EQ RESOURCES LIMITED — Interim / Quarterly Report 2010

Jan 27, 2011

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Quarterly Activities Report for Period Ended 31 December 2010

Highlights:

As a result of bulk sampling and ore sorter trials just completed, Icon now regards the low grade mineralisation stockpile (~12 million tonnes) from the historical open pit mining operation as a viable source of feed for a treatment plant. Re-treatment of the stockpile would allow for at least 4 to 5 years production at a rate of around 100 tonnes WO3 concentrate per month. Providing this is confirmed by final feasibility studies to be carried out in 2011, the planned retreatment programme commencing with tailings retreatment will amount to 6-7 years production and is thus significantly de-risked.

Icon’s Board of Directors has resolved to focus Icon solely on tungsten production, and during the quarter the following activities moved the Company towards this goal.

• Final feasibility metallurgical testwork on tungsten tailings is nearing completion and ore sorter trials on bulk samples from mineralised stockpiles were concluded with very encouraging results.

• Icon's copper-zinc prospects in Queensland were successfully spun out to Fitzroy Resources Ltd (listed in early December with Icon retaining approximately 20%).

• Icon's gold prospects are being vended into a new company, Gossan Hill Gold Limited, with the intent of raising fresh capital in an IPO, to enable drilling and further exploration of these exciting prospects. The Company is also negotiating with third parties to add additional advanced gold projects to the IPO.

• Joint Venture partners are actively being sought for the remaining Icon prospects.

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MT CARBINE: Tungsten, North QLD (III 100% of mineral rights)

Mining Leases MLs 4867, 4919, EPMs 14871, 14872.

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Plan view of Mt Carbine EPMs - evaluation of the Mt Holmes prospect and extensive tin-tungsten anomalism associated with historical workings to the SE of Mt Carbine is intended to identify targets warranting drill testing in conjunction with ongoing resource definition programs within the mine leases.

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Low Grade Stockpiles

Apart from the tailings (~2 million tonnes @ 0.1% WO3), there are three low grade stockpiles at the Mt Carbine Operations.

1. The low grade mineralisation stockpile, stockpiled from the historical open pit mining, contains approximately 12 million tonnes (based on historical mine records) with an estimated grade based on bulk sampling by Icon of 0.07% WO3.

2. The reject stockpile (Optical Ore Sorter Rejects) which contains approximately 6 million tonnes, rejected by the optical ore sorter in the previous mining operation.

3. The Run of Mine Ore, approximately 30,000 tonnes, which originated from the open pit and was left on the ROM pad, by the previous operators, after production ceased in 1986.

Bulk sampling of the Optical Ore Sorter Rejects and the Run Of Mine Ore (ROM) stockpiles, by ICON was completed in December 2010, with the resulting 1,000 tonne samples being crushed to -100mm, -80+50mm, -50+20mm, -20+10mm and -10mm size fractions. The minus 10mm product will not be sorted but will be processed when the processing plant is in operation.

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Bulk Sampling of the ROM Stockpile

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Preconcentration Metallurgical Testwork

Icon has operated an Applied Sorting second generation X-ray ore sorting test machine at Mt Carbine for several months evaluating the viability of the three stockpiles for preconcentration.

The testwork of the low grade stockpile is nearing completion, with the testwork continuing on the Optical Ore Sorter Rejects and the ROM stockpiles.

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Applied Sorting Technologies X-Ray Ore Sorter

The preliminary results for the preconcentration of the low grade stockpile sample are very encouraging and indicate that this material is very amenable to preconcentration by means of X- Ray transmission ore sorting. Additional testwork may enhance these results even further.

Preliminary results are now available for the low grade stockpile sample. They indicate that:

1. The calculated head grade of the sub-sample run through the ore sorter was 0.086% WO3;

2. The un-sortable minus 10 mm fines contain 33% of the mass and 40% of the tungsten;

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1. 90% of the feed mass was rejected from the plus 10 mm fractions at a mean grade of only 0.013 WO3;

2. 10% of the ore sorter feed mass (7% of the net mass) was contained in the plus 10 mm “accepts” at a mean grade of 0.66% WO3;

3. Ore sorting upgraded the ore sorter feed by a factor of 8.7; and

4. The ore sorting is giving a 91% recovery of the tungsten in the combined accept.

Further test work is being completed on the low grade stockpile after several spurious assay results were obtained, and it is anticipated the final results will be even better than those already obtained. Samples of the optical ore sorter rejects stockpile and the ROM stockpile have been crushed to minus 100 mm in an endeavor to reduce the amount of tungsten contained in the un-sortable minus 10 mm fines as well as evaluating the response of the 10-20 mm, 20-50 mm and the coarser 50-100 mm size fraction to ore sorting.

Burnie Research Laboratories are doing all the tungsten (as WO3) fusion XRF assays.

Tailings Retreatment Project

A bulk sample of the tailings stockpile has been sent to an independent testing facility, CPG Resources – Minerals Technologies Pty Ltd. The results of the metallurgical testwork are still awaited. The delays have been due to the increased work load experienced by all independent external metallurgical testing facilities due to the mining boom.

