Announcement PDF EQ RESOURCES LIMITED Investor Update / Webinar 09 May 2024 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) and most recent drilling announcements, 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 Talking Points Corporate Update / QIC Funding Mt Carbine Drilling / UG Development Tungsten Market Dynamics 1. 2. 3. Take Aways 3 Corporate Update 2023 - To Date (Share Price Performance & Key Announcements) Key Statistics Share Price A$0.05 per share Securities on Issue Shares 1.85B / Options 155m Market Capitalisation A$ 92.5 million 3 2 5 1 Top 20 Shareholders >60% (9% Board/Management) 0.09 400 0.08 350 Share Price AUD 0.07 300 0.06 250 0.05 200 0.04 150 0.03 0.02 Jan-21 100 Jan-22 Share Price Jan-23 Jan-24 APT PRICE* * Source: FastMarkets APT Price Rotterdam (US$/mtu, mtu = 10kg WO3) 6 APT Price USD 4 1 64% increase of Mt Carbine Indicated Resources (In-Situ) – Announcements 04 April 2023 (link) 2 EQR awarded Permit for historic Wolfram Camp Mine – Announcement 27 July 2023 (link) 3 Tungsten Output at Mt Carbine Increases 181% Quarter-On-Quarter – Announcement 03 October 2023 (link) 4 EQR completes Acquisition of Saloro SLU and $25m Placement with Oaktree – Announcement 18 January 2024 (link) 5 Saloro adds 69% of Measured and Indicated Resources to EQR’s Inventory – Announcement 01 February 2024 (link) 6 Saloro XRT Sorting Performance exceeds Expectations, adding 26% more Material to Gravity Plant – Announcement 15 February 2024 (link) 4 Consistent Board & Leadership Team Diverse and Experienced Board & Leadership Team Kevin MacNeill - Chief Executive Officer • • • • Interim CEO & Senior Technical Advisor since May 2019, CEO since January 2020. 35+ years in mining project development globally. Expertise in mineral processing, specifically tungsten. Past President of Etruscan Diamonds, founded Specialized Metallurgical Projects. Oliver Kleinhempel - Non-executive Chairman • Non-executive Director since August 2019, Chair since April 2020. • Experience in project development, finance, commodity trading. • Previous roles at Outotec, Ferrostaal Group, CRONIMET. • Executive Director at CRONIMET Group. Richard Morrow - Non-Executive Director Stephen Weir- Non-executive Director • • Appointed in January 2024, representing Oaktree Capital Management. Experience in corporate advisory, project finance, construction management. Former CEO of Magnetite Mines Ltd, Member of the Australian Institute of Company Directors, GBA Capital Advisory Board. • • • • Stephen Layton - Non-executive Director • • • Zhui Pei Yeo - Non-executive Director Background in executive management, project planning, resource management. Works in system integration in telecoms in SouthEast Asia. Executive director at a steel-product manufacturer. • • • Tony Bainbridge - Chief Geologist • • • Focus on Mt Carbine’s ‘King-Vein’ style mineralisation. Experience in tungsten projects in South Korea and Africa. Director at Asia Interplay Mining Ltd & AMB Exploration Pty Ltd Over 30 years as a sharebroker, interested in resources sector. Ex Chairman of Melbourne Mining Club. Investment roles at Lowell Resources Fund Management; Fellow of AusIMM. 35+ years in equity capital markets in the UK and Australia. Experience in ASX listings, corporate advisory. Directorships at Mithril Resources Limited Ian Kirkham – Senior Financial Adviser • • • 25 years in the mining oil and gas sector Expertise in debt and equity financing, treasury services, corporate secretarial services Past CFO of Eastern Star Gas & Warrego Energy Ltd 5 QIC - $20M Facility For Mt Carbine Expansion Queensland Investment Corporation (QIC) provides a $20million 3-year loan facility in two tranches from its Queensland Critical Minerals & Battery Technology Fund: • Tranche A: $12m will double processing capacity to 2mtpa and start underground drill testing • Tranche B: $8m to continue underground drill testing and start underground trial mining Deputy Premier, Treasurer and Minister for Trade and Investment Cameron Dick commented: “Our investment through the Queensland Critical Minerals and Battery Technology Fund provides a pathway for EQ Resources to extend the existing mine by further exploring tungsten resources accessible through underground mining. New plant equipment, drill testing and trial mining is forecast to increase capacity and extend the mine’s life by at least five years, ensuring global demand for tungsten continues to deliver local opportunities for Far North Queenslanders.” QIC’s State Chief Investment Officer Allison Hill commented: “Securing additional tungsten mineralisation will strengthen Queensland’s position as a significant contributor to global critical minerals supply chains. There are relatively few mines globally in a position to fill anticipated supply-demand gaps for tungsten as existing outputs are challenged and demand for clean energy technologies grows.” 