EQ Resources (ASX: EQR) adds 39% more tungsten at Barruecopardo — but will permit delays impact 2034 mine life plan?

EQ Resources Limited (ASX: EQR) has announced a substantial 39% increase in ore reserves at its 100%-owned Barruecopardo tungsten mine in Salamanca Province, Spain. The new reserve estimate extends the projected mine life through to 2034, up from prior forecasts, and reaffirms the project’s role as a key pillar in the company’s global tungsten production strategy.

The updated reserve estimate, effective as of 30 June 2025, lifts total contained tungsten metal to 1.89 million metric tonne units (mtu), compared with 1.35 million mtu previously. This increase translates to a total ore reserve of 13.87 million tonnes at a grade of 0.136% WO₃, up from 9.04 million tonnes at 0.150% WO₃. While the average grade has marginally declined, the increase in mineable tonnage more than offsets this, resulting in a substantial uplift in recoverable metal.

What is the rationale behind the reserve upgrade and how was the estimate conducted?

The significant increase in ore reserves at the Barruecopardo mine follows a detailed reassessment of resource models and operational performance by EQ Resources Limited’s technical team. The updated estimate was compiled by independent mining consultancy Mining Sense Global SL, with oversight from Mr. Hugh Thompson, a qualified Competent Person under the JORC Code. The new reserve figures account for depletion through mid-2025 and reflect ongoing improvements in ore recovery and processing efficiencies.

Since acquiring the Barruecopardo operation in January 2024, EQ Resources Limited has implemented an aggressive multi-phase improvement program aimed at enhancing process recoveries and mine planning. The 2025 reserve update builds upon the ore reserve announced in late 2024 and the subsequent depletion calculations disclosed in the 2025 annual report. By incorporating revised assumptions, including higher recovery rates and an adjusted mine plan, the latest estimate provides an updated and economically viable picture of the asset’s long-term potential.

How does the new reserve profile compare with previous estimates?

In quantitative terms, the ore reserve has risen from 9.04 million tonnes to 13.87 million tonnes. The contained metal has jumped from 1.36 million mtu to 1.89 million mtu, even though the average grade has decreased slightly. This is primarily due to the reclassification of additional resource blocks as economically mineable ore following higher recovery assumptions and improved processing flows.

The update splits the reserve into 3.89 million tonnes of proved ore at 0.142% WO₃ and 9.98 million tonnes of probable ore at 0.134% WO₃. The inclusion of 0.24 million tonnes of high-grade stockpiled ore at 0.173% WO₃ remains unchanged. Notably, the conversion of previously indicated and measured resources to reserves benefits from improved economic assumptions, particularly around long-term tungsten pricing and reduced operating costs.

What operational improvements and market forces contributed to the upgrade?

A key driver of the reserve upgrade has been a tangible improvement in processing performance at Barruecopardo. Historically, the plant was underperforming, with recoveries around 45%, far below its design capacity. Since 2024, EQ Resources Limited has been executing a seven-stage performance enhancement plan aimed at lifting recoveries to approximately 78%. As of mid-2025, the company reports that it is 70% through this plan, with plant recoveries rising to 58% in year one and 71% forecasted thereafter. These assumptions form the basis of the updated reserve model.

The market backdrop has also strengthened significantly. Over the past six months, tungsten prices have experienced a sustained rally, driven by geopolitical tensions, structural supply deficits, and demand growth in sectors such as defence, energy transition technologies, and electronics. EQ Resources Limited has conservatively assumed a long-term price of USD 450/mtu WO₃ in its reserve model. Additionally, the plant throughput capacity has been lifted from 120 tonnes per hour to 193 tonnes per hour through equipment upgrades, including the installation of three XRF ore sorters. These factors have collectively improved the economic viability of lower-grade material that was previously uneconomic to process.

What regulatory and permitting risks remain, and how might they affect production timelines?

Approximately 65% of the declared reserves lie outside the current approved mining boundaries and are subject to permitting extensions. Accessing these reserves requires regulatory approval for adjustments to pit geometry and expansion of the existing waste storage facility. The company acknowledges that these approvals may involve additional environmental impact assessments, particularly given the increased volume of tailings and mine waste expected over the extended mine life.

Nonetheless, EQ Resources Limited has a strong permitting track record in Spain. The operator of the Barruecopardo mine, Saloro SLU, has maintained full compliance with existing mining and environmental permits since operations began in 2019. The company asserts that the changes are internal reconfigurations and remain within the broader concession boundary. Given the site’s low environmental footprint, long-standing relationships with regulators, and absence of community opposition, management anticipates timely approvals. The current environmental permit allows mining through 2044, offering significant runway for mine development even with permit variation processes underway.

