Directors’ Report continued ANNUAL Report June 2023 Directors’ Report 10 (d) Non-binding terms agreed with Regal Resources Royalties on a first stage $10 million royalty-based funding package for the Mt Carbine Tungsten Project, with parties intending to negotiate in good faith the terms for an additional (second stage) $10 million. This funding package consists of a 3% royalty with a buy-back clause after recovery of the first stage royalty (and prior to the 7th anniversary of the execution of the definitive agreements) and payment of $2.75 million reducing the royalty to 1.5% (refer ASX announcement “Complementary Royalty Funding for Mt Carbine Development” dated 21 October 2022). The first $5 million drawdown was completed in in January 2023 with the second $5 million upon receipt of final environmental permitting for the restarting of open pit mining operations (refer ASX announcement “EQR Completes First Drawdown of $5M Royalty Funding for Mt Carbine Tungsten” dated 6 January 2023). The second $5M tranche draw down from Regal Resources Royalties was completed in March 2023 (refer ASX announcement “EQR Receives Second Tranche of Regal Royalty Payment” dated 31 March 2023). (e) November 2022 Update of the Company’s Bankable Feasibility Study for the Mt Carbine Expansion Program delivered an: NPV, of $209.6 million (59% increase compared to initial BFS, December 2021); IRR of 397%; Payback period of 1.5 years; and Life of Mine EBITDA of $324 million. (Refer ASX announcement “Strong BFS Update Delivers 59% Increase in NPV” dated 9 November 2022) A further update of the BFS, in the May 2023, resulted in the following strong Pre-Tax Economics*: NPV8 of $307.1 million (47% increase in the November 2022 BFS Update of $209); IRR of 477%; and Life of Mine EBITDA of $450 million. * Concentrate sales price basis US$340/mtu (mtu = metric tonne unit, 10kg) in 2023, with a long-term forecast average of US $369/mtu (2024 – 2040) calculated using the average of the Roskill Base Case and High Case price level scenarios (see Chapter 16 of 2021 BFS). (Refer ASX announcement “Strong BFS Update delivers 47% Increase in NPV” dated 22 May 2023.) 52 EQ Resources Limited Annual Report 2023
RkJQdWJsaXNoZXIy MjE2NDg3