BADONDO DRILLING RESULTS INCREASE SIZE AND GRADE OF EXPLORATION - - PDF document

EQUATORIAL RESOURCES LIMITED | ABN 50 009 188 694 Level 2, BGC Centre, 28 The Esplanade, Perth, WA, Australia 6000 | Phone: +61 8 9466 5030 | Fax: +61 8 9466 5029

www.equatorialresources.com.au

ASX: EQX | 30 OCTOBER 2013 | ASX RELEASE

BADONDO DRILLING RESULTS INCREASE SIZE AND GRADE OF EXPLORATION TARGET

REGIONAL SIGNIFICANCE CONFIRMED HIGHLIGHTS

• Drilling results received from the initial drilling program at Badondo have been used to remodel the

Exploration Targets for the Project.

• All holes drilled intersected high grade hematite mineralisation above 50% Fe. Significant near surface

downhole intersections include:

• 41.9m at 62.9% Fe in BADDD0001;
• 40.4m at 65.6% Fe in BADDD0002;
• 26.4m at 61.9% Fe in BADDD0003; and
• 13.5m at 61.5% Fe in BADDD0004.
• Exploration Targets have been independently prepared by Core Geophysics who have generated new models

based on results from the completed initial drilling program, geological mapping conducted by SRK, and the

• riginal geophysical data.
• The updated models have increased the Hematite Exploration Target to between 370 and 620 million tonnes at

a grade of between 58% and 67% Fe. The updated Total Exploration Target for Badondo has increased by more than 100% and is now 2.8 to 4.6 billion tonnes at a grade of between 35% and 67% Fe. The potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient exploration to estimate a Mineral Resource, and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

• Drilling to date has covered only 3km of more than 22km of identified magnetic strike at Badondo and

Equatorial is now progressing with preparations for a large scale resource definition drilling program.

• Discussions with regional stakeholders including governments, other mining companies, international

commodity traders, and potential infrastructure financiers are continuing over the development of regional infrastructure to unlock the significant potential of this emerging iron ore cluster. Equatorial Resources Limited (“Equatorial” or “the Company”) is pleased to announce a revised Exploration Target for the Company’s 100% owned Badondo Iron Project (“Badondo” or “the Project”) in the Republic of Congo (“ROC”). The updated Exploration Target has been independently estimated by Core Geophysics based on remodelling following recent on-ground work including results from the completed initial drilling program.

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Mr John Welborn, Managing Director & CEO, said: “The revised Exploration Target demonstrates Badondo has an integral role to play in the development of the Northern-Congo region. Badondo is among a limited number of regional projects in the north-eastern Gabon, southern Cameroon, and northern Republic of Congo which have the scale and grade potential to emerge as DSO producers. We continue to be delighted with the results from our work at Badondo. The results from holes completed in our initial drilling program have consistently demonstrated grades of above 60% Fe with no concern of deleterious elements. These grades, and the revised modelling, indicate Badondo is a major regional iron asset. We remain convinced that development of the region will be driven by co-operation and amalgamation of the high grade large scale deposits to form a Tier 1, globally significant, iron ore producing province.” The Total Exploration Target for the Project is made up of individually modelled Exploration Targets for three identified prospect areas: the Badondo Prospect, the Belinga North Prospect, and the Belinga North Extension Prospect. At each prospect a target estimate has been calculated for potential primary magnetite material (“Primary Itabirite”) and also for potential enriched hematite material (“Enriched Hematite”). The results from the initial drilling program, when combined with the geological mapping program conducted by SRK Consulting (Perth) Limited (“SRK”), have allowed for more accurate magnetic modelling to be conducted of the Badondo Prospect. No changes have been made to the size of the targets for the Belinga North Prospect, and the Belinga North Extension Prospect. Given the impact the drilling results and geological mapping has had on the Exploration Target over the Badondo prospect, it is conceivable that additional upgrades to the global Exploration Target could be achieved by completing similar programs at the Belinga North and Belinga North Extension prospects within the Badondo Project. Updated Badondo Exploration Targets Project Enriched Hematite Target (58 to 67% Fe) Primary Itabirite Target (35 to 54% Fe) Total Exploration Target (35 to 67% Fe) Badondo 270 – 450 Mt 1,770 – 2,950 Mt 2,040 – 3,400 Belinga North 40 – 70 Mt 460 – 770 Mt 500 – 840 Belinga North Ext 60 – 100 Mt 170 – 290 Mt 230 – 390 Total 370 - 620 Mt 2,370 – 3,950 Mt 2,770 – 4,630 Mt

