Chris Brown from Morgans likes it. TP 13c EQ Resources (ASX:EQR)...

Chris Brown from Morgans likes it. TP 13c

1	EQ Resources (ASX:EQR) Market Cap. @ A4.6cps: A$102.9M Valuation & TP: A$0.13ps In production EQR moves further to vertical integration with Vietnam acquisition EQR – the Western World’s largest tungsten miner EQ Resources operates the Mt Carbine tungsten mine, Queensland, and the Saloro tungsten mine, Spain. It is the World’s largest tungsten miner outside China. Both mines sell tungsten concentrate to downstream processors. The ammonium paratungstate price – on which the tungsten concentrate price is based - remains very strong at US$335/metric tonne unit (mtu). The second step in vertical integration EQR determined an enterprise Value (EV) of A$13.5M for Tungsten Metal Group. The acquisition of 100% is to be satisfied by the issue of 170M shares in EQR and a payment of A$2.5M. Operating since 2011, the production capacity of these facilities represents >80% of ferrotunsten (FeW) capacity installed outside of China and Russia. Main markets for FeW, outside of China, are Europe, Japan, South Korea and the Americas, with a combined annual consumption of approx. 5,000 tonnes. FeW is primarily used as an alloying agent for specialty alloys, with the defence, aerospace and automotive industries key end markets for the product. The first step in vertical integration In September 2024 EQ Resources announced a strategic collaboration involving a multi-year offtake agreement with leading US-owned and fully integrated tungsten manufacturer Elmet Technologies LLC. EQR and Elmet agreed to collaborate in mining, minerals processing and downstream tungsten manufacturing for the mutual benefit of both parties, and work collaboratively to develop and enhance the global tungsten supply chain with access to the North American strategic zone markets. “This strategic collaboration with EQ Resources provides our tungsten customers in defense, aerospace, medical, and semiconductor with increased supply-chain resiliency, which is aligned with our steadfast support of the U.S. defense industrial base. Over the past five years, Elmet and the U.S. Department of Defense have worked together to improve tungsten industrial base resiliency through special Government programs including the DoD’s Industrial Base and Sustainment (IBAS) office and the ARMY’s MANTECH initiatives. With an increasing focus on critical materials used for defense applications, securing long term access to high quality tungsten concentrate was a strategic imperative for our business. This collaboration with the fastest growing Western tungsten mining group, having active mines in both Australia and Spain, will ensure our ability to support the growing demand for our materials, particularly in the U.S. and Western countries.”
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3	Disclosure: The analyst involved in the preparation of this Research Flash holds shares in EQ Resources (ASX:EQR).

Chris Brown
Analyst