EQ resources presentation investor Tungsten

Nov 3, 2024

Corporate Update and Project Developments

Introduction

  • Technical difficulties led to re-recording of the webinar slides.
  • Presenters: Overview by main speaker, Tony on drilling and underground development, Oliver on the tungsten market.

Corporate Structure

  • Shares trading around 5 cents each.
  • Top 20 shareholders hold over 60% of shares.
  • Board management holds 9%.

Team Updates

  • Steve Weir, mining engineer with finance background, joins the company.
  • Ian Kirkham appointed as Acting CFO and Senior Financial Advisor during transaction phases.

Financial Developments

  • Loan from Queensland government’s QIC under Battery Technology fund.
    • $20 million loan in two tranches:
      • Tranche A: $12 million for doubling plant capacity and $2 million for drilling.
      • Tranche B: Further drilling, underground exploration, and feasibility studies.

Production and Expansion

  • Tungsten production increased by 6.5 times over the past year.
  • New equipment and steelworks arriving on site.
  • Vertical integration strategy involves:
    • Bringing Wolfram Camp online.
    • Exploration of waste dumps and sorting in Spain.
    • Hub and spoke model for cost-effective production.

Drilling and Underground Development

Tony Bainbridge on Geology and Mining at Mount Carbine

  • Geology:
    • Johnson vein package: 30m wide, core of 11m in center.
    • High-grade zones identified.
  • Mining Progress:
    • 10 months into a 9-year surface mining project.
    • Initial mining in a small area, Pit One.
    • Stage Two involves larger pit and higher-grade zones.

Drilling Results

  • April drilling program to test high-grade sections.
  • Consistent grades found between previous and new drill results.
  • Underground mining feasibility with potential 10-year mine life.

Tungsten Market Overview

Oliver on Market Dynamics

  • Tungsten classified as a critical mineral by European Commission.
  • Significant demand from sectors like automotive, mining, oil, gas, aerospace, and military.
  • Emerging demands from green energy and semiconductor industries.

Supply Concerns

  • China as a major supplier and consumer.
  • Production quotas reduced by the Chinese government.
  • US Defense Logistics Agency's reduced transparency on tungsten stockpiles.

Price Dynamics and Future Supply

  • Increase in tungsten prices over recent weeks.
  • Supply squeeze anticipated with limited new projects outside China.
  • Key projects worldwide facing delays or cancellations.

Strategic Insights

  • EQ Resources positioned as a leading non-Chinese tungsten producer.
  • Expansion plans at Carbine and Wolfram camp.
  • Continued community support and strong ESG credentials maintained.

Concluding Notes

  • Significant progress in plant capacity, drilling, and project feasibility.
  • Upcoming updates on the Solero project.
  • Strong company-community relations and environmental standards.

Here's a summary of the key numbers mentioned in the transcript:

  • Share Price: Shares are trading around 5 cents each.
  • Shareholder Ownership: Top 20 shareholders hold over 60% of the company's shares; board management holds 9%.
  • QIC Loan: A $20 million loan from the Queensland government's QIC, split into two tranches:
    • Tranche A: $12 million (plant capacity) + $2 million (drilling) = $14 million
    • Tranche B: An unspecified amount for further drilling, underground exploration, and feasibility studies.
  • Production Increase: Tungsten production increased 6.5 times over the last year.
  • Johnson Vein Package: Approximately 30 meters wide with an 11-meter core.
  • Stage One Pit Production: Approximately 2,000 tons of tungsten.
  • Stage One Pit Percentage of Total Ore: 11%
  • Drilling at Mount Carbine: Currently 20,000 meters of diamond drilling; plan to double this to 40,000 meters.
  • Indicated Resources (Mount Carbine): Approximately 6 million tons.
  • Inferred Resources (Mount Carbine): Approximately 22 million tons at 0.3% grade.
  • Underground Ore (Mount Carbine): Approximately 4 million tons at 0.52% grade (using a high cut-off). This could potentially provide 10 years of mine life at 3,000 tons of concentrate per year.
  • Underground Mining Target: 1,000 tons of ore per day.
  • Existing Tunnel Length: 430 meters.
  • Planned Tunnel Extension: 700 meters.
  • Solero Plant Upgrade: Increasing the size of the sords to 40 millimeters from 20 millimeters.
  • Tungsten Deficit: Projected deficit of over 10,000 tons annually by the end of the decade.
  • Chinese Exports (Tungsten Equivalent): Over 5,800 tons of concentrate, representing 78% of imports to various countries.
  • Low-Grade Stockpile Scalping (Carbine): Expected to yield an additional 800 tons per month.

Please note that some figures are approximate or estimations based on the information provided in the transcript.

This lecture provided a comprehensive update on corporate developments, significant financial backing, and strategic steps towards expanding production and meeting market demands. The insights into the tungsten market dynamics and supply constraints highlight the critical role EQ Resources plays in the global market.

Full transcript