EQ Resources (ASX:EQR) has agreed to a strategic collaboration involving a multi-year offtake agreement with US-owned and fully integrated tungsten manufacturer Elmet Technologies.
Both companies will collaborate and leverage their experiences and expertise in mining, minerals processing, and downstream tungsten manufacturing for the mutual benefit of both parties, while also working collaboratively to develop and enhance the global tungsten supply chain.
Under the agreement, Elmet Technologies will purchase tungsten concentrate from EQ, with an estimated value of $30 million over a five-year period. Elmet is to secure the offtake allocation through an advance payment of $2 million.
EQ Resources, which has a market capitalisation $91.71 million, will grant Elmet 20 million options exercisable at $0.10 and a two-year expiry date.
CEO Kevin MacNeill says the company has found a partner that shares ambitions with regards to developing sustainable and resilient supply chains for critical raw materials.
“EQ Resources’ rapidly growing tungsten mines in Australia and Spain will provide Elmet with the improved industrial resiliency to support their mission critical US defence customers,” MacNeill says.
“We trust this strategic collaboration will secure support from end-users in the tungsten space and we plan to continue to develop these types of relationships and alliances, as outlined in our strategy statements.
“Raw material security has become a top priority, geopolitically and in many board rooms around the world and investing in sustainable mining in Australia and Spain provides a unique market solution.”
Both of the companies have agreed to execute definitive agreements within the next four weeks.
Elmet Technologies CEO Peter Anania says this collaboration provides the company’s tungsten customers in defence, aerospace, medical, and semiconductor with increased supply chain resiliency, which is aligned with its support of the US defence industrial base.
“Over the past five years, Elmet and the US Department of Defense (DoD) have worked together to improve tungsten industrial base resiliency through special government programs including the DoD’s industrial base and sustainment office and the ARMY’s MANTECH initiatives,” Anania says.
“With an increasing focus on critical materials used for defence applications, securing long-term access to high-quality tungsten concentrate was a strategic imperative for our business.
“This collaboration with the fastest growing Western tungsten mining group, having active mines in both Australia and Spain, will ensure our ability to support the growing demand for our materials, particularly in the US and Western countries.”
Elmet Technologies is a US-owned and operated tungsten and molybdenum manufacturer. The company is focused on servicing its customers and applications including defence, aerospace, medical, semiconductor, industrial furnace, and more.
EQ Resources is a tungsten mining company focused on sustainable mining and processing practices. The company has assets in North Queensland and Spain.
Write to Aaliyah Rogan at Mining.com.au
Images: EQ Resources
