The 2022 financial year has been a progressive year for EQ Resources Limited (“EQR” or “the Company”) and its flagship project at Mt Carbine in Far North Queensland. Highlights The highlights of this year were: − Positive results from EQR’s Bankable Feasibility Study for the Mt Carbine Expansion Project, were received over the period, with a project NPV of $131.5 million and an IRR of 154%. Subsequent to this, further drilling has been completed, increasing the Mt Carbine Reserves and redefining the open pit mining plan resulting in the processing of addition ore. Revised economics will be completed on the updated Reserve statement in the near future; − Consistent and ongoing production at the Mt Carbine Gravity Plant, operated under an unincorporated joint venture between EQR and CRONIMET Australia Pty Ltd with trial shipments to leading tungsten consumers in Europe, the US and across Asia; − Binding Farm-in and Joint Venture Agreement entered into with Sozo Resources Pty Ltd whereby Sozo can earn up to an 80% interest in EQR’s Panama Hat and Crow Mountain Projects (EL’s 6648 and 8024) by completing expenditure of A$1.6M over 4 years; − Secured $600,000 in co-investment from the Federal Government’s Advanced Manufacturing Growth Centre (AMGC) for the upscaling of the XRT Sorter plant; − The Federal Government’s Critical Minerals Accelerator Initiative (CMAI) supports EQR’s expansion program at Mt Carbine with a $6 million grant; and − The Company achieved a major milestone with the successful financing and completion of the Mt Carbine Early Works Program, construction and commissioning of associated equipment and infrastructure done. A further review of the Company’s operating and financial activities for the 2022 financial year, up until the date of this report, is set out in this section. Health, Safety, Environment and Social Engagement Health & Safety Safety is the Company’s highest priority. The Company is committed to providing a safe, healthy and inclusive workplace for its people and to conduct business safely and responsibly. Our approach is to not only provide training and support to our employees but to also promote self-development through obtainment of new qualifications. The Company’s strong focus on constant improvement in safety has led to the development and implementation of an Integrated Management System (“IMS”). Risk planning and management is central to the Company’s activities, EQR’s operations are only conducted when the risk is within acceptable limits and as low as reasonably practicable (ALARP). The risk planning and management processes developed and implemented at the Mt Carbine site aim to provide a logical and systematic method of identifying, analysing, evaluating, treating, monitoring, and communicating risks. The following hierarchy of controls is applied to mitigate risk to a level which is ALARP: − Elimination/Removal; − Substitution; − Engineering/Isolation Control; − Administration; − Personal Protective Equipment; and − Human Behaviour. The hierarchy of controls is used to control hazards identified for all risk management processes. Less reliable control measures (e.g., administrative, PPE or safe behaviour controls) have been implemented as part of a holistic control strategy in addition to controls from the other more effective measures and are also used on their own where the level of current risk is ALARP. Operating and Financial Review 4 EQ Resources Limited Annual Report 2022
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