Table 1: Updated Exploration Targets for Badondo Figure 1: Cross section of drilling at Badondo for holes BADD0001 & BADD0002

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The remodelling of the Badondo Prospect has resulted in a 370% upgrade to the Exploration Target for primary magnetite and hematite banded iron formation (“BIF”) at that prospect. The Exploration Target for Enriched Hematite has been upgraded to between 270 and 450 million tonnes and the grade range has been increased to between 58% and 67% Fe. This represents a significant target of potentially high grade Direct Shipping Ore (“DSO”) material. The Exploration Target for Primary Itabirite has been upgraded to between 2,370 and 3,950 million tonnes at a grade of 35% to 54% Fe. This, combined with the previous Exploration Target at the Belinga North and Belinga North Extension Prospects (see ASX announcement dated 28 March 2011), provides an updated total Exploration Target for the project which has increased by more than 100% and is now 2,770 to 4,630 million tonnes at a grade range of 35% to 67% Fe. The total Exploration Target for enriched hematite is now between 375 and 625 million tonnes at a grade range of between 58% and 67% Fe. The Exploration Target estimates are based on a number of assumptions and limitations. The potential quantities and grades are conceptual in nature and should be considered broadly indicative at best. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource. The drilling at the Badondo Prospect which has enabled the remodelling of the Exploration Targets was conducted using a specially constructed helicopter portable diamond drill rig and consisted of 14 drill holes for a total of 1,092m. All 14 holes were drilled at the Badondo Prospect and all holes intersected high grade iron mineralisation above 50% Fe. The results demonstrate the potential for the Project to host significant quantities of high grade DSO iron mineralisation similar to other world class iron projects in the region. Initial Badondo Drilling Program high grade intercepts Hole_ID From Metres To Metres Interval Fe % SiO2 % Al2O3 % P % S % LOI % BADDD0001 41.9 41.9 62.9 2.6 2.97 0.163 0.021 3.9 BADDD0002 1.9 12.2 10.3 63.2 4.79 2.85 0.044 0.004 1.7 BADDD0002 40.8 96 55.25 63.4 5.71 2.06 0.05 0.002 1 Including 52 92.4 40.4 65.6 2.61 2.01 0.06 0.002 1 BADDD0003 26.4 26.4 61.9 5.82 3.32 0.028 0.014 2 BADDD0003 35 43.6 8.6 60.5 11.28 1.24 0.025 0.008 0.7 BADDD0004 2.9 16.4 13.5 61.5 2.12 3.76 0.113 0.058 5.6 BADDD0005 3.97 13.87 9.9 60.8 3.09 3.39 0.246 0.039 5.7 BADDD0008 5.9 11.65 5.75 62.3 3.56 3.71 0.048 0.022 3.3 BADDD0009 6.1 12 5.9 64.1 2.79 2.71 0.054 0.017 2.6

Table 2: Selected results from initial Badondo Drilling Program

Equatorial is preparing for a larger scale drilling program at Badondo. The primary purpose of this drilling program will be to define a maiden Mineral Resource at the Badondo Prospect as well as conduct initial drilling at Belinga North and Belinga North Extension. The program will require road access, local infrastructure support, and the development of a permanent camp. Equatorial is discussing opportunities to leverage the existing infrastructure in the region and further information will be provided in due course.

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Badondo is located among a cluster of very large iron projects including Sundance Resource Ltd’s Mbalam-Nabeba project, Core Mining’s Avima project, and the Gabonese Belinga project. Individually these projects would typically be classified as potential Tier 2 assets (the 80% of iron deposits that contribute 20% of global iron ore production). Equatorial believes that when combined these regional deposits have the potential to form a Tier 1, globally significant, iron ore producing province. The Company’s strategy for Badondo is to continue to progress geological exploration and resource definition while simultaneously working with regional stakeholders to progress an infrastructure solution that will unlock the value of the region.

