Equinox Provides Lumwana Production Update, Awards Lumwana Feasibility Study
for 35 Mtpa Expansion and Accelerates Drilling at Chimiwungo
TORONTO, June 1 /CNW/ - Equinox Minerals Limited (TSX and ASX: EQN) ("Equinox" or the "Company") announced today production progress results for April and May, 2010 from its 100% owned Lumwana Copper Mine ("Lumwana") in Zambia, the awarding of the contract to undertake a feasibility study into a 35 Mtpa expansion for Lumwana and the approval of an additional $10m to accelerate drilling at the Lumwana Chimiwungo deposit.
April/May 2010 Production Update
The Company is pleased to report that Lumwana production for the first two months of Q2-2010 totaled 29,733 tonnes (66 M lbs) of copper in concentrate, representing a 46% increase on the average monthly production results of Q1-2010 and a 83% increase on the average monthly production results for the corresponding period Q2-2009. Mine material movement has also consistently exceeded 300,000 tonnes per day since the end of the wet season in mid-April, with better equipment availability, productivity and utilization driving improved performance from the mine.
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LUMWANA MINE 2010
PRELIMINARY PRODUCTION Progress
STATISTICS Q1-2010 April/May TOTAL
Total material movement Mt 14.99 16.39 31.38
Ore mined Mt 3.09 3.44 6.53
Ore processed Mt 3.59 2.95 6.54
Head grade Cu % 0.93% 1.07% 0.99%
Copper recovery % 92% 95% 93%
Concentrate grade Cu % 44% 44% 44%
Copper in concentrate tonnes 30,471 29,733 60,204
Copper in concentrate M lbs 67.18 65.55 132.73
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New mining areas in the Lumwana Malundwe deposit to the north (pit 3E) and to the south (pit 2E) of the original Starter pits and pit 1E have been opened up and developed in such a way as to provide longer, more productive faces. Ore mined of 3.44 Mt in the two month period exceeded that of the prior three months (3.09 Mt) of Q1-2010 as well as the corresponding period Q2-2009 (3.03 Mt). The average head grade improved from 0.93% copper in Q1-2010 to 1.07% copper.
With the additional ore supply, the Lumwana mill was able to process record tonnes in April (19.8 Mtpa rate) prior to a planned 6-day plant shutdown for a SAG mill reline in May. The higher head grades at 1.07% and increased copper recovery at 95% resulted in 29,733 tonnes (66 M lbs) of copper in concentrate being produced in the two months April and May, 2010. The improvements in mining efficiency, grades and recoveries, together with the resulting higher copper production in the two months April and May have positively impacted C1 costs. Management maintains its full year 2010 guidance of 135,000 tonnes of copper in concentrate at a C1 cash cost of $1.35/lb Cu. Full details of Q2-2010 production and costs will be released in the quarterly report in August 2010.
Equinox Commences Phased Feasibility Study for Lumwana Expansion: Award to Ausenco
Equinox has commenced feasibility studies to investigate the expansion opportunities of the Lumwana copper project with the award, to Ausenco, of a two staged expansion plan for Lumwana.
The Phase 1 expansion to 24 Mtpa throughput rate at Lumwana is a continuation of mine ramp up. It is expected to be largely achieved through project optimization and 'de-bottlenecking' with some supplemental ore feed required from Chimiwungo and achieved with limited additional capital and within an 18 month time frame.
The Phase 2 expansion study will investigate the further expansion of the Lumwana operation to 35 Mtpa. A scoping study aimed at identifying the appropriate mining and processing scale for the Lumwana operation has indicated that the Chimiwungo orebody would be capable of sustaining a mining rate of 35 Mtpa of ore feed to an expanded Lumwana plant. Further scoping work has indicated that the plant expansion could be implemented by incorporating an additional SAG mill to support a milling rate of similar scale. Preliminary estimates indicate that an expansion to 35 Mtpa would take approximately 3-4 years to complete and cost in the order of US$300-400 million.
The Ausenco work is expected to take approximately twelve months to complete with results expected by the end of the first quarter 2011.
Accelerated Drilling Program at Chimiwungo
On May 6, 2010, the Company reported that the first hole (drill hole CHI0084) of the substantial Chimiwungo drilling program, designed to determine if and to what extent mineralization extends to the south and east of the current Chimiwungo pit designs, intersected significant intercepts of 127m (225m - 352m) of 0.82% Cu including 64m (288m - 352m) of 1.03% Cu. Subsequent to those encouraging results, the Company reports that it will expend an additional US$10 million in order to accelerate the drilling campaign and evaluate further extensions of known mineralization, particularly to the south and southeast of the currently defined Chimiwungo orebody.
