EQ Resources has successfully raised $22.5 million through an institutional placement, aiming to accelerate production and strengthen its financial position at the Mt Carbine tungsten project.
- Completed $22.5 million placement at $0.032 per share
- Issued 703.125 million new shares with an 11.3% discount to VWAP
- Proceeds to fund Mt Carbine growth, debt restructuring, and working capital
- Additional 132.879 million shares pending shareholder approval at October EGM
- Significant participation from Oaktree Capital Management with NSR royalty agreement
Capital Raise to Support Expansion
EQ Resources Limited (ASX, EQR), a global tungsten producer with operations in Australia and Spain, has announced a successful institutional placement raising $22.5 million before costs. The placement involved issuing over 700 million new shares at $0.032 each, representing an 11.3% discount to the 15-day volume weighted average price (VWAP). This capital injection is set to underpin growth initiatives at the Mt Carbine tungsten project in Queensland, alongside creditor management, debt restructuring, and working capital needs.
Strong Institutional Support and Strategic Partnerships
The placement attracted a broad range of sophisticated domestic and international investors, reflecting confidence in EQ Resources’ strategic direction amid record tungsten prices. Notably, Oaktree Capital Management, the company’s largest shareholder, subscribed for approximately $4.25 million worth of shares on a pro-rata basis. Oaktree also holds a 2.5% net smelter return (NSR) royalty agreement on the Saloro operation in Spain, which was executed in August 2025 and is subject to shareholder approval.
Tranche Structure and Shareholder Approval
The placement is structured in two tranches. Tranche 1, comprising 570.245 million shares, will be issued under EQ Resources’ existing placement capacity with settlement expected on 8 September 2025. Tranche 2 involves 132.879 million shares to be issued subject to shareholder approval at an Extraordinary General Meeting scheduled for 2 October 2025. The company retains the right to proceed with Tranche 1 regardless of the outcome of the shareholder vote on Tranche 2.
Use of Proceeds and Operational Outlook
Funds raised will primarily support the expansion of production capacity at Mt Carbine, including advancing the south wall stripping to access high-grade vein material and doubling plant capacity at the Iolanthe operation. Additionally, the capital will be deployed to improve the company’s financial position through debt management and creditor restructuring, ensuring operational resilience. EQ Resources’ CEO, Jono Kort, highlighted the timing of the placement as advantageous given the current high tungsten price environment and recent commissioning of projects in Spain.
Management and Fees
Lead managers Canaccord Genuity (Australia) Limited and Henslow Ltd facilitated the placement, receiving management and capital fees totaling 6% of the gross proceeds, alongside options exercisable at premiums to the placement price. These arrangements align the managers’ interests with the company’s growth trajectory.
Bottom Line?
EQ Resources’ capital raise positions it to capitalize on strong tungsten market dynamics while navigating financial restructuring challenges.
Questions in the middle?
- Will shareholder approval for the second tranche be secured at the October EGM?
- How will the NSR royalty agreement with Oaktree impact future cash flows and profitability?
- What operational milestones can investors expect from Mt Carbine and Saloro in the coming quarters?