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COPPER MINE DEVELOPMENT – Mine life doubled at Lumwana; new capital costs

ZAMBIA - Toronto-based EQUINOX MINERALS has announced revised resources and reserves for its Lumwana copper-cobalt-...



ZAMBIA – Toronto-based EQUINOX MINERALS has announced revised resources and reserves for its Lumwana copper-cobalt-uranium project in the Northwestern Province, based on an infill drill program. The project includes the Malundwe and Chimiwungo deposits.

GOLDER ASSOCIATES has revised the resource estimate, in accordance with the JORC Code and NI 43-101 Standards, using a 0.2% copper cut-off. The measured and indicated resources now total 358.1 million tonnes grading 0.76% Cu, 184 ppm Co and 0.02 g/t Au, containing 6.0 billion lb of copper. This is an overall increase of 21%, with a 9% increase for Malundwe and a 43% increase for Chimiwungo. As well, there are inferred resources of 564.4 million tonnes grading 0.06% Cu, 46 ppm Co and 0.01 g/t Au, containing 7.8 billion lb of copper. There has been no change to the Lumwana uranium resources as reported in October 20, 2005.

As a consequence of the in-fill drilling program and the re-design of the Lumwana pits at a copper price of US$1.20/lb, the defined mineral reserves have now increased 28% for Malundwe and 70% for Chimiwungo. At Chimiwungo the engineered pit optimization results in the three stand-alone pits previously designed now merging into one single large pit. The increased mineral reserves extend the mine life of the Malundwe pit from five to six 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 assumes no byproduct credits for cobalt or uranium.)

Equinox and the joint venture of AUSENCO INTERNATIONAL and BATEMAN MINERALS AND METALS (ABJV) have agreed the terms of an engineering, procurement and construction contract for the project. At a guaranteed maximum price of US$381 million with an end of Q1-2008 commissioning completion schedule. Further design and risk mitigation programs over the coming months are expected to reduce this to a lower ‘fixed-price’. The GMP includes the project capital cost, engineering, contingency, escalation and EPC fee to the ABJV. It represents a substantially increased scope for the ABJV.

The total Lumwana project debt facility has been increased to US$415 million. In addition, Equinox has mandated the asset-backed financing of the Lumwana mining fleet for a total of US$133.3 million.

The revised capital cost for the project including the fleet is US$762 million. More technical details on the Lumwana project are available at www.equinoxminerals.com.


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