EQX

About EQX

Equatorial Resources Limited (EQX) is an ASX-listed iron ore exploration and development company with two 100% owned large-scale iron ore projects in the politically stable and investment-friendly Republic of Congo.

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What does Equatorial Resources (EQX) do?

Miners with an iron resolve.

Equatorial Resources Limimted (EQX) is an iron ore explorer and developer. The company was founded in 1986 and is currently headquartered in Perth. It also operates out of a country office in Pointe-Noire, Republic of Congo (ROC) and a business development office in London, United Kingdom.

Over the past 12 years, the company has invested in two projects, the Badondo Iron Ore Project (Badondo) and the Mayoko-Moussondji Iron Ore Project (Mayoko-Moussondji).

Badondo is a potentially large-scale iron ore project located in the northwest region of the ROC. Equatorial began exploring Badondo for mining opportunities in 2010. Due to some initial success, Equatorial applied for a Mining Licence in 2016 but the company never received it.

Mayoko-Moussondji is located in the southwest region of the ROC and the project has access to an existing railway. Equatorial began exploration and development in 2010 with the ROC government granting the company with an exclusive Mining Licence in 2014. A year later, Equatorial sold Mayoko-Moussondji to Midus Global Limited with the intention of receiving a 2% royalty on all production going forward.

Is Equatorial Resources mining in the Republic of Congo at this time?

Equatorial is not mining Badondo or Mayoko-Moussondji at this time. 

In December 2020, the company found out the ROC had granted Sangha Mining Development a Mining Licence and exclusivity to mine the Badondo area. The ROC’s deal with Sangha negated Equatorial’s Exploration Licence, Mining Licence application and rights under a Mining Exploration Convention with the ROC Government.

The ROC government also issued a decree to withdraw the Mining Licence from Midus Global Limited, the mining company from which Equatorial was to receive an ongoing 2% royalty.

As a result of the ROC’s actions, Equatorial commenced international arbitration against the ROC to seek financial compensation for its “unlawful measures” in the final quarter of 2021.

In Equatorial’s most recent quarterly report, the company stated:

“Equatorial’s investment in Badondo and Mayoko-Moussondji have been expropriated and subjected to other unlawful measures by the ROC government as part of a wider campaign to dispossess foreign mining companies of their iron ore interests IN ROC. Various mining assets in the ROC, including Badondo, have been granted to a Chinese linked company named Sanga Mining Development with no apparent due process or legal validity."

Is Equatorial Resources a profitable company?

No, the company is not profitable at this time. However, the company is in a strong financial position with a significant cash reserve of A$19.3m and zero debt as of 31 January 2022.

Due to its dispute with the ROC, Equatorial is seeking out new resource sector opportunities. The company is open to direct project acquisitions, joint ventures, farm-ins, the acquisition of tenements/permits, or direct equity participation.

Is EQX stock a buy?

Investors are extremely bearish on EQX stock at this time. 

During the final quarter of 2021, Equatorial referred its investment dispute with the ROC to the International Centre for Settlement of Investment Disputes (ICSID) in Washington, DC. 

Equatorial expects the arbitration process to take four years to complete but there is no certainty they will be financially compensated by the ROC.

It may also take some time for Equatorial to find new business opportunities.

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Who owns EQX stock?

As of April 2022, EQX stock’s biggest owners are a mix of institutions and individuals. 

These include Westoz Funds Management (11.98%), BlackRock (8.04%), Angus Johnson (7.33%), Mark Savage (6.09%), Croesus Mining (2.61%) and DRFT Management (2.25%).