6 Doubling of Plant Throughput Capacity From a current 1mtpa to 2mtpa - initially planned for end 2025, now accelerated through QIC funding x2 As part of EQR’s transformation to become the largest independent tungsten raw material supplier outside China, the company realizes a 6.5-fold increase of concentrate output comparing Q4FY2023 and Q3FY2024 (through organic growth at Mt Carbine and by acquiring Saloro). 7 Vertical Integration Opportunities Tungsten Cluster - Australia EQR’s positioning as a leading source of responsibly mined & non-conflict tungsten concentrate provides the company with significant leverage: EQR Position in Global (ex-China/Russia) Producing Countries QUEENSLAND EQR Awarded Permit for Historic Wolfram Camp Mine. 27 Jul 2023 (link) Tungsten Cluster - Spain * Potential Partnerships, Structures & Options being explored: • Expand strategic partnerships, while M&A options being explored • EQR-Masan* Memorandum Of Understanding signed in 2023: Link • Toll treat EQR concentrate to APT - Global market has capacity to absorb & demand growth is forecasted • Downstream players interested in securing guaranteed supply 8 Talking Points Corporate Update / QIC Funding Mt Carbine Drilling / UG Development Tungsten Market Dynamics 1. 2. 3. Take Aways 9 Mt Carbine Veins on the Pit face and Ore Grade Structure and Characteristics of the Andy White Open Pit Vein 0.05-0.1% WO3 >0.2% WO3 0.1-0.2% WO3 Geological Update - ‘Phase 1 Pit’ Understanding CB001 CB001 CB005 CB004 Fig.2 - Above: Geo model incl. CB001 (red); Eliminated in latest update (below) Fig.1 - Top view of ‘Phase 1 Pit’ (Aug’23 - July’24), target ore in orange; 3 historical (pre-EQR times) in blue, CB001 was misplaced in survey Phase 1 Pit was not drilled by EQR due to water contained pit. Only 3 widely spaced holes to rely on for geological modelling. CB001 considered (very) high grade, but misplaced in survey – now eliminated from Pit 1, with remaining High-Grade Iolanthe Zone (yellow) holding well with EQR drilled exploration holes. 11 Geological Update - ‘Phase 2 Pit’ Drilling x3 Fig.1 - Drill areas in red: testing high-grade Iolanthe Zone and testing grade-vs-elevation model Successful drilling completed in April’24, testing vein consistency, ore grade for Phase 2 Pit and “grade-vs-elevation” model. Details see ASX announcement (link). Fig.2 - EQRC15-18 (April’24) coming in at double grade vs model 12 Geological Update - ‘Phase 2 Pit’ Drilling Infill RC Drilling at 10m spacing into the Iolanthe Vein System, confirming consistency of high-grade sections. Individual veins ranging with true widths of 0.3-2.5m were intersected at 0.5% to 3.66% WO3 grades. Interpretation confirms veins are increasing in grade as Stage 2 Pit commences at the 325m level. Drilling into the Iolanthe Vein System, considered the strongest zone identified so far in the open pit, does not reflect the entire system but rather 1 of 4 major vein packages. 13 Mt Carbine - Exploration & Underground Potential Iron Duke 2 North West Pit Extension Hole EQ026 1 Resources Drilling • Target to bring in more resources from inferred to indicated 2 Exploration Drilling Iron Duke zone 3 Hole EQ026 depth extents BFS Pit 1 5.95m@0.94% WO3 Extension Hole Resources: Indicated Resources Resources: Inferred Resources Existing decline Planned development 3 Target Zone 14 Existing Decline and Underground Development • AVOCA Mining method shown above • Historical pictures from 1986 of the existing decline on the right Talking Points Corporate Update / QIC Funding Mt Carbine Drilling / UG Development Tungsten Market Dynamics 1. 2. 