Announcement PDF EQ RESOURCES LIMITED A Globally Significant Critical Mineral Producer Investor Update / Webinar 21 November 2024 ASX : EQR Disclaimer • The material contained in this document is a presentation of general information about the Company's activities current as at the date of this presentation. It is provided in summary and does not purport to be complete. You should not rely upon it as advice for investment purposes, as it does not take into account your investment objectives, financial position or needs. These factors should be considered, with or without professional advice, when deciding if an investment is appropriate. • This document may contain forward-looking statements with respect to the financial condition, results of operations, and business strategy of the Company. These forward-looking statements are based on estimates, projections and assumptions made by the Company about circumstances and events that have not yet taken place. Although the Company believes the forward-looking statements to be reasonable, they are not certain. Forward-looking statements involve known and unknown risks, uncertainties and other factors that are in some cases beyond the Company's control, and which may cause actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements (and from past results). • The Company makes no representation or warranty as to the accuracy of any forward-looking statements in this document and undue reliance should not be placed upon such statements. • Forward-looking statements may be identified by words such as “aim”, “anticipate”, “assume”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “should”, “will”, or “would” or the negative of such terms or other similar expressions that are predictions of or otherwise indicate future events or trends. The forward-looking statements included in this document speak only as of the date of this document. The Company does not intend to update the forward-looking statements in this document in the future. 2 Summary Deal Terms - TMG Acquisition • Acquisition Structure: EQR has executed a binding Heads of Agreement (HoA) to acquire 100% of the shares in Tungsten Metals Group Limited, and subsidiaries, including Mr. George Chen’s interest in Asia Tungsten Products Co Ltd, securing 100% ownership of the TMG Group. ▪ • TMG Ferrotungsten Plant - Vietnam TMG Group own and operate the largest ferrotungsten (FeW) plant outside of China, located in Vietnam, with a potential production capacity of 4,000tpa FeW. Indicative Valuation: A$13.5M, inclusive of acquisition of TMG Group shares and liabilities, subject to conditions precedent and applicable adjustments at closing, per the terms of the HoA. • Consideration: • • Equity: ~170M new EQR shares issued to TMG shareholders Cash: A$2.5M funded via customer prepayments for FeW • Exclusivity Period: Parties committed to exclusivity until 20 December 2024. • Conditions Precedent: • • • • Completion of due diligence Signing of definitive agreements Regulatory and shareholder approvals Standard transactional conditions • Expected Completion: Targeted for H1 2025, pending fulfilment of conditions. • Escrow Arrangements: Related parties receiving EQR shares will face a 12-month voluntary escrow, ensuring long-term alignment. EQ Resources to Acquire 100% Interest in Producer of High-Quality Ferrotungsten. 18 Nov 2024 (link) 3 TMG Acquisition - Strategic Rationale • Raw Materials Supply: The Vietnam facility is the largest tungsten smelter outside China. Prior success of the operations was limited by a lack of quality raw materials to produce FeW at scale. EQR resolves this by providing a stable supply chain from its tungsten operations in Australia and Spain. • Vertical integration of EQR’s upstream operations aligns with EQR’s corporate strategy to leverage its existing substantial resource base and production output along the tungsten supply chain. • Leadership position gained, with largest FeW plant (by capacity) outside of China. • Capture higher margins from conversion of tungsten concentrate to value-added FeW product, achieving approx. 20% value addition to concentrate and accessing higher margin markets where FeW has outperformed APT prices. • Diversification and de-risking: EQR will 100% own and operate tungsten operations on three continents with access to a global customer base. Tungsten concentrate shifted to FeW production, may have positive benefits for the APT price segment, which is the price basis for EQR’s concentrates. • Policy shift by Western Governments: • ▪ Strategic / Critical Minerals classification (funding opportunities) ▪ Sanctions / Tariffs / Incentivise decoupling TMG acquisition expands EQR’s footprint to three continents Australia, Spain, and Vietnam strengthening its position as a leading Western tungsten producer. Strengthening ties between Vietnam and Australia (recently entered into a Comprehensive Strategic Partnership) and solid growth outlook for Vietnam’s overall economy. 4 Market / FeW Product Tungsten supply chain (simplified): • FeW market representing approx. 15% of concentrate consumption • FeW capacity outside China very limited, higher dependency on China for FeW as compared to APT Outside of China, the main consumers of FeW are steelmakers located in Japan & Europe: Expanded product portfolio (post TMG transaction) Partnerships Source: Tungsten Metals Group; United Nations Comtrade Database 5 FeW Production & Applications 6 Critical Metal – Margin uplift from processing to FeW Tungsten is defined by the EU as the Critical Metal which has the highest economic importance to industry. Estimated margin uplift of 20% upon processing of tungsten concentrate into FeW $ 2t Concentrate (50% WO3) Source: www.rmis.jrc.ec.europa.eu/?page=crm-list-2020-e294f6 Source: Company data; FastMarkets $$ ~20% 1t FeW (75% W) 7 EQR-Elmet Deal: Key Terms and Strategic Rationale • Definitive Agreement: 5-year tungsten concentrate offtake agreement with Elmet Elmet Technologies - USA Technologies valued at A$30 million. • Production Excellence: Barruecopardo (Saloro) achieved a record production of 11,007 mtu in October 2024, reinforcing supply reliability. • Supply Commitment: Tungsten concentrate will be sourced primarily from Barruecopardo Operations in Spain. • Strategic Collaboration: Joint pursuit of US Government funding under the Defence Industrial Base Consortium (DIBC) to enhance critical material supply and integrate EQR tungsten into the US supply chain. • Strengthening US-Australia Relations: Supports critical mineral supply chain security between allied nations, reducing reliance on China. • Geopolitical Significance: Addresses surging demand for critical minerals driven by global tensions and industrial needs in defence, aerospace and renewable energy. • Green Economy Alignment: Highlights tungsten’s vital role in EVs, renewable energy, and advanced manufacturing for economic resilience and decarbonisation. • Value Creation: Provides a long-term revenue stream while advancing downstream integration and innovation in the US tungsten supply chain. Tungsten Concentrate to Commence for Elmet Technologies. 12 Nov 2024 (link) 8 EQR Business Update Operations Update • Spain: October record production with recovery rates up to 65-70% (previously 38%). Focus on increasing throughput rates with sorter’s performing well. • Mt Carbine: Recovering from equipment downtime; accelerated stripping underway to access High Grade ore in Iloanthe vein package. • Group target: Maintain Q4CY production levels similar to Q3CY. Funding & Market Outlook • Strong customer demand for EQR products. • Geopolitical concerns on future sources for tungsten and other rare earth materials by western countries increasing. • TMG deal generating significant industry interest with customer offtake and potential funding offers being collected. Focus: Building momentum in operations, funding, and strategic partnerships. 9 Recent Media – TMG Acquistion 10 Site Contact: Investor Relations: Kevin MacNeill Chief Executive Officer T: +61 438 542 260 E: kmacneill@eqresources.com.au Peter Taylor NWR Communications T: +61 412 036 231 E: peter@nwrcommunications.com.au Registered Office: Mt Carbine Office: Level 4, 100 Albert Road South Melbourne, VIC 3205 Australia E: info@eqresources.com.au 6888 Mulligan Highway, Mt Carbine Qld 4871 PO Box 1496, Mareeba Qld 4880 www.eqresources.com.au Linkedin Logo PNG, Linkedin Logo Transparent Background FreeIconsPNG Follow us on A white x on a black background Description automatically generated