Goedy, you and I will again have to agree to disagree about...

Goedy, you and I will again have to agree to disagree about market efficiency especially in the small end. The market is probably valuing the company as it is today, producing 110t per month. Not where it's going.

Christopher Ecclestone from Hallgarten updated his monthly model and he thinks the company is going somewhere with an expectation of increasing his target price of 13c when the Spanish deal has been completed and both mines have increased production.

Tungsten – Stable, Not Flatlining
The chart for the price of APT is scarcely anything to set the house on fire…. But, if one compares it the
charts of most of the other metals (excepting Tin, Antimony and Uranium) it has actually dodged a
bullet. Since July the price has eased a few more dollars to stand at US$315 per MTU as at end of
August.
EQ Resources (ASX:EQR) – Bulking Up on Tungsten Production
When we attended the Melbourne Mining Club’s annual London dinner at the Guildhall with the team
from EQ we were initially surprised by the presence of a seeming competitor at the table in the form of
several executives from Saloro, a private company engaged in being back to life the Barruecopardo
Tungsten mine in Spain, which had been the main project of the fallen Tungsten developer, Ormonde
Mining, which had been listed on the London Stock Exchange.
It didn’t take much effort to put two and two together, but our lips were sealed.

Unsurprisingly, in mid-August, it was announced that EQ had agreed binding terms to acquire a 100%
interest in Saloro S.L.U., Spain from Tungsten Mining JV S.L.U., a portfolio company of funds managed by
Oaktree Capital Management.
The Deal
As part of the deal, Oaktree will subscribe for 278 million new ordinary shares at an issue price of $0.09
per share (representing a ~30% premium to the 15-days VWAP), amounting to an investment of
AUD$25mn. As a result, Oaktree will become a substantial shareholder in EQR with a holding of 15.86%
at completion. Oaktree will receive 78 million options, with an exercise price of $0.10 per share,
exercisable during the period of two years following the date of completion of the original share issue.
A Long History
The Iberian Peninsula has long been the prime production area for Tungsten, a role in which Spain and
Portugal worked both sides in WW2 to their advantages. Barruecopardo has a storied mining history
dating back almost 100 years. Historic activities ceased at the old mine in the early 1980s. After 10 years
of preparation by Ormonde Mining, including a 15-month construction period, Saloro brought the
Barruecopardo mine back online in early 2019 leveraging modern technology after nearly 40 years of
shutdown.
Mining and concentrating activities at the mine have been designed to minimise any environmental
impact while ensuring a high mineral recovery. Current production is approximately 140 tons/month of
high-grade (>65% WO3) tungsten concentrate, with various minor plant expansion projects ongoing for
higher recovery and throughput.
Geology
The Barruecopardo Mine is a tungsten deposit with Scheelite (CaWO4) as the main tungsten bearing
mineral and the deposit type being vein and sheeted vein coarse (nuggety) scheelite mineralisation
style. Within the pit area, mineralisation forms a main approximate 30-metre-wide envelope of subvertical-steep east dipping veins. The pit accommodates the intersection of two main sub-divisions,
being a main north trending mainly scheelite mineralised zone and a second north-northwest trending
scheelite plus wolframite mineralised zone.
The Resource
The resource is somewhat long in the tooth dating from December of 2011, when a Mineral Resource
Estimate was prepared for the Barruecopardo project by CSA Global and reported according to JORC
Code 2004.
Barruecopardo Resource
Tonnes Grade WO3 Metal
WO3 % MTU
Measured 5,469,000 0.34% 1,860,000
Indicated 12,326,000 0.26% 3,200,000
Total M&I 17,795,000 0.28% 5,060,000
Inferred 9,594,000 0.23% 2,200,000
Of course, there is a lot more meat on this bone than we discuss here due to the limitations of space. If
we eventually launch coverage, then we shall expound more upon the implications of EQ moving into
the (select) top tier of non-Chinese Tungsten players.
In one corporate leap, EQ has propelled itself into the same category as Almonty Industries, even if still
not as heavyweight. We reiterate the LONG status of EQ Resources in the Model Resources Portfolio
with a 12-month target price of AUD$0.13. This target price could likely be subject to revision upwards
in the case of an Initiation.