Equinox releases Preliminary Production Results for the Quarter Ended June 30, 2009
TORONTO, July 3 /CNW/ - Equinox Minerals Limited (TSX and ASX symbol:
"EQN") ("Equinox" or the "Company") announced today its preliminary production
statistics for the quarter ended June 30, 2009 ("Q2-2009") from its 100% owned
Lumwana Copper Project ("Lumwana") in Zambia. During this period, the Lumwana
mine was still in the ramp up phase for both the mine and process plant
operations.
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LUMWANA MINE PRODUCTION STATISTICS
Q2 2009 Q1 2009
Total mine material movement Tonnes 20,801,895 8,882,640
Ore mined Tonnes 3,030,352 1,837,530
Ore processed Tonnes 3,031,783 2,877,141
Head grade Copper % 0.99% 0.93%
Copper recovery Copper % 81.6% 82.9%
Copper produced in concentrate Tonnes 24,414 22,263
Copper produced in concentrate Pounds 53,823,593 49,081,908
Concentrate grade Copper % 39.1% 39.0%
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The preliminary Q2-2009 copper production results were well below
expectations and only a marginal improvement on the Q1-2009 production results
(as reported May 06, 2009). Key contributing factors to the Q2-2009 results
include:
- Availability of the mine truck and shovel mobile equipment fleet:
Although substantially improved from Q1-2009 (from 71% availability
in March, to 89% in June), this availability needs to further improve
and be maintained to meet production targets;
- Shovel and truck productivity and cycle times: Although also
significantly improved from last quarter (shovel productivity
increased from 1700tph in March, to 2800tph in June), productivity
needs to further improve and be maintained to meet production
targets;
- Transitional ore zones: Significant tonnages of transitional (mixed
sulphide-oxide) ore are being encountered where primary sulphide ore
was expected. Substantially lower metallurgical recoveries are
achieved in transition ore (ranging 5-65%) compared to sulphide ores
which during May achieved 94% recovery; and
- Uranium: The pits currently being developed on the Malundwe copper
orebody include the uranium zones at Valeria South and Valeria North.
As these uranium zones are being selectively mined (applying a cutoff
grade of 200ppm U, compared to the 700ppm U cutoff used in the
original mine plan) and stockpiled, they are not treated by the
copper concentrator and are effectively classified as 'waste' to the
copper project. This uranium-rich copper ore stockpile may be treated
at a later date, if and when the Company builds a uranium plant, but
is not contributing to current production cash flow.
The orebody-related issues are expected to improve in the coming months
as the mine moves below the weathering profile and the uranium zones and into
more consistent sulphide ore. Availability and productivity parameters
continue to improve and management is developing, as a matter of urgency,
strategies to further increase productivity and mine output. These strategies
include engaging specialist consultants to advise on opportunities to improve
productivity and the Company is intensifying its internal training programs to
improve the workforce skills and expertise.
Management is currently reviewing 2009 annual production and cost targets
and anticipates including this updated target information with the Company's
Q2-2009 results expected to be released during August 2009.
Commenting, Craig Williams said that "while the various issues that have
impacted production at Lumwana during Q2-2009 on their own could have been
managed with minor implications, the compounding effect of these, within a
short space of time, has presented significant limitations to maintaining
suitable ore supply to fully realize our large processing capacity.
Importantly, considerable gains were achieved on a number of fronts during the
second quarter, but the rate of improvement is likely to result in a more
modest production and revenue estimate for 2009 which will be advised with our
second quarter report."
Craig R. Williams - President & Chief Executive Officer
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Cautionary Language and Forward Looking Statements
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This press release contains certain information which may constitute
"forward-looking statements" and/or "forward-looking information" within
the meaning of securities laws. Forward-looking information can often,
but not always, be identified by the use of words such as "plans",
"expects", "is expected", "is expecting", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates", or "believes", or
variations (including negative variations) of such words and phrases, or
state that certain actions, events or results "may", "could", "would",
"might", or "will" be taken, occur or be achieved. Forward-looking
information may relate to management's future outlook and anticipated
events or results and may include statements or information regarding its
future plans or prospects of the Company. Without limitation, statements
that the uranium stockpile may be treated at a later date if the Company
builds a uranium plant; statements that orebody-related issues are
expected to improve in the coming months; and statements that management
intends on developing a revised annual production and cost target and
anticipates reporting it in August 2009, are forward-looking statements.
