The Royalty Giants Pay for Optionality. Tungsten Just Showed What It Is Worth

Mississauga, Ontario, October 1st, 2026, FinanceWire

Some of mining's largest royalty companies have built their businesses without operating mines. They acquire contractual interests in future production, sometimes before an asset is fully developed, while another company funds and operates the mine. The value lies partly in timing: securing exposure before drilling, development or commodity prices reveal what it may be worth.

Tungsten is the latest case study. Its price rose about sixfold between January 2025 and April 2026, the largest increase among the critical minerals assessed by the International Energy Agency. China mined roughly 79 percent of global supply in 2025 and has required export licenses since February of that year. The U.S. has not mined tungsten since 2015.

Spark Energy Minerals Inc. (CSE: SPRK) (OTCPK: SPARF) (FSE: 8PC) is not a royalty company. It controls its exploration properties and carries the geological and financing risk that comes with them. But the same timing principle applies at the asset level.

Spark's 12 Seridó permits in Rio Grande do Norte, Brazil, cover 21,493 hectares in the district that has supplied most of Brazil's tungsten since the Second World War. They were granted in 2023 and 2024, before the price increase, and tungsten-focused reconnaissance began in September.

"Spark secured 21,500 hectares on the rocks that host those mines before tungsten prices took off, and our geologists are now in the field," said Chief Executive Officer Dr. Fernando Tallarico. The Arapaima Project in Minas Gerais, where Spark has reported gallium and rare earth discoveries, remains the company's principal focus.

Who Buys Tungsten, and Where It Comes From

About 60 percent of U.S. tungsten goes into cemented carbide, the hard material used in cutting, drilling and machining tools; the rest goes into specialty steels, alloys, turbines, aircraft, armor, electrical components and chemicals. Its density and hardness also make it useful in armor-piercing projectiles. Demand has remained strong despite soaring prices: MSC Industrial Direct (NYSE: MSM) reported in July that tungsten carbide costs had risen about 500 percent, while cutting-tool volumes continued to grow because substitutes are limited.

Supply is unusually concentrated. Of roughly 85,000 tonnes mined globally in 2025, China produced 67,000, compared with 3,000 from Vietnam, the next-largest producer, according to the U.S. Geological Survey. China is also the largest importer and consumer of tungsten concentrate, while the number of mineral tariff lines under Chinese export controls has tripled since 2023. The U.S. mined none and imports more than half of its tungsten. The International Energy Agency ranks tungsten among the materials most exposed to supply vulnerabilities and identifies it as important to aerospace and defense.

Governments are responding with tariffs, stockpiles and incentives. Beginning January 1, 2027, U.S. defense contractors cannot use tungsten powder or heavy-alloy parts made from ore mined in China, Russia, Iran or North Korea. U.S. tariffs on several Chinese tungsten products reached 50 percent in late 2024, while a new rule requires U.S. tungsten scrap to be sold domestically unless an exception is granted. Defense Production Act funding has supported tungsten projects in Nevada, New Brunswick and Yukon, while Washington is exploring up to $700 million to support development in Kazakhstan. Europe has also identified tungsten as a strategic raw material and is moving toward coordinated stockpiling. The IEA describes the added cost of diversified supply as a “mineral security premium”, effectively insurance against supply concentration.

Brazil is increasingly part of that conversation. It participated in the U.S.-hosted Critical Minerals Ministerial in February, followed by a Brazil-U.S. critical minerals forum in São Paulo in March involving U.S. government financing agencies. The Seridó region has produced scheelite for more than 80 years, and Rio Grande do Norte's tungsten exports rose 356 percent in the first half of 2026, at four times the prior-year price. Brazil is also not among the countries restricted under the Pentagon's new sourcing rule.

What Optionality Pays

Franco-Nevada Corporation (NYSE: FNV) (TSX: FNV) describes its model as providing exposure to gold prices and exploration upside while limiting exposure to cost inflation. Second-quarter revenue rose 57 percent to $580.9 million as gold equivalent ounces sold increased 18 percent. In April, it paid $40 million for six royalties previously held by Victoria Gold, three of them on earlier-stage properties in Nevada and the Yukon.

