Announcement PDF EQ RESOURCES LIMITED Critical Mineral Producer : Stand M84 IMARC 2023: Mining Spotlight DOWNLOAD PRESENTATION Kevin MacNeill, CEO November 1st 2023 ASX : EQR Disclaimer Competent Person's Statement • The information in this presentation partly relates to the outcomes of the Mt Carbine Bankable Feasibility Study Update (May 2023), made available through the Company’s website www.eqresources.com.au/. • The Company confirms that it is not aware of any new information that materially affects the information included in the corresponding market announcements and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcements. General 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 forwardlooking 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 A Globally Significant Tungsten Raw Materials Supplier Corporate Overview Share Price Performance Key Statistics Share Price A$0.07 per share 12-month range A$0.04 - A$0.088 per share Shares on Issue 1.57B Market Capitalisation A$106.74 million Top 20 Shareholders 58.8% (~10% Board/Management) 4 2 12 10 6 7 Board & Management Oliver Kleinhempel Non-exec Chairman Stephen Layton Non-exec Director Zhui Pei Yeo Non-exec Director Richard Morrow Non-exec Director Kevin MacNeill Chief Exec Officer Tony Bainbridge Chief Geologist 13 11 8 14 9 3 5 1 1 Feasibility Study Resource Drilling results announced – Announcements: 06 July 2021 (link), 13 July 2021 (link), 05 August 2021 (link) 2 Updated JORC Mineral Resource announced – Announcement: 23 September 2021 (link) 3 Bankable Feasibility Study results announced – Announcement: 13 December 2021 (link) 4 AMGC Grant for 2nd XRT Sorter announced – Announcement: 25 January 2022 (link) 5 Underground Scoping Study results announced – Announcement: 12 April 2022 (link) 6 Government $6M Critical Minerals Grant announced – Announcement: 28 April 2022 (link) 7 Early Work Program completion announced – Announcement: 27 June 2022 (link) 8 Phase 1 2022 Drill Program and Updated JORC Mineral Resource announced – Announcements: 04 May 2022 (link), 20 May 2022 (link), 04 August 2022 (link) 9 Bankable Feasibility Study Update results announced – Announcement: 09 November 2022 (link) 10 First 2022 Drill Results: Iron Duke Disvocery and Confirmation Western Extension – Announcement: 13 February 2023 (link) 11 JORC Mineral Resources Update (+64%) announced – Announcement: 04 April 2023 (link) 12 Strong BFS Update Delivers 47% Increase In NPV – Announcement: 22 May 2023 (link) 13 EQR acquires Tungsten Producer and Secures $25M Funding – Announcement: 10 August 2023 (link) 14 Strategic Partner Cronimet Joins EQR Register – Announcement: 18 October 2023 (link) 4 Tungsten Uses Critical Alloy Element, Unsubstitutable in Many Applications Aviation Aerospace Automotive Heavy Machinery Heavy Industry Tools & Construction Medical Military EV Battery Development Green Energy Science & Tech Micro Electronics 5 Supply Risk Tungsten – A Material of Global Critical Significance Economic Importance 6 Tungsten – A Material of Global Critical Significance Tungsten is classified as a 'critical mineral’ by the US, UK, EU, Japan, South Korea, India and Australia: - Due to its economic importance - Supply dependency with >80% China market share - Inability to be substituted in many end-use applications EU Commission rates tungsten with highest ‘economic importance’; EU Critical Raw Materials Act further classifies tungsten as a ‘strategic mineral’ Dodd Frank Act (Art.1502) – tungsten, tin, tantalum & gold defined as ‘conflict minerals’ (resulting in wide ranging traceability obligations) Australia-US ‘Climate, Critical Minerals & Clean Energy Transformation Compact’ defines Australian resources as ’US domestic source’ at 3420OC highest melting point of all metals as carbide compound hardest element after diamond 10 U.S.C. 2533c prohibits acquisition of samarium -cobalt magnets, neodymium -iron-boron magnets, tungsten metal powder, and tungsten heavy alloy or any finished or semi-finished component containing tungsten heavy alloy from North Korea, China, Russia, or Iran. 7 Tungsten Market Overview • Decades of continuously increasing dependency on China resulted in a market where today 90% of tungsten raw materials originate from China and other non-transparent or