equinox increases lumwana mine life to 37 years

ARBN 108 066 986
June 29, 2006
Equinox Increases Lumwana Mine Life to 37 Years
Announces Fixed-Price EPC Contract with Ausenco-Bateman JV
Releases Updated Capital Costs
and Mandates additional Debt Capacity to include Mining Fleet
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.
Equinox Minerals Limited (TSX and ASX symbol: “EQN”) (“Equinox”) is pleased to present an update on
progress at the Lumwana Copper Project in Zambia (“Lumwana”).
Revised Lumwana Resources and Reserves
The Lumwana Project includes the Malundwe and Chimiwungo deposits. An in-fill drilling program has been
completed at Lumwana to convert ‘Inferred Resources’ to ‘Indicated Resources’ category. Golder Associates
Pty. Ltd. (“Golder”) has revised the Lumwana Resource Estimate in accordance with the JORC Code and
CIM NI 43-101 Standards and using a 0.2% copper cut-off, as follows:
Lumwana Resources : Measured + Indicated + Inferred
Category Tonnage
(Mt)
Cu
(%)
Co
(ppm)
Au
(g/t)
Contained Copper
MM lbs Cu
Measured 129.5 0.89 238 0.03 2,541
Indicated 228.6 0.68 153 0.02 3,427
Total M + I 358.1 0.76 184 0.02 5,968
Inferred 564.4 0.63 46 0.01 7,839
Note that there has been no change to the Lumwana Uranium resources as reported in October 20, 2005.
The revised total Lumwana Measured and Indicated Resource shows an overall increase of 21%, with a 9%
increase for Malundwe and a 43% increase for Chimiwungo. The high rate of conversion from Inferred to
Indicated categories following additional in-fill drilling confirms the consistency and predictability of the
Lumwana orebodies.
As a result, Equinox has been able, in conjunction with Golder, to revise the Lumwana copper ore reserves
and mineral resources contained within the engineered pit designs. The revised sulphide ore reserves and
mineral resources within the engineered pits are now as follows:
Lumwana Sulphide Reserve and Resource Within Engineered Pits
Deposit Tonnage (Mt) Cu (%)
Malundwe
Proved 42.9 1.09
Probable 78.2 0.79
Total Mineral Reserves 121.1 0.89
Inferred Resource 4.2 0.77
Chimiwungo
Proved 81.5 0.70
Probable 118.7 0.57
Total Mineral Reserves 200.2 0.62
Inferred Resource 413.0 0.60
Combined Malundwe + Chimiwungo
Proved 124.4 0.83
Probable 196.9 0.66
Total Mineral Reserves 321.3 0.73
Inferred Resource 417.2 0.60
The Mineral Reserve and Resource within engineered pits were determined by Golder on the basis of 12.5mx12.5mx4m block models,
including mining dilution and recovery, and optimised by Whittle 4X software with associated pit designs generated using Vulcan
software. The cut-offs applied were based on $1.20/lb Cu, resulting in sulphide cut-off grades of 0.16% for Malundwe and 0.21% for
Chimiwungo. Note: All currency is specified in US$ unless otherwise stated.
As a consequence of the in-fill drilling program and the re-design of the Lumwana pits at a copper price of
$1.20/lb the defined Mineral Reserves have now increased 28% for Malundwe and by a very significant 70%
for Chimiwungo. At Chimiwungo the engineered pit optimisation results in the 3 stand alone pits previously
designed now merging into one single large pit. The increased Malundwe Mineral Reserves extend the mine
life of the Malundwe pit from 5 to 6 years. Combined, the result is that Lumwana mine life doubles, going
from 18 years to 37 years, including Proved and Probable Mineral Reserves alone of 16 years. The
Lumwana mine plan continues to conservatively assume no by-product credits for cobalt or uranium. In
compliance with NI43-101 Equinox and its consultants are preparing an Amended Technical Report for
release within 45 days of this press release.
EPC Fixed-Price Construction Contract with Ausenco – Bateman JV (“ABJV”)
Equinox and the joint venture of Ausenco International Pty Ltd (“Ausenco”) and Bateman Minerals and
Metals Pty Ltd (“Bateman”) have agreed the terms of an Engineering, Procurement & Construction (“EPC”)
contract for the Lumwana Project. Following a detailed review and negotiation, the ABJV Guaranteed
Maximum Price (“GMP”) is $381 million with an end of Q1-2008 commissioning ‘Completion Schedule’. Over
the coming months, further detailed design, implementation and risk mitigation programs are expected to
reduce the GMP to a lower ‘fixed-price’. The GMP includes the project capital cost, engineering,
contingency, escalation and EPC fee to the ABJV and represents a substantially increased scope for the
ABJV so as to minimise cost overrun and completion risk for Equinox and its Financiers.
Equinox Minerals Limited
Lumwana Progress Report
2
June 2006
Lumwana Mining Fleet included in Debt Financing
On 3 August 2005 Equinox announced that it had mandated a syndicate of European, African and Australian
based Commercial Lenders, Developmental Finance Institutions (“DFI’s”) and Export Credit Agencies
(“ECA’s”) to provide US$355 million in project finance loans for the Lumwana Project, which includes US$50
million in sub-ordinated debt.