Wheaton Precious Metals Corp. (NYSE: WPM) (TSX: WPM) reported record second-quarter revenue of $929 million, up 85 percent, while gold equivalent ounces sold rose 14 percent. Its cash operating margin per ounce increased 65 percent. In June, Wheaton acquired a 1.5 percent net smelter returns royalty covering seven exploration properties in Japan for $7.5 million, plus a right of first refusal on those properties and nine others.

Royal Gold, Inc. (Nasdaq: RGLD) more than doubled second-quarter revenue to $450.5 million as metal prices rose and newly acquired interests began contributing, including gold at Xavantina and copper at Chapada, both in Brazil. Its July restructuring of the Hod Maden project illustrates the value placed on future choices. Alongside a new 2.5 percent royalty, Royal Gold received the right to buy an additional 2 percent royalty for $160 million, exercisable until 12 months after commercial production begins. Spark has no relationship with Franco-Nevada, Wheaton or Royal Gold.

What does early exposure look like at the junior end of the market, in a metal that has already repriced?

Three Metals on the Assay Sheet

Spark's crews are mapping and sampling for scheelite, the district's principal tungsten ore mineral, and samples will also be analyzed for gold and bismuth. The district hosts all three. A gold mine that declared commercial production in September 2025 is 18 kilometers from Spark's Lagoa permits. The Bonfim gold-tungsten-bismuth skarn lies 28 kilometers from its northern permits. Spark holds no interest in either mine and has not verified their reported figures; mineralization on neighboring properties is not necessarily indicative of mineralization on Spark's permits.

Gold traded around $4,300 an ounce in September. Bismuth, which has also been subject to Chinese export licensing since February 2025, is near five times its 2023 price. Spark has not identified gold or bismuth mineralization on its permits; the assays will show whether the district's other two metals are present on its ground.

A Field Test Before the Assay

Scheelite is pale and can be difficult to recognize in daylight, but it fluoresces blue-white under short-wave ultraviolet light. Spark is checking every rock and float sample under a UV lamp at its field base, so geologists can flag possible scheelite on the spot.

The highest of 1,888 public stream-sediment samples in the district returned 122.3 parts per million tungsten and included scheelite in its panned concentrate. It lies 1.6 kilometers outside a Spark permit in the first-priority Bodó area. Around the Lagoa permits, 13 of 21 public sampling stations within five kilometers are classified as anomalous or higher. Most of the public samples lie outside Spark's permits and are not necessarily indicative of mineralization on the project.

First assay results from the sampling program are expected before year-end. Ground geophysics will follow on any target confirmed in the field, ahead of drill planning.

What Arapaima Has Already Established

Spark is still in the early stages of its exploration story, with Seridó representing a newly advanced opportunity in a tungsten district with a long production history. At Arapaima, the company has already drilled 42 reverse-circulation holes across the Cruzeta and Boa Vista centers, with all 33 holes reported to date returning gallium from surface and rare earth mineralization beneath. At Seridó, the company has now moved from securing the ground to systematic field exploration, with mapping, sampling and follow-up geophysics underway. The next step is to determine what the targets can reveal through laboratory analysis and, ultimately, drilling.

Royalty companies demonstrate the value of securing exposure before the full potential of an asset is understood. Spark has done exactly that at two Brazilian projects: Arapaima, where drilling has already established multiple zones of gallium and rare earth mineralization, and Seridó, where the company controls more than 21,000 hectares in a historic tungsten district acquired before the metal's dramatic price appreciation. With field exploration now underway at Seridó and additional Arapaima results still to come, Spark is moving from geological potential toward the data needed to define it. No tungsten, gold or bismuth mineralization has yet been identified on the Seridó permits, and none of the targets has been drilled. For investors watching critical minerals, the next assays could provide an important look at what that early positioning may ultimately be worth.

The scientific and technical information about Spark's projects in this article is drawn from Spark's news releases of September 16 and September 23, 2026, and has been reviewed and approved by Dr. Fernando Tallarico, P.Geo., FSEG, Chief Executive Officer and Chairman of Spark, a Qualified Person as defined by National Instrument 43-101, who is not independent of Spark.

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