Equinox Releases Results for Quarter Ended June 30, 2008

    THE U.S./

    TORONTO, Aug. 12 /CNW/ -



    Highlights for the quarter include:

    -   On July 07, 2008, Equinox reported that a fire had caused damage to
        the 20MVA transformer and adjacent 11kV substation at its Lumwana
        Project. A remediation program is underway and orders for replacement
        equipment have been placed. Plant commissioning is ongoing.
    -   Project Start-Up Delay: The recovery schedule and Lumwana Project
        hand-over from the engineering contractor Ausenco-Bateman Ventures
        Limited ("ABV") based on current lead times for the replacement,
        installation and testing of the new equipment and completion of
        downstream testing activities is expected to be December 2008.
    -   Lumwana Project mine development activities within the Malundwe
        stage 1 pit continued to progress steadily with the commencement of
        continuous shift operations increasing the mining rate from 1 to 3Mt
        per month. This ramp schedule has now been extended following the
        project delay associated with the transformer fire on July 07, 2008
        (see below).
    -   Similarly the trolley infrastructure installation completion schedule
        has now been extended with energization expected now during Q4-2008.
    -   The balance of all major mining equipment required to deliver the
        operational phase steady-state production rate is now on site with
        operator training programs well advanced.
    -   Process plant commissioning activities progressed with the following
        key milestones:
        -  The raw water treatment plant was tested and commissioned;
        -  Testing of the crushing circuit conveyors and primary crusher;
        -  Energization and rotational testing of the SAG Mill and Ball Mill
           gearless mill drives; and
        -  Completion of most mechanical and structural installation and
           punch listed items.
    -   Town housing availability for occupancy purposes reached 410 houses
        with the relocation and long term occupancy of such houses by Company
        employees commencing late in the quarter (under the company home
        ownership scheme). Discussions with relevant institutions regarding
        support services for the town development are at an advanced stage.
    -   Relevant Statutory Instruments for the operational steady-state phase
        of the project have been granted and gazetted in accordance with the
        Company's Development Agreement ("DA") with the Government of the
        Republic of Zambia ("GRZ"). Discussions continue with GRZ officials
        on the most appropriate mechanism to provide the remaining incentives
        in accordance with the DA.
    -   The Lumwana Uranium Project Environmental Impact Assessment was
        lodged with the Environmental Council of Zambia in late July 2008.
        Processing by the GRZ of the Lumwana Uranium Licenses is expected
        during Q3-2008.

    Lumwana Transformer Fire Incident (the "Incident") and Resulting Delay to
    Start Up

    -   On July 07, 2008, Equinox reported that a fire had caused damage to
        the 20MVA transformer and adjacent 11kV substation at its Lumwana
        Project. This equipment and activity forms part of the process plant
        facility currently being commissioned by the ABV who are constructing
        the Lumwana Project under a US$407.6 million fixed price, fixed term
        contract with the Company as announced October 16, 2006.
    -   On July 18, 2008, the Company reported that assessments had been
        conducted by independent experts, insurance loss adjusters and ABV
        engineers to identify equipment that needed to be replaced due to the
        Incident. Work to repair and rebuild the damaged area has begun and
        ordering of requisite replacement items is completed and are being
    -   Project Start-Up Delay: The recovery schedule and Lumwana Project
        hand-over from the engineering contractor ABV based on current lead
        times for the replacement, installation and testing of the new
        equipment and completion of downstream testing activities is expected
        to be December 2008.
    -   Completion and commissioning work elsewhere is continuing on the
        Lumwana Project whilst the remediation program is implemented.
    -   Reticulated power from the Zambian power utility, ZESCO, remains
        unaffected and available.
    -   The Company advises that for the period to December 2008, the only
        hedging instruments in place are deferred premium put options.
        Thereafter and commencing in January 2009, copper forward contracts
        begin maturing from the end of January at the rate of ~2,500t per
        month. As a result of the Incident and due to Lumwana Mining Company
        Limited's ("LMC") copper hedging portfolio, there is not expected to
        be any cash flow impact. Further hedge accounting treatment of these
        instruments can be seen in the Financials section of this report.
    -   Current 'take and pay' off-take contracts with local smelters remain
        unaffected, and the Incident has not affected Lumwana Project smelter
        delivery commitments and the Company holds no outstanding delivery
        obligations due to delayed start-up.
    -   The Company has in place material damage and delay in start-up
        insurance which covers daily standing costs and debt service costs.
        The Company is vigorously pursuing its claims under these policies
        and to date does not contemplate nor has been informed of any
        material impediment to receiving a positive and expedient claim
        determination. Further, the Company has and continues to receive
        liquidated damages calculated on a daily basis under the terms of its
        EPC Contract with the engineering contractor ABV.
    -   The Company has a very supportive banking syndicate and will ensure
        that it has sufficient working capital to meet its requirements.
    -   The specific cause of the Incident, whilst out of the control of the
        Company, as it occurred prior to handover, is likely to remain
        confidential so as not to prejudice ongoing insurance and other
        commercial investigations and claims. Internal investigations have
        focussed on efficient remediation of the issue and in ensuring that
        such problems are unlikely to re-occur.
    -   Equinox now expects to produce concentrate during December 2008. Full
        production is anticipated to be reached in 2009 at which time Lumwana
        is projected to be Africa's largest copper mine.


