Ann: Extension Drilling Commences, page-5

1		EQ Resources Market Cap @ A6.4cps: A.7M Valuation & TP: Not formally covered In cashflow positive production
2	How big IS the Mt Carbine resource. • Treatment of the 12Mt stockpile at Mt Carbine is projected at a rate of 1Mtpy, in a 50/50 JV with European metal trader CRONIMET. Recent de-bottlenecking has led EQR to project monthly production of 90t per month of a 50% WO3 concentrate, generating a strong operating margin. The unmined open pit and underground resource – 9.21Mt @ 0.63% WO3 – and the exploration upside is 100% EQR’s. • The Feasibility Study into the hard rock resource looked at mining around 15% of the total resource at Mt Carbine. That’s ONLY 15% of the total resource. This drill program is designed to extend the resource and get a better understanding of the geology around the high-grade Blossom Zone. • The plan view below shows the various tungsten veins including the Iron Duke mineralization, not included in the Resource, and sited immediately east and north of the Mt Carbine resource. This mineralization would likely fall within an optimized open pit shell. Success in the Western Extension and Eastern Extension drilling could be expected to add to the resource. Our view and interpretation EQR and its JV partner have now optimized the processing of tungsten ore using the TOMRA XRT ore sorters. The power supply, mining equipment, crushing and screening, conveyors and the sorter have been upgraded to support 24/7 operations. In December 2022, Mt Carbine produced 40t of tungsten concentrate, at a 50% grade. EQR now reports that it anticipates producing +/-90t per month of tungsten concentrate through 2022, processing the low grade stockpile ore in its 50/50 JV with CRONIMET. Given the current ammonium paratungstate (APT) price, and the discount for a 50% tungsten concentrate, which has to be to be converted to APT, we anticipate that Mt Carbine could generate A$1M per month for the JV. More significantly it will continue to further de-risk the processing route for the Mt Carbine hard rock mining operation, where we see the real value for EQR. A re-start of open pit mining – 100% to EQR – would generate production from a resource of 0.63% WO3, approximately 8 times the grade of the low grade stockpile currently being processed by the JV. Longer term, we’d expect to see EQR extend the resource base at Mt Carbine along strike and to depth, and to add Iron Duke mineralization to the resource base. This drilling is expected to lead to a firmer understanding or the Mt Carbine resource, and extend the resource and the potential mine life.

Morgans - another research flash