Chief Executive Officer’s Letter Dear Shareholders Since the release of last year’s Annual Report, EQR’s Mt Carbine team have been working tirelessly to execute the Bankable Feasibility Study (“BFS”), define additional resource, drive operational growth and execute the Early Works capital expansion. In this regard, the EQR Team, with the support of its employees, shareholders, and contracting partners have been able to achieve all of the above, delivering on the goals for the year and in doing so, giving confidence to the market on EQR’s ability to deliver a world class tungsten operation which has so often been seen as a significant challenge for companies in Western economies. Some of my key highlights for the year are set out below: 1. We have successfully redefined the Mt Carbine Tungsten Resource resulting in the design of a new open pit that currently allows at least 4-years of open pit mining along with 10 years of Low Grade Stockpile (“LGS”) mining. In this same regard, hole 26 from the Company’s latest drilling sees the ore body extending strongly to the west and at depth. This is very exciting, as we look toward the coming year and planning a drill campaign with the intention of converting additional resource in the Western Extension into Reserves and to better understand the extent of the ore body through the Western Extension as it appears to have the potential to extend the open pit life of mine. Lastly, in regard to the mining, EQR was able to complete a Scoping Study on the Underground Resource at Mt Carbine which gives the team additional confidence to drill out and convert the study to pre-feasibility in the near future. 2. The completion of the BFS has shown the strong fundamentals of the Mt Carbine Tungsten Project and set the foundation for further resource definition, expansion, and positive project economics. In the coming months, the Company is targeting the republication of an updated BFS showing the economics of the new Open Pit from the recent Reserve Upgrade. 3. Since the completion of the BFS, we have been able to upgrade, acquire and install several key pieces of equipment at the Mt Carbine operations that have proven their positive economic impact. The exact upgrades are discussed in detail within the Mt Carbine Expansion section of the Report, however, the past year has seen a second XRT Sorter purchased and commissioned, the crushing and screening capacity increased through the Early Works capital expansion, along with the upgrade of the overhead power lines. Several of these upgrades were part of the BFS capital requirements and therefore reduce future spend requirements for the execution of the BFS. 4. EQR has had strong support from the Government getting behind their Critical Minerals Strategy for Australia. This has been shown through the Company receiving Federal Grants from Advanced Manufacturing Growth Centre (“AMGC”), accelerating the purchase of a second XRT Sorter and the Critical Minerals Accelerator Initiative, which is a grant for $6M focused on the execution of the BFS capital expansion. These grants greatly benefit the development of the Mt Carbine Tungsten Project as it is non-dilutive to long-term shareholders. The past year has once again been a year of strong growth and definitive value addition for the business driving the longterm growth of the Company. 2 EQ Resources Limited Annual Report 2022
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