EQ Resources Limited Annual Report 2021

Chief Executive Officer’s Letter Dear Shareholders The past year has been a year of targeted growth and accretive value processes driving toward the long-term growth of the Company using the Mt Carbine resource and operations as a springboard to accelerate this process. Since the release of last year’s Annual Report, the EQR and Mt Carbine team have been working toward the achievement of the strategic goals set out in the four key development areas of Gravity Plant operations, XRT Sorting, Quarry operations and Mt Carbine Exploration activities: 1. Working with our unincorporated joint venture partner, CRONIMET Australia Pty Ltd (part of the CRONIMET diversified commodities group), the Gravity Plant has continued its optimisation now achieving +1,000tpd throughput capacity, +80% plant availability, and a tungsten recovery of +70%; These were major milestones that have added significant value to the operations and project and will be critical for the sustained operations as the project continues on its growth trajectory; 2. The XRT Pilot Plant has processed +70,000t of feed material trial samples from all over the mineralised stockpile; The results have been excellent with a +90% tungsten recovery through the XRT Sorter on a consistent basis, throughputs of +70tph and on average a +/-10-times upgrade of the feed to sorter concentrate grade; A significant amount of the test work was completed under the successfully completed METS Ignited grant program, which was a joint effort by CRONIMET Australia Pty Ltd, The University of Queensland – WH Bryan Mining and Geology Research Centre, TOMRA Sorting Pty Ltd, DAS Mining Solutions Pty Ltd and the Company; The work completed over the past year has proven the XRT Sorting technological capabilities and benefits for the Mt Carbine project and will have a tremendously positive financial and operational impact over the life of project through its consistency and capability of debulking the majority of the Low-Grade Stockpile (“LGS”) feed material; 3. We have better defined the Mt Carbine resource focusing on reserve drilling under the open pit by drilling an additional 16-diamond drill holes with oriented core; This has resulted in the successful redefinition of the mineral resource estimate showing strong potential for both open pit and underground mining activities to be better defined in the ongoing Bankable Feasibility Study (“BFS”); 4. The Quarry has successfully completed one of its largest ever projects, a $4-million contract for the supply of road building materials to the Bama Civils Group; All material supplied for this project was inert waste rock recycled from the barren stockpiled rock at Mt Carbine; This means low energy intensity in production, a more competitive cost base for provision of materials and a reduction of the environmental footprint from historic mining activities. Mt Carbine Clean Water Tailings Catchment Area 2 EQ Resources Limited Annual Report 2021