King Island Scheelite chairman Johann Jacobs is looking forward to a very busy period as the company moves to re-open its high-grade tungsten mine on a small island in the Bass Strait.

The current JORC resource for the flagship Dolphin project contains 10.82 million tonnes at 0.81% tungsten (WO3), a grade that Jacobs says puts KIS up to four times ahead of its peers.

At the time of going to press, the company was further refining this resource statement and expected to release it imminently.

"Our current average grade of the open cut and underground is about 0.8% tungsten, whereas most of our competitors are mining up to about 0.2%, so we're in the order of four times the difference of our competitors," Jacobs said.

"It's a very exciting project."

It's not only the high grade that sets the company apart. It also enjoys strong community and shareholder support, and KIS has been working hard to de-risk the project, with recent optimisation studies offering significant potential cost savings.

The historic Dolphin mine operated from 1917 until 1990, when it closed due to extremely low tungsten prices.

KIS acquired the project in 2005 and became the sole owner five years later.

The company embarked on a major dewatering of the old open pit at Dolphin in 2014, which dried the pit out for the first time since 1992 and enabled resource definition drilling. Prior to this, the company had converted 1.9Mt of resources to reserves at 0.55% WO3 for 10,450 tonnes.

This reserve only took into account the open cut potential, not the underground, and demonstrated that Dolphin was viable as a standalone, four-year open cut mine.

However, the company has since completed optimisation studies that extend the open cut to a seven-year mine life.

Jacobs said the benefits of open cut mining were lower costs, higher extraction of in-situ tungsten and a more predictable mining environment.

"We still have broader plans to go underground, but we'll decide in six years whether we go deeper or go underground," Jacobs said.

The company also plans to develop the tungsten potential at its nearby historic Bold Head mine and limited tailings retreatment.

KIS identified significant further improved project metrics at Dolphin through enhanced ore sorting techniques and establishing a hybrid power supply.

Newly-appointed engineering contractor Mineral Technologies has also presented some innovative solutions to improve ore processing, reduce the processing plant's footprint and offer further cost savings.

Jacobs said that by mid-year KIS would confirm the capital cost of its processing plant, then announce its conditions to proceed to re-opening the mine.

The company is already in discussions about financing the project and establishing off-take agreements.

"We're still targeting to be in production in 2016," Jacobs said.

"From a technical perspective everything stands up.

"In 2014, we dewatered the entire pit and we didn't take that decision lightly. It cost about $A700,000 and was completed in time and within budget."

The dewatering pumped out 425 litres a second around the clock for three months, allowing confirmatory drilling of the resource.

"It was worth doing to confirm all the assumptions based on the feasibility study," Jacobs said.

"The dewatering removed the equivalent of more than 1000 Olympic-sized swimming pools of water. Most of the cost was in the diesel for pumping because of insufficient power on the island."

The company is already in discussions to address the power issue and is investigating a hybrid of wind, diesel and solar power options.

"Power is by far our single largest cost," Jacobs said.

"If we had to do everything by diesel it's a lot more expensive on the island due to transport costs, so a hybrid option would give us a significant benefit.

"It depends how our discussions continue, but if they do stall for any reason we will use our base-case as diesel, with the potential for significant improvements from that."

Jacobs said the company expected relatively low capital expenditure to start mining.

"It will be in the order of $60 to $70 million capex, which is significantly lower than some of our competitors, and starting with open cut mining gives us significantly lower operating costs," he said.

The company is trialling several new methods as it finalises its mining and processing plan.

It has already successfully tested ore sorting at a Melbourne workshop using x-ray transmission testing, a process which could reduce the volume of ore being sent to the processing plant by up to 30%.

"The sorting rejects extremely low grade or barren material and keeps the valuable material for processing," Jacobs said.

"This could present significant savings and improved tungsten recovery, but at the moment we're not looking at it as part of our base case but as an add-on."

KIS is also investigating the modular plant concept and trialling the new spiral processing equipment put forward by Mineral Technologies.

"It's going to be a very busy next three months," Jacobs said.

"Hopefully at the end of June, we'll be able to commit to the project, subject to a couple of conditions precedent, which will be the financing and off-take arrangements.

"We'll have a revised resource, confirm the capital cost of the processing plant and have a fixed price contract ready to be implemented."

Jacobs said strong community and shareholder support and the very high grade of KIS' tungsten were the three key foundations for a strong company and a very robust project.

"The community on King Island is very supportive of the mine reopening," Jacobs said.

"The local municipality, as well as the Tasmanian government, is keen on the project going ahead, and that support is a very large tick in one of the main boxes."

From an investor's perspective, Jacobs said KIS had one of the highest-grade tungsten deposits in the world and could meet a significant proportion of global tungsten requirements over a minimum of 13 years.

"The third aspect is that we have a very supportive shareholder base, the largest have been with the company a long time and are very supportive of the board's initiatives going forward," he said.

"We have the foundations of a very good company and a very good project that just keeps getting better."

*A version of this report, first published in the May-June 2015 edition of RESOURCESTOCKS magazine, was commissioned by King Island Scheelite.