EQ Resources snubs QLD gov’t funding for proposed tungsten mine expansion

EQ Resources (ASX:EQR) has turned its back on a proposed loan from the Queensland Investment Corporation (QIC) to expand a tungsten mine.

QIC is a State Government-owned investment company that seeks to make strategic investments to the net benefit of Queensland – both in terms of quality of life and finances.

In May, EQR and QIC entered early negotiations towards a world where the latter funded the expansion of EQR’s Mt. Carbine tungsten mine with a $20 million loan. Funds were to come from the QLD Critical Minerals and Battery Technology Fund (QCMBTF).

But, those funds are never to leave the account. At least not for EQR’s Mt. Carbine.

The company has on Monday effectively snubbed the QIC proposed loan, determining it not in the interest of shareholders.

“EQR has decided not to accept the revised terms of an extension of the loan facility with QIC. The board and management are confident, that this decision is in the best interest of shareholders and will not negatively impact our ability to deliver our growth projects,” EQR CEO Kevin MacNeill said.

The company pointed to recent deals it’s struck with a view towards walking back from the QIC loan.

“Recent positive offtake and convertible note arrangements executed with Elmet Technologies LLC and Square Resources Holding Pty Ltd,” the company wrote on Monday – that lattermost deal taking place just late last week.

The company also pointed at “third-party interest for additional offtake arrangements,” also citing “large Western tungsten consumers” may be interested.

That good be good timing.

Tungsten is the latest critical mineral slated for an export ban by the Chinese government – which, typically, controls the lion’s share of world supply.

Whether or not that formed part of EQR’s thinking wasn’t made clear on Monday.

EQR last traded at 5.5cps.

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