Announcement PDF resourcing the new economy for a better tomorrow 29 October 2024 EQR RELEASES BARRUECOPARDO ORE RESERVES, WITH NEXT PHASE DRILLING PROGRAM SCHEDULED FOR 2025 EQ Resources Ltd is a global tungsten producer with mining activities in Australia and Spain. Highlights: • EQR on 1st Feb, 2024, announced a Mineral Resource Estimate (MRE) for its Barruecopardo Mine in Spain (see ASX Announcement: ‘Saloro Adds 69% of Measured and indicated Resources to EQR’s In-Situ Resources Inventory’) o • Total Measured + Indicated + Inferred Resources of 24.4Mt @ 0.20% WO3 (equal to 4.74 million mtu) EQR used an optimised pit design and mining plan with the latest economic data to determine the Ore Reserve Statement o Total Proven + Probable Reserves of 10.5Mt @ 0.16% WO3 (equal to 1.64 million mtu) • This Ore Reserve gives EQR at least 7-year open-cut mine life (LOM) base plan by increasing throughput with ongoing XRT ore sorting optimisations and process plant efficiencies • EQR believes that with the next phase drilling program scheduled for 2025, a significant portion of the existing Mineral Resource can be upgraded to Ore Reserves, and both can be further expanded by following the ore body along its strike and at depth mtu = 10kg WO3 EQ Resources Limited ("EQR" or "the Company") is pleased to announce the Ore Reserves for its wholly owned Barruecopardo Mine in the Salamanca Province, Spain. The Ore Reserve Statement attached is a first issue under EQR ownership, using the current 2012 JORC Code Standard and also incorporating the guidelines for the JORC 2024 Standard. Since mining recommenced in 2019, the Mineral Resource Estimates / Ore Reserve Statement were completed only on an internal basis, since the project was held by a private company. EQ Resources’ CEO, Kevin MacNeill, commented: “The release of the updated tungsten Ore Reserves for our Barruecopardo Mine is a significant development, emphasising the potential for sustained mine life over at least the next seven years. This reflects a base plan which is realised by increasing throughput with ongoing XRT ore sorting optimisations and process plant efficiencies, as we already see first positive effects from our debottlenecking and recovery enhancement programs.” With operations and production records recently set at both Barruecopardo and Mt Carbine (see ASX Announcement ‘EQR hits new production record as China and US trade tensions impact Tungsten market’ ,dated 2 October 2024), the Company is confident that this long-term outlook for its Barruecopardo Mine will continue to make EQR a leading supplier of tungsten for many years. Page 1 resourcing the new economy for a better tomorrow “Located in the Salamanca province of Spain, Barruecopardo has been a key source of tungsten, a critical metal used in various industrial applications including in the defence, aerospace, electronics, and mining industries. This Ore Reserve sets up the company to be a long-term significant producer of tungsten and one of the largest employers in the region”, said Mr MacNeill. The Ore Reserve Statement is current as of October 2024 and accounts for all mining activities undertaken to this date. Figure 1 - Ore Reserve Statement October 2024 The Ore Reserve Statement was updated in accordance with the JORC Code (2012 Edition) guidelines as highlighted in Figure 1 above. Page 2 resourcing the new economy for a better tomorrow Figure 2 - Barruecopardo Tungsten Mine, 2024 Figure 3 - Potential extension WD Layout Figure 4 - End of Month Surface, August 2024 The Ore Reserves have been limited to a practical pit shell based on current known economic limits for the deposit. The report completed by independent consultancy, Mining Sense Global SL, was signed off by Competent Person Mr Hugh Thompson who has 40 years’ experience in all aspects of mining. The reserves identified in this statement are considered economically viable for extraction under current conditions, with positive prospects under future predicted scenarios, ensuring sustainability is integrated into the mine’s longterm planning. Page 3 resourcing the new economy for a better tomorrow Figure 5 - End of Year Phase Position - Evolution of the Pit at the End of Each Year in the LOM. For the Barruecopardo tungsten deposit, ramps were integrated into the pit shell with appropriate widths and grades to accommodate the planned open-cut mining fleet. The open pit shell and the low-grade stockpile (LGS) were subdivided into detailed mining blocks, which were fully scheduled, including haulage modelling, for the planned LOM. The resulting schedule was evaluated within a financial model to assess the overall economic viability of the project. Revenue generation was based solely on Ore Reserves, including LGS, while all other materials were classified as waste. Concentrate Price Assumptions Revenue assumptions are based on the forecast for