Ann: Investor Update / Webinar, page-36

Article from Resource journo Barry Fitgerald

EQ Resources:

Talking about government support in strategic metals, tungsten producer EQ Resources (EQR) has received a serious helping hand for its growth ambitions from the Queensland government.

The government’s Critical Minerals and Battery Technology Fund is providing EQR with a $20 million 3-year loan facility to double capacity and to get moving underground at its Mt Carbine mine which is an easy drive from Port Douglas.

The funding is not a gift, it’s a loan facility as announced, with a 10% coupon to boot.

But it averts any need for EQR to go down a highly dilutive equity raise route which is a good thing. Having said that, market conditions have turned in favour of tungsten producers anyway.

The Chinese price had put on 20% from the start of the year to last week, and it has popped 6% higher since to $US345/$US365 a metric tonne unit (10kg), as the stuff is priced.

China has a grip on 80% of the market apparently hit supply constraints. In that situation, it would want to keep perhaps the most critical of metals in-country.

Tungsten has the highest melting point of all metals (3410°C), and being the hardest of all metals, it has wide-ranging uses in the aerospace and defence industries, mining equipment, construction and the automotive industry, among others.

Assuming GDP-type growth in consumption, a supply gap is forecast to open up in the back half of the decade. Sounds like copper, uranium, zinc etc.

The Western World hates its dependence on China for supplies which is why Mt Carbine is getting the government support it is. Along Group 6 Metals (G6M) which has returned the King Island mine back in to production, Australia is doing the heavy lifting for the ex-China world.

It is apt then Mt Carbine, which is a historic tungsten producer, took its name from the racehorse Carbine which among other victories, won the Melbourne Cup in record time in 1890 carrying 24kg more than the second placegetter.

EQR last traded at 5.5c for a $102m which doesn’t seem a lot for a company on a pathway to becoming the biggest tungsten producer ex-China from Mt Carbine and its recently acquired operation in Spain.

It is stating the obvious that if Chinese supplies do get held back for the domestic market, the tungsten price could do anything.