    Highlights for the quarter include:

    -   The Kanga Prospect is located south of the Malundwe pit where mining
        has commenced. A 20,000m reverse circulation percussion drilling with
        minor diamond core drilling program was conducted, focusing on
        testing the area extending south from Malundwe (optimised at
        US$1.20/lb copper) into the Kanga area. Malundwe style copper
        sulphide mineralisation, typically 10 to 20m thickness of (greater
        than) 1% Cu has been extended south from the Malundwe pit design
        along an extended strike length of 1km and over a width of 1.2km
        across strike. Following compilation of all assay results, it is
        expected that a Kanga inferred resource estimate will be able to be
        calculated and once Malundwe pit optimizations are applied, the
        Company will be better placed to determine the scale of the
        opportunity that may exist to increase current Lumwana reserves and
        mine life. Details of drilling results released to date can be seen
        on the Company's website with the original filed announcement.
    -   The Ndola West prospect is located on the Copperbelt, 320km east of
        the Lumwana Project. Following previous work at site, the Company
        completed an extensive reverse circulation percussion drilling
        program in late 2007 and a 20 hole diamond core drilling (1987m)
        program during Q1-2008 to evaluate the oxide potential along 2km
        strike of Ndola West. Assay results from these diamond core drilling
        holes, which were interspersed amongst the reverse circulation
        percussion drilling holes, confirmed the previous low grade drilling
        results. The strike extent tested to date at Ndola West represents
        less than 15% of the available prospective strike and further
        planning is underway to implement diamond core drill testing of a
        favorable contact position determined to exist in the north-west and
        in adjacent fold limbs.
    -   At Cheyeza on the Kabompo Project, 100km west of Lumwana, copper
        anomalism in soil samples up to 5,000ppm Cu peak value was identified
        in late 2007. This area was tested by a series of shallow reverse
        circulation percussion drill holes which intersected several zones of
        sporadic copper values (up to 1% Cu over four meters). Subsequent
        diamond core drilling in Q1-2008 identified modest copper anomalism
        (drill holes CHE041, 042). Exploration ground work has continued with
        the excavation of 18 pits and trenches to penetrate the thick
        colluvium to expose bedrock and facilitate better mapping control.
    -   At Lolwa and at Kabompo, where reverse circulation percussion
        drilling identified sporadic, elevated uranium values over 6 km of
        strike in late 2007, 112 pits and 8 trenches have been excavated. The
        excavations will enable better targeting for stratigraphic diamond
        core drilling planned for Q3-2008.
    -   The Ngala target on the Copperbelt (Kitwe tenement) was the subject
        of a conceptual review of historical data. This review has
        highlighted compelling targets for the field crews to test and
        diamond core drilling is planned to commence during Q3-2008.
    -   At the Mwekere prospect, work in the 1970's by RST identified copper
        sulphide mineralization and a non-compliant historical copper
        resource was estimated at depth. The resource lies at the Upper Roan/
        Lower Roan contact, and whilst that resource is too deep (100-500m),
        the Company is currently testing the economic potential of the near-
        surface target in a 9 hole diamond core drilling program.


