Ann: 43% Increase in Mt Carbine Ore Reserves From Western Pit, page-7

Pac Partners updated their research. Likely to see another update when the BFS comes out

EQ Resources (EQR) hasrevised its mining reserves and mine plan ahead of commencing open cutoperations next month.

Key takeouts are:

• Mining Ore Reserveincrease of 43% to 1.66 million mtu of WO3.
• Mine life increased to 7 years from 4.5 years.
• Reserve grade 0.28% as EQR captures more ore given its proven success over the past 12 months in making low grade tungsten ore (0.07%) economic.
• The reserve encapsulates only 19% of the total Mt Carbine resource with further drilling and longer term mine planning underway (we see scenarios of open cut + selective underground mining in latter years).
• 1st year production guidance (issued last month) 760kt @ 0.44% WO3 to be sourced from pit floor location (a FCF yield of 20%++ in FY24 per our model).

Helps confirm ourmodel and positive view of EQ’s progress

While much of the reserveincrease is reflected in our work on EQR already, it is far from reflected inEQs current share price (our target price $0.12c).

After recent share priceweakness across the tungsten names, we reiterate our BUY rating on EQ Resourcesahead of open cut mining commencing in June which will increase current orefeed into the mill from a paltry 0.07% (that EQ manages to make work), to ahigh grade 1st year 0.44% grading ore (recently confirmed with mine plan RC drilling).

Positive FCF from Sept-Qtr onwards should see FY24 be >20% FCF yield relative to today’s market valuation with relatively less risk.
A key part of our investment thesis has been that EQR is already operational, funded and only modest capital has been needed to redevelop theopen cut mine. EQ does not carry any significant debt but is funded via royaltyprepayments, grants and similar.

Across the industry Tungstenprices remains well supported at ~$325/mtu as some peers experience delays tomine ramp ups, helping maintain tight supply side economics alongside growing demand from defence another sectors as detailedin our sector note Tungsten Industry - A critical renaissance (March-23).

At the board level EQ Resources has also been strategically busy signing up new stakeholder cooperation agreements tobroaden EQ’s horizons:

• In April… signed an MoU with Masan High Tech Materialsone of the largest tungsten companies globally including offtake sub-agreement with EQR. Massan is experiencing ore shortage to feed its processing plants and its back to back offtake agreement EQ->Cronimet->Masan helps address this issue.
• In May… EQ announced Collaboration with the European Raw Materials Alliance which may lead to further opportunities for the company to support EU’s Critical Minerals strategy. EQR’s offtake and JV partner Croniment is a significant European Metals recycling and trading company providing these valuable links between sources of Critical Minerals demand and Critical Minerals supply from EQ Resources.