So, while Tungsten West is struggling this morning.UK Broker -...

So, while Tungsten West is struggling this morning.

UK Broker - SP Angel published this in their morning note. At some point we should see some buying interest from Europe.

EQResources (EQR AU) A$0.053/s, Mkt cap A$112m – September hits production record

· EQ Resources reports that its tungsten operations atMt Carbine in Queensland and Barruecopardo in Spain, which was acquired inJanuary, have both achieved monthly production records during September.

· The company reports that the operations produced20,721mtu (metric tonne units; equivalent to 10kg) of tungsten trioxide inconcentrate during September, approximately 15% higher than the 18,058mtu inAugust and 37% above July’s 15,097mtu

· Although the output is not detailed by operation, thecompany says that improvements at Mt Carbine reflect “improving ore grade”while those at Barruecopardo are the result of “the successful implementationof recovery-enhancing upgrades”.

· EQ Resources says that the “September monthlyproduction record reflects a 51% increase in tungsten output at the EQR Grouplevel, compared to the average monthly output recorded in Q4FY2024 … [and thatboth] … operations saw daily production records improving to 641 mtu at MtCarbine (previously 571 mtu) and 518 mtu at Barruecopardo (previously 497mtu)”.

· Today’s announcement also highlights the world’sdominant tungsten producer, China’s, increasing control over tungsten exportsand the United States’ “additional tariff of 25% on Chinese tungsten productscoming into the US, effective 27 September 2024” and American controls on theUS Department of Defence “from acquiring tungsten from China and Russia”.

· The company says that “There is no doubt that endusers in Europe and North America are nervous about supply disruption out ofChina following the recent announcement that China is further tightening exportcontrols for several critical metals, especially those used in defense andsemiconductor applications. China controls more than 80% of global tungstenoutput, and in the past 15 years, the Western world had only brought fourtungsten mines into operation – two of them are operated by EQ Resources”.

· The current price of the benchmark ammoniumparatungstate (APT) product currently stands at around US$335/mtu compared to~US$300/mtu at the beginning of 2024.

Conclusion: Improving tungsten production from EQ Resources will add welcomeadditional western world output of a strategic mineral commodity in a marketdominated by China and Russia.