Ann: First Blast at Mt Carbine Restarts Open Cut Production, page-3

Blast off!!

We have waited a long time for this to occur.

Some higher grade production leading to higher cashflow.

Pacpartners updated their research on tungsten today as well.

• Australia is rapidly closing in on addressing the critical minerals gap in tungsten as redeveloped mines prepare to ramp up production in Q3.
• Australia’s re-emergence as a tungsten leader with 2 significant producing mines (EQR, G6M), to be followed by larger scale developments in South Korea (Almonty) and the UK (Tungsten West). These new sources of supply are only a fraction of global production given the dominance (>80%) of incumbent producers.
• Tungsten prices have remained largely unchanged in 2023 (at around $325/mtu) despite manufacturing softness, as defence and other industries pick up the demand slack.
• China’s production continues to decline, on the back of a more stringent regulatory environment, and falling ore grades.

• (EQR) (BUY, target price $0.12, market cap $103m) – Open pit mining is commencing this month which sees EQR set to immediately capitalize on the strong tungsten price environment. We reiterate our BUY recommendation as development gives way to low cost production (US$104/mtu) and significant FCF this quarter (Sept-Qtr) (a 35%+ FCF yield on our estimates). Continuing the incremental lower risk approach to growth, EQR is to double process capacity from 2025 with another $7.7m in capex so it can continue to tap the low grade ore stockpile in addition to mining 1mt/yr from the open pit.