Material Business Risks The Board is committed to the identification, assessment and management of risk throughout the Company’s business activities. The Company’s Risk Management Policy recognises that risk management is an essential element of good corporate governance and fundamental in achieving its strategic and operational objectives. Risk management improves decision making, defines opportunities and mitigates material events that may impact security holder value. The Board reviews the entity’s risk management framework at least annually. Management reports risks identified to the Board through regular operations reports, and via direct and timely communication to the Board where and when applicable. The Company does not have an internal audit function. The Company faces risks inherent to its business, including economic risks, which may materially impact the Company’s ability to create or preserve value for security holders over the short, medium or long term. The Company has in place policies and procedures, including a risk management framework, which is developed and updated to help manage risks. During the reporting period, management reported to the Board on the effectiveness of the company’s management of its material business risks. The matters listed below are not listed in order of importance and are not intended to be an exhaustive list of all the risks and uncertainties affecting the business. Operational Risks The Mt Carbine Mine in Australia is subject to various operational risks, including disruptions in operations, equipment failures, challenges in securing replacement equipment, and issues with product separation and screening. Since its inception in February 2020, the Mt Carbine site has evolved from a junior exploration entity into a comprehensive mining operation under the leadership of EQR’s CEO, Kevin MacNeill. With the initiation of open cut mining in late June 2023, Kevin leveraged his 30 years of experience managing mining operations across North America, Europe, and Africa. His extensive background has fostered the development of a proactive, hands-on management style and a streamlined operational team, which emphasises efficient decision-making and employee empowerment to achieve optimal outcomes. The Saloro Barruecopardo Mine in Spain faces similar operational risks, though Europe’s advanced infrastructure, including roads, ports, and utilities, supports efficient mining operations. Reliable transport networks ensure smooth supply chain operations, from transporting raw materials to delivering finished products, while also reducing logistics costs and improving market access. Additional risks for both operations include, but are not limited to, adverse weather conditions, material availability, the availability and productivity of skilled workers and contractors, industrial and environmental incidents, labour disputes, and unexpected increases in the costs of labour, consumables, spare parts, and equipment. The operation also faces potential IT disruptions, unforeseen regulatory changes, and broader risks tied to global uncertainty and events such as the COVID-19 pandemic, which could include governmental responses that impact operations. Environmental Risks EQR must comply with a range of environmental performance and reporting requirements, many of which are conditions of its mineral exploration and mining activities. There is a risk that the Company may not be able to achieve the financial performance or outcomes disclosed herein if it fails to comply with those environmental performance and reporting requirements or if the requirements change in the future and the Company is no longer able to comply with the requirements or must incur material unplanned expenditure in order to remain compliant. EQR seeks to manage and minimise this risk through its existing risk management framework and through detailed environmental management plans and systems including the implementation of ISO 14001:2015 Environmental Management Systems (EMS). Saloro’s Barruecopardo operations are accredited under ISO 14001. The globally accepted standard offers a structured approach for organisations to create and deploy an EMS, and continuously enhance their environmental practices. Compliance with this standard enables organisations to proactively reduce their environmental impact, adhere to applicable legal regulations, and fulfill their environmental goals. The framework covers numerous elements, including resource consumption, waste management, tracking environmental performance, and engaging stakeholders in environmental initiatives. EQ Resources Limited Annual Report 2024 63
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