Mineral Resources and Ore Reserves Mineral Resources and Ore Reserves are estimates of mineralisation that have reasonable prospects for eventual economic extraction in the future, as defined by the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”). JORC Code compliant statements relating to EQR’s Ore Reserves and Mineral Resources are estimates only. An estimate is an expression of judgement based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, Resource Estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional fieldwork and analysis, the estimates are likely to change and may be updated from time to time. This may result in alterations to mining plans or changes to the quality or quantity of EQR’s Ore Reserves and Mineral Resources, which may, in turn, adversely or favourably affect EQR’s operations. Mineral production involves risks, which even a combination of experience, knowledge and careful evaluation may not be able to adequately mitigate. No assurance can be given that the anticipated tonnages or grade of minerals will be achieved during production or that the indicated level of recovery rates will be realised. Additionally, material price fluctuations, as well as increased production and operating costs or reduced recovery rates, may render any potential Mineral Resources or Reserves containing relatively lower grades uneconomic or less economic than anticipated, and may ultimately result in a restatement of such Resource or Reserve. This in turn could impact the life of mine plan and therefore the value attributable to mineral inventory and/or the assessment of recoverable amount of EQR’s assets and/or depreciation expense. Moreover, short term operating factors relating to such potential mineral Resources or Reserves, such as the need for sequential development of mineral bodies and the processing of new or different mineral types or grades, may cause a mining operation to be unprofitable in any particular period. In any of these events, a loss of revenue or profit may be caused due to the lower than expected production or ongoing unplanned capital expenditure in order to meet production targets, or the higher than expected operating costs. EQR seeks to manage and minimise this risk through its existing risk management framework including an external audit process for its Mineral Resources and Ore Reserves. Throughout the year, a total of 273 Reverse Circulation (RC) Grade Control drill holes were completed, covering 9,165 meters. The drill hole depths ranged from 33 to 51 meters. The majority of these were in-pit grade control holes, with the exception of 43 holes (2,184 meters) drilled outside the pit. These exploratory holes included 26 holes drilled to a depth of 50 meters at the Ruby Vein prospect and 17 sterilisation holes. The mine staff continuously validates the resource estimate by reconciling actual production against the feasibility model. This ongoing reconciliation process has underscored the critical role of drill hole data density as the pit deepens. During the first six months, reconciliation was poor (56%), primarily due to a lack of diamond drilling in the upper portion of the pit, where reserves could only be estimated at Possible Reserves. However, after completing close-spaced grade control drilling, a strong correlation between production and the model was achieved. In the second six months, reconciliation against the BFS Model improved significantly, where diamond drill spacing had reduced to approximately 30-meter centers and mining advanced into the main ore body. This resulted in an excellent match between actual production and the feasibility model with reconciliation reaching 97%. Going forward, EQR sees no reason to alter the current Reserve model as mining is entering the well drilled out main ore body. It is necessary that the detailed 10 x 10m spaced RC be continued as it clearly outlines the vein zones on a blast by blast basis. Operating and Financial Review continued 32 EQ Resources Limited Annual Report 2024
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