EQ Resources Outlines Mt Carbine Tungsten Mine as Low-Cost

EQ Resources believes it needs just A$20 million to advance the historic Mt Carbine tungsten mine in Queensland to the next profitable stage, nearly 150 years after the initial discovery.

The company has just completed a bankable feasibility study for the restart of the Andy White pit, which will prepare it for a third, larger phase. The first phase has already begun, targeting incremental improvements through a joint venture with global metals group Cronimet to process the existing 12 million tonnes of stockpiled ore.

The second phase upgrades infrastructure and dewatering of existing pits prior to targeting higher grade ore. The largest cost will be a new $14.5 million crushing, screening and processing, adding to the existing facilities and ore sorters.

EQ has spent $3 million on the project. the BFS delivered a pre-tax NPV of $131.5 million with an IRR of 154% and a mine life of 12 years, generating $207 million in revenue.

The payback period is 25 months, but the focus in years three and four is on high grade mines, providing operating pre-tax cash flow of $38 million and $95 million, respectively.

C1 cash costs were US$113 per metric ton unit compared to expected concentrate sales of US$315 per metric ton. One metric tonne is equivalent to 10 kilograms. Cabin Hill is approved to process 1 million tonnes per year, but trial operations are limited to the current plant capacity of 480,000 tonnes per year.

CEO Kevin MacNeill said EQ Resources is confident of securing financing for the next phase of development as on-site concentrate production has been rising in recent months as new equipment has come online. The BFS has only evaluated 16% of the current 9.21 million tonnes of 0.63% tungsten resource.

Approximately 80% of Mt Carbine tungsten mine is in underground areas and EQ's plan is to restart the pit without over-investing and prepare Mt Carbine for Phase 3, which will see the expansion of the pit and the rehabilitation of the underground workings.

A third phase of the scoping study will be ready in early 2022. MacNeill said Mt Carbine is positioned as one of the lowest cost pure tungsten producing mines in the world, which is well-positioned in a world where high costs are needed to incentivize new supply.

EQ Resources raised A$6 million earlier this year through an issue of notes convertible to 6.5c. EQ shares rose 6% this morning to 7.3c, giving the company capital of US$93 million. The stock hit a 12-month peak of 7.8c earlier in the session. Over the past year it has traded as low as 2.3c.

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