EQ RESOURCES LIMITED — Interim / Quarterly Report 2017

Apr 27, 2017

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

CARBINE TUNGSTEN LIMITED ABN Quarter ended (“current quarter”) 77 115 009 106 31 March 2017

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Consolidated statement of cash flows Current quarter Year to date
$A’000
(9 months)
$A’000
1. Cash flows from operating activities
1.1 Receipts from customers - -
1.2 Payments for
-
(a) exploration & evaluation (144)
(b) development (167) (480)
- -
(c) production
(d) staff costs (43) (131)
(e) administration and corporate costs (92) (361)
1.3 Dividends received (see note 3) - -
1.4 Interest received 5 21
1.5 Interest and other costs of finance paid (1) (11)
1.6 Income taxes paid - -
1.7 Research and development refunds - -
1.8 Other (provide details if material) - -
1.9 Net cash from / (used in) operating
activities (298) (1,106)
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• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

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Consolidated statement of cash flows Current quarter Year to date
$A’000
(9 months)
$A’000
2. Cash flows from investing activities
2.1 Payments to acquire:
-
(a) property, plant and equipment (1)
- -
(b) tenements (see item 10)
- -
(c) investments
- -
(d) other non-current assets
2.2 Proceeds from the disposal of:
(a) property, plant and equipment - 12
- -
(b) tenements (see item 10)
- -
(c) investments
- -
(d) other non-current assets
2.3 Cash flows from loans to other entities - -
2.4 Dividends received (see note 3) - -
2.5 Other – Lanstead Sharing Agreement Net (47) (138)
Movement
2.6 Net cash from / (used in) investing
activities (47) (127)
3. Cash flows from financing activities
3.1 Proceeds from issues of shares 958 1,456
3.2 Proceeds from issue of convertible notes - -
3.3 Proceeds from exercise of share options - -
3.4 Transaction costs related to issues of (64) (113)
shares, convertible notes or options
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings - (28)
3.7 Transaction costs related to loans and - -
borrowings
3.8 Dividends paid - -
3.9 Other (provide details if material) - -
3.10 Net cash from / (used in) financing
activities 894 1,315
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• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

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Consolidated statement of cash flows Current quarter Year to date
$A’000
(9 months)
$A’000
4. Net increase / (decrease) in cash and
cash equivalents for the period
4.1 Cash and cash equivalents at beginning of
period 294 761
4.2 Net cash from / (used in) operating (298) (1,106)
activities (item 1.9 above)
4.3 Net cash from / (used in) investing activities (47) (127)
(item 2.6 above)
4.4 Net cash from / (used in) financing activities 894 1,315
(item 3.10 above)
4.5 Effect of movement in exchange rates on - -
cash held
4.6 Cash and cash equivalents at end of
period 843 843
5. Reconciliation of cash and cash Current quarter Previous quarter
equivalents $A’000 $A’000
at the end of the quarter (as shown in the
consolidated statement of cash flows) to the
related items in the accounts
5.1 Bank balances 843 93
5.2 Call deposits - 201
5.3 Bank overdrafts - -
5.4 Other (provide details) - -
5.5 Cash and cash equivalents at end of
quarter (should equal item 4.6 above) 843 294
6. Payments to directors of the entity and their associates Current quarter
$A'000
6.1 Aggregate amount of payments to these parties included in item 1.2 83
6.2 Aggregate amount of cash flow from loans to these parties included -
in item 2.3
6.3 Include below any explanation necessary to understand the transactions included in
items 6.1 and 6.2
Payment for consulting services at commercial rates.
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• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

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7. Payments to related entities of the entity and their Current quarter
associates $A'000
7.1 Aggregate amount of payments to these parties included in item 1.2 -
7.2 Aggregate amount of cash flow from loans to these parties included -
in item 2.3
7.3 Include below any explanation necessary to understand the transactions included in
items 7.1 and 7.2
N/A
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8.	Financing facilities available Add notes as necessary for an understanding of the position Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000
8.1	Loan facilities 235 235
8.2	Credit standby arrangements - -
8.3	Other - Lanstead Sharing Agreement 519 266
8.4	Include below a description of each facility above, including the lender, interest rate and
	whether it is secured or unsecured. If any additional facilities have been entered into or are
	proposed to be entered into after quarter end, include details of those facilities as well.

Loan facilities

Loan facilities refer to the loan of US$1 Million established in February 2014 from Mitsubishi Corporation RtM Japan Ltd and is secured against 2.7% of the equity of Carbine’s wholly owned subsidiary Tungsten Resources Pty Ltd. Repayments of US$800,000 (AU$1,029,180) were made during the 2016 financial year. The balance of the loan is $235,000 as at 31 March 2017. The loan bears an interest rate of 6% per annum.

Lanstead Sharing Agreement

In March 2016, the Company signed Subscription Agreements to raise, in aggregate, $1,875,000 before expenses from Lanstead Capital L.P. ("Lanstead") by way of a subscription for 75,000,000 ordinary shares at a price of $0.025 per share. The Company also entered into a Sharing Agreement with Lanstead such that the Company's economic interest will be determined and payable in 18 monthly settlement tranches as detailed in the placement announcement of 20 November 2015. As consideration for entering into the sharing agreements, the Company issued 3,000,000 shares on 20 November 2015 and a further 5,000,000 shares on 11 March 2016 such that 83,000,000 shares, in total, have been issued to Lanstead pursuant to the Subscription Agreements at 31 March 2016. During the March 2017 quarter, the Company received $104,819 in credit support instalments, net of sharing agreement settlements pursuant to the Subscription Agreements. $519,440 remains invested in the Sharing Agreements at 31 March 2017.

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

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9. Estimated cash outflows for next quarter $A’000
9.1 Exploration and evaluation -
9.2 Development 100
9.3 Production -
9.4 Staff costs 40
9.5 Administration and corporate costs 100
9.6 Other (Provide details if material) -
9.7 Total estimated cash outflows 240
10. Changes in Tenement reference and Nature of Interest at Interest
tenements location interest beginning at end of
(items 2.1(b) and of quarter quarter
2.2(b) above)
10.1 Interests in mining
tenements and
petroleum
N/A N/A N/A N/A
tenements lapsed,
relinquished or
reduced
10.2 Interests in mining
tenements and
petroleum N/A N/A N/A N/A
tenements acquired
or increased
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Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Sign here: . Date: 28 April 2017 Company Secretary

Print name: David W. Clark

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been

3. See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

• prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

• Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

• See chapter 19 for defined terms 1 September 2016

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