EQ Resources has acquired a 100% interest in the Mt Carbine operation after agreeing to purchase joint-venture interest from CRONIMET

EQ Resources (EQR), an Australian primary tungsten producer, owns the Mt Carbine Project located near Cairns. The project consists of the Mt Carbine tungsten mine, the Mt Carbine processing plant (which was operated through a joint venture with CRONIMET), and a stockpile at Mt Carbine Quarries. On 18th October 2023, EQR announced that it had entered a binding Heads of Agreement (HoA) with CRONIMET Asia and CRONIMET Australia, which will see EQR acquire CRONIMET Australia’s 50% interest in the joint venture of the processing plant.

In 2019, EQR, through its wholly owned subsidiary Mt Carbine Retreatment, and CRONIMET Asia, through its wholly owned subsidiary CRONIMET Australia, each took a 50% stake in an unincorporated joint venture.

As part of this joint venture, the Mt Carbine processing plant recommenced, where historical tailings and low-grade ore stockpiles from Mt Carbine were processed into tungsten concentrate, and Mt Carbine Retreatment, CRONIMET Asia, and CRONIMET Australia entered into a long-term offtake agreement, which saw CRONIMET Asia purchase all tungsten concentrate produced at Mt Carbine. Under the offtake agreement, CRONIMET Asia made an advance payment of US$6.5M towards the development and ramp-up of production and CRONIMET Australia injected US$2.2M into the operation as working capital and then another US$1M as an agreement to lease mining equipment, such as XRT Ore Sorters, which brought the total investment to US$3.2M.

As part of the HoA, CRONIMET Australia and EQR have agreed to simplify the structure of the joint venture. CRONIMET Australia will transfer its 50% joint venture interest to EQR, subject to certain conditions being met. Two conditions have been stipulated. Firstly, EQR is to issue new ordinary shares at A$0.09 (US$0.057) per share to CRONIMET Asia, equating to a total of US$7.5M and secondly, EQR will take over all obligations under the Offtake Agreement. The transfer will also see CRONIMET granted rights to enter into a product marketing agreement with EQR for the purchasing and sales of tungsten concentrate produced at the Barruecopardo Mine in Spain. However, this agreement is conditional upon EQR obtaining rights to the mine in Spain.

The move sees EQR strengthen its position in the tungsten supply chain while allowing CRONIMET to further expand its position as a distributor of various tungsten products.