conflicted sources – including Russia, North-Korea and Central Africa • Contrary to the “disturbing” supply balance, NAFTA, EU, Japan and South Korea alone stand for ~2/3 of end-use demand for tungsten products • Strategic / developed industries (automotive, energy, aerospace, defense) continue to depend on tungsten, in addition to new applications in high-tech / high-growth sectors such as batteries and semiconductors (e.g. nano tungsten oxide) • Declining output from Chinese mines and the lack of new projects (i.e. in the western world) will result in a severe shortage and further increasing geo-political competition around this critical mineral Supply / Demand Forecast Scenarios ??? Source: ITIA Tungsten End Use Analysis (2021) Source: (a) Argus Tungsten Analytics (2021), (b) Roskill Tungsten Outlook to 2030 (2021), (c) ITIA Tungsten End Use Analysis (2021) 8 Mt Carbine Flagship Project De-risked Mt Carbine Mine Is Australia’s Leading Tungsten Mine and Is Consistently Exporting Concentrate to Global Consumers Mt Carbine Open Pit & Processing Plants Perfectly situated within a Critical Minerals Hub (W, Sn) in Far North Queensland: Tungsten Cluster W atershed Mt Carbine Mine Access & Infrastructure Power Supply Network • • • Close proximity to international export channels underpins low-cost production. 130km via sealed highway to Cairns International Airport. Townsville Port received $232 million upgrade in 2021, securing its position as largest port in North Australia and the economic gateway to Asia. • • 2021 upgrade of power supply line & new substation allows plant to operate 24/7. Will accommodate all future growth phases of Mt Carbine as production ramps up with mining of Open Pit. Bulk fuel supply on site through direct local supplier ensures reliability. • Water Supply Security • • Accommodation, Offices & Towns • Multiple responsible sources of supply including 2 catchment storage dams, 17 investigation- and 1 production boreholes, draining of open pit, recycling of water through plant. Mt Carbine motel, roadhouse, gas station & caravan park chalets for out-of-town specialist teams. Nearby towns of Port Douglas, Mossman, Mt Molloy & Mareeba allow up-skilled staff to be sourced locally and go home each day. Upgraded onsite Management & Admin offices facilitate hands-on management. W olfram Camp Cluster potential - significant mineral deposits defined in the region: Watershed: 2014 DFS by Vital Metals (2012 JORC) Wolfram Camp 2015 Technical Report by Almonty Industries (NI 43-101) EQR Awarded Permit for Historic Wolfram Camp Mine. 27 Jul 2023 (link) 9 Solidly Developing Mt Carbine Economics Since 2021 Continuous Value Generation Through Targeted Exploration, Value Engineering and Technology Deployment Comparison of Mt Carbine Project Economics (excl. Underground Feasibility Work) Initial BFS BFS Pit Optimisation BFS Pit Optimisation (December 2021) (November 2022) (May 2023) US$/mtu 113 118 104 Capital Cost A$m 22.96 21.4 26.3* Pre-tax NPV8, real A$m 131 210 307 NPV / Capex Ratio x 5.7 9.2 11.7 years 2.25 1.5 <1 Strip Ratio (Waste:Ore) 11.1:1 3.1:1 3.9:1 Concentrate Produced (t / 50% WO3) 26,680 30,960 38,570 Parameter Unit Total Cash Cost (FCA) Payback Period Indicative Tax Payable from BFS modelling is +/- $95 Million over the LOM * Capex has increased due to $7.7m added to double plant capacity (without this, capex forecast is lower than last BFS) Notes: • The BFS has been prepared to a -20% to +20% level of accuracy. The production target and financial information in this table must be read in conjunction with the cautionary statement in the relevant ASX Release • AUD:USD average exchange rate of 0.688 over the life of project was used for currency conversions 10 Saloro as Latest Member of EQR Group Barruecopardo Open Pit World-class Processing Plant Europe’s Largest Tungsten Mine, With Outstanding ESG Credentials, Additional Ramp-Potential and Regional Exploration Upside Iberian Peninsula has historically been one of the leading Tungsten producing regions globally: Tungsten Cluster Barruecopardo History: • Mine discovered in 1900’s, stopped in 1982; • Redeveoped by Saloro in 2019; • EQR acquired in Q3/23, expansion planned for 2024 Note: Barruecopardo Mine has been in operation since 2019, funded by US private equity group, Oaktree, on the basis of a historic bankable feasibility study; EQR is currently preparing an update of the historic independent mineral resource and ore reserves estimate and will report a JORC-compliant update within Q1/2024; until then EQR is not allowed to report financial projections for the Barruecopardo project. 