KEY POINTS
- EQ Resources will hold 10 percent of a joint venture with operator Elmet Group (70 percent) and Blue Moon Metals (20 percent) to restart Nevada’s Springer tungsten plant.
- Elmet funds the first $75 million of restart costs with US Department of Defense backing, and EQ’s contribution is capped at $3.125 million.
- EQ will supply 4,000 tonnes of tungsten concentrate over eight years and gain APT processing access, sending its shares to a 19-year high.
Australian miner EQ Resources will take a 10 percent stake in a joint venture with Nasdaq-listed Elmet Group and Blue Moon Metals to restart the Springer tungsten project in Nevada, the company said.
Investors welcomed the move. Specifically, EQ Resources shares jumped as much as 16.9 percent to A$0.45, their highest level in 19 years. Moreover, the deal gives the company a foothold in US downstream processing of tungsten, a critical mineral used in defence and industry.
How the partners split the venture
The partners divide the project three ways. Specifically, Elmet will hold 70 percent and operate the asset, while Canada-based Blue Moon takes 20 percent and EQ Resources 10 percent. Furthermore, the venture plans to restart the Springer ammonium paratungstate plant with an initial processing capacity of about 4,000 tonnes a year.
The funding structure shields the smaller partners. According to EQ Resources, Elmet will cover the first 75 million dollars of restart costs, backed by US Department of Defense financing. However, Elmet and EQ will jointly fund costs between 75 million and 100 million dollars by ownership share, with EQ’s contribution capped at 3.125 million dollars, while all partners split anything above 100 million dollars pro rata.
Supply and processing benefits
The deal also locks in offtake and access. Specifically, EQ Resources will supply 4,000 tonnes of tungsten concentrate to the venture under an eight-year arrangement, and it will gain access to up to 1,000 tonnes a year of APT processing capacity during the plant’s first five years.
According to Managing Director Craig Bradshaw, EQ already produces tungsten from Australia and Spain, and the venture opens a pathway into downstream APT processing in the United States. Additionally, the company will contribute engineering, project management oversight and ore-sorting technology. Ultimately, the tie-up positions EQ Resources across the tungsten chain, from mining to US processing, as Western governments push to secure critical-mineral supply.
