industrial maintenance services.

Contract awards for SRG Global

In this morning’s release, SRG Global advised it has secured two new contracts, worth $45 million in total.

The first deal, awarded by GFG Liberty OneSteel, will see SRG Global deliver engineered access solutions at the Liberty Steelworks site in Whyalla, South Australia. The agreement will run for an initial 3-year period, with an extended 2-year option.

The second deal, entered with Pit N Portal Mining Services, is for drilling support at RED 5 Limited’s Great Western gold mine in Western Australia. Under the agreement, SRG Global will provide production drill and blast services as well as the supply for explosives to uncover mineral deposits. The contract is set for an initial 12-month term.

SRG Global will start both projects immediately.

What did the managing director say?

SRG Global managing director David Macgeorge, welcomed the progress, saying:

We are very pleased to have secured these two term contracts, adding to our recurring annuity earnings.

Importantly, the GFG Liberty OneSteel contract is with a repeat customer, providing new services in addition to our existing refractory services term contract.

The Pit N Portal contract was specifically targeted as it builds upon our mining services portfolio of high-quality growth commodities whilst diversifying SRG Global’s customer base.

About the SRG Global share price

The SRG Global share price fell more than 50% in March due to COVID-19 impacts. Since then, its shares have gained more than 175%.

Based on the current share price, SRG Global has a market capitalisation of $220 million.

More reading

• Why Alliance Aviation, REA Group, SEEK, & Vulcan shares are charging higher
• King Island Scheelite (ASX:KIS) share price explodes 58% higher today
• 4 most trusted ASX companies (and the 4 least trusted)
• Report: Kia to build Apple’s electric car in Georgia in 2024
• GameStop (NYSE:GME) appoints 3 new Vice Presidents from Amazon and Chewy

Motley Fool contributor Aaron Teboneras 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 Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) looks to have run out of steam on Thursday and is on course to end its winning streak. In late morning trade, the benchmark index is down 0.5% to 6,791.4 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are charging higher:

Alliance Aviation Services Ltd (ASX: AQZ)

The Alliance Aviation share price has jumped 10% to $4.32. Investors have been buying the airline operator’s shares after it announced a material agreement with Qantas Airways Limited (ASX: QAN). That deal will see Alliance lease up to 14 E190 aircraft with at least one crew member to the airline giant. The agreement is initially for three aircraft and will be based in Adelaide and Darwin. It will be servicing the Adelaide–Alice Springs, Darwin–Alice Springs, and Darwin–Adelaide routes.

REA Group Limited (ASX: REA)

The REA Group share price is up 2.5% to $158.95. Investors appear to be buying the property listings company’s shares in anticipation of the release of a strong half year result on Friday morning. However, one broker that isn’t buying shares is Credit Suisse. This morning it retained its neutral rating and $137.70 price target on its shares. It expects some of its first quarter operating cost reductions to have reversed in the second quarter.

SEEK Limited (ASX: SEK)

The SEEK share price is up 3% to $30.46. Credit Suisse is a lot more positive on SEEK. This morning it reiterated its outperform rating and lifted its price target to $31.30. It is another broker which is tipping the job listings company to increase its full year guidance with its half year results. As I mentioned here earlier, Goldman Sachs is tipping the company to do the same.  

Vulcan Energy Resources Ltd (ASX: VUL)

The Vulcan share price has jumped 16% to $9.10. This morning the clean lithium company announced the receipt of firm commitments for its $120 million institutional placement. Vulcan is raising the funds at $6.50 per new share, which represents a 17% discount to its last close price. The cornerstone investor in the placement was Gina Rinehart’s Hancock Prospecting.

More reading

• Here’s why the Vulcan Energy (ASX:VUL) share price is storming 14% higher
• Alliance Aviation (ASX:AQZ) share price surges 13% higher on Qantas (ASX:QAN) deal
• Leading broker tips 3 ASX shares to positively surprise during earnings season
• Millionaire maker! Rent.com.au (ASX:RNT) share price now up 300% in a week
• ASX 200 jumps 1.5%, RBA doubles QE, Afterpay soars

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended REA Group Limited and SEEK Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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.

More reading

• 4 most trusted ASX companies (and the 4 least trusted)
• Report: Kia to build Apple’s electric car in Georgia in 2024
• GameStop (NYSE:GME) appoints 3 new Vice Presidents from Amazon and Chewy
• Why the Core Lithium (ASX:CXO) share price is crashing lower today
• Here’s why the Vulcan Energy (ASX:VUL) share price is storming 14% higher

Motley Fool contributor Gretchen Kennedy 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 Bruce Jackson.

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