Paradise Capital
AI & Defense Investor, Ex-Special Operations/Private Military Contractor
Elmet's strategic equity stake in EQ Resources further secures a pathway for tungsten to reach Elmet for processing at stable prices, a positive for Elmet. @mc_khristina expects a muted reaction for Elmet since the stake comes from exercising a deep in-the-money option and the two stay separate stocks. x.com x.comÂ
EQ Resources is still cheap after doubling revenue in a quarter: it trades at 2x next-twelve-month EBITDA and 3x net income. The company reports record Q1 FY27 revenue of A$158.8 million, up 101% quarter on quarter, on production up 81% to 51,233 mtu, with cash up 192% to A$82.3 million. Barruecopardo produced a record 34,088 mtu, up 123%. x.comÂ
EQ Resources looks like a no-brainer because the tungsten rally is not yet reflected in its earnings and it is less known than Almonty. China has stopped exporting tungsten and become a net importer amid surging defense demand and the AI buildout; per @KawzInvests, tungsten rose from $320 to $3,000/mtu in 18 months. Almonty's upside needs excellent execution, while EQR could multiply simply by being discovered. x.com x.comÂ
China's tungsten export cutoff hands pricing power to the two meaningful Western producers, and EQ Resources is far cheaper than Almonty Industries. China spent 40 years closing Western mines with below-cost supply, then halted exports; APT prices rose from $320 to $3,000 in 14 months, new mines need 2+ years, and a US defense ban on Chinese and Russian tungsten starts January 2027. Almonty trades at $81,000 EV per annual mtu; EQ Resources produces nearly 3x the volume at $5,600 per mtu. x.comÂ
EQ Resources should benefit as the tungsten trade catches fire, because unlike rhodium, tungsten has no substitute. Rhodium rose 14 times in 2020-2021 until automakers found substitutes, but chip fabs, defense companies and manufacturers can't stop buying tungsten even after prices quintupled, so demand is almost price insensitive. China has closed the taps and is now importing. EQR is the largest non-Chinese tungsten producer, with two operating mines and insider buying. x.com x.comÂ
Elemental Royalty has a genuine pivot catalyst in a $450M US Department of War commitment tied to a tungsten supply award. It also has a strong recent IPO chart, a low float and high short interest, giving it the criteria of a potential winner. A negative market could still drag it down. x.com x.comÂ
EQ Resources' best upside is still ahead as higher-grade ore reaches production at Mt Carbine in Queensland. It removed 1.6 million tonnes of waste rock to unlock the Iolanthe vein, which runs 3 to 4 times current grade. More tungsten per tonne with APT near $3,000, up from $320 a year ago, is an extraordinary margin story. Production already rose 33% last quarter, the new CEO ran one of the world's largest tungsten mines, and the US defense ban on Chinese tungsten starts January 2027. x.comÂ
Almonty's only upside lies in excellent execution, and the tungsten thesis has to play out all the way. EQR, by contrast, could multiply simply by catching up and being discovered by the market. A reply from another investor adds that Almonty is very expensive at this stage. x.comÂ
EQ Resources, MP Materials and 5N Plus are top picks in minerals and materials, each tied to defense supply chains. EQ Resources runs the Mt Carbine and Barruecopardo tungsten mines, one of the few investable non-Chinese tungsten supply stories. MP Materials has a Defense Department partnership, a 15% government equity stake and a $110/kg NdPr price floor for 10 years. 5N Plus supplies germanium for precision-guided munitions, with a defense supply-chain re-rating already underway. x.comÂ
Critical-metals miners such as tungsten producer Almonty Industries supply inputs AI cannot do without, and those inputs are barely priced. Almonty CEO Lewis Black says every semiconductor needs tungsten gas in fabrication, with zero substitutes, and the AI trade has run through chips, memory and power but not raw materials. He blames the sector's weak year on hyped junior miners without operating mines; the ones to own have real mines, growing revenue and profits, and invested management. x.comÂ
Almonty Industries gains from a policy-driven tungsten squeeze outside China. Every advanced chip uses WF6 gas made from tungsten, with no mature substitute. China's tungsten powder exports to Japan were zero, and outside China tungsten sits 3% off its high. From 2027, Pentagon contractors cannot use tungsten from China, Russia, North Korea or Iran, about 84% of supply; 18 months is also what chipmakers need to substitute away. Almonty's Korean Sangdong mine and Portugal pit own that floor. … Show more