Drilling in this area is ongoing, currently with one RC percussion rig and two diamond core rigs, and the campaign will accelerate during June with the addition of another RC rig and two further diamond core rigs.
Equinox President and Chief Executive Officer Craig Williams said that "Through the continuing improvements in operating performance and the launching of our two stage expansion plans, the Lumwana mine is beginning to demonstrate its full potential. Production in the first two months of Q2-2010 has almost exceeded that for the full quarter of Q1-2010 and, thanks to the dedication of the Lumwana team, the operation is now close to nameplate design throughput of 20 Mtpa. With the award of the phased expansion feasibility studies we intend to continue ramp up to our Phase 1 expansion target of 24 Mtpa and further assess our Phase 2 expansion target of 35 Mtpa. The exciting drill results from Chimiwungo East, although still in its early stages, suggest that there is potential to significantly expand the Chimiwungo resource and extend the life of operations under a Phase 2 expansion."
Craig R. Williams - President & Chief Executive Officer
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About Equinox
Equinox Minerals Limited is an international mining company dual listed on the Canadian (Toronto) and Australian stock exchanges.
The Company is currently focused on operating its 100% owned large scale Lumwana Copper Mine in Zambia, one of the largest new copper mines to be developed globally over the last few years.
Equinox acquired the Lumwana project in 1999 and following nearly 10 years of feasibility, financing and construction, commissioned the mine, plant and infrastructure in December 2008.
Situated 220 km northwest of the Zambian Copperbelt, Lumwana is now a major copper mine which will establish Equinox as one of the world's top 20 copper producing companies.
At initial design capacity, Lumwana will process in excess of 20 million tonnes of ore per year, mined at an average life of mine strip ratio of 4.2:1. Lumwana ore, which is predominantly sulphide, is treated through a large, yet conventional plant, producing a copper concentrate for sale to local and international offtakers.
In addition, Equinox is looking at opportunities to grow the Company through both internal expansion (potential uranium plant to process the high grade uranium stockpile and an expansion of the Lumwana copper plant throughput rate) and through the international search for mergers and acquisitions.
For information on Equinox and technical details on the Lumwana Project please refer to the company website at www.equinoxminerals.com
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Cautionary Note regarding Forward-Looking Statements
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This press release contains or incorporates by reference certain information which may constitute forward-looking statements within the meaning of Canadian securities laws. All statements, other than statements of historical fact, are forward-looking statements. Forward-looking statements can often, but not always, be identified by the use of words such as "plans", "expects", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes", or variations (including negative variations) of such words , or statements that certain actions, events or results "may", "could", "would", "might", or "will" be taken, occur or be achieved or similar expressions concerning matters that are not historical facts, and 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 Company anticipates meeting its previously announced full year 2010 guidance of 135,000 tonnes (300 million pounds) of copper at a C1 cash operating cost of $1.35/lb copper; Lumwana will establish Equinox as one of the world's top 20 copper producing companies; and that Lumwana will process in excess of 20 million tonnes per year, milled at an average life of mine strip ratio of 4.2:1; including the timing and other related matters of such statements, are forward-looking statements. The purpose of forward-looking information is to provide the reader with information about management's expectations and plans for 2010 and subsequent years. Actual results may vary.
Forward-looking statements are 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. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. These factors, estimates and assumptions are fully discussed in the Company's Annual Information Form dated March 15, 2010 filed on SEDAR at www.sedar.com and on the Company's website at www.equinoxminerals.com. Without limitation, in stating that the Company anticipates meeting its previously announced full year 2010 guidance of 135,000 tonnes of copper, that Lumwana will establish Equinox as one of the world's top 20 copper producing companies and that Lumwana will process in excess of 20 million tonnes per year, milled at an average life of mine strip ratio of 4.2:1, 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; that its ongoing efficiency programs and efforts will continue to result in productivity improvements and that the continuing efforts of its equipment suppliers will achieve the desired results and meet their contractual commitments to the Company. 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.
Readers are cautioned that forward-looking statements involve 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 15, 2010. 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. The forward-looking statements 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 statements, whether as a result of new information, estimates or opinions, future events or results or otherwise. There can be no assurance that forward-looking statements 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 statements.
Certain technical information in this press release has been summarized or extracted from the Technical Report on the Lumwana Project, North Western Province, Republic of Zambia dated June 2008 and as re-filed in April 2009 (the "Technical Report"). 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 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. Readers are also directed to the cautionary notices and disclaimers contained therein.
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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: [email protected] or Kevin van Niekerk (V.P. Investor Relations), Phone: (416) 865-3393, Email: [email protected] or David Griffiths (Gryphon Management Australia), Phone +61 (0) 419 912 496, Email: [email protected]
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