Mayank Bansal, CFA
Mayank Bansal is a CFA Charterholder and heads the Equity Research team at Kapitales Research, with over 5 years of experience analysing global equity markets. He leads fundamental, data-driven research combining rigorous financial analysis with macro trends.
EQ Resources Returns to Profit as Tungsten Prices Strengthen
Highlights
Stronger Start to FY27
EQ Resources Limited (ASX: EQR) released its FY2026 Annual Report on 30 September 2026, marking a notable improvement in the company’s financial position after a difficult operating period. The tungsten producer moved back into profitability, rebuilt liquidity and entered FY2027 with stronger exposure to a sharply improved tungsten pricing environment, although weather disruption weighed on annual production.
Financial Position Improves Sharply
EQ Resources reported statutory net profit after tax of AU$7.1 million for FY2026, compared with a loss of AU$39.2 million in the previous financial year. EBITDA improved to AU$50.6 million, reflecting a substantial change in the company’s earnings profile.
Liquidity also strengthened materially. Cash and cash equivalents stood at AU$28.2 million at 30 June 2026, up from AU$1.9 million a year earlier. Meanwhile, net working capital moved to a AU$16.2 million surplus, reversing the prior-year restated deficit of AU$96.8 million.
The improvement followed a broad recapitalisation program that included AU$56.5 million in new equity, AU$25.8 million of debt settled through share issuance and AU$23.5 million received from option exercises. EQR also refinanced €15 million of external debt associated with its Spanish business.
Weather Pressures Tungsten Production
Group tungsten production declined to 118,946 mtu of WO₃ during FY2026 from 167,805 mtu previously.
Operational setbacks were concentrated across both major assets. Mt Carbine experienced water constraints and cyclone-related disruption, while exceptionally heavy rainfall at Barruecopardo limited mine access and pushed activity into lower-grade areas.
Encouragingly, operating momentum improved as Mt Carbine reached the higher-grade Iolanthe vein, while Barruecopardo regained access to higher-grade sections after dewatering. Group revenue reached a record AU$79 million in the June quarter.
Tungsten Market Creates Stronger Backdrop
Market conditions became significantly more supportive during the year. The Fastmarkets APT tungsten benchmark increased from around US$350 per mtu in March 2025 to approximately US$2,900 per mtu by June 2026.
Chinese export controls and rising strategic demand for non-Chinese tungsten supply contributed to the price escalation, improving the commercial backdrop for EQR’s Australian and Spanish operations.
FY2027 Outlook Centres on Execution
EQ Resources is now advancing its AU$39 million Mt Carbine Expansion Project, designed to lift crushing capacity from about 1 million tonnes per annum to roughly 2 million tonnes per annum. Commissioning is expected to begin during the March 2027 quarter.
Looking ahead, stronger tungsten pricing, improved ore access and a repaired balance sheet provide a firmer platform for growth. However, FY2027 performance will depend heavily on safer operations, consistent production, improved weather resilience and timely execution of the Mt Carbine expansion.
Note- All data presented is based on information available at the time of writing.
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