Lumwana Project

Lumwana Project and Construction Summary

The Company's optimized development plan is based on the published (October 2006 Technical Report) ‘Development Case' which provides a mining schedule that contains 45% Measured and Indicated Resources and 55% Inferred Resources to be mined over a 37 year life-of-mine (‘LOM') on the basis of processing 20 million tones per year of ore to produce copper concentrates for shipment to local smelters.

LOM (37 years) annual production will average 122,000 tonnes (269 million lbs) of copper metal, with over 169,000 tonnes (373 million lbs) being produced per year during the initial 6 year period.

Total Operating Cash Costs under the Development Case are expected to be US$0.78 per pound during the initial 6 year period and average US$0.90 per pound of copper produced for LOM.

In addition, Lumwana hosts a Probable Uranium Resource containing almost 22 million pounds of U₃O₈ or 13 million pounds within the designed copper pits. A feasibility study is currently near completion on the Lumwana uranium.

Project Location

Located in the North Western Province of Zambia, 220 km west of the Copperbelt and 65 km west of the town of Solwezi, Lumwana is easily accessed by the Northwest Highway.

The Copperbelt, one of the world's greatest concentrations of copper cobalt deposits, has been a centre of commercial copper production for 80 years.

Mining License

The Lumwana Large Scale Mining License, LML-49, covers 1,355 km², and includes two major copper deposits, Malundwe and Chimiwungo, and 25 exploration prospects. Equinox owns 100% of LML-49.

Infrastructure

The Northwest Highway, which links the Lumwana region, Solwezi and the Copperbelt, passes within 3 km of the project.

ZESCO, the Zambian national power generating and distributing company has recently completed the construction of its 330kV power line extension from Solwezi to the Lumwana substation. Equinox has a long-term (15 year) power supply offtake agreement with ZESCO.

Mine Plan

The Company's optimized mine plan is based on the ‘Development Case' which contemplates a mining schedule that contains 45% Measured and Indicated Resources and 55% Inferred Resources to be mined over a 37 year mine life on the basis of processing 20 million tones per year of ore at an average strip ratio of 4.2:1.

The Development Case mine plan envisages that the Malundwe and Chimiwungo deposits, which are 7km apart, will be mined sequentially by open-pit mining methods. The ore bodies are 95% sulphide (with only 5% oxide) and very consistent, so large-scale bulk-mining methods are being employed utilizing equipment that includes a total of 27 x 240 tonne capacity diesel-electric drive hybrid haulage trucks and 7 x 518 tonne diesel and electric loaders (excavators and face shovels).

Sulphide ore will be processed on-site by conventional crushing, grinding and flotation to produce copper concentrates for shipment to offsite smelters. Metallurgical test work indicates recoveries of greater than 95% copper, producing average concentrate grades of 43.3% Cu for Malundwe and 29.5% Cu for Chimiwungo. The flotation plant has a design capacity to treat at least 20 million tonnes per year of ore and will, in the first 6 year period, produce in concentrate 169,000 tonnes of copper metal per year (373 million lbs per year).

Life of mine production will average 122,000 tonnes of copper metal per year (269 million lbs year) based on the 20 million tonnes per year throughput.

Concentrate Offtake

During 2007 Equinox signed off take contracts for 100% of its copper concentrate production for the first 5 years of the mine life.

The first offtake contract is with Chambishi Copper Smelter Limited, a joint venture between China Nonferrous Metal Mining (Group) Co. Ltd. and Yunnan Copper Industry (Group) Co. Ltd. to build a new copper smelter at the Chambishi mine on the Zambian Copperbelt. Equinox will supply this new smelter in a 5-year ‘take and pay' contract to commence from Lumwana commissioning, with annual commitments to Chambishi of 100,000 tonnes of copper contained in concentrates or approximately 230,000 tonnes of Lumwana concentrates. While the Chambishi smelter will probably not commission until early 2009, the ‘take & pay' nature of the offtake contract means that Lumwana concentrate will be delivered to the smelter from mine commissioning.

Equinox also signed concentrate sale and purchase agreements with Mopani Copper Mines Plc and Glencore International AG (‘Glencore') for a total minimum contractual ‘take and pay' tonnage of 53,000 tonnes of copper contained in concentrates or approximately 120,000 tonnes of Lumwana concentrates annually.

The agreements also grant Glencore a first option right to process further additional annual quantities of Lumwana copper concentrates in excess of the above commitments.

Project Debt and Equity Financing

In December 2006 the Company signed a US$583.8 million senior and subordinated project finance debt facility with a group of financial institutions for the completion of development and construction of Lumwana. The project debt facility is being provided by a syndicate of European, African, Canadian and Australian based Commercial Lenders, Developmental Finance Institutions and Export Credit Agencies. As part of this facility, the Company also established a US$45 million contingent funding credit facility to be used should cost overruns occur or for corporate purposes post project completion.

