EQ Resources Limited Annual Report 2021

The MRE was completed on the basis that the in-situ Mineral Resource will be mined by either open cut or underground mining methods. Given the proximity of the modelled orebody to the current open pit, the MRE has been deemed by the Competent Person to pass the “reasonable prospects for eventual economic extraction test” (RPEEE). EQ Resources is currently completing a Feasibility Study, using the current geological model and MRE as a key input to that work, and when completed, more details on the results of that work will be released. No upper cut-off grades were applied to the Mt Carbine Resource Estimate. The competent person establish to his satisfaction that the high grade zones recorded in the drill results were present in the mineralized zones and could be correlated between sections. A lower cut of 0.15% WO 3 was used to determine the resource and definition of the geological boundaries to the mineralized zones. The Competent Person completed an assessment of tonnes by grade table to assist in the determination of the cut off grade. The Mt Carbine Tungsten Mine MRE has been classified by the Competent Person as Indicated and Inferred Mineral Resource categories, based on the current understanding of continuity of orebody geometry (geology) and grade. The classification reflects the Competent Person’s confidence in the location, quantity, grade, geological characteristics and continuity of the Mineral Resource. The MRE was classified as Indicated and Inferred based on relevant factors, including but not limited to the following: − Drill hole density (Indicated spacing is approximately 30 m x 30 m; Inferred is approximately 60 m x 60 m). − Style of mineralisation and geological continuity. − Data quality and associated QA/QC and grade continuity. Two methods were used to determine the optimal drill spacing between boreholes for resource classification at the Mt Carbine Project: − Variogram methodology which analyses the different proportions of the sill; and − an estimation variance methodology. The current data spacing and distribution is sufficient to establish geological and grade continuity appropriate for the MRE and classification, and the results appropriately reflect the Competent Person’s view of the deposit. The LGS is comprised of mineralised rock extracted during open pit mining operations between 1974 and 1987. Grade Control practice during this open pit mining discriminated between ore sent for processing and mineralised rock deemed at the time to be too low grade to justify processing at the time of mining. Historical mine records indicate that approximately 12 Mt of mineralised rock is contained in the LGS. This has been shown to reconcile well, with the estimate of tonnes contained in the LGS, determined by an independent estimate of total tonnes of material mined from the open pit of 22 Mt, less the 10 Mt of material recorded as having been processed through the processing plant. The LGS has been the subject of a bulk sampling programme and 22,000 tonnes of material has been sampled to date. Bulk samples included the following: − 8 costeans dug with an excavator; − Regular costeans/trenches ranging up to 10 m deep and 50 m long; and − 80 grab samples locations (approximately 20 kg each of -100 mm material) for mineralogical and chemical characterisation. The bulk samples have been assayed and subjected to extensive sorting trials with a pilot-scale X-ray sorter (SEI- CNQ-III ASX announcement 23 March 2011). The 2011 pilot-scale X-ray sorter trials indicated that the low-grade material could be pre-concentrated by sorting with an optimum 6 times upgrade. The grade of the bulk sample was estimated to be 0.075% WO 3 , which compares favourably with a back-calculation from historic mine production and mill recovery records, and the recent modelling and MRE of the LGS. Mineral Resources and Ore Reserves Statement continued 18 EQ Resources Limited Annual Report 2021