EQ RESOURCES LIMITED — Capital/Financing Update 2012

Feb 26, 2012

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Activities Update

Carbine Tungsten Limited is pleased to advise shareholders of the progress that has been made at the Mt Carbine tailings re-treatment project, as well as its current Rights Issue, the revision of plans to drill test the Tara prospect in NSW for silver (and tin), and the progress made on the proposed spin-out and IPO of Gossan Hill Gold Limited.

Highlights

Tailings Re-Treatment Project, Mt Carbine

• All major equipment is now on-site, the power is connected, commissioning has commenced and construction is nearing completion.

• All plant operations staff members have now been employed.

Other Highlights

• A Rights Issue is underway to raise A$3.88 million to ensure the ramp-up of production and the completion of a feasibility study for Stage 2, being the processing of the 12 million tonne stockpile.

• Very high silver grades are now the target at the Tara prospect in NSW.

• The IPO for gold associate Gossan Hill Gold Limited is now underway. Carbine Tungsten will retain a 22% shareholding following the listing of Gossan Hill Gold Limited if the issue is fully subscribed. The Prospectus was lodged with ASIC on 24 February 2012 and is now available on the Gossan Hill Gold Limited website at www.gossanhillgold.com.au

Tailings Re-Treatment Project, Mt Carbine

The last shipment of major equipment for the plant was delivered to the site on 23 February 2012.

Carbine Tungsten now has a full staff complement to operate the plant.

The final stages of construction are under way, with the plant approximately 90% complete and the site construction contractor is now in the process of handing over to Carbine Tungsten’s crew.

Power from leased generators is now connected and dry commissioning of plant components has commenced.

Exploration Drilling, Mt Carbine

Assay results have not been received for the exploration drilling recently completed at Mt Carbine.

Carbine Tungsten Limited ACN 115 009 106 Registered Office : Suite 505, Level 5, 35 Lime Street, Sydney NSW 2000, Tel: +61 2 9279 1252, Fax: +61 2 9279 2727 Cairns Office : 50 Scott Street, Bungalow QLD 4870, Tel: +61 7 4052 2400, Fax: +61 7 4052 2444

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Rougher shaker tables at the right, Slimes / fines recovery shaker table in the foreground.

Kelsey Jig modules at the right nearing completion, shaker table shed at the left.

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Office, stores and workshop area under construction at the right, shaker table shed at the left, Carbine Tungsten front-end loader in the foreground, lowgrade stockpiles visible.

Upper deck, Kelsey jig module.

Rights Issue

A non-renounceable Rights Issue was announced on 13 February 2012 to raise working capital of approximately $3.88 million. Whilst progress on construction of the tailings re-treatment plant is now nearly complete, unforeseen delays were encountered in the construction phase of the Company’s tailings re-treatment plant. The plant was originally intended to be commissioned by the end of December 2011, but these delays, and unexpected business demands on engineering and design contractors due to the mining boom, have caused cost over-runs to the original project budget, which in turn means that the Company requires additional working capital. The additional working capital will ensure the successful commissioning of the tailings re-treatment plant and continuation of the feasibility study for the second stage of development, namely the processing of approximately 12 million tonnes of previously-mined stockpiled material.

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Review of Financial Performance of Tailings Re-Treatment Project

The total cost of design, equipment purchase and plant construction for the tailings re-treatment project will be close to the budget of $4.5 million, and the Company has reviewed forecast operating costs. Even with the delays referred to in the previously-announced Rights Issue Offer Document, the revised cash flow models of the tailings re-treatment project indicate that the project has very robust economics. Assuming conservative revenues and an A$:US$ exchange rate of 1.08, models of forecast cash flows indicate that the project has very attractive NPV and Return on Capital. The Board advises that more specific guidance regarding the financial performance will be provided once the plant is commissioned and operating, and the quality of the product is known with greater certainty.

Tara Prospect (NSW) Silver Prospectivity

The Tara prospect (EL 6532, refer below) has been tested for tin mineralisation and remains an attractive tin prospect, but a review of data by Carbine Tungsten’s geological team indicates that the prospect also has very significant silver prospectivity, with bonanza grade intercepts in two holes 400 metres apart (12 metres at 3,598 g/t or 116 ounces per tonne silver from 116.6 metres in hole TRD8, and 1.3 metres at 643.2 g/t silver from 181.9 metres in hole TRD6, both drilled by Pan Australian in the mid-1980s). The coincidence of silver and tin mineralisation is similar to high-grade silver-tin veins found at the Oruro field in Bolivia. It is proposed to drill a deep diamond core hole to test the geophysical target for both its silver and tin potential. The hole has been targeted using the extensive geophysical and geological database on the Tara prospect that the Company has developed over the past four years.