    Warrant Expiry

     On May 06, 2008, 26,406,250 common share purchase warrants originally
     issued as part of the March 6, 2007 equity offering of units expired.
     A total of 26,403,315 warrants were exercised raising total proceeds
     for the Company of C$60,727,624.50.

    New Independent Directors Appointed

     On May 07, 2008 two additional independent directors, Mr. David
     McAusland of Beaconsfield, Québec and Mr. Jim Pantelidis of Toronto,
     Ontario, were appointed to serve on the Board of Directors of the


    The Company is focused on the development of its 100% owned Lumwana
Copper Project in Zambia. The Lumwana Copper Mine is expected to produce an
average of 172,000 tonnes per year of copper metal contained in concentrates
for the first 6 years of its 37 year mine life. With construction largely
complete, remediation of works following the transformer fire incident
underway (see subsequent events section), and commissioning continuing, the
mine is anticipated to commence production by the end of 2008. Full production
is expected to be reached in 2009 at which time Lumwana is projected to be
Africa's largest copper mine.
    At June 30, 2008 the Company had outstanding capital commitments for the
Lumwana Project of $100.5 million. Despite the delay in production
commencement the Company is confident that its current efforts with its very
supportive banking syndicate will allow it to meet its construction
commitments and ongoing working capital requirements.
    Equinox has completed a UFS investigating the onsite treatment of
discrete and high grade uranium mineralization contained within the Lumwana
copper pitshells. The UFS has confirmed the viability of onsite uranium
treatment. On the basis of appropriate approvals, commissioning of the uranium
processing plant is targeted for 2010.
    Equinox plans to expand exploration activities, evaluate and potentially
implement opportunities at Lumwana to expand throughput, improve transport
logistics and in the longer term, consider the processing of concentrate on
site. It will also actively monitor new project and corporate development
    A copy of Equinox's Q2 Financial Statements and the MD&A for will be
available from August 12, 2008 at www.sedar.com, www.asx.com.au and at

    On Behalf of the Board of Directors of Equinox:

    Craig R. Williams - President & Chief Executive Officer

    Cautionary Language and Forward Looking Statements
    This press release contains "forward-looking statements" and
"forward-looking information", which may include, but is not limited to,
statements with respect to the future financial or operating performances of
Equinox, its subsidiaries and their respective projects, the future price 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, 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. Often, but not always, forward-looking
information can 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. The purpose of forward-looking information is to provide the
reader with information about management's expectations and plans for 2008.
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. Such factors include,
among others, those factors discussed in the section entitled "Risk Factors"
in the Company's AIF. Although Equinox has attempted to identify statements
containing important factors that could cause actual actions, event 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. Technical information in this
release is summarized or extracted from the "Amended Technical Report on the
Lumwana Copper Project, North West Province, Republic of Zambia" dated October
2006 (the "Technical Report"), prepared by Michael Davis, Process Manager,
Ausenco Ltd. ("Ausenco"), Ross Bertinshaw, Principal of Golder Associates Pty
Ltd. ("Golder"), Tim Miller, Director, of Investor Resources Finance Pty Ltd
("IRF"), and Robert Hanbury, Associate Director, of Knight Piésold Pty Ltd.
("Knight Piésold"), each of whom 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 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.

                         CONSOLIDATED BALANCE SHEETS
                  As at June 30, 2008 and December 31, 2007

                                                        June 30  December 31
                                                           2008         2007
    ASSETS                                                $'000        $'000
    Current assets
      Cash and cash equivalents                         104,174       73,367
      Accounts receivable                                28,710       25,946
      Prepayments                                         6,259        5,940
      Inventory                                           6,761            -
                                                        145,904      105,253

    Restricted cash                                      25,878       25,601
    Property, plant and equipment                       908,990      677,249
    Future income tax asset                                   -       15,555
    Other financial assets                                5,476        4,344
                                                      1,086,248      828,002
    Current liabilities
      Accounts payable and accrued liabilities           73,420       63,999
      Current portion of employee future benefits           319          256
      Current portion of long term debt                 119,727       13,466
      Current portion of derivative instruments          61,790        4,025
                                                        255,256       81,746

