EQ Resources : Retraction of Statement in Announcement

resourcing the new economy for a better tomorrow

13th April 2022

RETRACTION OF STATEMENT IN ANNOUNCEMENT

EQ Resources Limited (ASX: EQR) (EQR") has received guidance from the ASX that a recent statement in the ASX Release "Underground Scoping Study Gives Confidence To Proceed With Pre-feasibility Work" (the Release) from the 12th April 2022, on page 1, in the highlights section of the Release contained a forward-looking statement in relation to the Company's targeted production outputs and timeline for these outputs based on the recent Underground Scoping Study completed for the Company's Mt Carbine Tungsten Project.

Following consultation with the ASX, EQR retracts the production statement and life of mine indication contained in the Release. The statements were intended to be conceptual targets in nature only and the Company does not consider, at this stage, that it has a reasonable basis to disclose production targets and life of mine production as interpreted under the ASX Listing Rules.

The Company advises that the retracted statement should not be used as the basis for an investment decision regarding EQR's shares.

Please find below a revised version of the announcement.

Released on authority of the Board by:	Further Enquiries:
Kevin MacNeill	Peter Taylor
Chief Executive Officer	Investor Relations
0412 036 231
[e-mail]
About the Company

EQ Resources Limited is an ASX-listed company transforming its world-class tungsten assets at Mt Carbine in North Queensland; leveraging advanced technology, historical stockpiles and unexploited resource with the aim of being the pre-eminent tungsten producer in Australia. The Company also holds gold exploration licences in New South Wales. The Company aims to create shareholder value through the exploration and development of its current portfolio whilst continuing to evaluate corporate and exploration opportunities within the new economy and critical minerals sector.

REGISTERED OFFICE: Level 4, 100 Albert Road, South Melbourne, VIC 3205 PRINCIPAL PLACE OF BUSINESS: 6888 Mulligan Highway, Mt Carbine Qld 4871

POSTAL ADDRESS: PO Box 1496, Mareeba Qld 4880

ABN: 77 115 009 106 (ASX: EQR)

T: [phone] | F: [phone] | W: eqresources.com.au

resourcing the new economy for a better tomorrow

12th April 2022

UNDERGROUND SCOPING STUDY GIVES CONFIDENCE

TO PROCEED WITH PRE-FEASIBILITY WORK

EQ Resources Limited is the 100% owner of the Mt Carbine Tungsten Mine near Cairns, Australia's only primary tungsten producer.

Highlights:

• - Positive results from the Mt Carbine Underground Mine ("UG Mine") Scoping Study gives confidence to proceed with pre-feasibility work

• - Mt Carbine UG Mine has potential for a long life, technically and economically viable project (at current tungsten price*)

• - The Company intends to upgrade the remaining resource with additional drilling later in the year where it is expected a considerable amount of the resource will be included in the pre-feasibility study ("PFS")

• - Scoping Study utilised the drilled out areas where mineralisation continuity was demonstrated ie. 2.36Mt @ 1.05% WO3 of the Mt Carbine resource inventory (78% Inferred & 22% Indicated)**

• - UG Mine Economics are more sensitive to ore grade (mined metal content) and tungsten price, as compared to a lower sensitivity on Capex and Opex

• - Scoping Study demonstrates that underground mining could be done in parallel to the open cut operation leaving a geotechnical buffer around the open cut mine

• - Tungsten prices remain strong at US$350/mtu currently up from US$275/mtu in the previous 12 months

* Tungsten Price: APT (ammonium paratungstate) price index reported by FastMarkets, currently at US$350/mtu (mtu=10kg WO3) ** See ASX announcement 'Mineral Resource Update Drives Mt Carbine BFS Optimization', September 23th, 2021

Queensland Tungsten producer EQ Resources ("EQR" or "the Company") is pleased to announce the completion of the Scoping Study on the Mt Carbine UG Mine development. The Scoping Study was completed by Deswik Mining Consultants (Australia) Pty Ltd ("Deswik"), with the goal to explore the potential of delineating and creating an underground mining inventory (design, schedule and economics).

The results on the Scoping Study have provided the Company with significant confidence to progress to a Pre-Feasibility Study on the potential for an underground operation together with committing to an underground drill program that is expected to commence later in the year, upon full inspection and refurbishment of the existing, fully permitted 440-meter decline.

