A doubling of the processing plant to be in play by 2025. This...

A doubling of the processing plant to be in play by 2025. This includes 3 components: 1 additional XRT sorter, larger wet screen and additional tables.

--Large Wet Screen Prior to Jig
EQR plans to purchase a new large Techroq Vibrating Screen, that is fit for purpose. This will feed the two jigs that are placed side by side in front of the current wet screen. Provisional space allocation for the larger footprint requirement has been accounted for during the ongoing Phase 2 upgrades.

--Tables Feed Preparation
The Company intends to use a Schenk screen with a larger rolls crusher in place of the current smaller wet screen and rolls crusher. The Company is currently completing an upgrade to the Gravity Plant under Phase 2 that sees this exact upgrade happening, next to the current functional table feed preparation circuit. In December 2024, the company will place the order for the large Techroq Wet Screen and begin the upgrades to the second tables feed preparation circuit.

--Additional TOMRA XRT Sorter
As the head feed rate to crushing and screening plant will increase, a third sorter will be required to handle the additional throughput from the crusher with the sorters running at maximum capacity. Throughput tonnages are currently verified through the operational TOMRA XRT Sorters on site. There is a TOMRA XRT Sorter that has been identified for implementation. Negotiation of commercial terms is ongoing.

A power line upgrade will be required to achieve the doubling of plant capacity. Environmental approvals for the increase are already sorted.

The original mining fleet included:
2x 90t excavators
6x 45t dump trucks

The new mining fleet is:
1x190t excavator
13x 55t dump trucks.

year 2023 (I assume starting 1 july 2023) plan is to produce 4290t of 50% concentrate. Which is $76.2m AUD in revenue.


Year 2026 is the big year. Doubling of plant capacity will have occurred and decent grade ore will be coming in. Expected cash flow of $103m for the year. Mid 2024 to mid 2025 will see a reduction in concentrate as the mine plan is worked through.

It looks like the 2mt Tailings that is low grade is not worth processing again so I think we can scrub that for now, which is fine, it doesn't play much of a role in the economics.

As others have mentioned opex has reduced which is freaking amazing. These are real numbers based on TODAY (15th of May). Current estimate is 104/MTU. But with the doubling of plant capacity should drive a few extra minor cost savings.

For those that have no desire to read the BFS this info is probably the most informative.
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-Since the original model, the key changes in the latest model have been made:
a) Incorporation of a new mining schedule as defined in EQR’s most recent Mineral Reserve Estimate, released by Optimal Mining dated 15 May 2023, which resulted in an additional 2Mt ore and 7,600t of concentrate for sale (compared to the November 2022 Economic Update). The methodology of using
the LGS to top up crushing/screening and gravity processing plant to utilise available capacity has been retained;

b) Selective processing so that the high-grade and medium-grade ore from the open-pit is processed first, and all other ore stockpiled. Once processed, the low grade from the open-pit is processed, and finally the low grade stockpile is processed.

c) Doubling of plant capacity (from 83kt/ month to 166 kt/month, or 1Mtpa to 2Mtpa) commencing May 2025, and an additional $7.9m capital expenditure added to the model to pay for this (spent over the 4 months preceding the capacity increase);

d) The doubling of capacity also triggers a 30% drop in the three processing related unit costs (providing a double benefit of more tonnage earlier and cost reduction);

e) The doubling of the plant capacity shortened the LOM by circa 4 years (from a mid 2036 end date, to now ending early 2032);

f) Some minor changes in forecasts of Tungsten price, FX and APT payable:
• Tungsten price (in USD) was decreased it in 2024, and increased in later years;
• AUD:USD increased (reduced AUD revenue) in 2023, and decreased it (i.e. improved AUD revenue) slightly in 2027 and 2028 based on revised macroeconomic indicators; and
• APT payable has improved slightly, in 2025 and 2026, based on discussions with CRONIMET Asia Pte Ltd as the customer.
The changes and impacts to the financial outcomes are summarised in Figure 22.

The NPV has increased by circa $98M since the last November 2022 Economic Update, which reported an NPV of $209M (using the same 8% discount rate). The key reasons for this increase are the changes outlined above. And in addition to the cost improvements, bringing forward the revenue (from doubling of capacity) also further improves the NPV, due to the time value of money.

The IRR has increased by 80% (397% last year, to 477% now), for same reasons the NPV has increased. The macroeconomic, operational, and strategic factors presented in this section underpin the comprehensive financial model analysis completed for the basis of this economic study.

The economic model was developed to incorporate critical financial impacts required to undertake the development and operation of the project including estimated capital expenditures and deferred capital, revenues generated, and operational expenditures. Tax payable and funding options are contained in the financial model, but not included in the NPV and IRR reported.

The project has been generating revenue since last year, and based on current assumptions, the project is estimated to generate cashflows, starting 1 June 2023 of:
- $450M before any capex, tax or financing;
- $324M after adding on capex, and GST and equipment finance costs (which are akin to operating
costs);

It is noted that tax is not payable until mid 2025- thus further increasing early post-tax cashflows. Based on current modelling, the best economics of the open pit are in calendar year (CY) 2026, delivering a pre-tax cash flow of $121M in that year. This is the best year due to:
- The quantum of ore: 1.992m tonnes of ore fed into plant (the most ore feed in any year because capacity has doubled midway in the previous year) at an average blended grade of 0.25%. The low strip ratio of that year is also a factor, as well as APT payable increases from 72% in CY2025 to 73.5% in CY2026.
- CY 2027 also has high ore throughput due to doubled plant capacity, however average blended grade of plant feed is lower at 0.08%

On depletion of the current ore reserve accessible through open pit mining, that has been modelled for the purposes of this document, the intention is to extract additional ore from pit extensions that will be firmed up by additional drilling and underground mining activities. A scoping study on the underground mining option was completed April 2022 with a positive outlook on the underground potential and further definition will be undertaken in the future. Should an economic solution be defined for the potential underground ore reserves, the positive economics and strong cash flow is expected to continue.


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GLTAH.