EQ Resources Limited, a global tungsten producer with mining operations in Australia and Spain, has secured a binding term sheet for a US$7.5 million royalty-based funding arrangement through its wholly owned subsidiary, Saloro S.L.U. In this transaction, funds managed by Oaktree Capital Management, L.P. have committed to an upfront payment of US$7.5 million. In return, Saloro will grant Oaktree a 2.5% royalty on the gross proceeds received from selling tungsten concentrate produced at the Barruecopardo Project in Salamanca Province, Spain. The funds will support ongoing capital projects at Saloro and reinforce working capital, thereby strengthening the balance sheet of the group as it continues to enhance its tungsten operations. Recent operational improvements at the Barruecopardo mine have led to increased metal recoveries across processing stages, and the construction of a third XRT sorter is expected to boost the production capacity further. Additional equipment has already been ordered to capitalize on these recovery gains, a move timed to take advantage of a significant price improvement in tungsten during the first half of 2025, in the context of firm market conditions driven by China’s tungsten export restrictions. The royalty agreement includes several key components such as an upfront payment, a mechanism for a buy-back option on a portion of future royalty obligations within the first five years, and provisions for security interests over shares held by related entities. These technical indicators underscore the financial structuring behind the deal, notably the 2.5% royalty rate and the buy-back option that could potentially lessen the long-term cost of the funding. Market sentiment appears mixed. On the bullish side, the funding will provide crucial capital to advance operational improvements and expand production capacity, positioning the company to benefit from elevated tungsten prices and sustained market demand. Conversely, the bearish perspective might raise concerns about the ongoing royalty payment obligations, which could weigh on future cash flows, and the reliance on continued regulatory and market conditions remaining favorable. Overall, investors will be watching closely as EQ Resources Limited executes its planned improvements and as global tungsten market dynamics unfold.