Operating and Financial Review continued Mt Carbine Operations Project Timeline The Company has worked hard implementing the operational and execution strategy for its Mt Carbine assets, this has seen the update of the Company’s Resource Statement which has delivered the information required to publish a Bankable Feasibility Study (“BFS”) for the Company in December 2021. The Company has worked hard to ensure timelines published were adhered to over the past 18-months, with the schedule holding within approximately 3-months of original forecast over the period and through the COVID-19 supply chain delays. The past 12-months have focused on the upgrade of the Resource Statement, publication of the BFS and expansion of processing capacities and plant outputs with the Early Works program. Over this period the Company worked hard to secure the funding for the next phase of expansion at Mt Carbine, which will see the purchase of a new Sandvik crushing and screening plant to increase capacity throughput once more, increasing efficiencies and reducing overall costs of the future operations as the open cut mine comes online. On top of this, the Company was able to continue executing relevant approvals for the reopening of the Open Pit mining operations. The original results from EQR’s BFS for the Mt Carbine Expansion Project were positive and predicted to produce operational pre-tax cash flow of $38 million and $95 million in years 3 and 4 respectively, with an NPV of $131.5 million and an IRR of 154%. However, after the reporting period, the Company completed additional drilling around the defined Open Pit area and toward the Western Extension and is now planning to release an updated BFS with the new information available. The coming 12-months for the Company will focus on the re-opening of the open pit, extraction and processing of primary ore, and additional Resource definition at Mt Carbine to define the further development plan and mining strategy for the Company at its operations. Figure 1: Timeline of the Mt Carbine Development. Mt Carbine Expansion During the second quarter of the financial year, the Leadership Team developed an early works strategy to increase revenues during the period from the completion of the BFS through to the final funding, design, engineering and project execution. This strategy saw minimal capital outlay for the upgrade of specific facilities or equipment to be upgraded for the BFS which would also allow increased production outputs. The Early Works consisted of several upgrades, including not only the Crushing and Screening Plant, but also, in summary the following which are all critical contributors to the accelerated growth and success of the Mt Carbine development: − Installation of a Second TOMRA XRT (partial funding through the Advanced Manufacturing Growth Centre – “AMGC” Grant); − Design, engineering, installation, and integration of a high-volume Sandvik wet screen (170tph) into Mt Carbine’s crushing circuit; − Slurry pipeline from the crushing area to the Gravity Plant for fines pumping (OPEX reduction); 12 EQ Resources Limited Annual Report 2022
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