Australian-based EQ Resources (EQR) is set to gain another global tungsten foothold thanks to a promising deal in Vietnam.
The tungsten producer has signed a binding heads of agreement to acquire Tungsten Metals Group (TMG), which currently owns and operates the largest ferrotungsten plant outside of China.
The plant has a potential ferrotungsten production capacity of 4000 tonnes per year and is considered one of the most competitive in the industry.
EQR currently owns and operates the Mt Carbine tungsten project in north Queensland and the Barruecopardo mine in the Salamanca Province of Spain.
“This transaction aligns with EQR’s strategic initiatives to be the preeminent western tungsten producer,” EQR chief executive officer Kevin MacNeill said.
“Upon completion of the transaction, EQR will have achieved a strategic diversification of products, customers and geography, and be proud 100 per cent owner and operator of critical western tungsten operations on three continents.
“Additionally, EQR will have achieved vertical integration of our upstream operations, leveraging our substantial resource base and existing production output, throughout the tungsten supply chain.”
In order to secure the deal, EQR has agreed to issue 170 million new fully paid ordinary shares and pay $2.5 million in cash.
“Bringing together TMG Group’s advanced ferrotungsten plant in Vietnam with EQR’s high quality upstream operations represents a compelling investment case for all shareholders,” TMG executive chair Tony Adcock said.
“The TMG board believes there are significant synergies that can be realised following this potential transaction, with the enlarged EQR positioned very well to benefit from the tailwinds in the tungsten and ferrotungsten markets globally.”
The deal is expected to be completed by the end of the year.
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