Australian miner EQ Resources (ASX: EQR) said on Tuesday it would take a 10% stake in a joint venture with Nasdaq-listed Elmet Group (Nasdaq: ELMT) and Blue Moon Metals (Nasdaq: BMM) to restart the Springer tungsten project in Nevada.
Shares of EQ Resources jumped as much as 16.9% to A$0.45, their highest level in 19 years.
Under the agreement, Elmet will hold a 70% stake and operate the project, while Canada-based Blue Moon and tungsten supplier EQ Resources will own 20% and 10%, respectively.
The joint venture plans to restart the Springer ammonium paratungstate (APT) plant in Nevada with an initial processing capacity of about 4,000 tonnes per year.
Elmet will fund the first $75 million of restart costs for the plant, backed by financing from the U.S. Department of Defense.
Elmet and EQ Resources will jointly fund costs between $75 million and $100 million based on their ownership stakes, with EQ’s contribution capped at $3.125 million, while costs above $100 million will be shared by all partners pro rata.
EQ Resources will supply 4,000 tonnes of tungsten concentrate to the JV under an eight-year offtake arrangement, with the deal allowing it access for up to 1,000 tonnes per year of APT processing capacity at the plant during the first five years of operations.
“We are already producing tungsten from Australia and Spain, and this proposed joint venture gives us a pathway into downstream APT processing in the United States,” said Craig Bradshaw, managing director of EQ Resources.
The company will also contribute its technical expertise, including engineering and project management oversight, and ore-sorting technology.
(Reporting by Shruti Agarwal in Bengaluru; Editing by Sonia Cheema)
