EQ Resources Shares Holding Strong on Record Production

EQ Resources shares (ASX: EQR) extended a remarkable rally, climbing 3.77% to A$0.28 on Thursday as the tungsten producer reported its strongest quarterly performance in over two years, reinforcing its position as the West’s leading supplier amid a global supply squeeze.

The EQ Resources share price heads into the final trading session of the week at A$0.28, marking a 243% gain year-to-date, despite having chopped around in a range for much of the past four months, as you can see on the chart above. Yesterday’s gains came on the back of preliminary quarterly figures that exceeded market expectations, with the company delivering both production and revenue milestones.

Record Production and Revenue Breakthrough

EQ Resources delivered 13,050 metric tonne units of tungsten concentrate during the quarter ended 30 June 2026, representing a 175% quarter-on-quarter increase and the highest production since the first quarter of FY2024. The surge in output translated directly to the bottom line, with record sales reaching A$79 million, up 140% from the prior quarter.

The production jump marks a critical validation of the company’s strategy at its flagship Mt Carbine operation in Queensland, where months of waste stripping and development work to access the higher-grade Iolanthe vein system have begun yielding results. The operation has transitioned from a period of elevated stripping ratios and modest profitability to a phase where higher-grade ore is feeding through the processing plant, driving both volume and margin expansion.

At the company’s Barruecopardo mine in Spain, operational momentum has also strengthened, with recent months seeing record monthly output approaching 12,000 mtu. The two-asset platform provides geographic diversification and production flexibility, allowing the company to respond to varying market conditions across jurisdictions while maintaining consistent supply to Western customers increasingly concerned about reliance on Chinese tungsten sources.

The revenue figure of A$79 million in a single quarter represents a material step-change for a company that has historically operated at micro-cap scale. With tungsten APT prices consolidating around US$3,000 per mtu in Rotterdam markets through recent weeks, the combination of volume growth and sustained high pricing is delivering the operating leverage that markets had long anticipated but struggled to see in earlier reporting periods.

Mt Carbine Expansion Approved

Holders were further boosted in early June, as EQ Resources’ Board formally approved a A$39 million expansion project at Mt Carbine designed to double crushing capacity from approximately 1 million tonnes per annum to 2 million tonnes per annum. The expansion, expected to reach full commissioning in the third quarter of FY2027, initially targets an additional 500 tonnes of tungsten concentrate annually through processing of low-grade stockpiles, with further upside potential from resource conversion, exploration at the adjacent Wolfram Camp project, and regional feed sources.

The capital commitment signals management confidence in both the durability of current tungsten market fundamentals and the resource base at Mt Carbine. The project economics are underpinned by the assumption that elevated tungsten prices will persist through the construction period and into initial production, allowing the company to generate returns that justify the significant capital outlay relative to its historical balance sheet size.

Tungsten Market

The broader tungsten market backdrop continues to provide strong tailwinds for producers with existing capacity. Western APT prices have climbed sharply through late 2025 and early 2026, driven by a combination of Chinese export restrictions, inventory depletion among consumers, and growing strategic concern among defense and aerospace manufacturers about supply chain security for this critical metal.

Industry commentary increasingly frames tungsten as a “war metal” given its essential role in armor-piercing ammunition, aerospace components, and high-temperature applications where substitution is technically difficult or impossible. This strategic dimension has elevated EQ Resources’ profile beyond typical commodity producer status, with the company now positioned as a key element of Western efforts to reduce dependence on Chinese critical minerals supply.

The sustainability of current price levels remains a subject of debate. Bulls argue that structural supply constraints, coupled with rising defense spending and limited new mine development pipelines, will keep prices elevated for years. Bears counter that current pricing reflects panic buying and short-term inventory dynamics, with a risk of sharp correction if Chinese export policy softens or alternative supply sources ramp faster than expected.

Questions Remain

While production volumes have surged, questions remain about the sustainability of output levels and the true all-in cost structure across both operating sites.

Previous quarterly reports showed Mt Carbine operating at or near break-even during periods of heavy waste stripping, and the market will scrutinise upcoming detailed financials to assess whether the June quarter’s strong revenue performance translates to robust free cash flow after accounting for operating costs, capital expenditure, and debt service.

At Barruecopardo, European energy costs present an ongoing margin risk. Spanish power pricing and labour cost inflation have been flagged by market participants as potential headwinds to margin expansion, even in a strong tungsten price environment. The company’s ability to manage these input costs while scaling production will be critical to defending current valuation multiples.

The company now faces a rising expectation bar, and markets will demand continued production growth, clear evidence of free cash flow generation, and successful exploration outcomes to justify current valuation levels.