EQ Resources’ $18.8M Capital Raise Hinges on Regulatory Approval and Shareholder Vote
EQ Resources Limited has successfully raised $18.8 million through a share placement, complemented by a $3 million Share Purchase Plan, to fund its tungsten mining projects and reduce debt.
- Raised $18.8 million via placement at $0.035 per share
- Share Purchase Plan to raise up to $3 million on same terms
- Conversion of $1.2 million loan into equity included
- Oaktree Capital L.P. to participate pending regulatory approval
- Funds allocated to capital projects, working capital, and debt reduction
Capital Raise Overview
EQ Resources Limited (ASX: EQR), a leading tungsten mining company with operations in Australia and Spain, has announced a significant capital raising initiative. The company secured firm commitments to raise $18.8 million through a placement of 537.3 million new shares priced at $0.035 each. This placement is complemented by a Share Purchase Plan (SPP) aiming to raise up to an additional $3 million on the same terms, providing existing shareholders an opportunity to participate.
Strategic Participation and Loan Conversion
A notable feature of this capital raise is the participation of Oaktree Capital L.P., EQ Resources’ largest shareholder, which has committed $8.735 million subject to Foreign Investment Review Board (FIRB) approval and shareholder endorsement at an Extraordinary General Meeting scheduled for late 2025. Additionally, the company will convert an outstanding loan amount of $1.2 million plus accrued interest into equity at the placement price, further strengthening the balance sheet.
Use of Proceeds
The proceeds from the placement and SPP will be directed towards capital expansion and optimisation projects at EQ Resources’ flagship Carbine mine in Queensland, Australia, and the Barruecopardo mine in Salamanca, Spain. The funds will also support working capital requirements and contribute to debt reduction, positioning the company to capitalise on the current tight tungsten market conditions driven by supply constraints and geopolitical factors.
Market Context and Company Outlook
EQ Resources operates in a market characterized by a global shortage of tungsten, a critical mineral with increasing demand in various high-tech and industrial applications. The company’s successful capital raise reflects strong investor confidence amid these market dynamics. Chairman Oliver Kleinhempel highlighted the unprecedented support from both institutional and sophisticated investors, underscoring the strategic timing of this raise to accelerate growth initiatives and reduce exposure to debt.
Next Steps and Timetable
The placement shares, along with lead manager options issued as part of the transaction, are expected to be allotted and commence trading on May 27, 2025. The SPP will open on May 28 and close on June 10, 2025, with results announced shortly thereafter. The company retains discretion over the acceptance of oversubscriptions under the SPP. Investors should watch for the outcome of the FIRB approval and the Extraordinary General Meeting, which will be pivotal for Oaktree’s participation and the overall capital structure.
Bottom Line?
EQ Resources’ capital raise marks a decisive step to fund growth and strengthen its balance sheet amid a tightening tungsten market.
Questions in the middle?
- Will Oaktree Capital’s participation be fully approved by FIRB and shareholders?
- How will the additional capital impact EQ Resources’ production timelines at Carbine and Barruecopardo?
- What are the potential dilution effects for existing shareholders following the placement and SPP?