The purpose of forward-looking information is to provide the reader with
information about management's expectations and plans for 2009. Forward-
looking information is based on certain factors and assumptions
regarding, among other things, anticipated financial or operating
performances of Equinox, its subsidiaries and their respective projects;
future prices of copper and uranium; the estimation of mineral reserves
and resources; the realization of mineral reserve estimates; the timing
and amount of estimated future production; estimated costs of future
production; the sale of future production and the performance of off-
takers; capital, operating and exploration expenditures; costs and timing
of the development of the Lumwana Project; the costs of Equinox's hedging
policy; costs and timing of future exploration, requirements for
additional capital; government regulation of exploration, development and
mining operations; environmental risks; reclamation and rehabilitation
expenses; title disputes or claims; and limitations of insurance
coverage. Without limitation, in stating that the uranium stockpile may
be treated at a later date if the Company builds a uranium plant, the
Company has assumed that the costs of building such a plant will be
feasible, that the materials, labour, regulatory approvals and other
requirements will be available and that the price and demand for uranium
will be profitable. In stating that orebody related issues are expected
to improve in the coming months, the Company has assumed that the
distribution of the copper mineralization described in the Amended
Technical Report dated April 2009 is accurate and that it will
successfully mine through the oxide and transition mineralization in the
weathering profile and reach the more consistent sulphide ore. Further in
relation to mining of the orebody, it assumes that it will successfully
segregate the uranium mineralization within the copper orebody at the
lower 200ppm U cutoff grade. In stating that management intends to
develop a revised annual production and cost target and anticipates
reporting it in August 2009, the Company has assumed that its efficiency
study by its third party consultants will be completed or substantially
completed to enable management to make a reasonable estimate on
production. While the Company continues to evaluate and address these
issues, the full impact of them on the Company's annual production
target, earnings and ability to meet its obligations can not be
ascertained at this time. Similarly, there can be no assurance on the
affect of these issues on the Company's debt service obligations or loan
covenants under its banking facilities and its offtake obligations. The
Company is actively evaluating and addressing these issues with the
expectation of mitigating them in the near term.
Readers are cautioned that forward-looking information involves known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Equinox and/or its subsidiaries
to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking information.
These factors include risks inherent in the exploration and development
of mineral deposits; operational risks inherent in the conduct of mining
activities; risks relating to changes in copper and uranium prices;
changes in demand and supply of copper and uranium; uncertainties
inherent in the estimation of mineral reserves and resources; risks
inherent in the estimation of future production and future production
costs; the estimation of cash costs of copper production; risks related
to the Company's indebtedness including risks related to meeting its
financial covenants; financing risks; risks related to interest rates,
exchange rates; inflation or deflation; changes in the value of the U.S.
dollar to foreign currencies; political and economic conditions of major
copper-producing countries; risks inherent in securing off-take
arrangements and terms and/or enforcing such terms; insurance, government
regulation, licences and permits and environmental risks; risks inherent
in the estimation of reclamation costs; risks related to the Company's
hedging activities; litigation; competition and reliance on key
personnel. These risks are discussed in the section entitled "Risk
Factors" in the Company's Annual Information Form dated March 27, 2009.
Although Equinox has attempted to identify statements containing
important factors that could cause actual actions, events or results to
differ materially from those described in forward-looking information,
there may be other factors that cause actions, events or results to
differ from those anticipated, estimated or intended. Forward-looking
information contained herein are made as of the date of this document
based on the opinions and estimates of management on the date statements
containing such forward looking information are made, and Equinox
disclaims any obligation to update any forward-looking information,
whether as a result of new information, estimates or opinions, future
events or results or otherwise. There can be no assurance that forward-
looking information will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such
information. Accordingly, readers should not place undue reliance on
forward looking information. Scientific and technical information
contained in this press release has been prepared under the supervision
of Robert Rigo, BEng., FAusIMM, MIEAust, Vice President, Project
Development of Equinox who is a "Qualified Person" in accordance with
National Instrument 43-101 - Standards of Disclosure for Mineral
Projects. Readers are cautioned not to rely solely on the summary of
information contained in this release, but should read the Amended
Technical Report which is posted on Equinox's website at
www.equinoxminerals.com and filed on SEDAR at www.sedar.com and any
future amendments to such report. Reader are also directed to the
cautionary notices and disclaimers contained therein.
Readers are cautioned not to rely solely on the summary of such
information contained in this release, but should also read the final
prospectus dated April 16, 2009 and the documents incorporated by
reference therein, particularly, the Annual Information Form dated March
27, 2009, all of which are filed on SEDAR (www.sedar.com). Readers are
also directed to the cautionary notices and disclaimers contained herein.
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For further information: Craig R. Williams (President and Chief
Executive Officer), Michael Klessens (Vice President - Finance and Chief
Financial Officer), Phone: +61 (0) 8 9322 3318, Email:
equinox@equinoxminerals.com, Or Kevin van Niekerk (V.P. Investor Relations),
Phone: (416) 865-3393, Email: kevin.van.niekerk@equinoxminerals.com; For
information on Equinox and technical details on the Lumwana Project please
refer to the company website at www.equinoxminerals.com
