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EQ Resources agreed to acquire a 10% stake in a joint venture with Elmet Group y Blue Moon Metals to reactivate the Springer tungsten complex, located in Nevada, United States.
The operation will allow the Australian mining company to expand its presence in the tungsten value chain and participate directly in the processing of this mineral within the US market.
Elmet will control 70% of the joint venture
Under the agreed terms, Elmet Group will hold a 70% stake and act as the project operator, Blue Moon Metals will retain a 20% stake, while EQ Resources will hold the remaining 10%.
For EQ Resources, the operation represents a further step beyond the tungsten production which it already operates in Australia and Spain. The company will also contribute technical expertise to the project through engineering support, management oversight, and specialized mineral sorting technology.
The Springer plant will be able to process approximately 4,000 tons of APT per year
One of the main objectives of the joint venture will be to bring Springer’s ammonium paratungstate (APT) plant back into production, with an initial capacity planned at approximately 4,000 tons per year.
Currently, the facilities remain under a regime of care and maintenance, before restarting operations, it will be necessary to carry out rehabilitation work, modernize certain equipment, and complete the commissioning process.
The Springer resort is located in Imlay, Nevada, and in the past was one of the main United States tungsten operations the site has infrastructure for open-pit and underground mining, as well as facilities for mineral processing.
Elmet will assume the first US$75 million of the reactivation
Elmet will provide the initial US$75 million needed to move forward with the plant’s reactivation, the plan is backed by US government funding aimed at strengthening the tungsten supply chain.
If project costs exceed US$75 million but remain below US$100 million, EQ Resources will assume 12.5% of the additional expenditure. Its contribution within this tranche will be limited to a maximum of US$3.125 million.
Once the US$100 million threshold is exceeded, any additional expenses will be distributed among the participants according to their respective stakes in the joint venture.
In total, the announced transactions for Springer involve approximately US$150 million in investment by Elmet. An additional US$25 million has been reserved by Elmet and EQ Resources to cover further needs related to bringing the APT plant back into production.
EQ Resources will supply tungsten concentrate to Springer
The agreement will also open a new marketing channel for tungsten produced by EQ Resources in its international operations. The joint venture plans to establish an eight-year supply contract to acquire a total of 4,000 tons of tungsten concentrate from EQ Resources.
In return, the Australian mining company will have access to a processing capacity of up to 1,000 tons per year of APT during the first five years of operation of the plant.
We already produce tungsten in Australia and Spain, and this joint venture proposal opens the way for us to process ammonium paratungstate in the United States.
Craig Bradshaw, director general de EQ Resources.
The agreement still needs to complete several stages
For the time being, the agreement establishes the basis for forming the joint venture and moving forward with the reactivation of the Springer complex.
Before closing the transaction, the companies must complete due diligence processes, as well as technical and financial reviews. They will also need to finalize the documentation and obtain the corresponding regulatory and stock market approvals.
With this operation, EQ Resources seeks to expand its presence from concentrate production to APT processing in USA meanwhile, Elmet and Blue Moon are moving forward with the recovery of a historic tungsten infrastructure in Nevada.
Source: Reuters
Photo: Shutterstock