ammonium paratungstate (APT) price starting at US$316/mtu (metric tonne unit, 1mtu=10kg WO3) in 2024 increasing to US$330/mtu in 2031. Page 4 resourcing the new economy for a better tomorrow The pricing strategy exhibits a conservative approach compared to EQR’s internal budget projections, which align more closely with the actual APT prices observed in 2024. While the financial model bases its revenue assumptions on a starting APT price of US$316/mtu in 2024, increasing only to US$344.2/mtu by 2026 and to decrease to US$330/mtu from 2027 until 2031.The internal budget is adjusted to reflect more current market conditions, with prices that started around US$330/mtu in 2024 and peaked close to US$350/mtu. This internal budget approach ensures that the company's financial planning is responsive to real-world pricing trends, enhancing its accuracy and relevance in forecasting revenue. For further detailed information, please refer to the Ore Reserve Statement published on the EQ Resources Website: www.eqresources.com.au/site/invest-in-us/technical-reports Released on authority of the Board by: Further Enquiries: Kevin MacNeill Chief Executive Officer Peter Taylor Investor Relations 0412 036 231 peter@nwrcommunications.com.au About the Company EQ Resources Limited is a leading tungsten mining company dedicated to sustainable mining and processing practices. The Company is listed on the Australian Securities Exchange, with a focus on expanding its world-class tungsten assets at Mt Carbine in North Queensland (Australia) and at Barruecopardo in the Salamanca Province (Spain). The Company leverages advanced minerals processing technology and unexploited resources across multiple jurisdictions, with the aim of being a globally leading supplier of the critical mineral, tungsten. While the Company also holds gold exploration licences in New South Wales (Australia), it aims to create shareholder value through the exploration and development of its current project portfolio whilst continuing to evaluate corporate and exploration opportunities within the new economy and critical minerals sector globally. Competent Person’s Statements This Ore Reserve Statement for the Barruecopardo Mine has been prepared by independent consultant Mining Sense Global SL under the guidance of Mr Hugh Thompson. The Barruecopardo Mine consists of (a) the Barruecopardo open pit and (b) Stockpiles A, B & QP. The estimates of Open Cut Ore Reserves for the Barruecopardo Mine Project as at October, 2024 presented in the announcement and corresponding report have been prepared in accordance with the requirements of the 2012 edition of the Australasian Code for Reporting of Mineral Resources and Ore Reserves (2012 JORC Code). Mr Thompson is a qualified Mining Engineer, (BE (Mining), has over 40 years of experience in in the feasibility, design, and operations of mining projects in Australia, Asia-Pacific, Africa and South America. He led numerous multi-discipline projects, working with professionals from backgrounds such as Environmental, Community, Geology, Mining, Processing, Infrastructure and Corporate aspects of projects. He has a B. Eng (mining), and a Grad. Dip (Finance). He is both a Fellow of the AusIMM and a CP mining. He holds First Class Mine Managers Certificates for; Western Australia, Queensland and Papua New Guinea and is a Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM). Mr Thompson has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and the activity being undertaken to qualify as a Competent Person as defined in the JORC Code. Mr Thompson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Neither Mr Thompson or Mining Sense Global SL has any material interest or entitlement, direct or indirect, in the securities of EQ Resources Limited or any associated companies. Fees for the preparation of this report are on a time and materials basis only. Mr Thompson consents to the release of the report, in the form and context in which it appears. Page 5 resourcing the new economy for a better tomorrow Forward-looking Statements This announcement may contain forward-looking statements. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. Particular risks applicable to this announcement include risks associated with planned production, including the ability of the Company to achieve its targeted production outline due to regulatory, technical or economic factors. In addition, there are risks associated with estimates of resources, and there is no guarantee that a resource will have demonstrated economic viability as necessary to be classified as a reserve. There is no guarantee that additional exploration work will result in significant increases to resource estimates. Neither the Australian Securities Exchange nor its Regulation Services Provider (as that term is defined in policies of the Australian Securities Exchange) accepts responsibility