EQR's Chief Executive Officer, Mr Kevin MacNeill, commented, "The results of the Scoping are pleasing and demonstrated the potential to significantly increase production at Mt Carbine post the mining of the proposed Open Pit."

REGISTERED OFFICE: Level 4, 100 Albert Road, South Melbourne, VIC 3205 PRINCIPAL PLACE OF BUSINESS: 6888 Mulligan Highway, Mt Carbine Qld 4871

POSTAL ADDRESS: PO Box 1496, Mareeba Qld 4880

ABN: 77 115 009 106 (ASX: EQR)

T: [phone] | F: [phone] | W: eqresources.com.au

"The Scoping Study supports the potential technical and financial viability for an underground operation which could form part of Mt Carbine's long-term plan for sustainable tungsten production. The work performed will allow EQR to follow up in a clear direction with a pre-feasibility study assessment."

"With the potential underground operation being part of the Mt Carbine development targets, we are taking another key step towards becoming one of the world's top tier tungsten producers."

Previously, EQR released a Bankable Feasibility Study ("BFS") covering a 12-year operation with the earlyyears focused on the high grade Open Pit development supplemented by the Low-Grade Stockpile (see ASXannouncement 'Mt Carbine BFS Delivers Low Capex, Strong Early Cash Flow Operation With SignificantDevelopment Potential' dated 13 December 2021). Undertaking the Scoping Study for the UG Mine has provided dynamics around the remaining hard rock resources not used in the Open Cut Inventory (see Fig.1 below) and has identified the potential for this to be mined economically.

It is important to note that 78% of the resource used in the Scoping Study is in the Inferred category and does not allow for the economics of this study to be reported. EQR is significantly encouraged to move forward into the PFS. With the planned drilling campaigns, the Company aims to further define the remaining 5.74Mt @ 0.43% WO3 of Inferred resources (currently outside the planned Open Cut and UG Mine scoped mineralisation) towards Indicated resources.

The waterfall diagram below shows the Indicated and Inferred resources examined in the Scoping Study (2.36Mt @ 1.05% WO3):

Fig.1 - Resource Inventory Waterfall

The Scoping Study broadly consisted of:

• o Geological review (to understand geology, structural controls, grade distribution, resource status, inventory to be assessed for underground potential);

• o Stope optimiser runs (to spatially delineate stopes greater than 0.25% WO3);

• o Mining method review (appropriate methods, assessment and exclusion exercise);

• o Review and update of supplied first-principles cost build up for underground mining costs;

• o Level by level, stope by stope assessment of potentially economic stopes;

• o Preliminary design, task creation, sequencing and scheduling of concept design; and

• o (Internal) financial cost model and SWOT analysis.

Fig.2 below visually highlights the areas of the UG Mine modelling covered in the Scoping Study. The green areas represent Indicated resources whilst the blue are Inferred resources. Fig.3 shows an example of the effect of the sheeted vein system for UG mining at Mt Carbine in a level plan on 80m RL level. The illustration highlights that multiple stopes may occur on each level. Colours reflect Inferred grades for the mineralisation.

Fig.2 - Inferred and Indicated resources outside the Open Cut modelled as part of the UG Scoping Study

Fig.3 - Scoped layout of the 80m RL Level (block model slice included)

The Company is currently awaiting final assays from its first phase 2022 drilling program for a possible westextension of the Open Pit (see ASX announcement 'Drilling Confirms Mineralisation At Western Pit Extension' dated 15 March 2022). As part of the Scoping Study the Company investigated the potential of a parallel open cut and underground mining operation, which had been confirmed by the underlying Scoping Study work.

The most sensitive parameters examined in the Scoping Study were ore grade and tungsten price, with the latter having risen substantially (+27%) in the recent 12 months (from US$275/mtu in March 2021 to US$350/mtu currently).

Released on authority of the Board by:	Further Enquiries:
Kevin MacNeill	Peter Taylor
Chief Executive Officer	Investor Relations
0412 036 231
[e-mail]
About the Company

EQ Resources Limited is an ASX-listed company transforming its world-class tungsten assets at Mt Carbine in North Queensland; leveraging advanced technology, historical stockpiles and unexploited resource with the aim of being the pre-eminent tungsten producer in Australia. The Company also holds gold exploration licences in New South Wales. The Company aims to create shareholder value through the exploration and development of its current portfolio whilst continuing to evaluate corporate and exploration opportunities within the new economy and critical minerals sector.