this is a great post Scott and you have provided huge and valuable insights into this company and the benefits of the Spanish deal - all extremely positive without question.
But my read from these posts is that few people have any knowledge of Oaktree - they are a huge Investment Company with almost $200 Billion USD under management
They invested in tungsten via the deal they originally did with Ormonde Mining but as time went by, Ormonde seemed to fall short of the mark in terms of getting the best out of the Barruecopardo mine and also managing their own financial position.
So, Ormonde had to pull the pin and that left Oaktree in the lurch wondering how to exit with face
After a long time, and considering many potential operators, they chose EQ Resources - and thats the deal we now see presented before us.
Another poster suggested that Oaktreee would do a "dump" and that the announced deal was good for Oaktree and a dilution for EQR
My view is that the EQR team, having already proven their credentials in tungsten processing and mine development, afforded Oaktree an opportunity for them to save face, establish a relationship with a successful mine and a successful team and negotiate a "cooperative arrangement" where both parties would benefit mutually
EQR could apply their skills to ramping up both Mt Carbine and Barruecopardo (TOMRA's being key in grade increase) both quite similar mines, locations, environmental issues etc,, produce 400 tonnes plus of concentrate per month (at $20/- per tonne) and attain the level of largest western world tungsten producer.
BUT, they didnt go looking for this because they already had a successful enough mission on their hands with Mt Carbine, Wolfram Camp and establishing that regional hub concept (whatever that may end up being)
What happened was that Oaktree, after ploughing some $200M plus into Barruecopardo saw an opportunity to not only get something back from their investment but to maybe come out in front and restore their reputation in the investment community - and this was to write-off Saloro debt, sell an asset, and invest "substantially" in a great team of tungsten miners who, thus far, have been able to achieve what none of the other tungsten mine resurrectionists (or aspirants) have been able to achieve - which was to bring a single mine into production at such low cost, which such an incredible IRR of 477% and payback period of less than 6 months.
Now tell me - why would Oaktree "dump" on this deal ?
Oaktree will have a seat on the Board and they will be doing their absolute best to promote and market this deal to a full and fruitful conclusion.
They are solidly on board and we will all benefit from their presence
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