3. Take Aways 16 Tungsten - A Critical Metal of Global Relevance Unique Properties, Without Substitution in Many Applications One of the Most Important Critical Materials according to European Commission ▪ Tungsten is declared by the European Commission to be a “critical raw material” as a result of high supply risk and highest economic importance Tungsten Market dominated by non-OECD members ◼ China accounts for over 83% of world Tungsten primary (mining) production ◼ Unique properties make Tungsten an essential industrial metal ▪ On March 7, 2018, U.S. Congress passed the “National Strategic and Critical Minerals Production Act” (H.R. 520) defining and including tungsten as a “critical mineral” ▪ Western Governments world-wide are becoming increasingly focused upon the importance of critical raw materials (incl tungsten) supply ▪ Down-stream Tungsten end users are becoming increasingly worried about lack of visibility on future raw material supply ◼ Raw Materials Critical Non-critical Niobium Borate Graphite Scandium Indium PGMs SUPPLY RISK ❑ End-market application for light and heavy industrial, energy and military uses include in heavy metal alloys such as high-speed steel, from which cutting and pressing tools are manufactured Benchmark pricing continues upward trend considering tungsten’s strategic relevance and precarious supply / demand situation Primary Tungsten Production by Country Tungsten Reserves by Country 1.1% 1.1% 0.8% 0.5% 0.8% 1.4% 0.3% 0.1% 2.7% 1.8% 3.0% Tungsten Germanium Baryte Gallium Rhenium Highest melting point of all metals and highest tensile strength, high density, hardness close to diamond, thermally and chemically stable, excellent conductor, and environmentally benign 1.2% 1.5% Beryllium Bauxite Lithium ❑ Vanadium 5.7% Cobalt 51.4% Hafnium Silicon 32.5% 83.3% Phosphate Rock Manganese Tantalum Chronium Tin Tellurium Molydbenum Iron Ore Feldspar Potash Magnesite Kaolin Clay Silver Sulphur Gypsum Zinc Aluminium Talc Nickel Titanium Silica Sand Gold Copper Aggregates Limestone Lead Coking Coal 10.8% Total World – 79kt China Portugal Total World – 3,700 kt Other Countries Korea, North Russia Spain Vietnam Rwanda Bolivia Austria ECONOMIC IMPORTANCE 17 Tungsten Uses & Market Outlook Raising Supply Concerns with Defence, Micro Electronics and Green Energy driving Demand “Purple tungsten oxide helps prolong lithium battery life.” “Reduced costs, increased efficiency key to wider use of tungsten filament.” “Tungsten demand to increase due to its key role in chip industry.” By Fastmarkets - Friday 20 October By Fastmarkets - Friday 20 October By Fastmarkets - Tuesday 19 December 18 Tungsten Market Dynamics EQR is unhedged, provides spot price exposure to a tight market China Trade Balances May 2024 - Highest price in 12 months with momentum 16%) National Security Project Delays • On November 30, 2023, the Ministry of National Security of China defines tungsten a critical material, subsequently the Government reduced the 2024 production quota for the domestic tungsten sector • New round of Environmental Inspections across tungsten sector commencing (Fastmarkets, May 2024) • US Defence Logistics Agency (DLA) stopped reporting Government Tungsten Stockpile in May 2023, leaving room for speculation on whether the DLA becoming a buyer in 2024 China Import China Export Concentrate 5,818t FeW, Oxide, Carbide 10,253t Top 4 (78%): Top 4 (>90%) - - North Korea Russia Myanmar Central Africa Source: China Custom Data (2023) EU Japan South Korea US New Supply? Comment Project 1 (Aus) 1,500t WO3, 2022, ramping up Project 2 (Can) 5,500t WO3, 2023, BFS/funding Project 3 (Kor) 3,500t WO3, 2021, development Project 4 (Esp) 1,050t WO3, 2024, cancelled Project 5 (UK) 3,500t WO3, 2020, reset Source: Company internal assessment 19 Talking Points Corporate Update / QIC Funding Mt Carbine Drilling / UG Development Tungsten Market Dynamics 1. 2. 3. Take Aways 20 EQR Near Term Catalysts - Timeline Mt Carbine Operations Increasing scalping in the LGSP, bringing LGSP forward Q2 CY2024 Doubling Plant Capacity Q4 CY2024 24,000 meters drilling, to bring Inferred to Indicated Resources, new Ore Reserves announcement Q4 CY2024 BFS on the Underground Mining Q4 CY2024 Reopening of the underground decline and trial mining Q1 CY2025 Wolfram Camp / Bamford Hill exploration starts Q3 CY2024 Saloro Operations Recovery improvement through newly installed XRT Sorter Plant and Gravity Plant debottlenecking Q2 CY2024 Purchase of 3rd XRT Sorter Q3 CY2024 Exploration along strike Q3 CY2024 New Ore Reserves announcement Q3 CY2024 21 What We Care About Responsible and Sustainable Critical Mineral Production BENEFICIAL REUSE 22 A Globally Significant Tungsten Raw Materials Supplier 23 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