EQ Resources Limited Annual Report 2021

Tungsten Market Outlook Throughout the last year APT (Ammonium Paratungstate; as the underlying price reference for tungsten concentrate) prices between US$205/mtu (metric ton unit; equals 10 kg) in July-August 2020 and US$315/mtu, as of the date of this report, have been seen. This represents an increase of approximately +50% within the period, and confirms the strong underlying fundamentals the tungsten market is in at the moment. The Company believes that price fundamentals remain favorable in the months ahead, as global manufacturing sectors continue to recover from the disruptions caused by the pandemic and industrial activities in leading economies start to benefit from the large stimulus packages rolled out by various governments. Corporate Activities Board of Directors The Board welcomed Mr Richard Morrow as a Non- executive Director as from 16 March 2021. Richard is an experienced professional in mining finance based in Melbourne, Australia. He is a director of specialist resources fund Manager Lowell Resources Fund Management and manager of the ASX-listed Lowell Resources Fund (ASX:LRT). For many years he was an equity holder of Melbourne-based stockbroker, E.L. & C. Baillieu, now part of the Ord Minnett Group. Richard is the honorary Chairman of the Melbourne Mining Club and has over 30 years’ experience as a stockbroker in Melbourne and in London and is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Morrow’s experience in capital markets and industry oversight provides an invaluable contribution to marketing the Company’s continued progress and potential. Leadership Team Ms Kim Cavallaro resigned as Executive Director and Chief Commercial Officer effective from 15 January 2021 with Mr Kevin MacNeill entering an Executive Employment Agreement on 1 April 2021 as Chief Executive Officer. The Company is pleased Mr Kevin MacNeill will continue to lead the Company as its CEO, expanding his focus on the operational front at the Company’s flagship projects at Mt Carbine, to drive ongoing strategic initiatives at both Mt Carbine along with the Company’s gold exploration assets in New South Wales. Mr MacNeill will work with the team to align key management roles to best advance these initiatives and seize the opportunities ahead. Capital Raisings Equity Raising – March 2021 On 15 March 2021, the Company announced it had received $6.5 million of firm commitments in a well-supported placement of new fully paid shares (New Shares) to institutional and sophisticated investors (Placement). Strong support was shown for the placement from a broad range of high-quality institutional investors. The issue price for the placement was $0.032 (3.2 cents) per share, being an 18% discount on the most recent closing price and a 16% discount to the 15-day VWAP. The placement was conducted by Morgans Corporate Limited (Lead Manager). 187.5 million fully paid ordinary shares (New Shares) were issued under the Placement on 19 March 2021 with a further 15.625 million fully paid shares issued to Directors on 20 May 2021 upon receiving shareholder approval at the General Meeting on 17 May 2021 being the total gross proceeds from the Placement to $6.5 million before costs (refer ASX announcement “EQR Raised A$6.5M to Accelerate Mt Carbine Expansion and Underground Development”). Convertible Notes – September 2021 Subsequent to the end of the 2021 financial year, the Company raised a further $6.0 million via the issuance of 2 year convertible notes with a conversion of 6.5 cents per share, a ~45% premium to the last price of 4.5 cents per share (“Convertible Notes”). The funds will be used to commence early works for its Mt Carbine tungsten mine, well ahead of the release of the Company’s Bankable Feasibility Study. Details: Amount: A$6.0 million Term: T wo years with the ability to be converted early by the Note Holders. Coupon: 7 % per annum. Coupon payable in shares or cash at the election of the Note Holders. Conversion Price: $ 0.065 per ordinary share, a 44% premium to the last close on 8 September 2021. Conversion Terms: C onverted into new ordinary shares or repayment of the loan at the Note Holders election. The Note Holders may elect to convert the Convertible Notes into new shares early during the term. EQ Resources Limited Annual Report 2021 15