How are institutional investors responding to the reserve increase and mine extension?

The reserve upgrade has been well received among institutional investors and strategic analysts tracking the critical minerals sector. The extension of mine life by an additional nine years provides added visibility to EQ Resources Limited’s production outlook and solidifies its role as a key European tungsten supplier. This is particularly important as downstream buyers in the EU continue to seek stable and traceable sources of tungsten to meet clean energy, battery, and defence supply chain goals.

EQ Resources Limited now benefits from a diversified production base, with Barruecopardo in Spain complementing its Mt Carbine operations in Queensland, Australia. This dual-asset footprint gives the company strategic flexibility to meet demand from both the European and Asia-Pacific markets. The company is also positioned to benefit from increased EU scrutiny on Chinese-dominated tungsten supply chains, creating a potential premium for locally sourced concentrate.

What are the key economic assumptions behind the new reserve model and what risks remain?

The updated ore reserve model applies a cut-off grade of 0.038% WO₃, with overall dilution estimated at 27% and mining losses at 8%. Long-term metallurgical recovery is assumed to be 71%, with a conservative initial year recovery of 58%. Operating cost assumptions include processing costs of USD 9.42 per tonne and selling costs of USD 3.14 per mtu. A payability factor of 78% is applied based on current commercial offtake contracts. The model assumes a flat exchange rate of 1.12 USD/EUR, and no inflation or escalation factors have been applied across the life-of-mine plan.

The primary project sensitivities lie in metallurgical recovery performance and dilution control. Management has acknowledged that recoveries below 60% could make certain areas of the pit uneconomical to mine. However, given the progress of the ongoing improvement plan and the historical underperformance of the plant, there is confidence that recovery targets are achievable. The company also notes that no inferred resource material has been included in the reserve model, ensuring high confidence in the estimate.

What does this mean for EQ Resources Limited’s long-term strategy and global positioning in tungsten?

The reserve expansion at Barruecopardo marks a pivotal step in EQ Resources Limited’s ambition to become a globally dominant producer of tungsten. As demand for critical minerals continues to escalate, particularly across electrification, green infrastructure, and national security segments, the company is well-positioned to capitalize on its strengthened asset base.

The 13.87 million tonnes of mineable ore now declared at Barruecopardo provides EQ Resources Limited with over nine additional years of production runway. This not only supports future revenue visibility but also reinforces the company’s marketing position in securing longer-term offtake contracts with industrial and strategic buyers.

EQ Resources Limited has reaffirmed its commitment to responsible mining and is actively progressing its environmental rehabilitation, permit extensions, and waste facility redesigns. These efforts, combined with growing institutional interest in sustainable and regional supply chains, could enhance the company’s valuation and investment appeal in the coming quarters.

What are the key takeaways from EQ Resources Limited’s Barruecopardo reserve upgrade and mine life extension?

• EQ Resources Limited (ASX: EQR) has increased ore reserves at its Barruecopardo tungsten mine in Spain by 39%, from 9.04 million tonnes to 13.87 million tonnes as of 30 June 2025.
• Total contained tungsten metal now stands at 1.89 million metric tonne units (mtu), up from 1.36 million mtu, despite a slightly lower average grade of 0.136% WO₃.
• The reserve estimate was prepared by Mining Sense Global SL and reviewed by Competent Person Hugh Thompson under the JORC Code 2012 framework.
• The updated mine plan extends the projected life of the Barruecopardo operation through to 2034, adding nine years of production visibility.
• Operational improvements have raised tungsten recoveries from historic levels of ~45% to 58% in year one, with 71% targeted for the rest of the mine life.
• The economic model is based on a USD 450/mtu WO₃ price, 78% payability, and a processing cost of USD 9.42/tonne, reflecting conservative but commercially grounded assumptions.
• Approximately 65% of the upgraded reserves require permit extensions related to pit boundary and waste facility expansion, although management expects timely approvals.
• Institutional sentiment has been positive, with analysts viewing the reserve uplift as de-risking the asset and strengthening EQ Resources Limited’s critical minerals profile in Europe.
• Barruecopardo’s strategic location and established sales contracts position EQ Resources Limited as a key non-Chinese tungsten supplier to the EU industrial base.
• The company continues to progress a seven-stage performance plan and environmental rehabilitation to ensure compliance, sustainability, and operational continuity.