EQ Resources has signed a deal with Oaktree Capital Management to acquire Spanish tungsten miner Saloro and its assets. 

Australia’s EQ Resources (EQR) operates the Mt Carbine tungsten mine, processing plant (through a joint venture with Cronimet), and the quarry stockpile yard in Queensland, Australia. Saloro is a Spanish mining company, which owns and operates the Barruecopardo tungsten mine in Salamanca, Spain. The mine has been producing tungsten concentrate since the early 1900s, but operations ceased in 1982, before being restarted by Saloro in 2019.  Barruecopardo currently produces 140tpm of high-grade concentrate which makes it one of the largest producers in Europe.  

EQR agreed to binding terms by signing a Share Purchase Agreement which will see it obtain 100% interest in Saloro from Tungsten Mining joint venture S.L.U. (Tungsten Mining), Spain, a portfolio company of funds managed by Oaktree Capital Management (Oaktree). As per the conditions of the agreement, EQR's wholly owned subsidiary European Tungsten will obtain full ownership of Saloro by purchasing all of its shares from Tungsten Mining for a nominal sum of €1 (US$1.1) alongside all of its intercompany loans owed to the Oaktree, which totals approximately €80M (US$87.7M) for an additional €1. 

As part of the transaction, Oaktree will invest AU$25M (US$16.3M) into EQR, through the subscription of 278M new ordinary shares at AU$0.09 (US$0.06) per share. The AU$25M (US$16.3M) investment will result in Oaktree holding a 15.86% interest in EQ Resources at completion of the transaction. Additionally, Oaktree will obtain 78 million options with an exercise price of AU$0.10 per share, which can be used within a span of two years following the conclusion of the transfer. The deal remains subject to closing conditions as both parties await approvals from foreign direct investment agencies in Australia and Spain. 

Project Blue expects the tungsten market to steadily grow over the next 10 years with demand for cemented carbides and their applications in the automotive, machining, mining, and oil and gas industries being the main driver. China dominates tungsten supply and accounted for 81% of production last year. Due to tungsten’s importance in a wide variety of industries and sectors, it is listed on various government critical raw materials lists and the West is constantly looking for alternative tungsten supply.