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Tara silver-tin prospect, showing location of planned deep diamond drill hole to test for silver and tin mineralisation.

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Bonanza silver values were obtained in holes TRD6 and TRD8 (see above), and high silver values were obtained in holes ITD002 and PDT12. The key target area is a gravity and magnetic anomaly that also coincides with a basement topographic high beneath recent cover with strong evidence from shallow drilling that tin has shed from the topographic high to be incorporated in the cover sediments. The aeromagnetic image shows the interpreted source of the geophysical anomalies at depth, highlighted by gravity contours (gravity high) superimposed on a reduced to pole magnetics grid (magnetic high).

IPO for Gossan Hill Gold Limited

Carbine Tungsten has previously advised its shareholders that it planned to spin-out the gold prospects held by the Company into a new company, Gossan Hill Gold Limited (Proposed ASX Code: GOS), with the intention of raising sufficient funds via an Initial Public Offer (IPO) to adequately test the gold prospects. As well as the two main gold prospects (Peel Fault and Weabonga) vended into GOS by Carbine Tungsten, the Company was fortunate in negotiating the acquisition of two other gold prospects (Mt Adrah from Bright Star Resources Limited and Bauloora from Robust Resources Limited) into GOS. A priority offer of shares in GOS will be made to Carbine Tungsten Limited shareholders (as well as to Bright Star and Robust shareholders).

The IPO plans to raise $8 million (with a minimum subscription of $4 million) and Carbine Tungsten will hold approximately 22% of the shares in GOS if the IPO is fully subscribed. It has already been announced that the Carbine Tungsten Directors intend to make an in-specie distribution to Carbine Tungsten Limited shareholders of its GOS shares once these are out of ASX-imposed escrow, subject to a favourable capital return ruling by the Australian Tax Office and shareholder approval.

It is intended to commence a drilling programme that will continue for two years, with the intention of increasing shareholder value through early discovery and extension of known gold mineralisation in each prospect. All the gold prospects in the GOS IPO are in NSW (refer map below) and a brief description of the prospects is as follows:

Mt Adrah , centred on the Hobbs Intrusion Related Gold Deposit (IRGD) on the Gilmore Suture, 23 kilometres north-west of the historic goldfield of Adelong, where drilling and IP surveys are planned to locate possible extensions to a JORC compliant 239,000 ounce inferred gold resource or similar mineralisation in the vicinity;

Bauloora , located about 10 kilometres north of Cootamundra, contains a recently-recognised, lowsulphidation, epithermal gold mineralised system, which extends for 2 kilometres. Drilling and detailed geological mapping are planned to test this prospect, where surface rock chip samples grading up to 39 g/t gold, with visible gold, have been obtained;

Peel Fault , following on from the discovery of gold mineralisation at the Magnesite Hill prospect; drilling, and geophysical and geochemical surveys are planned to test for orogenic gold deposits and IRGD along the 100 kilometre strike-length of the Peel Fault on the western flank of the New England province; and

Weabonga , where geophysical and geochemical targets are ready to drill on historic gold mines that shut down nearly a century ago.

The Prospectus for GOS was lodged with ASIC on 24 February 2012 and can be viewed at the website www.gossanhillgold.com.au

General Enquiries

Contact Dr Andrew White on 0411 110 513

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Location of Gossan Hill Gold Limited gold prospects in NSW.

Competent Person Statement

Information in this announcement that relates to Exploration Results is based on information compiled by Dr Kris Butera who is a Member of the Australian Institute of Geoscientists (MAIG). Dr Kris Butera is a full-time employee of Carbine Tungsten Limited and its subsidiariary / affiliate companies, and has sufficient experience relevent to the styles of mineralisation and types of deposits under consideration, and to the activity he is undertaking to qualify as a Competent Person as defined by the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Kris Butera consents to the inclusion in the report of matters based on his information in the form and context in which it appears.

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