ANNUAL REPORT June 2026 Notes to the Consolidated Financial Statements Initial payments for the acquisition of intangible mineral lease assets are capitalised and amortised over the term of the permit. The Group regularly reviews each area of interest to determine whether the carrying amount continues to be recoverable. Capitalised costs are carried forward only where recovery through the successful exploitation or sale of the relevant area of interest is considered probable. Where recovery of capitalised expenditure is no longer considered probable, the relevant carrying amount is recognised as an impairment loss. Intangible Assets Acquired in a Business Combination Intangible assets acquired in a business combination and recognised separately from goodwill are initially measured at fair value at the acquisition date. After initial recognition, intangible assets acquired in a business combination are accounted for on the same basis as intangible assets acquired separately. Derecognition of intangible assets An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised. (k) Impairment of assets Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to depreciation and amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). (l) Inventory Inventory is valued at the lower of cost and net realisable value as per AASB 102 with the exception of the 7 million tonnes of stockpiled inventory which was recognised at fair value as part of the Mt Carbine Quarries Pty Ltd business combination recognised on 28 June 2019. This inventory will be consumed on a units-ofproduction basis. As at 30 June 2026, approximately 5.32 million tonnes remain (2025: 5.36 million tonnes remained). The cost of partly processed and saleable products is generally the cost of production, including: • labour costs, materials and contractor expenses which are directly attributable to the processing of quarry material or the production of tungsten concentrate; • the depreciation of property, plant and equipment used in the processing of quarry material or the production of tungsten concentrate; and • Production overheads. 54 EQ Resources Limited Annual Report 2026 Notes to the Consolidated Financial Statements continued
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