Figure 2: Badondo Project location plan Figure 3: The iron mountains of the Congo Craton

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BADONDO EXPLORATION PROGRAM

Exploration to date at Badondo has consisted of an airborne geophysical survey, surface rock chip sampling, metallurgical testing, geological mapping program, and an initial diamond drilling campaign.

Figure 4: Badondo Project location plan

The airborne geophysical survey identified anomalies with a combined strike length in excess of 22km. The potential strike has been divided into three potential project areas: the Badondo Prospect, the Belinga North Prospect, and Belinga North Extension Prospect. The Belinga North Prospect and the Belinga North Extension Prospect are considered extensions of the Belinga Project in Gabon. Equatorial conducted a rock chip sampling campaign at all three Prospects which returned assay values up to 64.7% Fe. Detailed metallurgical and petrographic analysis of the rock chip samples and drill core from the test drill hole has confirmed the presence of microplaty hematite at Badondo as the main style of mineralisation. Microplaty hematite occurs very rarely as the main mineralisation style in iron deposits with other examples including BHP Billiton’s Mount Whaleback mine and Rio Tinto’s Mount Tom Price mine in Australia. Microplaty hematite mineralisation systems tend to extend to greater depth and strike extent and typically produce a premium quality product compared with the more typical supergene iron ore systems. The identification of microplaty hematite at Badondo is extremely encouraging as it indicates the potential for high grade iron mineralisation to occur at depth and along strike at Badondo SRK completed a geological and structural mapping program of the Badondo and Belinga North prospects at the Project. This mapping identified an extensive blanket of potentially high grade hematite mineralisation up to 50m thick in outcrop

• verlying magnetite BIF, extending over the entire 7km strike length of the Badondo prospect and over 4km of strike at

the Belinga Prospect. In addition, extensive canga deposits of re-cemented colluvial hematite mineralisation were identified at the Badondo Prospect.

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INITIAL DRILLING PROGRAM

Equatorial completed an initial diamond drilling program at Badondo consisting of a total of 1,093m of NQ diamond drilling in 14 holes. The drilling program was designed to test the thickness, quality and extent of the high grade hematite mineralisation along the strike of the Badondo Prospect. The Badondo Prospect is the largest of three identified target prospects within the Project area. Drilling was completed over 3km of strike which represents a small fraction of the more than 22km of magnetic strike that have been identified within the Project area.

Figure 5: Location of the drill holes at Badondo

All assay results from the drilling campaign have been received and are highly encouraging as they confirm the presence

• f thick high grade iron mineralisation at, and close to, surface. The high iron grades are consistent with the rock samples

that have been collected from the Badondo and Belinga North Prospects as part of the SRK mapping program. All 14 holes have intersected mineralisation grading above 50% Fe. In addition to the selected assay results shown at Table 2, the assay results of all holes drilled are provided in Appendix 1.

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UPDATED EXPLORATION TARGET

The previously announced Exploration Target for Badondo (refer ASX announcement 28th March 2011) was completed by independent consultants Resource Potentials Pty Ltd and was presented as follows: Previous Exploration Target for Badondo Estimate: Enriched Hematite Cap: 200Mt – 300Mt at a grade of 40% to 65% Fe Primary Itabirite: 1,100Mt – 1,900Mt at a grade of 30% to 45% Fe Total: 1,300Mt – 2,200Mt at a grade of 30% to 65% Fe

Table 3: Previous Exploration Target for Badondo

A revised Exploration Target for the Badondo project area has been estimated by Core Geophysics using all available data from the completed drilling program, geophysical data from the airborne geophysics survey flown by Fugro Airborne, rock chip data acquired by Equatorial, and geological mapping data prepared by SRK during their mapping program. The original magnetic modelling completed was based on a number of assumptions and without any ground mapping or drilling information for constraint. As such the models were generated with a vertical dip and were of limited strike and depth extent. The recent mapping and drilling completed by Equatorial indicates that the dips of the BIF units are shallow to the east and more strike extensive. Seven updated models were generated to replace the original models to provide a better fit to the new information at the Badondo Prospect. The near surface colluvial hematite was unable to be modelled directly as it is non-magnetic. As such the dimension of the new modelled BIF units were used to estimate the areal extent and a range of thicknesses applied for calculation of an Exploration Target. The estimation of the hematite and colluvial hematite has been based on reconnaissance mapping, geological interpretation and limited drilling. The proportional weighting thickness of the hematite and colluvial hematite layer >58%Fe intersected in the regional drilling to date ranges from 0.3m to 55.8m. For the purposes of the Exploration Target calculation an average thickness of 15m was applied. As such further drilling is required to validate the Exploration Target and specifically the thickness of the hematite and colluvial hematite layer over the Project. As a result of the completed drilling campaign the Exploration Target has been revised as follows: Updated Exploration Target for Badondo Estimate: Enriched Hematite Cap: 370Mt – 620Mt at a grade of 58% and 67% Fe Primary Itabirite: 2,370 – 3,950Mt at a grade of 35% to 54% Fe Total: 2,770 – 4,630Mt at a grade of 35% to 67% Fe