for the adequacy or accuracy of this announcement. Follow us: Page 6 resourcing the new economy for a better tomorrow Appendix 1 – Signed Ore Reserve Statement Ore Reserve Estimate ORE RESERVE ESTIMATE FOR THE BARRUECOPARDO W MINE Prepared by: Mining Sense Global, SL And reviewed by: Mr. Hugh Thompson For: Saloro SLU Page 7 resourcing the new economy for a better tomorrow Appendix 2 – Jorc Table – Section 4 Ore Reserves Page 10 resourcing the new economy for a better tomorrow Page 11 resourcing the new economy for a better tomorrow Page 12 resourcing the new economy for a better tomorrow Page 13 resourcing the new economy for a better tomorrow Page 14 resourcing the new economy for a better tomorrow Page 15 resourcing the new economy for a better tomorrow Page 16 resourcing the new economy for a better tomorrow Appendix 4 - MATERIAL INFORMATION SUMMARY OF BARRUECOPARDO MINE 2024 ORE RESERVE ESTIMATE FOR THE BARRUECOPARDO W MINE Prepared by: MiningSense Global, SL And reviewed by: Mr. Hugh Thompson For: Saloro SLU October 2024 Page 18 resourcing the new economy for a better tomorrow This report is more extensive than is usual for a typical JORC 2012 ORE report. This is primarily due to the time that has passed since the previously released Ore Reserves Estimate for this property, there have been numerous updates and changes in many areas fundamental to the estimate of the ore reserve. Therefore, the documentation contained herein is correspondingly more comprehensive. Background The Barruecopardo Tungsten deposit was sporadically mined from the early 1900’s until the 1980’s. The mining activity was re-started in 2019 and, up to December 2023, a total of 35.5Mt of total rock has been mined. Of this, 6.5Mt was mined as ore to produce a scheelite saleable concentrate, and the rest, 29Mt, was considered waste and sent to the waste dump. The most important documents in the recent history of the project are: • • • • The current Mining License was requested via submission to the Mining Authority as the request for Exploitation Project (EP), C.E. Barruecopardo, Nº6.432-11 (“Proyecto de Explotación”. Sadim, 2011). Sadim is a Spanish consulting firm. The submission for the EP included the required components of the Rehabilitation Plan and the Environmental Impact Assessment. The latest has not been provided for its review to develop this ORE report. The EP request was granted in 2014, as noted below. Mineral Resource Estimation Barruecopardo Tungsten Deposit. CSA Global Resources, 2012. Feasibility Study Saloro SLU Barruecopardo Tungsten Project. CSA Global Resources, 2012. Mineral Resource Estimation Barruecopardo deposit. JORC Code Edition 2012 technical report. Jörg Pohl, 2024. The base technical information date is December 2023, and the effective date of the Ore Reserve Estimate is the 1st of September 2024. Reliance on other experts Hugh Thompson as Competent Persons accomplished mining professional with 40 years of experience in the feasibility, design, and operations of mining projects in Australia, Asia-Pacific, Africa and South America. He led numerous multi-discipline projects, working with professionals from backgrounds such as Environmental, Community, Geology, Mining, Processing, Infrastructure and Corporate aspects of projects. He has a B. Eng (mining), and a Grad. Dip (Finance). He is both a Fellow of the AusIMM and a CP mining. He holds First Class Mine Managers Certificates for; Western Australia, Queensland and Papua New Guinea. The competent person, Hugh Thompson, has not visited the site. He has relied on Mining Sense Global SL for their site visit verifications, noting the long relationship Mining Sense Global SL has had with Saloro since they began operations in 2019. Hugh Thompson has known Mining Sense Global SL professionally for 10+ years. Hugh Thompson held regular meetings with Mining Sense Global SL during the delivery of this service; mostly via video conferences and one in-person meeting. Mineral asset Barruecopardo mine licence and operating permit were submitted for approval on 11 January 2011. These permits were granted, as follows: Page 20 resourcing the new economy for a better tomorrow • On the 16th of January 2014 the Environmental License, (“Declaración de Impacto Ambiental”) (DIA), was granted, and published on the 6th of February 2014 in the public bulletin “Boletín Oficial de Castilla y León” ORDEN FYM/2014. • The Mining License was granted on the 19th of December 2014 as “Concesión de Explotación Barruecopardo” (C.E. BARRUECOPARDO Nº6.432-10). This allows the extraction of Tungsten, according to the Spanish mining regulation. The validity of the Mining License is for 30 years, being renewable two more times for the same period. The project site, and mining concession is 100% owned by Saloro SLU. On August 2023 EQ Resources Limited (EQR) acquired a 100% interest in Saloro from