ANNUAL REPORT June 2026 Notes to the Consolidated Financial Statements (h) Exploration and evaluation expenditure Exploration and evaluation expenditure incurred by or on behalf of the Company is accumulated separately for each area of interest. Such expenditure comprises net direct costs and an appropriate portion of related overhead expenditure but does not include general overheads or administrative expenditure not having a specific connection with a particular area of interest. Exploration and evaluation costs in relation to separate areas of interest for which rights of tenure are current are brought to account in the year in which they are incurred and carried forward provided that: • such costs are expected to be recouped through successful development and exploitation of the area, or alternatively through its sale; or • exploration and/or evaluation activities in the area have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. Once a development decision has been taken, all past and future exploration and evaluation expenditure in respect of the area of interest is aggregated within costs of development. (i) Property, Plant and Equipment Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, where applicable. Cost includes expenditure that is directly attributable to the acquisition or construction of the asset. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Economic life assets' depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives, as follows: • Mining plant and equipment 3 - 10 years * • Mine properties units-of-production • Motor vehicles 4 years ** • Office equipment 3 - 5 years * Except for life-of-mine assets which are depreciated on the units-of-production ("UoP") method. Depreciation is based on assessments of proven and probable reserves to be mined by the current production equipment. ** In some circumstances the useful life of motor vehicles such as trucks, concentrate haulage trailers or service vehicles may be estimated to be either lesser than or greater than four years, in which case those vehicles will be depreciated over their estimated useful life. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss. 52 EQ Resources Limited Annual Report 2026 Notes to the Consolidated Financial Statements continued
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