EQ Resources expands into Spain

10th August 2023 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

EQ Resources expands into Spain

The Barruecopardo mine in Spain

KALGOORLIE (miningweekly.com) – Tungsten miner EQ Resources on Thursday revealed a transaction that would result in the acquisition of a new mine and a new major shareholder to the company’s register.

EQ Resources has inked a share purchase agreement (SPA) to acquire Spain-based Saloro SLU from portfolio company Tungsten Mining, which is owned by fund manager Oaktree Capital Management.

Saloro owns the Barruecopardo mine in Salamanca, which has been in production since 2019 and is currently producing around 140 t a month of high-grade tungsten concentrate, with various minor plant expansion projects ongoing to increase recovery and throughput.

The project currently has a mineral resource estimate of 27.38-million tonnes, grading 0.26% tungsten for 7.26-million tonnes of tungsten metal.

Under the agreement with Oaktree Capital Management, EQ Resources will acquire Saloro for a nominal consideration of €1 and the benefit of all the intercompany loans owed by Saloro to Oaktree, which amounts to €80-million, for a further €1.

The transaction is subject to a number of conditions, including approval from foreign direct investment agencies in both Australia and Spain.

As part of the transaction, Oaktree will subscribe for 278-million new ordinary shares in EQ Resources at an issue price of 9c a share, which represented a near 30% premium to the 15-day volume weighted average price.

The A$25-million investment will result in Oaktree holding a 15.86% interest in EQ Resources at completion of the transaction. Oaktree will receive 78-million options, with an exercise price of 10c a share, exercisable during the period of two years following the date of completion of the SPA.

"This is without doubt an outstanding development and a transformational acquisition for EQ Resources that delivers a huge value opportunity for shareholders,” said CEO Kevin MacNeill.

“We continue building a robust growth pipeline with the addition of the Saloro operation and considering the exploration ground around the Barruecopardo mine is covering prospective historical workings. Saloro has a great management team which built and commissioned a mine during the rough times of Covid and is now coming to a stage of sustainable production growth.

“We are delighted Oaktree agrees and supports the value proposition of the expanded operation across two jurisdictions through their investment in EQ Resources at a significant premium, demonstrating commitment to the forthcoming value creation journey. We look forward to having a high-profile globally significant fund such as Oaktree, who has been an excellent owner to Saloro, join our share register and support EQ Resources to expand its footprint and strategic positioning in the global tungsten supply chain. We feel this relationship is accretive to our shareholders,” MacNeill said.