Eurobattery Minerals to acquire majority stake in Spanish tungsten miner

Swedish miner Eurobattery Minerals (FRA: EBM) has signed a non-binding letter of intent to invest €2.5 million ($3.7 million) in Spanish company Tungsten San Juan (TSJ) and obtain 51% ownership on a fully diluted basis.

TSJ is working on the development of the San Juan wolfram deposit, located in Galicia, northwestern Spain. The site has proven reserves of 60,000 tonnes at 1.3% WO3, tungsten mineralization that has never been mined. 

“This acquisition is a game changer for Eurobattery Minerals and it will transform the company’s DNA,” CEO Roberto García Martínez said on Tuesday. “Tungsten is listed as a critical raw material by the EU and tungsten-enhanced steel is vital, for example, for the defence industry.”

The payment is to be made in cash in two tranches of €1.5 million and €1 million, respectively, where the company would access its full ownership stake directly after the payment of the first tranche, Eurobattery said in a press release. Both instalments are to be made this year, it said. 

TSJ has planned an initial small-scale open-pit operation. With consideration of a potential extension of the open pit as well as the other reserves in the remaining numerous outcroppings of skarn, TSJ forecasts a mining objective for the project in the order of at least 960,000 metric ton units (which are 10 kg each). That is more than 12 times the size of the proven reserves.

Licences, off-take

San Juan has all the necessary licences and contracts in place to commence production, according to Eurobattery. These include a letter of intent for an off-take agreement with Wolfram Bergbau und Hütten AG, an Austrian tungsten producer within the Swedish Sandvik Group.

Eurobattery Minerals’ full investment amount would primarily be used for designing and building a processing plant and as working capital for starting production, the company said. First tungsten delivery is expected next year.

Tungsten is a critical raw material used widely in industrial applications, as well as in the electronics and power industry, and the aeronautics and defence sectors.

Eurobattery Minerals is also the majority owner of the ground and mining rights to the Hautalampi nickel-cobalt-copper project in Finland and the Corcel nickel-copper-cobalt project in Galicia. 

Shares in Eurobattery Minerals fell less than 1% to 3 euro cents apiece on the Eruonext exchange in Paris on Wednesday. They’ve traded in a 52-week window of 2.7 euro cents to 45 euro cents.