EQR has developed a market value model as a basis for revenue modelling for the Mt Carbine Project through the BFS completed in December 2021. The model was informed by the current contractual elements that are in place for the sale of concentrate from the Mt Carbine site as well as considering end-user purchase prices as known to EQR. The project economics continue to look favourable for EQR with a strong price forecast looking forward due to market pressure on the supply side from the Western economies. Market value modelling was developed to adjust the baseline reference prices to reflect the value of Mt Carbine products in the global market. The parameters selected for price adjustments were: − Base Price: Calculated on a metric tonne unit (MTU) of WO3 contained in a dry metric tonne delivered FCA Mt Carbine (INCOTERMS 2010); − Index: London Metal Bulletin (LMB) European APT; − Pricing: Low and High European APT averaged for the calendar month of delivery for the tungsten concentrate; − APT payable: A floating payable is considered, covering the period under the fixed off-take contract with CRONIMET and for the period afterwards; − Payment terms: 95% payment upon delivery of product and 5% balance payment upon final settlement based on weighing and assay results. Currently CRONIMET is the sole off-taker for the Project from the rights secured through early investment into the Mt Carbine Project. Since the start of the Project, concentrate has been sold to customers in Europe, the United States, Vietnam, and China. CRONIMET is also partnered with EQR through a Joint Venture to process the Low Grade Stockpile along with the historic tailings materials. Based on the Off-take Agreement in place between CRONIMET Australia Pty Ltd, CRONIMET Asia Pte Ltd and Mt Carbine Retreatment Pty Ltd (a wholly owned subsidiary of EQR), the specifications for tungsten concentrate produced at Mt Carbine are provided in Table 7. Table 7: Tungsten Concentrate Specifications Name of Element Specification WO3 50% min S 1.5% max Sn 0.50% max Mo 0.40% max Sb 1.0% max As 0.15% max H2O 1.0% max These specifications are in line with the overall market requirements for tungsten concentrate and shall remain applicable on the new products being defined in the future. Tungsten concentrate being loaded for shipment. Operating and Financial Review continued 28 EQ Resources Limited Annual Report 2022
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