When the results for the flowsheet design have been received, due at the end of April 2011, construction of the tailings retreatment processing plant will commence.

Mt Carbine EPMs

During the quarter geological mapping and reconnaissance field portable XRF soil geochemistry was completed adjacent to the Mt Carbine mining leases within EPMs 14871 and 14872, with several areas of historical workings and broad tin-tungsten anomalies identified for further evaluation. The Mt Holmes tin-tungsten workings within EPM 14871 are structurally similar to the Mt Carbine sheeted vein system and will be investigated to identify priority targets for drill testing during 2011.

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Mt Carbine Tailings, largest particle size is 8mm

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ICON’S MINERAL EXPLORATION PORTFOLIO

Icon is rationalising its portfolio of mineral exploration projects to focus on becoming a tungsten producer at Mt Carbine.

During the December Quarter the Fitzroy Resources IPO was completed successfully.

During the coming months Icon plans to complete a similar divestment of its gold assets through the Gossan Hill Gold IPO.

Icon is seeking partners to advance its remaining exploration projects.

Fitzroy Resources IPO

During the Quarter Fitzroy’s Offer of Securities by way of Prospectus dated 7 October 2010 raised $5,000,000 from the issue of 25,000,000 Shares at 20 cents.

The Company was admitted to the official list of ASX and quotation of its Shares commenced on 9 December 2010. The ASX Code for the company’s shares is FRY . Listing on ASX was the final condition for the completion of the Sale and Purchase Agreements between the Company and Icon for the Rookwood and Glentanna Projects. Both projects are now 100% owned by Fitzroy Copper Pty Ltd a wholly owned subsidiary of Fitzroy Resources Ltd. The payable consideration to Icon for the assets was 7,500,000 FRY shares, which are subject to an ASX escrow of 2 years and 5,000,000 30 cent options.

Gossan Hill Gold Limited

As previously reported (June 2010 Quarterly Report), Icon’s drilling on the Peel Fault has defined a broad zone of gold mineralisation associated with a series of well defined geochemicalgeophysical targets, extensive alteration and historical gold workings at Magnesite Hill within the Crow King licence, EL6648.

As part of the company’s rationalisation strategy, Icon is working towards a new gold-focussed IPO in 2011 (Gossan Hill Gold Limited). Icon's Peel Fault tenements, which now cover ~75km strike length of the northern Peel Fault, give the Company a strong tenement position in this highly prospective terrain, and will form a key component of the float.

A draft prospectus has been prepared and negotiations are well advanced to include two other third party highly prospective gold properties in the planned IPO. Tenement renewals have been lodged for several of Icon's gold tenements, and discussions with broking houses regarding sponsorship for the IPO have commenced.

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Greenfields Exploration Tenements

Icon is continuing negotiations to introduce other parties into all its other tenement holdings.

Corporate

Dr John Bishop retired from the position of Managing Director on the 31 December 2010 and was replaced as Managing Director by Mr Ian Sheffield-Parker as announced to ASX on 16 November 2010 and 7 January 2011.

Ian Sheffield-Parker Managing Director

28 January 2011

Information in this report that relates to Exploration Results is based on information compiled by Mr. Darcy Milburn, who is a member of the Australian Institute of Mining and Metallurgy. Darcy is a full-time employee of Icon and has sufficient experience relevant 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 in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Milburn consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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Icon at a Glance

Directors

Dr Leon Pretorius, Chairman Ian Sheffield-Parker, Managing Director Dr Andrew White, Director

Cash Balance

At 31 December 2010 Icon’s cash balance was approximately $1,072,000.

Issued Capital

Company Secretary Mr. Robert Waring

At 25 January 2011 Icon’s issued capital was 119,122,998 ordinary shares, and 23,010,881 unlisted options exercisable between 15 and 45 cents.

Registered Office

Suite 505, 35 Lime Street Sydney, NSW 2000 Australia Ph: +61 (0)2 9279 1252 Fax: +61 (0)2 9279 2727 Email: info@iconresources.com.au

Number of Shareholders

At 25 January 2011 Icon had 977 shareholders.

Major Shareholders

The share register records the following as major shareholders at 25 January 2011 accounting for 41.31% of the issued shares:

Shareholder Enquiries

Matters relating to shares held and change of address should be directed to the share registry:

Computershare Investor Services Pty Ltd Level 2, 45 St Georges Terrace Perth WA 6000 Ph: +1300 557 010

To receive Icon’s announcements by email, Email to: info@iconresources.com.au

Website

Shareholder	%
L Pretorius	10.91
S Bartrop and associates	6.68
J Bishop and associates	4.03
A White and associates	3.63
N Watson and associates	3.53
G Nicholson and associates	3.06
G Fallon and associates	3.00
Alcardo Investments Limited	2.67
Sofew Assets Pty Ltd	2.10
D Milburn	1.70

Please visit Icon’s website for the latest announcements and news: www.iconresources.com.au

General Enquiries

Contact Ian Sheffield-Parker on 0409 989 960

ASX Listing Code

The Company’s ASX listing code is III

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