Table 4: Updated Exploration Target for Badondo

Most notably, the Exploration Target for Enriched Hematite has almost doubled in size with an associated significant increase in the grade range which was originally between 40% and 65% Fe and is now between 58% and 67% Fe. The increase in grade reflects the numerous high grade intercepts received from the drilling program which has confirmed the results of previous mapping and surface rock chip assays.

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Figure 6: Updated Exploration Targets for Badondo

The revised Exploration Target was generated using 3D and 2D magnetic modelling to estimate the thickness and strike length of the magnetic bodies. The modelling required the adoption of a number of assumptions. These include but are not limited to:  The strike length of the models for the selected magnetic anomalies represents ore grade mineralisation;  the depth extent (fixed to 500m), dip and the width remain constant over their entire length;  100% recovery and no dilution;  the specific gravity of the BIF/ hematite is 3.3t/m3 and hematite-colluvial hematite is 3.0t/m3; and  the magnetic susceptibility of the BIF/ hematite is 1SI. The Exploration Target estimates are based on a number of assumptions and limitations. The potential quantities and grades are conceptual in nature and should be considered broadly indicative at best. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource. For further information contact: John Welborn Managing Director & CEO

Telephone: +61 8 9466 5030 Email: info@equatorialresources.com.au Web: www.equatorialresources.com.au

For the latest news from Equatorial, subscribe to our email bulletin service via our website at http://www.equatorialresources.com.au/display/index/subscribe

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COMPETENT PERSONS STATEMENT

This announcement has been prepared in compliance with the current JORC Code 2004 Edition and the current ASX Listing Rules. However, the Company has determined to include the Table 1 Checklist of Assessment and Reporting Criteria prescribed by the proposed new JORC Code 2012 Edition and the proposed new ASX Listing Rules. The information in this announcement that relates to Exploration Results (other than Metallurgical Test Results, Geophysical Exploration Results, and Exploration Targets) is based on, and fairly represents, information compiled by Mr Mark Glassock, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Glassock is a full time employee of Equatorial Resources Limited. Mr Glassock has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Glassock consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears. The information in this announcement that relates to Geophysical Exploration Results and Exploration Targets is based, and fairly represents, on information compiled by Mr Mathew Cooper, a Competent Person who is a Member of The Australian Institute of Geoscientists. Mr Cooper is employed by Core Geophysics Pty Ltd who was engaged by Equatorial Resources Limited to provide geophysical consulting services. Mr Cooper has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Cooper consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Figure 7: Diamond drilling at Badondo Figure 8: John Welborn and team at Badondo during the initial drilling campaign

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ABOUT EQUATORIAL RESOURCES

Equatorial Resources Limited (ASX:EQX), is focused on the exploration and development of two 100% owned potentially large-scale iron ore projects located in the politically stable and investment friendly Republic of Congo (“ROC”) in the emerging global iron ore province of Central West Africa. The Mayoko-Moussondji Iron Project, located in the southwest region of the ROC, has an estimated global Exploration Target of between 2.3 and 3.9 billion tonnes of iron mineralisation at a grade of 30% to 65% Fe. It should be noted that the potential quantity and grade of the Exploration Target is conceptual in nature, that there has been insufficient exploration to estimate a Mineral Resource, and that it is uncertain if further exploration will result in the estimation of a Mineral Resource. The project has access to a rail line running directly to the deep-water port of Pointe-Noire, where the Company’s administrative office is located. The Badondo Iron Project, in the northwest region of ROC, has an estimated global Exploration Target of between 2.8 and 4.6 billion tonnes of iron mineralisation at a grade of 35% to 67% Fe. It should be noted that the potential quantity and grade of the Exploration Target is conceptual in nature, that there has been insufficient exploration to estimate a Mineral Resource, and that it is uncertain if further exploration will result in the estimation of a Mineral Resource. The project is located within a regional cluster of world-class iron ore exploration projects including Sundance Resources’ Mbalam-Nabeba project. For further information contact: John Welborn Managing Director & CEO Telephone: +61 8 9466 5030 Email: info@equatorialresources.com.au Web: www.equatorialresources.com.au

