EQ Resources Limited Annual Report 2021

In accordance with the Offtake Agreement between the unincorporated JV formed by the Company and CRONIMET Australia Pty Ltd on the one hand and CRONIMET Asia Pte Ltd on the other, by the end of the financial year CRONIMET has taken delivery of +200 tonnes of concentrate. Individual production lots are tested against agreed quality parameters, upon which CRONIMET determines the acceptance of concentrate. Trial deliveries to large tungsten consumers in Asia, the US and Europe were successfully completed and were of utmost importance, given the specific composition of the Mt Carbine concentrate (containing mixed mineralisation of scheelite and wolframite). XRT Sorter Development The Company had a very successful year with the bulk testing of material through the XRT Sorting plant at Mt Carbine with results showing on average a 10 times upgrade of feed material to sorter concentrate produced with a yield of feed to concentrate averaging +/-10%. The XRT Sorter operates continuously at +70tph with a +90% tungsten recovery. The results over the period have proven the robustness of the technology and specifically the adaptability of the technology to the Mt Carbine LGS material. This has given the Company a very cost effective method of processing the LGS through the reduction of mass to be processed through the Gravity Plant by concentration through the XRT Sorter. Over the year, the Company worked with TOMRA, the leading equipment manufacturer of sensor based sorters, to upgrade several pieces of hardware and software in the machine to ensure it was fitted with the latest technology to deliver optimal results. After the upgrades were completed, the Company continued working with TOMRA on the feed characteristics and materials to develop an algorithm that was suited to the LGS material while maximising recovery. Aerial view of XRT Sorting plant Tonnes 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Q1 2021 FY Q2 2021 FY Q3 2021 FY Q4 2021 FY Q1 2022 FY In July 2020, the project consortium’s application to METS Ignited Australia Limited for a $220,000 grant under the Queensland METS Collaborative Projects Fund was awarded (refer to ASX announcement Government Support for Mt Carbine Mine Waste Transformation Initiative released 24 July 2020) . The project consortium was led by CRONIMET Australia and consists of the Company, CRONIMET Australia, The University of Queensland - WH Bryan Mining and Geology Research Centre, TOMRA Sorting Pty Ltd and DAS Mining Solutions Pty Ltd. The project was used to establish the physical controls on separation efficiency of the LGS materials at Mt Carbine to develop new mine planning and scheduling models and optimise scale-up application of ore sorting technologies. This was completed through the excavation of several pits and two large trenches on the LGS. Much of the information and data produced were essential for the compilation of the BFS and design of the operations going forward. To continue generating data, the central test pit of the program has been excavated further in all directions to continue testing grade continuity and material variability through the stockpile. More than 40,000t of material has been excavated from this area alone with results of the -6mm fines material and XRT sorted material providing consistently positive results. Average Quarterly XRT Sorter Feed (t) EQ Resources Limited Annual Report 2021 9