UK Broker SP Angel had a piece in their morning note. The last...

UK Broker SP Angel had a piece in their morning note. The last dot point is an important one.

• EQ Resources. which announced a binding agreement with the investment company, Oaktree Capital, to acquire the Barruecopardo tungsten mine in Salamanca Province in August, reports that Australia’s Foreign Investment Review Board (FIRB) “has issued a ‘no objection notification’ for the $25 million investment in EQR by funds managed by Oaktree Capital Management”.
• The company confirms that “EQR and Oaktree are working through remaining formalities to close the transaction still ahead of year end”.
• EQ Resources confirms that “FIRB approval represents a key condition precedent under the sale and purchase agreement entered into between EQR and Oaktree”.
• Oaktree’s A$25m investment will be deployed to repay Saloro’s debt and for additional capital investment at Barruecopardo and for working capital.
• Today’s announcement confirms that EQ Resources is “making good progress at the Barruecopardo operations as well, improvements in the processing technologies and production output are a result of the lessons learned at … [the company’s Australian tungsten operation at] … Mt Carbine”, including X-Ray sorting technology and the installation of improved recovery of ‘fines’ in the process plant.
• The historic Barruecopardo mine was reopened in 2019 “after nearly 40 years of shutdown” and is currently producing “approximately 140 tons/month of high-grade (>65% WO3) tungsten concentrate, with various minor plant expansion projects ongoing for higher recovery and throughput”.
• With world supply dominated by China, tungsten features as a critical mineral commodity in a number of jurisdictions including the US, EU, Australia and Japan. The emergence of a sizeable western world producer is likely to be a welcome development for intermediate processors and end-users in these areas.

Conclusion: FIRB approval is an important milestone inthe further development of the Barruecopardo tungsten mine.