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APPENDIX 1: ASSAY RESULTS FROM ALL DRILL HOLES

Hole_ID Northing Easting RL Dip Azimuth Maximum Depth Interval From To Fe SiO2 Al2O3 P S LOI Metres % % % % % % BADDD0001 170,067 304,943 640

• 90

61.45 41.9 41.9 62.9 2.6 2.97 0.163 0.021 3.9 BADDD0002 170,027 304,477 791

• 60

220 172.45 10.3 1.9 12.2 63.2 4.79 2.85 0.044 0.004 1.7 BADDD0002 170,027 304,477 791

• 60

220 172.45 55.25 40.8 96 63.4 5.71 2.06 0.05 0.002 1 BADDD0003 169,504 304,816 803

• 60

220 78.25 26.4 26.4 61.9 5.82 3.32 0.028 0.014 2 BADDD0003 169,504 304,816 803

• 60

220 78.25 8.6 35 43.6 60.5 11.28 1.24 0.025 0.008 0.7 BADDD0003 169,504 304,816 803

• 60

220 78.25 3.8 47.2 51 55.5 18.12 1.5 0.022 0.011 0.8 BADDD0003 169,504 304,816 803

• 60

220 78.25 3.3 61 64.35 54 21.71 0.51 0.016 0.002 0.3 BADDD0004 170,918 304,477 686

• 60

220 112.55 13.5 2.9 16.4 61.5 2.12 3.76 0.113 0.058 5.6 BADDD0004 170,918 304,477 686

• 60

220 112.55 3.4 24.7 28.05 53.8 14.59 5.35 0.116 0.004 2.8 BADDD0004 170,918 304,477 686

• 60

220 112.55 4 33.5 37.5 51.1 23.65 1.99 0.066 0.003 0.9 BADDD0005 171,719 303,784 658

• 60

220 118.6 9.9 3.97 13.87 60.8 3.09 3.39 0.246 0.039 5.7 BADDD0006 171,708 303,402 691

• 60

220 130.85 10.5 2.5 13 50.4 23.43 1.14 0.074 0.004 3.1 BADDD0007 168,994 304,968 822

• 60

220 125.5 11.15 0.75 11.9 52.8 22.62 1.03 0.026 0.003 0.6 BADDD0007 168,994 304,968 822

• 60

220 125.5 12 102 113.75 52.3 23.8 0.76 0.02 0.002 0.5 BADDD0008 169,304 305,291 665

• 60

220 53.8 5.75 5.9 11.65 62.3 3.56 3.71 0.048 0.022 3.3 BADDD0009 169,304 305,291 665

• 60

270 147.4 5.9 6.1 12 64.1 2.79 2.71 0.054 0.017 2.6 BADDD0010 172,480 303,864 540

• 90

19.6 13.6 13.6 56.7 5.65 5.11 0.159 0.046 7.6 BADDD0011 172,497 304,069 531

• 90

18.2 1.5 7.7 9.2 55.1 7.47 4.71 0.081 0.064 8.4 BADDD0012 172,235 303,870 553

• 90

15 3 6 9 57.8 6.67 2.82 0.191 0.026 7.3 BADDD0013 172,129 304,059 576

• 90

18 3.3 8.2 11.5 55.2 8.49 4.93 0.116 0.035 6.8 BADDD0014 172,527 303,966 534

• 90

21 6 4.5 10.5 53 9.45 5.72 0.137 0.053 8.2

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APPENDIX 2: CHECKLIST OF ASSESSMENT AND REPORTING CRITERIA Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.) Criteria JORC Code explanation Commentary Sampling techniques  Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.  The Badondo iron ore project was sampled using diamond drill core which was sawn in half via a diamond core saw where core was competent or cut in half via a splitter where samples were of a friable nature.  Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.  Certified Reference Material (CRM) was inserted into the samples on the basis of 1/20. Samples were pulverized at the “Company” sampling laboratory at Mayoko, Republic of Congo. Sample pulps were assayed via standard XRF technique at SGS Laboratory in Perth Australia.  Standard QAQC analysis was carried out on the assay data to confirm the validity of both the sampling method and laboratory

