Domestic tungsten challenges the orthodoxy

EQ Resources’ Mount Carbine operation may have passed the haute couture test that has traditionally kept investors at a distance from tungsten. The mineral had long been unfashionable compared to its Hollywood cousins gold, silver and nickel, MineLife resources analyst Gavin Wendt said. Mount Carbine, located west of Port Douglas in far North Queensland, is the only pure tungsten mine in the country. Mr Wendt said funding had traditionally not flowed to the tungsten sector due to its volatility. “Tungsten has been a difficult one,” he said. “It's not a sexy commodity. It's not at the top of the hit parade as far as investors are concerned when they think of commodities. “Certainly, as far as Australia is concerned, we think of gold and nickel and copper and zinc and even tin. “But tungsten is one of those commodities that has traditionally, in recent decades, been difficult for companies to make money out of. I'm talking internationally here as well as domestically.” “Volatility, higher operating costs and a supply side dominated by low-cost Asian suppliers has made it difficult for the domestic industry.” A different approach Enter EQ Resources chief executive officer Kevin MacNeill, who is approaching the opportunity differently. EQ Resources bought the mining leases with the acquisition of Mount Carbine Quarries in 2019 and, with it, an immediate cashflow. EQ Resources CEO Kevin MacNeill The company is also tapping into an historically mined resource where Roche Brothers spent 10 years for 20 million tonnes mined in the mid-70s to mid-80s. More than half was stockpiled and EQ Resources is running that material through an XRT sorter as the low-hanging fruit. The plans were to push the current open cut down 60m before mining stopes underground, all the while growing their capacity and their bank balance, Mr MacNeill said. A cash-flow bird in the hand was worth two in the dark bush of a fickle market, Mr MacNeill told Industry Queensland late last year. “Most (junior miners) come up in the exploration game and I think the tendency is to drill, drill, drill because the market loves it,” Mr MacNeill said. “And you keep drilling off and drilling off and drilling off these massive reserves. “Then they do the feasibility study and then somebody says, ‘Oh, your feasibility plans will cost you $500 million.’ So now what are you going to do? You’ve got to put up 30 per cent equity for that. “Once you have all the de-risking and you have some cash flow you’re able to do some debt financing by bringing the banks in here and limiting your exposure because you’ve already put your equity into the game early on. “The next step for us is just increasing our crushing capacity in the early works … our bankable feasibility study shows compelling returns and a 10-plus year mine life. “We are well underway in expanding crushing and sorting capacity putting us into a position to open up the open pit, subject to permitting.” Hardened alloys Tungsten is a hardening additive with properties that make a steel alloy which is the preferred source for demanding operational environments. It has the highest melting point of all elements and applications include drill bits, superalloys, radiation shielding and gas tungsten arc welding. Work on the open pit is scheduled for late this year, subject to permitting. The published pre-feasibility study has identified an in-situ opencut resource and a historical low-grade stockpile. Ore reserves are 1.26 million tonnes at 0.71 per cent WO3 and 10.2 million tonnes at 0.075 per cent WO3 respectively. Resource drilling is ongoing to optimise pit design and start the process of mapping out potential underground mining using an historic decline into the Mount Carbine deeps. EQ Resources has partnered with German company Cronimet, which employs sensor-based sorting processes to extract value from the low-grade piles. Cronimet has sold Mount Carbine product to customers in the US, Singapore and Austria. Current sales of tungsten concentrate are around 20 tonnes a month, but completion of early works capital spending, including a second TOMRA XRT ore sorter are expected to more than double output, Mr MacNeill said.

Domestic tungsten challenges the orthodoxy

Industry Queensland

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