EQ Resources' (ASX:EQR) preview for the September quarter featured "solid production and cash generation" from both its Australian and Spanish businesses, Euroz Hartleys said in a Tuesday note.

The company's cash on hand increased to AU$82 million quarter over quarter, 30% higher than the equity research firm's estimated closing cash balance of AU$63 million, as strong tungsten pricing buoyed cash generation.

Physicals performance was also positive with the company's Barruecopardo project in Spain producing 34,088 metric tonne units in the quarter, 23% higher than Euroz Hartleys' expectation, while the 17,145 metric tonne units of production at the Mt Carbine project in Queensland improved 31% from the previous quarter.

At spot tungsten prices, the investment firm forecasts EQ Resources generating about AU$400 million in free cash flow in fiscal 2027.

"Andrew Forrest's 16.8% stake in the company, followed by a low cost and strategic entry into the USA's downstream tungsten market demonstrates a consistent positive drive from management to deliver for shareholders," Euroz Hartleys said.

It maintained a speculative buy recommendation on EQ Resources with an unchanged target price of AU$0.55.

EQ Resources shares fell 11% in recent Tuesday trade.