EQ Resources to Acquire Tungsten Metals Group in Major Vertical Integration Move

EQ Resources (EQR) has executed a binding heads of agreement (HoA) to acquire 100% of Tungsten Metals Group Limited (TMG) and its subsidiaries, along with George Chen's interest in Asia Tungsten Products Co Ltd (ATC). The agreement will result in EQR obtaining full ownership of TMG Group, marking a significant step toward diversification and vertical integration of its upstream operations.

TMG Group owns and operates the largest ferrotungsten (FeW) plant outside of China, located in Vietnam. With a potential production capacity of 4,000 tonnes per annum, the facility is considered one of the most competitive in the industry due to its scale and favorable cost structure. The transaction aligns with EQR’s strategy to leverage its existing resource base and expand production throughout the tungsten supply chain.

The acquisition is subject to customary due diligence procedures and shareholder approvals and is expected to close in the first half of 2025. According to the HoA, the enterprise value of TMG Group is $13.5 million, including the acquisition of 100% of TMG shares plus George Chen's 40% interest in ATC, as well as related liabilities.

To complete the transaction, EQR plans to issue approximately 170 million new fully paid ordinary shares and make a cash payment of $2.5 million, which will be funded through customer prepayments for FeW. EQR will also assume TMG Group's liabilities as part of the deal.

EQR CEO Kevin MacNeill expressed enthusiasm for the acquisition, stating, "This transaction aligns with EQR’s strategic initiatives to be the preeminent western tungsten producer. Upon completion, EQR will achieve strategic diversification of products, customers, and geographic presence, becoming a proud owner and operator of critical tungsten operations across three continents. Additionally, EQR will have achieved vertical integration of its upstream operations, leveraging our substantial resource base and existing production output throughout the tungsten supply chain."

TMG’s Executive Chair, Tony Adcock, also highlighted the synergies expected from the acquisition, noting that combining TMG's advanced ferrotungsten plant in Vietnam with EQR's upstream capabilities represents a compelling investment case. "The TMG Board believes there are significant synergies that can be realized through this transaction, with the enlarged EQR positioned well to benefit from growing demand in the tungsten and ferrotungsten markets," Adcock said.