Notes to the Consolidated Financial Statements continued ANNUAL Report June 2022 Notes to the Consolidated Financial Statements 43 22. CONTRACT LIABILITIES 2022 $ 2021 $ Contract Liability - Sublease1 Current 405,851 242,397 Non-current 1,432,259 1,650,481 1,838,110 1,892,878 Contract Liability - Offtake2 Balance at beginning of the year 2,323,423 2,547,615 Plus: Offtake extension (partial draw down) 689,265 - Less: Unrealised foreign exchange (gain) / loss 253,502 (224,192) 3,266,190 2,323,423 1 Mt Carbine Sublease Rent prepaid to Mt Carbine Quarries Pty Ltd as per the Retreatment Operations Sublease Agreement between Mt Carbine Quarries Pty Ltd, CRONIMET Australia Pty Ltd and Mt Carbine Retreatment Pty Ltd. 2 The Company’s wholly owned subsidiary and 50% unincorporated joint venture partner, Mt Carbine Retreatment Pty Ltd’s, Offtake Advance recognition. The Loan is denominated in USD and the terms and repayment of this advance are governed by the Offtake Advance Agreement between CRONIMET Asia Pte Ltd, CRONIMET Australia Pty Ltd and Mt Carbine Retreatment Pty Ltd. A further offtake prepayment facility of up to US $3 million was secured from the Company’s joint venture and offtake partner, CRONIMET Asia Pte Ltd with US $1 million of this additional facility being drawn as at 30 June 2022 (refer ASX Announcement “CAPEX Funding for Mt Carbine Expansion Secured” dated 2 May 2022). Note: The Company’s wholly owned subsidiary and 50% unincorporated joint venture partner, Mt Carbine Retreatment Pty Ltd’s, interest in the offtake prepayment equates to 50% of the total prepayment facility. The contract liability arrangements for the Offtake Advance are secured as follows: ▪ general security deed from Mt Carbine Retreatment Pty Ltd over its present and subsequent acquired assets; ▪ general security deed from CRONIMET Australia Pty Ltd over all its present and subsequent acquired assets; and ▪ mortgage from Mt Carbine Quarries Pty Ltd over mining leases ML4867 and ML4919. This mortgage also includes an interest over “Featherweight Property” which is all other property of Mt Carbine Quarries Pty Ltd other than the mining leases. The mortgage is limited recourse, in that it is limited to the value of the mining leases. The contract liability arrangement for the unincorporated joint venture between Mt Carbine Retreatment Pty Ltd and CRONIMET Australia Pty Ltd (Joint Venture) are as follows: ▪ Deed of Cross Security between the Joint Venture parties and Mt Carbine Retreatment Management Pty Ltd (as the manager) which secures the performance of their obligations to each other under the Joint Venture; and ▪ General Security Deed from Mt Carbine Quarries Pty Ltd in favour of the Joint Venture parties over all present and after acquired property of Mt Carbine Quarries Pty Ltd including its rights under the Mining Leases. 74 EQ Resources Limited Annual Report 2022
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