EQ Resources Limited (EQR) has announced the signing of a Share Purchase Agreement (SPA) to acquire Saloro S.L.U. from Tungsten Mining JV S.L.U., a portfolio company of funds managed by Oaktree Capital Management L.P. (Transaction).
Oaktree will invest $25 million in the Company by subscribing to 278 million new ordinary shares (Subscription Shares) at an issue price of $0.09 per share (representing a 30% premium to the 15 days VWAP). Consequently, Oaktree will increase its stake in EQR after the Transaction, with a holding of 15.86% (determined as of the day the SPA was signed). Oaktree will receive 78 million options with an exercise price of $0.10 per share and an expiration date two years after the SPA’s completion.
“This is without doubt an outstanding development and a transformational acquisition for EQR that delivers a huge value opportunity for shareholders. We continue building a robust growth pipeline with the addition of the Saloro operation and considering the exploration ground around the Barruecopardo mine is covering prospective historical workings. Saloro has a great management team which built and commissioned a mine during rough times of Covid and now coming to a stage of sustainable production growth. Our technical and geology teams assessed this opportunity in the recent months and with the installation of their first Tomra XRT sorter we can provide technical assistance to our new colleagues at Saloro to immediately optimise production,” EQR CEO Kevin MacNeill said.
“We are delighted Oaktree agrees and supports the value proposition of the expanded operation across two jurisdictions through their investment in EQR at a significant premium, demonstrating commitment to the forthcoming value creation journey. We look forward to having a high-profile globally significant fund such as Oaktree, who has been an excellent owner to Saloro, join our share register and support EQR to expand its footprint and strategic positioning in the global tungsten supply chain. We feel this relationship is accretive to our shareholders”, MacNeill added.
Oaktree Managing Director Federico Alvarez-Demalde stated, “We are excited to have selected EQR as partner to acquire Saloro. EQR is a remarkable partner that shares our operational excellence and ESG values, committed to responsible and sustainable practices. This partnership reinforces our conviction about the incredible opportunity presented in the tungsten supply space, and the need to secure sustainable and ESG focused critical metals supply chains. In that capacity, we have found in EQR an excellent team which demonstrated the ability to create lasting value while positively impacting society and the environment.”
