A definitive agreement for EQ Resources (EQR) to acquire the remaining 50 per cent of joint venture interest in the Mt Carbine Retreatment JV from CRONIMET has been executed.
The agreement is related to the Joint Venture Interest Transfer with CRONIMET Asia Pte (CR Asia) and CRONIMET Australia (CR Australia).
The agreement formalises the binding Heads of Agreement entered into in October 2023, which was subject to financial and legal due diligence by the parties.
In 2019, EQR – through its wholly owned subsidiary Mt Carbine Retreatment – (MCR), and CR Asia, through its wholly owned subsidiary CR Australia, embarked on a Joint Venture to reprocess the historic Mt Carbine tailings and low-grade ore stockpiles, known as the Mt Carbine Tungsten Operation. Under this arrangement, CR Australia and MCR each held a 50 per cent interest in the JV.
As part of that JV arrangement, CR Asia prepaid an initial US$3.5 million, subsequently increased by an additional US$3 million (currently US$6.5 million), for a long-term offtake agreement for 25,000 of tungsten concentrate from the Mt Carbine Tungsten Operation.
CR Australia loaned US$2.2 million in working capital into the JV and a further US$3.2 million for equipment leases, including one XRT Ore Sorter and various material handling equipment. EQR will assume 100 per cent of these liabilities under the agreement.
With the successful operation of the processing plant and the expansion of operations to include the Andy White Open Pit, EQR and CR Australia have agreed to a streamlined JV structure with EQR purchasing CR Australia’s 50 per cent interest in the JV subject to conditions precedent.
The parties agreed on the following consideration for the transfer of the JV interest:
- EQR to issue new ordinary shares at AUD$0.09 per share to CR Asia (or its nominee), equal to a total of US$ 7.5 million
- EQR assumes all obligations under the offtake agreement
- EQR assumes all assets and liabilities of the Joint Venture
- CRONIMET and EQR enter into a marketing agreement under which CRONIMET will receive a net one per cent marketing fee for marketing Saloro production over five years
EQR’s Chief Executive Officer, Kevin MacNeill, said, “We are pleased that we could conclude the definitive agreement and simplify the commercial structure of our Mt Carbine operations and see CRONIMET join our share register.
“CRONIMET has been a great partner in developing the processing plants and is a well-respected player in the global tungsten market. The relationship remains strong, with CRONIMET taking a marketing role for our Saloro concentrate.”
Featured image: Thapana_Studio/shutterstock.com