Oaktree. Oaktree remains a substantial shareholder in EQR, because of the transaction. The Barruecopardo project, covers 6.052km2 is in the municipality of Barruecopardo, Figure 1, in the Salamanca province of Castilla y León, in Western Spain. This is 260km WNW of Spain’s capital Madrid and close to the Portuguese border. The mine is 4 Kms south of Barruecopardo village and is accessed by the public roads DSA-573 and DSA-570 public roads. These roads connect through with the town of Vitigudino (population2,700), and through to the regional capital of Salamanca (population 150,000) 95 Kms from the mine. Figure 1 Location of Barruecopardo Mineral Resource Estimate This section is based on the document “JORC TECHNICAL REPORT Mineral Resource Estimation of Barruecopardo Tungsten deposit”, prepared by Jörg Pohl (EurGeol. #1728) for SALORO SLU. in November 2023. The first JORC resource reported by CSA in 2012 was based on 83 diamond drill holes (DD) drilled between 2006 and 2011. Seven more DD holes were added in 2012 and 2015 to test the deposit's eastern extension. In 2019, 27 DD holes were drilled to investigate structural control. Between 2021 and 2023, 26 more DD holes explored depth continuity, totalling 143 DD holes. After each campaign, the block model was updated, and Page 21 resourcing the new economy for a better tomorrow Geotechnical The geotechnical performance and parameters of the Barruecopardo open pit have been comprehensively reviewed in 2023 and 2024. The geotechnical review was conducted by Mr Leandro Alejano, Professor of Rock Mechanics, School of Mining and Energy Engineering, University of Vigo. During the study the historical information has been analysed and site visits undertaken to map exposed faces, measure the in-situ conditions of the rockmass and take samples for laboratory analysis of physical properties. The rock mass was characterized using discontinuity samples from the mine, data from Golder’s 2020 report and bi-monthly updates by Saloro and Mining Sense Global SL. This update categorized the rock mass as a medium to good quality with a GSI of 62, identifying four main joint sets: three sub-vertical and one subhorizontal. The final slope design proposed confirms the previous Golder’s report: double-benching of 10m resulting in 20m benches, at 75º inclination and 7m berms to a maximum depth of 290m. Potential instabilities such as toppling, planar, and wedge failures were reviewed and recommendations to control their effects are included in the geotechnical report. General pit slope stability was assessed using four representative sections of a similar pit design to the final pit obtained as per the current ORE, with 20m slopes and 59º overall slope angle. This resulted in safety factors above acceptable levels (FoS > 1.6, SRF > 1.4), ensuring stability if structural homogeneity and fault absence assumptions hold. Mining operations Mining is carried out by a contractor responsible for: Drill and blast, load and haul, maintenance of roads and sumps, and refeeding from the ROM stockpiles into the ROM Ore bin. All ore goes through the stockpiles, with no direct truck dumping into the ROM hopper. All waste goes to the ex-pit waste storage facility immediately to the west of the pit. All waste has been characterised as Non-Potential Acid Forming. Dried tailings from the concentrator are codisposed inside the waste storage facility, along with the run-of-mine waste. Saloro, as the owner, provides overall supervision, and mine technical services such as resource estimation, grade control in—pit, and pit design. As well Saloro directly conducts the progressive rehabilitation of the waste storage facility. Saloro operates the processing plant and uses a separate contractor for the offsite truck transport of concentrate as final product. The water used in the operation comes from the mine drainage system, stored in various ponds on surface depending on the intended use. The mining operation uses two 120 Tonne excavators with loading 100-tonne trucks on both ore and waste. Mining benches are nominally 5m high, with double-benched 10m heights used in bulk waste. The mine works two 12-hour shifts Monday to Friday, with a 12-hour shift on weekends. Generally, day shift operates 1 excavator plus two drills, and the night shift operates two excavators and one drill. Grade control Grade control is based on the collection and analysis of data from blast holes after initial review with a UV lamp. The visual positive blasthole samples are analysed in the on-site laboratory, typically providing results within 1-2 days. These results are used to define polygons representing different grade zones within the blasting area. The definition of the polygons after blasting, that is their translation in space, is supported with on-site specialised software. The material is classified into five categories: Page 23 resourcing