Proceeds from the placement have been used to fund the ongoing Mt Carbine expansion program as per the BFS, additional drilling towards the open pit west extension and exploration work related to the recently identified geophysical and soil anomalies north of the Andy White open pit. Regal Resources Complementary Royalty Funding In the first quarter of the 2023 calendar year, the Company agreed non-binding terms with Regal Resources Royalties Fund for a $10 million royaltybased funding package to support the Mt Carbine Tungsten Project’s development. The agreement included negotiations for an additional $10 million in the second stage. The funding involved a royalty percentage of 3%, which can be bought back by EQR after recovering the first-stage royalty. This buyback option can be exercised before the 7th anniversary of the definitive agreement’s execution. Additionally, a payment of $2.75 million will reduce the royalty percentage to 1.5%. The definitive agreement was signed following the successful completion of the technical, tax and legal due diligence conducted by independent advisors engaged by the parties. The $10 Million funding package, received in early 2023, allowed for an accelerated 2023 drilling program targeting the Open Pit Western Extension and is intended to aid in advancing the Project’s redevelopment. Regal Funds Management Pty Limited manages the Royalties Fund, which seeks to invest in natural and renewable resource royalty investments to provide income and growth while minimising risks associated with mining activities. EQR Completes First and Second Drawdown From $6m Federal Grant The Federal Government’s $6 million grant awarded to EQR under the Critical Mineral Accelerator Initiative (CMAI) has been utilised to support the development programs defined in the Company’s updated BFS (refer ASX announcement ‘Strong BFS Update Delivers 47% Increase In NPV’ dated 22 May 2023). This includes utilising historic mine waste and highgrade resources mined from the Andy White open pit (refer to ASX Announcement ‘43% Increase in Mt Carbine Ore Reserves From Western Pit’ dated 18 May 2023). The $6 million grant is also contributing towards the ongoing upgrade of the Gravity Plant and additional resource drilling. Tungsten bags ready to ship. Previous CMAI site tour showcased the successful acceleration of the Mt Carbine Tungsten Project. Operating and Financial Review continued 44 EQ Resources Limited Annual Report 2023
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