Can EQ Resources Maintain Momentum Amid Heavy Mt Carbine Development Costs?

Operational Milestones

EQ Resources Limited has delivered a standout performance in the second quarter of fiscal 2026, setting new records in mining and processing at its flagship tungsten operations in Spain and Australia. The Barruecopardo mine in Spain achieved record material extraction and processing volumes, with concentrate production reaching the second-highest quarterly total on record. Meanwhile, the Mt Carbine mine in Queensland accelerated mining activity, blasting and extracting significantly more material than in previous quarters, positioning the company to access the higher-grade Iolanthe vein in the coming months.

Financial Strengthening and Market Context

Behind these operational gains, EQ Resources successfully raised A$34 million through an equity issue, complemented by the conversion of existing debt facilities and a refinancing of €15 million in Spanish debt. These moves have materially improved the company's liquidity and reduced near-term debt maturities, providing a solid financial platform for ongoing growth. The timing aligns with a robust tungsten market, where prices for Ammonium Paratungstate (APT) have surged by over 180% year-on-year, driven by persistent global supply deficits and strong demand, particularly from China.

Cash Flow and Operational Efficiency

Cash flow dynamics reflect the contrasting stages of the two operations. Barruecopardo generated positive operating cash flow of approximately A$14.2 million, benefiting from increased production and higher tungsten prices. Conversely, Mt Carbine recorded negative cash flow as it invested heavily in accelerated development and ramp-up activities to unlock higher-grade ore zones. The company’s focus on plant optimisation, including commissioning a third ore sorter and upgrading processing circuits, aims to improve throughput and recovery rates in upcoming quarters.

Safety, Environment, and Community Engagement

EQ Resources continues to prioritise safety and environmental stewardship across its operations. Both mines maintained safety performance below industry benchmarks, with comprehensive training and risk assessment programs in place. Environmental initiatives, such as habitat restoration and water management, are integrated into daily operations, alongside community engagement efforts including local school programs and biodiversity monitoring.

Looking Ahead

With the company on track to access higher-grade ore at Mt Carbine and optimise processing capabilities at Barruecopardo, EQ Resources is well positioned to capitalise on favourable market conditions. The strengthened balance sheet and ongoing operational improvements set the stage for sustained growth and value creation in the critical tungsten sector.