the new economy for a better tomorrow • • • • • A+: Ore with a grade higher than 0.15% WO3 and high sulphide content. A-: Ore with a grade higher than 0.15% WO3 and low sulphide content. B+: Ore with a grade between the 0.07% and 0.15% WO3, and high sulphide content. B-: Ore with a grade between 0.07% and 0.15% WO3, and low sulphide content. OP: Ore assigned outside the geological model according to grade control. Mine optimization and design The resource block model used for grade estimation, has been re-blocked up to the SMU (Selective Mining Unit) of 6x6x5m for optimisation and design. This includes the addition of 12% planned dilution and 2% losses. Further to these planned losses and dilution, an additional operational loss and dilution of 6% and 15%, respectively, are applied in the mine plan. To identify measured and indicated category resources for the optimization process a cut-off of 0.05% WO3 has been applied using the domains defined as class 1 and 2. The MRE resource block model has been checked for alignment along the main orientation of the mineralised veins’ strike which is 15º NNE. The rotation is applied to minimise any dilution which might occur through misalignment between mineralisation and blocks. The extents of the block model are 1800m in the NNE-SSW direction, 800m across strike in a WNW-ESE direction with vertical extension between 755m and 300m RL. Good lateral definition along strike, and reasonable vertical continuity mean that mining to minimise loss and dilution should be successful. The ORE block model has been depleted with the end of period surface as of 31 December 2023, to account for mining operations continuing from 1 January 2024, the date of record of the model, until 31 August 2024, date of record for the ORE estimate. In the economic scenarios different mining limits have been set for total material moved from 6.2Mt to 9Mt of total material moved. A fixed plant throughput of 1.3Mt of ore is targeted per year and a minimum production of 9,000mtu/month. The 8% discount rate has been applied to this optimization. All the cost and revenues have been denominated in US$ in the optimization software with the exchange rate of 1.10 €/US$ applied when the base data was provided in Euros. The long-term scenario, used for selecting the ultimate pit-shell, considers a 54º slope angle, 71% metallurgical recovery and 330US$/mtu price scenario. This was done whilst including the material selected as ore for the short-term scenario. The pit-shell selected delivers 11.1Mt of ore at an average grade of 0.153% WO3 and 48.6Mt of waste at a Cut-off grade of 0.059% WO3. Two pit-shells, maximum cash flow (pit-shell 36), pit-shell selected (pit-shell 45) and current phase in operation design boundary have been displayed in plan view, Figure 2, and section view, Figure 3. Page 24 resourcing the new economy for a better tomorrow Figure 2 Pit-shell 36 versus Pit-shell 45 selected plan view Figure 3 Pit-shell 36 versus Pit-shell 45 selected, section view Final pit design has been performed after several iterations to optimize material ore/waste balance, and allowing for haul ramps etc. After that, practical phases have been designed for schedule and operational purposes with a minimum of 25 meters working width. Page 25 resourcing the new economy for a better tomorrow The phased design was then assessed in Whittle, with the assumption that the pit must be mined in a feasible sequence which delays, as much as possible the North area. This resulted in a Whittle DCF NPV reduction of 1.6M€ - if the northern phase is included. Furthermore, mining of the northern phase would require the removal of currently existing surface infrastructure, thus incurs a capital cost (not included in this analysis). As a result, the northern phase is not included in the production plan. The final design considered for planning is shown in Figure 4 in plain view, and Figure 6 in section view. Figure 4 Final Pit Design Figure 5 shows the final, selected pit design and the excluded “Northern Phase” As the North area is not considered in the final design due to the proximity of the current infrastructure and the high strip ratio in this area, it may be studied further for inclusion in a future reserve estimate. Page 26 resourcing the new economy for a better tomorrow Figure 5 Final Pit Design vs Pit shell plan view Figure 6 Final pit design long section view Mine schedule The pit has been scheduled out to the end of its’ Life of Mine (LoM) so that it exhausts the reserves. Scheduling has been at monthly for the first two years, quarterly the following two and yearly for the remaining LoM. Reports are shown here only at an annual level. The existing stockpiles form part of the ore reserves, Table 3, shows the status as of 31 Dec 2023. These Page 27 resourcing the new economy for a better tomorrow BARRUECOPARDO 2024 ORE RESERVE ESTIMATE