    Long term debt                                      356,413      263,107
    Employee future benefits                                 92           43
    Future income tax liabilities                         1,829        1,628
    Asset retirement obligation                           3,560        3,025
    Long term compensation                                  584          421
    Derivative instruments                              138,814       59,694
                                                        756,548      409,664
    Share capital                                       577,163      499,715
    Deficit                                             (74,274)     (64,338)
    Contributed surplus                                  18,590       15,941
    Warrants                                                  -       12,122
    Accumulated other comprehensive loss (net of tax)  (191,779)     (45,102)
                                                        329,700      418,338
                                                      1,086,248      828,002

          For the three and six months ended June 30, 2008 and 2007
                          Three months            Six months            from
                             ended                  ended       inception on
                            June 30                June 30           June 29
                        2008        2007        2008        2007        1993
                       $'000       $'000       $'000       $'000       $'000
    Other income /
     (expense)         7,291       2,763       8,000       5,323      25,663

      Exploration      1,776       2,022       4,810       2,568      26,011
      General and
       administration  1,944       1,521       3,734       5,476      27,760
      Financing costs  4,076           -       5,911           -       8,561
      Incentive stock
       expensed        1,330       2,910       3,143       7,083      34,277
      Share of loss
       of equity
       investee            -         370           -         867       1,325
      Amortization of
       plant and
       equipment          69          28         127          54         942
                       9,195       6,851      17,725      16,048      98,876

    Loss before
     income tax and
     non controlling
     interest         (1,904)     (4,088)     (9,725)    (10,725)    (73,213)

    Future income tax    127        (188)       (211)       (332)     (1,506)
    Non controlling
     interest              -                       -           -         445

    Loss for the
     period           (1,777)     (4,276)     (9,936)    (11,057)    (74,274)

    Basic and
     diluted loss
     per share        $0.003      $0.008      $0.017      $0.022

    Weighted average
     number of shares
     (000's)         582,653     553,782     574,190     512,984

          For the three and six months ended June 30, 2008 and 2007

                                       Three months            Six months
                                          ended                  ended
                                         June 30                June 30
                                    2008        2007        2008        2007
                                   $'000       $'000       $'000       $'000
    Loss for the period           (1,777)     (4,276)     (9,936)    (11,057)
    Other comprehensive losses
      Net unrealized gains
       (losses) on available-
       for-sale securities
       (net of tax)                1,521       3,509       1,003       3,274
    Net unrealized derivative
     instrument losses           (28,390)     (5,057)   (147,680)     (5,057)
    Total comprehensive loss     (28,646)     (5,824)   (156,613)    (12,840)

          For the three and six months ended June 30, 2008 and 2007

                                  Three months ended        Six months ended
                                        June 30                 June 30
                                    2008        2007        2008        2007
                                   $'000       $'000       $'000       $'000
    Share capital
      Balance at start of
       period                    504,615     470,696     499,715     304,217
      Issue of shares                  -           -       4,314     171,442
      Share issue costs                -         (38)          -      (8,623)
      Conversion of stock
       options                     1,050      18,485       1,400      22,107
      Conversion of warrants      71,498          98      71,734          98
      Balance at end of period   577,163     489,241     577,163     489,241

      Balance at start of period (72,497)    (41,704)    (64,338)    (34,868)
      Transition adjustment -
       Financial instruments           -           -           -         (55)
      Loss for the period         (1,777)     (4,276)     (9,936)    (11,057)
      Balance at end of period   (74,274)    (45,980)    (74,274)    (45,980)

      Balance at start of period  17,631      21,362      15,941      18,893
      Stock based compensation     1,417       2,990       3,230       7,164
      Transferred to share
       capital on exercise of
       stock options                (371)    (10,777)       (494)    (12,482)
      Forfeited stock options        (87)        (80)        (87)        (80)
      Balance at end of period    18,590      13,495      18,590      13,495

