EQ Resources opens FY2027 with record tungsten cashflow and new guidance

Record tungsten quarter delivers stronger cash position

EQ Resources Limited (ASX:EQR) has started FY2027 with a quarter that materially changes the financial shape of the tungsten producer. Revenue more than doubled from the previous quarter to a record A$158.8 million, while unaudited EBITDA reached A$122.5 million and unaudited NPAT hit A$114 million.

“Q1 FY2027 cash and accrual movements (A$m).”

Operating cashflow was A$75.6 million, lifting cash from A$28.2 million at the end of June to A$82.4 million at 30 September after investing and financing outflows. The filing also reports A$51.5 million in receivables, giving the quarter a substantial accrual and cash-generation component rather than relying solely on production statistics. EQ Resources had already flagged a sharp recovery in its previous quarterly records, but this report now puts costs and cashflow behind the headline numbers.

Production, pricing and costs moved in the same direction

Group tungsten production increased 81% from 28,315 to 51,233 metric tonne units, or mtu, while sales rose 69% to 49,715 mtu. Realised pricing climbed 20% to US$2,248 per mtu, and reported cash cost fell 30% to US$483 per mtu. One mtu represents 10 kilograms of 100% tungsten trioxide, or WO₃.

“BARRUECOPARDO OPERATIONS”

Barruecopardo supplied the largest operational step-up. Production more than doubled to 34,088 mtu as the Spanish mine moved from dewatering and pre-stripping into full ore production. Ore mined more than tripled, the strip ratio improved sharply, and the mine ended the quarter with 669,541 tonnes of run-of-mine stockpiles. At Mt Carbine, production rose 31% to 17,145 mtu, with recovery improving through the quarter as higher-grade ore and plant optimisation supported processing.

First FY2027 guidance sets a higher execution bar

For the first time, EQ Resources has provided full-year guidance of 240,000 to 280,000 mtu of production, cash costs of A$595 to A$691 per mtu, equivalent to US$416 to US$483, and capital expenditure of A$80 million to A$100 million. The company said it will stop providing monthly performance updates now that formal annual guidance has been introduced.

The targets imply that the unusually strong first quarter must be followed by sustained output, cost control and delivery of the planned investment program. That is not a forecast of what will happen, but it does give investors a clearer set of operational markers against which future quarters can be measured.

Mt Carbine expansion and exploration advance

“Mt Carbine Processing Plant Expansion and Automation Project.”

The A$39 million Mt Carbine processing plant expansion and automation project remains on budget and on track for commissioning in the March quarter of 2027. Procurement packages have been awarded, major equipment deliveries have begun and construction work is under way. The project is intended to lift crushing capacity from about 1 million tonnes a year to approximately 2 million tonnes a year while integrating and automating the existing plant. It follows the company’s Mt Carbine expansion approval, which targeted commissioning in Q3 FY2027.

Exploration is also moving into its next phase, with 17,233 metres drilled at Mt Carbine and an 8,000-metre program designed for Wolfram Camp. In Spain, 12 of 36 planned holes have been completed in a 12,200-metre Barruecopardo program. Assay results and updated resource estimates remain future catalysts rather than current additions to the company’s mineral inventory.

Barruecopardo regulator issue remains unresolved

The main qualification to the strong quarter sits at Barruecopardo. EQ Resources said engagement with the Salamanca territorial industry, commerce and economy service has mitigated the previously reported risk of a temporary suspension linked to partial non-compliance with the mine’s restoration plan. The company also said work continues to address that non-compliance and meet regulatory requirements, meaning the immediate suspension risk has been mitigated rather than the underlying matter fully closed.

The company has additionally secured a 10% interest in a US tungsten-processing joint venture with The Elmet Group and Blue Moon Metals to restart the 4,000-tonne-per-annum Springer ammonium paratungstate plant in Nevada. For now, the more immediate test is whether the mines can convert this record opening quarter into the production and cost range promised for FY2027 while the expansion and regulatory work proceed in parallel.