• analysis. In addition SGS laboratory has an internal QA process

which includes both duplicates and standards in the analysis.  An examination of the QAQC sample data indicates satisfactory performance of the duplicate samples and the laboratory has acceptable precision confirming no bias.  Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.  Drilling was carried out via a helicopter supported diamond drill rig an EVH2100 built in Australia  Holes were sampled on a nominal 2m interval within the iron ore zone and 6m either side of the ore zone.  Samples were dried and pulverised at the Company’s sample preparation laboratory to get 90% of the sample <160µm to provide a 150g gram sample which was then assayed via industry standard XRF at SGS Perth. Drilling techniques  Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face- sampling bit or other type, whether core is oriented and if so, by what method, etc).  Drilling was carried out via a helicopter supported diamond drill rig an EVH2100 built in Australia. The drill collar was established via an HQ tube where necessary with the remaining hole being drilled by a NQ2 barrel and bit. Core was not orientated due to the breakdown of the core orientation tool.

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Criteria JORC Code explanation Commentary Drill sample recovery  Method of recording and assessing core and chip sample recoveries and results assessed.  Core recoveries were recorded for every drill hole. Greater than 90% recovery was obtained for the majority of the mineralized intervals  Measures taken to maximise sample recovery and ensure representative nature of the samples.  Core penetration was altered to maximize recovery as was the use of the larger barrel (HQ) over (NQ2) where material was of a friable nature near surface.  Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.  No obvious bias has been detected in iron ore recovery versus core recovery within the 14 drill holes completed to date. Logging  Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.  All diamond drill core has been geologically logged by suitably qualified geological staff. Lithology’s, colour, texture, percentages of iron ore minerals, RQD, density and magnetic susceptibility were recorded.  Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.  Logging is qualitative in nature with the exception of density and magnetic susceptibility which is quantitative in nature.  All core has been photographed.  The total length and percentage of the relevant intersections logged.  All core has been geologically logged. Samples were selected from each hole to conduct on site density measurements using the wax/water immersion technique. Magnetic susceptibility was carried out on nominal 2m intervals from the entire diamond core recovered. Sub-sampling techniques and sample preparation  If core, whether cut or sawn and whether quarter, half or all core taken.  The diamond drill core was cut in half via a diamond core saw within the sampled zones. Where duplicate samples were collected these were collected by means of splitting the half core again into a quarter core sample, this sampling was conducted using standard industry techniques.  If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.  Core was sampled dry.  For all sample types, the nature, quality and appropriateness of the sample preparation technique.  Sample preparation for all samples was carried out in the on-site sample preparation laboratory run by SGS. Samples were crushed to 2mm, a 1.5 kg split of the 2mm samples was pulverized to 90% passing 106um. A 150g pulp split was then taken for analysis. The remaining 2mm coarse reject and the pulp residue are kept on-site for latter reference.

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Criteria JORC Code explanation Commentary  Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.  Sizing analysis of the laboratories crushing and pulverizing is monitored daily, no issues on the particle sizing or representivity has been discovered.  Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.  The diamond drill core was cut in half via a diamond core saw within the sampled zones. Where duplicate samples were collected these were collected by means of splitting the half core again into a quarter core sample, this sampling was conducted using standard industry techniques. QA/QC analysis of the primary versus duplicate samples has shown excellent correlation and no sampling bias has been detected.  Whether sample sizes are appropriate to the grain size of the material being sampled.  Samples were collected on nominal 2m intervals within the iron