Equinox has since mandated an additional US$60 million in loans, expanding the total Lumwana Project
debt facility to US$415 million. In addition, Equinox is pleased to announce that it has mandated the assetbacked
financing of the Lumwana mining fleet for a total of US$133.3 million.
Revised Capital Costs
The revised pre-production Capital Cost estimate for Lumwana is as follows:
Lumwana Capital Costs
$MM
Mining
Pre-Production Mining Costs (Pre-strip) & Ancillary Equipment 81
Processing
ABJV EPC contract - Process Plant & Related Infrastructure (1) 381
Pre-Production – Other 28
Tailings Dam & Storage & Water Management 26
General and Administration 43
TOTAL DIRECT COSTS 559
Mining Fleet 165
Contingency & Accuracy 38
TOTAL including Mining Fleet 762
(1) Includes engineering, contingency, escalation and fee for the EPC. Note: All currency is specified in US$ unless otherwise stated.
Construction Activities
Construction activities continue to ramp up with the commencement of the keyway installation for the tails
and water storage facilities, completion of the key arterial roads to the various work fronts (ie: plant site,
heavy industrial area, mine and town), clearing and stripping activities on the Malundwe pit foot-print and the
necessary build up in provision of construction accommodation. Long-lead items currently under
manufacture (primarily the mining fleet and major plant items) remain on schedule.
Development Timetable
Equinox is currently working with its Financiers towards the completion of Lumwana Project debt financing.
It is anticipated that the final approval from the Financiers for debt completion, subject to various conditions
precedent, will be concluded at the end of Q3-2006.
The Company’s objective is to continue to progress and maintain the construction schedule utilizing funds at
hand. Following debt completion, there will be conditions precedent to debt drawdown that will include the
conclusion of concentrate offtake arrangements, and any requirements for additional capital and hedging.
Offtake negotiations with respect to concentrate placement are at an advanced stage with several parties.
Equinox Minerals Limited
Lumwana Progress Report
3
June 2006
Commenting on progress, Craig Williams, Equinox President and CEO said “the significant increase in
Proven and Probable Reserves as well as mine life coupled with the certainty provided by having a fixed
price EPC effectively limits our exposure to any possible schedule or capital cost overruns and provides a
strong level of confidence in the Lumwana development going forward. With respect to any further additional
capital required, there are a number of different capital market and corporate financing alternatives available
to Equinox. As the Company is currently adequately funded following the major capital raising earlier this
year, Equinox will assess these options at the appropriate time. The completion of debt financing by Q4-
2006 will allow us to maintain the momentum of the project through construction to commissioning in Q1-
2008.”
On Behalf of the Board of Directors of Equinox:
Craig R. Williams - President & Chief Executive Officer
For further information please contact:
Craig R. Williams (President and Chief Executive Officer), Michael Klessens (V.P. Finance and CFO)
Phone: +61 (0) 8 9322 3318 Email: [email protected]
or
Kevin van Niekerk (V.P. Investor Relations/Corporate Development)
Phone: +1 (416) 865 3393 Email: [email protected]
For information on Equinox and technical details on the Lumwana Project please refer to the company website at
www.equinoxminerals.com
Equinox Minerals Limited
Lumwana Progress Report
4
June 2006
Cautionary Language and Forward Looking Statements
This press release contains “forward-looking statements”, which are subject to various risks and uncertainties that could cause actual results and future
events to differ materially from those expressed or implied by such statements. Investors are cautioned that such statements are not guarantees of future
performance and results. Risks and uncertainties about the Company's business are more fully discussed in the Company’s disclosure documents filed from
time to time with the Canadian and Australian securities authorities. The independent definitive feasibility study prepared by GRD Minproc Ltd, Golder
Associates Pty Ltd, Investor Resources Ltd. and Knight Piesold Pty Ltd has been disclosed in the Amended Technical Report dated October 2005, and is
compliant with the JORC Code and National Instrument 43-101. Unless otherwise indicated, technical information contained in this release which updates
such information contained within the Amended Technical Report is based on information compiled by Ross Bertinshaw and John Battista (Golder) each of
whom is a “Qualified Person” who is either a corporate member of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists or
the CIM.
The economic analysis of Lumwana in the Amended Technical Report is based on a model which includes Inferred Resources that are considered not to be
defined in sufficient detail to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no
certainty that the economic performance proposed in the economic analysis following depletion of the Mineral Reserves will be achieved. Exemptive relief
has been granted by the applicable Canadian securities regulators for this analysis. See the Amended Technical Report for further details. A further
Amended Technical Report will be released within 45 days of this press release.
Readers are cautioned not to rely solely on the summary of such information contained in this release, but should read the Amended Technical Report which
is posted on Equinox’s website (www.equinoxminerals.com) and filed on SEDAR (www.sedar.com) and any future amendments to such report. Readers are
also directed to the cautionary notices and disclaimers contained herein. All currency in this release is U.S. dollars unless otherwise stated.