Ann: FIRB Approval received for Oaktree Investment in EQR, page-20

Pacpartners updated their research yesterday.

Target price 15c

EQR has received FIRB approval for theOaktree investment into the listed company:

• Oaktree is investing into EQR at 9c per share, compared to last trade 5.6c.
• This will be welcome cash influx by year end as EQ continues to ramp up production in Qld, and bed down the Spanish acquisition.
• Of course EQ are dealing with the FNQ floods at Mt Carbine, social media updates suggest weeks of mined material on the ROM pad is ready for process plant, mining was to take a break anyway over Christmas.
• I see floods as a transitional issue, tungsten prices remain solid at ~US$300/mtu providing a very good long term margin for EQR on both Qld and at its now market leading Spanish product.
• Transitional issues can be a good time to buy... target price 15c. See research notes below.

Today's news:

EQ Resources Limited (“EQR” or “theCompany”) is pleased to announce that the Australian Government ForeignInvestment Review Board (“FIRB”) has issued a ‘no objection notification’ forthe $25 million investment in EQR by funds managed by Oaktree CapitalManagement, L.P. (“Oaktree”).

The FIRB approval represents a keycondition precedent under the sale and purchase agreement entered into betweenEQR and Oaktree. FIRB’s ‘no objection notification’ and investment by Oaktreein EQR complements the approval by the Spanish Ministerial Council for EQR’s100%-owned subsidiary, European Tungsten Pty Ltd, to acquire Saloro S.L.U.,owner of the Barruecopardo tungsten mine, located in Castilla y León, SalamancaProvince, in north-west Spain. EQR and Oaktree are working through remainingformalities to close the transaction still ahead of year end.

EQ Resources Chief Executive Officer, MrKevin MacNeill commented: “We are pleased with the progress and having receivedpositive feedback from FIRB. Oaktree becoming a key stakeholder of EQR,assisting us to fully materialise our strategy to become the leading tungstenconcentrate producer outside of China. We are making good progress at theBarruecopardo operations as well, improvements in the processing technologiesand production output are a result of the lessons learned we had at MtCarbine.”

Social Media EQRyesterady:

Mighty Mt Carbine is backon its feet after Cyclone Jasper ripped through the Cape. Our twomain roads have re-opened and our shifts are back at the crusher and thegravity plant.

The dam is full so ourwet screen is back in action. We have water in the pit, something that mighttake a while to remedy, but we have several weeks worth of materialon the ROM pad to keep the crushing, screening, sorting andgravity plants in action.

We are certainly morefortunate than others who experienced flooding. We are grateful to our people,our contractors and suppliers who helped us out and we are also proud to havehelped out our communities with comms gear and other bits and pieces. And aspecial shout out to road repair crews, we have lots of responsibly-minedaggregates ready for sale when the time comes to bring our roads back up toscratch. https://www.linkedin.com/posts/eq-resources-ltd_mighty-mt-carbine-is-back-on-its-feet-after-activity-7143087041629609984-7vjz?utm_source=share&utm_medium=member_desktop

Prior PAC Partnersnotes:

Subject: EQ Resources (EQR) | Mcap $115m | InvestorMeetings 31st Oct & 1st Nov

COMPANY	EQ Resources (EQR)
Market cap	$115m
Commodity	Tungsten (Critical Mineral)
Status	Operator of 2 fully developed mines (Queensland and Spain) plus other development options (Wolfram Camp Qld)
Market cap	$115m (Fee float: 70%)
Valuation potential	Target price 15c (last trade 7c), A$80m EBITDA Queensland, similar potential in Spain
Cash position:	$11m net debt now pre Spain acquisition (which sees EQ take on A$60m (E35m) in project debt and receive $25m in a placement to vendor (FCF from Qld alone is forecast $20-60m coming 3 years on flat commodity prices).

Significant Shareholders:

• Oaktree (recent vendor) 15% at 9c/share putting in A$25m cash,
• Cronimet (offtaker and early financier) 7% at 9c/share,
• (and Regal Royalty Fund long term financier)

Recent PAC PartnersResearch notes:

• EQ Resources Spanish acquisition – Olla! Oaktree 10-August
• Tungsten Industry - Poised For Production 26-June
• Tungsten industry - A Critical Renaissance, March 2023
• EQ Resources – Initiation report - Smaller Start, Significant Potential, 7-Dec-2022