The company has just completed a bankable feasibility study for the restart of the Andy White pit, which would set it up for a third, much larger phase.

 

Phase one is already underway and targets incremental improvements from processing of the existing 12 million tonnes of stockpiled ore in a joint venture with global metals group Cronimet.

 

The proof of concept has helped feed into the BFS.

 

Phase two upgrades the infrastructure, and dewaters the existing pit before targeting the high-grade ores.

 

The largest cost would be new $14.5 million crushing, screening and processing, adding to the existing facilities and ore sorters.

 

EQ has already spent $3 million on the project.

 

The BFS delivered a pre-tax net present value of $131.5 million, an internal rate of return of 154%, and a mine life of 12 years that generates earning of $207 million.

 

Payback would be 25 months, but years three and four would focus on the high-grade pit, delivering operational pre-tax cash flow of $38 million and $95 million respectively.

 

C1 cash costs are put at US$113 per metric tonne unit, compared with expected concentrate sales of $315/mtu. An mtu is equivalent to 10 kilograms.

 

Mt Carbine is approved to process 1Mtpa, but the pilot operation is limited to current plant capacity of 480,000tpa. 

 

CEO Kevin MacNeill said on site concentrate production had been rising as the new equipment has come online in recent months, so the company is confident of getting the financing for the next phase of the development. 

 

The BFS only assessed 16% of the current 9.21 million tonnes at 0.63% tungsten resource. 

 

Some 80% of resources are in the underground areas.

 

EQ's plan is to restart the pit without over-capitalising, and set Mt Carbine up for phase three, which would see an expansion of the pit and rehabilitation underground workings.

 

A phase three scoping study for phase three will be prepared early in 2022.

 

MacNeill said Mt Carbine was positioned as one of the lowest cost tungsten-only producing mines in the world, which positions it well in a world which needs high costs to incentivise new supply. 

 

The company earlier this year raised A$6 million by issuing notes that can convert at 6.5c. 

 

EQ shares were up 6% this morning to 7.3c, capitalising the company at $93 million.

 

The stock hit a 12-month peak of 7.8c earlier in the session. It has traded as low as 2.3c over the past year.