11 EQR & Saloro’s Global Significance Arguably the two best producing tungsten assets today, with similar characteristics: – Both in Tier 1 jurisdictions – Similar mineralogy: Both are hosted in sheeted quartz – Complementary geology: Granite (Barruecopardo) and Metasediments (Mt Carbine) – Identical mining method: Open pit blast plus truck and excavator - identical fleet – Similar processing: Crush, screen, XRT-sorting, jigs and tables; Saloro incorporates flotation and mag.sep.cleanup, producing a higher-grade product – Identical Marketing: Both supplying the same end customers – Both operating adjacent to world renowned National Parks (strong ESG credential) – Organisational and significant technical synergies (comparable operational output) EQR will have a production second only to Vietnam in ex China/ Russia producing countries, and second only to Nui Phao (Masan Group, Vietnam) compared to top producers ex China/Russia. Read More on EQR’s Saloro Acquisition: Click 12 What We Care About Responsible and Sustainable Critical Mineral Production BENEFICIAL REUSE CORE VALUES 13 Recognition For Our Sustainability Efforts Responsible and Sustainable Critical Mineral Production 14 Strategic Partners Endorsement Through Funding & Grants Strong Support for Critical Minerals Projects in Australia Queensland METS Collaborative Projects Fund (METS Ignited) ASX Announcement 24 July 2020: Government Support for Mt Carbine Mine Waste Transformation Initiative Advanced Manufacturing Growth Center (AMGC) ASX Announcement 25 January 2022: Federal Government Co-Invests in High-Tech Ore Sorting Critical Minerals Accelerator Initiative (CMAI) ASX Announcement 19 September 2022: Federal Government Funding for Mt Carbine Reconfirmed 15 Inflection Point of Value INCREASING MARKET CAP & NPV INCREASING SHARE PRICE 0,08 350 307 0,07 0,07 300 0,06 0,05 209 $AUD $AU Millions 250 200 0,04 131 150 ~100 100 50 24% 20 0,03 0,03 33% 100 50 0,05 0,02 0,01 15% 0,00 0 2021 Market Cap NPV 2022 2023 01/07/2021 01/07/2022 03/07/2023 2021 2022 2023 JULY yearly share price ✓. %Of Market Cap 16 A Globally Significant Tungsten Raw Materials Supplier WO3 Established Production Australia’s largest primary tungsten producer, consistently accelerating production. Recent acquisition of Saloro (Barruecopardo Mine) makes EQR the largest western supplier of tungsten raw materials Secured Long-Term Offtake Partnership Secured offtake via CRONIMET partnership at fair market value. Product from both EQR mines globally accepted, shipments to some of the largest Asian, US and European consumers. De-Risked Operations Both mines scaled up production over recent years: proven economics, fully permitted, infrastructure in place, low-cost expansion ongoing, Government supported. Large Economic Resources Both resources provide economic grades well above world average. Both mines with Life Of Mine >12 years. Ongoing drilling programs at clearly defined targets provide upside potential. Both mines are located in historic regional mining clusters. Positive Market Conditions & Outlook Increasing commodity price forecast combined with favourable supply-demand dynamics underpins EQR’s strategic relevance in the critical minerals sector. Classified as critical mineral for its economies by US, UK, EU, Japan, South Korea & India. Genuine ESG Performance & Commitment EQR is committed to embedding resource efficiency to minimise environmental footprint and delivering positive societal impact while striving to lead by example. Recognised by industry and Government awards. Beneficial Waste ReUse & Renewables As Cost-Saving Measures Beneficial re-use of waste product promotes Circular Economy commitment at Mt Carbine (similar investigations initiated for Saloro). Installation of solar PV renewable energy plant(s) to lower cost and reduce environmental footprint. Saloro’s PV project is construction-ready. 17 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 Follow us on