While I didn’t like how the capital raising was carried out, IMO, if I had to guess, the issues that led to this rushed capital raising appear to be more confined to unexpected delays/ issues at Mt Carbine and the need for more funds due to the planned acquisition of TMG. It would then make sense why they couldn’t meet the terms of the QIC loan as some of the conditions of the loan would surely have been related to how Mt Carbine was progressing. The urgency of the raise and the disappointing terms they agreed to though is a bit surprising to me given how much EQR has achieved to date and given the supposedly positive state of the Tungsten market.
In the past, I would be more concerned as Mt Carbine used to be their only mine but at least now, they are more diversified and have Saloro which appears to be performing well. Also, the fact that Oaktree increased their % holding gives me more confidence that overall, everything else is still progressing to plan.
EQR is a significantly different company today and has progress a lot since I invested in them more than 10 years ago and they have definitely been in much worse shape in the past so I will continue to give them the benefit of the doubt. I still do believe that if they manage to successfully pull off what they are trying to do ie. Mt Carbine underground, Saloro and now vertical integration through TMG, the share price will be significantly higher even if the tungsten price remains where it is at the moment.
IMO, the next major catalyst for EQR will be whether they deliver on the high grade production at Mt Carbine they alluded to in their many presentations by the end of January 2025. Fingers crossed they don’t disappoint again…
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