Agreement with Sandvik on Binding Terms for Financing of Crushing & Screening Plant In March 2022, EQR agreed with leading mining technology company Sandvik on the binding terms for the delivery and financing of the crushing and screening mechanical and structural equipment for the Company’s expansion program at Mt Carbine (refer ASX Announcement “EQR and Sandvik Agree on Binding Terms for Financing of Crushing & Screening Plant” dated 8 March 2022). The scope of supply comprises the primary, secondary and tertiary crushing stations, as well as a screening station and all related structures. The new crushing and screening plant will have a capacity of 350 metric tonnes per hour, which is 2.5-times the throughput of the crushing and screening plant currently in operation. Figure 3: 3D design for new crushing, screening and XRT sorting plant. As part of the binding terms agreed between EQR and Sandvik, Sandvik Financial Services Pty Ltd (“SFS”) has extended financing terms as following: − The agreed delivery scope amounts to $4.8 million, with the financing facility being subject to a 30% deposit by EQR; − The facility considers (up to) 48 monthly instalments and a fixed interest rate of 5.75% p.a.; and − Industry standard security arrangement agreed, subject to SFS standard documentation, including a first rank priority pledge over the Sandvik supplied equipment Critical Minerals Accelerator Initiative (“CMAI”) CMAI is supporting EQR’s expansion program at Mt Carbine with a $6 million grant (refer ASX Announcements “Federal Government Funding for Mt Carbine Critical Minerals Program” dated 28 April 2022 and “Federal Government Funding for Mt Carbine Reconfirmed” dated 19 September 2022). This funding will be utilised to accelerate the Mt Carbine Expansion Program which focuses on the transformation of historic mine waste into a sustainable source of tungsten along with the commencement of open-cut mining of the Andrew White Open Pit. Specifically, it will be used to fund plant and equipment, drilling and additional studies, as well as expand on innovative technologies to efficiently produce tungsten concentrate from relatively low-grade ore currently stockpiled aboveground and from high-grade resources identified in the accessible Andrew White Open Pit. − Combined investment from EQR, Cronimet and CMAI, totalling approximately $15 million, in line with the Company’s BFS, while considering the Early Works Program as currently being completed. − The formal co-funding agreement will be finalised in the coming weeks. Expansion Funding (BFS Scope) As communicated to the market across various platforms, the Company is working to close out the best possible options of funding arrangements that it has been negotiating over the past several months to ensure the best interests of the Shareholders are upheld. This has led the Company to secure two Government Grant facilities as well as binding financing terms from Sandvik for the provision of their crushing and screening plant. The Company is working to finalise additional finance offers and will announce to the market as finalised. The continued development of the expansion project and restart of the open pit mining operations remains the key focus of the Company. The Board and Management are endeavouring to do this in what they believe is the most beneficial way for shareholders. Operating and Financial Review continued 14 EQ Resources Limited Annual Report 2022
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