containing relatively lower grades uneconomic or less economic than anticipated, and may ultimately result in a restatement of such Resource or Reserve. This in turn could impact the life of mine plan and therefore the value attributable to mineral inventory and/or the assessment of recoverable amount of EQR’s assets and/or depreciation expense. Moreover, short term operating factors relating to such potential mineral Resources or Reserves, such as the need for sequential development of mineral bodies and the processing of new or different mineral types or grades, may cause a mining operation to be unprofitable in any particular period. In any of these events, a loss of revenue or profit may be caused due to the lower than expected production or ongoing unplanned capital expenditure in order to meet production targets, or the higher than expected operating costs. EQR seeks to manage and minimise this risk through its existing risk management framework including an external audit process for its Mineral Resources and Ore Reserves. Operational Risk At the Mt Carbine Mine operational risks can cause disruptions to operations, failures in plant and equipment, difficulties in obtaining replacement equipment and difficulties with product separation and screening. The Mt Carbine site is a mature operating site that has been in operation since February 2020. EQR’s CEO, Kevin MacNeill, has successfully navigated the Company’s from a junior explorer to a fully-fledged ming operation with the commencement of open cut mining operations in late June 2023. Kevin has over 30 years’ of experience in managing mining operations through North America, Europe, and Africa. This experience has aided the development of a cohesive, hands-on management approach and operations team development while restricting the reporting chain to ensure employees are empowered in their roles for efficient decision making and optimal outcomes. Other risks include, and are not limited to, weather, availability of materials, availability and productivity of skilled and experienced workers and contractors, industrial and environmental accidents, industrial disputes and unexpected shortages or increases in the costs of labour, consumables, spare parts, plant and equipment IT failures or disruptions, unanticipated changes in government regulation and risks associated with increased global uncertainty and/or global events such as the COVID-19 pandemic (including the national or regional governmental response to such events). Any inability to resolve any unexpected problems relating to these operational risks or adjust costs profiles on commercial terms could adversely impact continuing operations, Mineral Resources and Ore Reserves estimates and the assessment of the recoverable amount of EQR’s assets. EQR seeks to manage and minimise this risk through its existing risk management framework including the implementation of an Integrated Health and Safety Management System that protects employees physical safety and mitigates operational risks which are guided by the Integrated Management System (IMS) which addresses the intended outcomes of ISO 9001:2015 Quality Management Systems, ISO 14001:2015 Environmental Management Systems and ISO 45001:2018 Occupational Health and Safety Management Systems. Environmental Risks (including climate change) EQR must comply with a range of environmental performance and reporting requirements, many of which are conditions of its mineral exploration and mining activities. There is a risk that the Company may not be able to achieve the financial performance or outcomes disclosed herein if it fails to comply with those environmental performance and reporting requirements or if the requirements change in the future and the Company is no longer able to comply with the requirements or must incur material unplanned expenditure in order to remain compliant. EQR seeks to manage and minimise this risk through its existing risk management framework and through detailed environmental management plans and systems. Social Risks EQR is exposed to social risks as a result of the many stakeholders who are involved in its operations including but not limited to employees, contractors, local community members residing in areas where the Company operates, governments and government agencies (local, state and federal) as well as customers and suppliers. EQR is subject to reputational damage as well as potential claims for damages as a result of any harm or loss sustained by any stakeholder as a result of the actions by the Company and/or and its representatives. There is a risk that the Company may not be able to achieve the financial performance or outcomes disclosed herein if it incurs reputational damage or significant claims for damages. EQR seeks to manage and minimise this risk through its existing risk management framework, including Board approved policies on stakeholder management and through established stakeholder consultation processes. EQ Resources Limited Annual Report 2023 15
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