Equinox completed an equity offering in early 2007 for gross proceeds of Cdn$211.25 million (US$179 million). This completes a total of US$427 million raised by Equinox since early 2006.

Project construction is now significantly advanced having passed 90% completion and is on schedule with commissioning to commence late in the second quarter of 2008.

Following satisfaction of all conditions precedent Equinox successfully achieved financial close on its US$583.8 million Lumwana Project finance debt facility in August 2007 and drawdowns are well underway.

Lumwana Construction

Project construction commenced in early 2006. The project is now significantly advanced having passed 90% completion and is on schedule with commissioning to commence late in the second quarter of 2008. Other highlights include:

• Large scale mining commenced in April 2007 at the Malundwe pit and has now reached the primary ore body;
• Machine assembly and handover of mining equipment proceeding largely on schedule with 16 Hitachi EH4500 haul trucks now commissioned and all parts for the remaining 11 haul trucks on site. Two Hitachi EX5500 shovels are now in operation with three shovels being assembled on site
• All process plant equipment is on site and major equipment has been physically installed;
• ZESCO has connected the Lumwana substation to the national electricity grid;
• Lumwana residential township construction is well underway with over 320 houses ready for occupation.

Uranium Feasibility Study

Equinox commenced the Uranium Feasibility Study (‘UFS') investigating the onsite treatment of the discrete and high grade uranium mineralization contained within the copper pit shells.

This study is reviewing and updating the 2003 uranium study and will expand upon previous testing. It will include processing plant, infrastructure design and prepare cost estimates for the production of uranium ‘yellowcake'. The results of the UFS are anticipated to be available early in the second quarter of 2008.

An Environmental Impact Assessment (‘EIA') has been prepared as part of the UFS and will be lodged for project approval during the second quarter of 2008. Approval of this EIA by the Environmental Council of Zambia is required for uranium plant permitting. Furthermore, the Government of the Republic of Zambia is enacting legislation for the processing and export of uranium, consistent with International Atomic Energy Agency guidelines. It is anticipated that both the permitting and revised legislation will be completed by mid-2008.

On the basis of project approval during the second quarter of 2008, commissioning of the uranium processing plant is targeted for the first half of 2010.

Potential Project Enhancements

• The Lumwana process plant is conservatively rated at 20 million tonnes per year throughput. By optimizing and ‘de-bottlenecking' the plant, Equinox engineers believe that throughput could potentially, at limited additional capital cost, be increased by 20% to about 24 million tonnes per year, increasing copper output to above 200,000 tonnes per year.
• Given the very large resource and long mine life at Lumwana there is an opportunity to further expand throughput to about 35 million tonnes per year, increasing copper production to about 300,000 tonnes per year.
  Such a further expansion would require significant additional capital cost and be subject to the completion of a feasibility study.
• A study into improving the transport logistics at Lumwana has commenced and includes the potential to build a concentrate pipeline to the Copperbelt. Transporting the concentrate as a slurry could significantly reduce trucking costs for the concentrate.
• The 2003 Bankable Feasibility Study included the design of a roast-leach-electrowin (‘RLE') plant to process Lumwana concentrate into copper cathode on-site.
  The Company took the pragmatic option of committing its concentrates for the initial 5 years to the Copperbelt smelters.
  However, Equinox may consider building a facility, probably a RLE, onsite after year-5.
  Apart from enabling Lumwana to produce its own cathode on-site, independent of the smelters, this would enable the recovery of significant by-products including gold, cobalt and sulphuric acid. An on-site processing facility could maximize these by-products while providing significant transport savings.
• The potential to build a uranium plant to produce a uranium by-product has been discussed above.

Reserves and Resources

The Lumwana Project includes the Malundwe and Chimiwungo deposits. The Lumwana resource, defined by Golder Associates Pty. Ltd. (‘Golder') in accordance with the JORC Code and CIM Standards NI43-101 and using a 0.2% copper cut-off, has been defined as follows:

Sulphide Reserves and Resources within Designed Pits - Development Case

	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
Total
Proved	124.4	0.83
Probable	196.9	0.66
Total Mineral Reserves	321.3	0.73
Total Inferred Resource	417.2	0.60

  

Oxide Reserves and Resources within Designed Pits - Development Case

	Tonnage (Mt)	Cu (%)
Proved	5.2	0.85
Probable	4.4	0.52
Total Mineral Reserves	9.6	0.69
Inferred Resource	3.6	0.42

As part of the mine planning process, the effect of changes in variables such as price, metallurgical recovery and process method were examined.  There are no particular factors other than those covered in this report (October 2006 Technical Report) that should have a significant impact upon these estimates.

Contacts

Email: equinox@equinoxminerals.com

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