Table 4 Mine Plan Page 29 resourcing the new economy for a better tomorrow Water Management The water management system is based on controlling water flows to separate clean water from the process water. Aiming to minimise the discharge of used water into the natural environment and optimize the use of water in all process during the LoM. Surface drainage system to collect run-off water outside the pit and all facilities are maintained to optimize the water balance and to minimize the environmental impact. The drainage network consists of 4 water ponds lined with high-density geosynthetic plastic (PEAD) equipped with their own pumping systems. Several local sumps and an external drainage system collects pit bottom water and rainfall and delivers that water to the ponds. After settlement this is then sent to the water treatment plant, from where it goes to either the process plant or discharged off-site. The water table level is monitored through a series of perimeter observation holes. An underground and surface monitoring plan is in place to detect any early-stage change in the performance of the aquifers. Environmental Social and Permitting The project currently has valid and appropriate Environmental License(s) and Mining License to operate until 2044. The project also has the appropriate construction authorisation that enabled the 2018 construction of the plant and the project associated facilities. The water usage and water discharge permits are in place with a water consumption permit of 884,774m3/year and a water discharge permit of 12,000m3/year. Most of the water consumed is retained in the tailings and used for rehabilitation and dust control. With this permit, the mine has been able to work continuously since 2019 without any interruption due to water permit restrictions. Saloro in any case is currently requesting an increase in their discharge permit to improve the operation flexibility. The current open pit is authorised for a limited footprint, that supports operations until the end of the year 2 of the mine plan reported in this ORE. To support the full LOM considered for this ORE, it will be necessary to seek approval to increase the waste dump footprint, as described above, and to increase the permitted open pit footprint. Both items are planned to be requested in 2024. These will, likely, be considered a ‘material change’ to the existing operating licence for the project, therefore it is likely that a new, or revised Environmental Impact Assessment will also be required. This process usually takes 1 to 2 years to be assessed by regulators. As the mine is in operation and the changes triggering an environmental impact assessment are not new or substantial, it is likely that time between submission and approval may be shorter. Furthermore, although the project is in an environmentally sensitive area, it is expected that the new authorizations are likely to be granted based on the exceptional performance of the project to date on the environmental aspects, as well as the positive social perception of the operation. Capital and Operating Cost The cost base used for the model have provided by Saloro in Euro as per 2024Q1. The capital costs are limited to the investment needed in the plant to improve recovery, as described above, plus a reasonable allowance for overall sustaining capital Table 9 summarises this CAPEX. Page 35 resourcing the new economy for a better tomorrow Table 14 2012 MRE and Reserves Risks overview The main risk in the estimate of these reserves is in not achieving the planned metallurgical recovery. Lower than planned recovery will compromise the economics of the project. To mitigate this risk, it is recommended that clear KPIs’ are defined to measure the incremental and long-term performance of the recovery improvement plan currently underway. The other risks of note are; • The risks inherent in mining veined deposits such as Barruecopardo whereby loss and dilution control require tight operational supervision, and vigilance. • Delays in obtaining the required variations to operating permits and authorisations, as necessitated by the extension of the Life of Mine. Forward work plan It is recommended to perform a detailed study to reduce planned and operational loss and dilution. Although economic viability is proven, profitability could be increased by optimizing these parameters and delivering increased value to the project. Work is suggested in both how loss and dilution are operationally controlled through all stages of mining, as well as how it is modelled and assessed for planning. The reserves are highly influenced by the expected recovery, a considered program on how these improvements in the plant produce the expected recovery, on a near to real-time basis is critical and must be aligned with an accurate reporting system to track the changes and improve future planning. Page 39