Australia-based EQ Resources (EQR) has signed a share purchase agreement (SPA) to acquire Spanish tungsten producer Saloro from Tungsten Mining JV (Tungsten Mining).

Tungsten Mining is a portfolio company of funds managed by investment management firm Oaktree Capital Management.

According to the terms of the transaction, Oaktree Capital Management will invest A$25m ($16.4m) in EQ Resources through the subscription of 278 million new ordinary shares in the latter at A$0.09 ($0.059) per share.

Following the completion of the deal, the investment firm will become a substantial shareholder in EQ Resources with a stake of 15.86%.

Besides, Oaktree Capital Management will receive 78 million options for an exercise price of $0.1 ($0.0066) per share. The options are exercisable during the period of two years after the date of completion of the SPA.

Saloro owns the producing Barruecopardo tungsten mine in Salamanca, Spain. The company acquired the past producing tungsten mine in early 2019 and brought it back into production after a gap of nearly 40 years.

Currently, the Barruecopardo mine is producing around 140 tons/month of high-grade tungsten concentrate.

The Spanish tungsten mine is also undergoing various minor plant expansion projects for higher recovery and throughput.

Oaktree Capital Management managing director Federico Alvarez-Demalde said: “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.”

EQ Resources, which owns the Mt Carbine tungsten mine in Queensland, Australia, aims to improve its capital market positioning through the acquisition of Saloro.

EQ Resources CEO Kevin MacNeill said: “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.”

The deal is subject to multiple conditions, including the approval of foreign direct investment agencies in Australia and Spain.

In May 2023, EQ Resources awarded a mining services contract worth about $117.5sm to Golding Contractors to restart the open pit mining operations at the Mt Carbine project.