EQ Resources Limited (ASX: EQR) has announced it has executed a binding Heads of Agreement (HoA) to acquire 100% of the shares in Tungsten Metals Group Limited and its subsidiaries, and separately Mr. George Chen’s interest in Asia Tungsten Products Co Ltd.
TMG Group currently owns and operates the largest ferrotungsten (FeW) plant outside of China, located in Vietnam, with a potential production capacity of 4,000tpa FeW. Due to its scale and favourable cost structure, the facility is regarded as one of the most competitive in the industry.
In addition, the company believes the completion of the transaction will allow for diversification and vertical integration of EQR’s upstream operations. The Transaction aligns with EQR’s strategic plans to leverage its existing substantial resource base and production output along the tungsten supply chain.
EQR’s CEO, Kevin MacNeill, said, “EQR is pleased to announce the execution of a Heads of Agreement for the 100% acquisition of the TMG Group. This transaction aligns with EQR’s strategic initiatives to be the preeminent western tungsten producer. Upon completion of the transaction, EQR will have achieved a strategic diversification of products, customers and geography, and be proud 100% 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.”
FeW pricing dynamics are partly decoupled from the tungsten concentrate market (currently being EQR’s sole product) and respective ammonium paratungstate (APT) markets, which are currently EQR’s main offtake industries. FeW prices over the recent 24 months have outperformed APT prices by approximately 19%.
The HoA is subject to customary due diligence procedures, shareholder approvals and is expected to complete in the first half of 2025.
To find out more, please visit www.eqresources.com.au
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