      Balance at start of period  12,082      12,147      12,122           -
      Fair value of warrants
       issued                          -           -           -      12,147
      Transferred to share
       capital on conversion of
       warrants                  (12,081)        (17)    (12,121)        (17)
      Forfeited warrants              (1)          -          (1)          -
      Balance at end of period         -      12,130           -      12,130

    Accumulated other
     comprehensive income (loss)
      Balance at start of
       period                   (164,910)        676     (45,102)          -
      Cumulative translation
       adjustment                      -           -           -         (12)
      Transition adjustment -
       Financial instruments           -           -           -         923
      Net unrealized losses on
       securities                  1,521       3,509       1,003       3,274
      Net unrealized
       derivative instrument
       losses                    (28,390)     (5,057)   (147,680)     (5,057)
      Balance at end of period  (191,779)       (872)   (191,779)       (872)

          For the three and six months ended June 30, 2008 and 2007
                      Three months ended        Six months ended          on
                            June 30                 June 30          June 29
                        2008        2007        2008        2007        1993
                       $'000       $'000       $'000       $'000       $'000
    Cash flows
     (used in)/
     provided by
      Loss for the
       period         (1,777)     (4,276)     (9,936)    (11,057)    (74,220)
      Items not
         of property,
         plant and
         equipment        69          30         127          54         942
         loss /
         (gain)       (3,402)         35      (2,857)     (1,523)     (1,877)
         stock option
         expense       1,330       2,910       3,143       7,083      34,277
        Share of loss
         of equity
         investee          -         370           -         867       1,325
        Future income
         tax expense
         (benefit)      (127)        187         211         332       1,506
         costs       (12,518)         38     (12,102)         57     (19,259)
        Long term
         expense         100           -         163           -         583
         on sale of
         plant and
         equipment         -           -           2           -         (29)
        Other              -           -           -           -      (3,470)
      Changes in
         (decrease) in
         and employee
         benefits     (1,320)        339        (547)      2,500       2,290
         decrease in
         inventory    (6,761)          -      (6,761)          -      (6,761)
         decrease in
         prepayments  (5,015)       (369)     (3,164)        (96)    (25,179)
                     (29,421)       (735)    (31,721)     (1,783)    (89,872)
    Cash flows (used
     by financing
      Issue of share
       capital        60,095       7,789      60,518     176,834     555,559
      Share issue
       costs               -         (38)          -      (8,623)    (24,996)
      Issue of
       warrants            -           -           -      12,147      12,147
      Proceeds from
       borrowings    113,174           -     202,479           -     572,329
      Repayment of
       borrowings     (7,611)          -      (8,228)          -     (70,340)
       fees and
       cost                -      (2,656)          -      (4,243)    (41,781)
      Finance lease
       repayments          -           -           -           -         (65)
                     165,658       5,095     254,769     176,115   1,002,853
    Cash flows (used
     by investing
       and evaluation
       costs               -           -           -           -     (37,903)
       (increase) in
       cash             (275)      7,997        (277)     24,201     (25,880)
      Payments for
       plant and
       equipment     (91,996)   (100,104)   (195,349)   (176,488)   (751,248)
      Payments for
       instruments         -     (19,786)          -     (19,786)          -
      Proceeds from
       sale of
       plant and
       equipment           -           -           -           -          47
       note receipts       -           -           -           -         375
                     (92,271)   (111,893)   (195,626)   (172,073)   (814,609)

    Net (decrease)/
     increase in
     cash and cash
     equivalents      43,966    (107,533)     27,422       2,259      98,372
    Cash and cash
     equivalents -
     start of period  56,854     177,426      73,367      66,238           -
    Effects of
     exchange rate
     changes on cash
     held in foreign
     currencies        3,354         219       3,385       1,615       5,802
    Cash and cash
     equivalents -
     end of period   104,174      70,112     104,174      70,112     104,174

    Total interest
     payments made     9,088           -      10,700           -      15,225

For further information:

For further information: Craig R. Williams (President and Chief
Executive Officer), Michael Klessens (V.P. Finance and CFO), Phone: +61 (0) 8
9322 3318, Email: equinox@equinoxminerals.com Or Kevin van Niekerk (V.P.
Investor Relations/Corporate Development), 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

Organization Profile

Equinox Minerals Limited

More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890