Ann: Early Works Program Completed, page-10

Note from Morgans

	EQ Resources Limited (EQR) – not formally covered
	EQ Resources has completed the Early Works Program at their Mt Carbine Tungsten Mine, located 130km north of Cairns. This is a significant milestone for the company, with construction and commissioning of all associated equipment and infrastructure now complete. The major items of the Early Works Program were previously outlined in the Company’s Bankable Feasibility Study (BFS), released in September 2021. The Program outlays the basis for the scheduled 1Mtpa operation from the historic low-grade stockpile and later supplemented with higher-grade tungsten ore from the Andy White Open Pit. The open pit historically produced 13.5 million ore tonnes containing approximately 10,000 tonnes of tungsten concentrate. EQR is the only primary tungsten producer in Australia and has a binding off-take agreement on the 12 million tonne Low-Grade Stockpile at Mt Carbine, which is a 50:50 joint venture with global commodity trader CRONIMET. EQR is aiming to re-start mining from the high-grade ore from the 100% owned, Andy White Pit in H1 2023. Major items of the Early Works Program include: Phase 1 Crushing & Wet Screening Circuit installed including all conveyors The 2nd TOMRA XRT Ore Sorter installed and operating. New slurry pipeline installed to connect the recently new wet screen plant to the gravity processing plant. This will lead to significantly reduced haulage and OPEX. Power supply line upgraded, and a new substation installed to permit a 24/7 operation of plant processing equipment. Production outlook now significantly higher and forecast to reach a rate of 1,000tpa of concentrate. Forward works program in line with the BFS include: Installing groundwater monitoring bores to gather hydrogeological information prior to the submission of Environmental Amendment to reopen the open pit. Upgrading and expanding the site office for new operational and third-party contractors. Purchasing dewatering circuit for the Gravity Plant to improve water recovery Purchase of a tertiary crushing circuit for the TOMRA XRT Ore Sorter concentrated with installation and commissioning within the next two months. Scoping works outlined in the 2021 BFS are fully funded through a $6 million grant from the Federal Government’s Critical Minerals Accelerator Initiative (see EQR’s ASX release on the 28th of April 2022). EQR is currently using a local mining contractor who utilise simple “free digging” of the low-grade tungsten ore stockpile. Material is then fed through a simple processing circuit of crushing/ screening/ ore sorting and gravity separation. The BFS outlined a 12-year mine life through mining and processing of ore from the Low-Grade Stockpile and the Open Pit. Our View EQR has achieved a key milestone at their Mt Carbine Tungsten Mine after completing the Early Works Program, designed to expand the production rate to 1Mtpa, and forecast to significantly increase the concentrate output to 1,000tpa. An upgraded crushing and wet screen circuit now allows for a threefold production throughput to the gravity plant and TOMRA Ore Sorters. A doubling of Ore sorting throughput should see increased production efficiencies and a consistent overall mining and processing rate. The overall mining and processing operation is simple and benefits from existing infrastructure, an experienced management team, and an established mine-to-ship logistics chain. We look forward to further updates from EQR, as the team advances through the final stages of permitting to re-start mining of the high-grade Andy White Pit in H1 2023. Figure 1: Recently installed and commissioned Sandvik wet screen plant. Source: Company Image 24/6/2022 Figure 2: Second TOMRA XRT Ore Sorter now installed and commissioned Source: EQR ASX release 27/6/2022

Disclosures Analyst(s) own shares in the following stock(s) mentioned in this report: Corporate disclosure: Morgans Corporate Limited was Lead Manager to the Placement of shares in EQ Resources Limited in March 2021 and received fees in this regard.