EQ Resources (ASX:EQR) is set to take a 10% interest in a planned US tungsten processing joint venture under a US$150–175 million ($210–245 million) investment package for the Springer Tungsten Complex in Nevada, US.
Under a binding letter agreement, EQ will partner with Blue Moon Metals (TSX-V:MOON) and The Elmet Group (NASDAQ:ELMT) to restart Springer’s ammonium paratungstate (APT) plant.
Elmet will hold 70% of the processing joint venture and operate the plant, while Blue Moon will own 20% and retain full ownership of the Springer mine and mill.
EQ Resources will supply 4,000 tonnes of contained tungsten trioxide (WO₃) in concentrate over eight years from the plant’s commissioning.
During the first five years, 25% of the plant’s input capacity will be allocated to EQ Resources concentrate, subject to a 1,000-tonne annual cap. Its allocation will fall to 10% after the fifth year.
EQ Resources is also conducting preliminary ore-sorting test work at Springer using technology developed across its operations. The parties describe the initial results as positive and recommend further test work before deciding whether to install the system.
Managing Director Craig Bradshaw says the agreement would provide EQ Resources with a new market for production from its Australian and Spanish operations.
“This transaction is transformational for EQR,” Bradshaw says.
“Partnering with Blue Moon and The Elmet Group, with the sponsorship of the US Department of War, cements EQR’s position as an important supplier of this critical mineral and opens a strategic new market for our Australian and Spanish production.”
Springer funding structure
The proposed investment includes US$150 million from Elmet, comprising a US$75 million injection into the APT plant, a US$50 million prepayment facility for Blue Moon, and a US$25 million equity investment in Blue Moon.
Elmet and EQ Resources have also set aside a further US$25 million for standby requirements associated with restarting the plant.
“By working in collaboration with Blue Moon and EQ at Springer, we hope to bring together critical resources, processing expertise, and downstream manufacturing capabilities to create a more resilient source of tungsten materials for the US and its allies,” Elmet CEO Peter V Anania says.
The package forms part of Elmet’s broader initiative with the US Department of War. According to the parties, US$150 million of a US$450 million government investment in Elmet has been designated for the Springer transactions.
Springer comprises historical open pit and underground mines, a 1,200-tonne-per-day mill, and an APT plant designed to produce up to 4,000 tonnes annually.
The complex has a historical mineral resource of 10.7 million tonnes @ 0.45% WO₃ based on reports from 1984. Blue Moon has not verified the estimate under current reporting standards and is not treating it as a current mineral resource.
“This is a great day for the US with regard to providing a major boost to the US tungsten supply chain,” Blue Moon CEO Christian Kargl-Simard says.
Blue Moon is targeting a restart of the mine and mill in the December 2027 quarter, followed by the APT plant during the second half of 2028.
The transactions remain subject to due diligence, definitive agreements, and regulatory approvals, including consent from the TSX Venture Exchange.
EQ Resources is a tungsten producer operating the Mt Carbine tungsten mine in Queensland and the Barruecopardo tungsten mine in Spain.
Write to France Pinzon at Mining.com.au
Main image: EQ Resources
