In a statement to the Australian Securities Exchange, Group 6 said lead engineering, procurement and construction contractor Gekko Systems was foreshadowing higher than expected costs in executing the EPC contract at the mine, due to the high inflationary environment.
That involved logistics, materials and installation costs of $7.5 million, which is 14% of the value of Gekko's EPC contract and 8% of the overall project's capital budget.
Despite the constraints, Group 6 maintained that construction of Dolphin's processing plant was progressing well against schedule, with completion, commissioning and first production of concentrates pencilled in for early 2023.
The company said it was working with Gekko to mitigate the anticipated cost increases.
"The parties are also in discussions regarding options to limit the impact of these anticipated cost increases on the company's cashflow while the plant is being commissioned and ramping up to nameplate production," Group 6 said.
"While these newly anticipated construction costs are unfortunate, in today's high inflationary environment for construction projects they are difficult to mitigate against."
