EQ Resources (EQR) Conference Transcript

Summary of EQ Resources (EQR) Conference Call - July 23, 2025 Industry Overview - Tungsten Market Significance: Tungsten is classified as a critical mineral, essential in Australia, the European Union, and the US [1] - Global Reserves and Production: Global tungsten reserves are approximately 3.7 million tonnes, with annual production around 79,000 to 80,000 tonnes, indicating a small market size [2] - Production Concentration: China, Russia, and North Korea account for about 87% of total tungsten production and 60% of global reserves, highlighting geopolitical risks affecting supply [2] Market Dynamics - Geopolitical Tensions: The US Department of Defense is set to ban Chinese tungsten imports by January 2027, while China has also restricted its exports, leading to a significant supply reduction in the Western market [3] - Price Trends: Tungsten prices have increased by approximately 40% over the last six months, reaching around $4.50 per MTU (10 kg trading unit) [3] Company Performance and Strategy - Production Capacity: EQ Resources produced 1,700 tonnes in the twelve months ending March 31, 2025, positioning itself as a significant player in the tungsten market [6] - Capital Raising: The company raised $24.6 million to reduce debt and support operations, including a €5 million debt repayment in Spain [7] - Development Projects: Ongoing developments at Barracupada in Spain and Mt. Carbine in Queensland are crucial for future production increases [7][12] Operational Insights - Asset Details: The Soloro asset in Spain has a seven-year mine life with potential extensions, while Mt. Carbine has a 19-year mining permit and significant untapped resources [9][11] - Ore Recovery Improvements: The company aims to enhance ore recovery rates from 30% to 60-70% through the installation of ore sorters [9][10] Collaborations and Funding Opportunities - US Ex-Im Bank Interest: A letter of interest from the US Ex-Im Bank could provide up to $34 million in funding for Mt. Carbine's development [7] - Strategic Partnerships: Collaborations with Hartech Metals in Vietnam and Almed Technologies in the US are expected to strengthen market position and funding opportunities [13][14] Market Outlook - Supply Chain Shortages: The tungsten market is tightening, with increasing demand from defense, industrial, mining, and construction sectors [5][16] - Investment Rationale: The company presents a strong investment case due to its expandable operations, secured offtakes at spot pricing, and focus on ESG performance [16][17] Conclusion - Future Prospects: EQ Resources is well-positioned to capitalize on the tightening tungsten market, with ongoing developments and strategic partnerships enhancing its growth potential [18]