• re zone and 6m either side of the ore zone which is industry

standard practice for sampling of iron ore drill core. Quality of assay data and laboratory tests  The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.  All samples were analysed at SGS Laboratory Perth, Australia using XRF analysis which is an industry standard analysis type for iron ore. Loss on Ignition (LOI) was also analysed in every sample by means of thermo gravimetric analysis (an industry standard).  For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.  Magnetic susceptibility was measured on nominal 2m samples using a KT-10 plus machine. Three analyses for each sample were collected. The KT-10 plus machine is manufactured by Terraplus Inc. The machine measures in 1x10-6 SI units and contains an in-built calibration against magnetite.  Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.  Quality Assurance was conducted on the basis of 1 duplicate sample being collected every 20 samples and 1 certified reference sample (CRM-standard) of iron ore material being inserted on a 1 in 20 basis as well. The duplicate samples and standard references material were analysed at SGS Laboratory Perth using identical methods. All duplicate samples returned acceptable analysis with samples achieving >95% coefficient of

• correlation. No bias is shown in the duplicate samples. Standard

references (CRM) results returned analysis within 3 standard deviations of the expected grade.  Sample analysis is routinely checked via pulp round robin tests with other certified laboratories. No bias or analytical issues have been detected to date.

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Criteria JORC Code explanation Commentary Verification of sampling and assaying  The verification of significant intersections by either independent

• r alternative company personnel.

 All significant data has been checked by the Data Manager (Senior Geologist), General Manager Exploration and senior site based geologists.  The use of twinned holes.  No twin holes have been drilled at this early stage of exploration  Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.  All data is logged onto manual sheets by site geologists. Data is then transferred to Excel data entry templates. The data entry templates are checked by the Data Manager and then input into the company’s sequel geological database. Data is input into temporary database tables where it passes through verification

• testing. Once verified it is input into the database. All assay data

is supplied in csv format from the laboratory and input directly into the data base assay tables. A QA/QC package is linked to the database which checks both duplicate and standard assay results to track sampling and analysis accuracy.  Discuss any adjustment to assay data.  No adjustments have been made to assay data returned from the laboratory. Location of data points  Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.  All drill hole locations have been identified with a hand held GPS to an accuracy of 5 metres in the horizontal. The relative level (RL) was applied to the drill holes from the topography contours from the magnetic survey.  Specification of the grid system used.  The license is located entirely within Universal Transverse Mercator Zone 33N with all co-ordinates recorded using the World Geodetic System 84 (WGS84) datum and UTM Zone 33 projection.  Quality and adequacy of topographic control.  Topography data is based on the topography contours from the magnetic survey, which is adequate for this stage of exploration. Data spacing and distribution  Data spacing for reporting of Exploration Results.  The spacing of the drill holes varies and was related to ease of access for the rig. The spacing ranges from 800 x 400 to 250 x 100 metres.  Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.  The current spacing was insufficient for a Mineral Resource so none has been announced.

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Criteria JORC Code explanation Commentary  Whether sample compositing has been applied.  No sample composting took place. Orientation of data in relation to geological structure  Whether the orientation of sampling achieves unbiased sampling

• f possible structures and the extent to which this is known,

considering the deposit type.  The orientation of bedding is perpendicular to the drilling

• rientation and as the mineralisation is strata bound it is

considered unbiased.  If the relationship between the drilling orientation and the

• rientation of key mineralised structures is considered to have

introduced a sampling bias, this should be assessed and reported if material.  No sampling bias is perceived. Sample security  The measures taken to ensure sample security.  A chain of custody is managed by Equatorial and SGS staff. The secured core trays are transported from the drill site to Badondo camp. These core trays were then flown by helicopter to Mayoko for more detailed logging, density and sampling. Samples were collected from site and given to SGS at the on site sample preparation laboratory. Sample submission paper work is created digitally on paper. Pulps are sent from the on- site sample preparation laboratory to SGS in Perth for analysis. Details of the sample identity and analysis are sent to the Data Manager in both digital and paper format. Audits or reviews  The results of any audits or reviews of sampling techniques and data.  All QAQC data is reviewed on an ongoing basis. Equatorial Resources database has been reviewed in the past by CSA Global for the Mayoko-Moussondji Resource and no issues were found.

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Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.) Criteria JORC Code explanation Commentary Mineral tenement and land tenure status  Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.  In accordance with Articles 25 and 27 of the Republic of Congo Mining Code, Presidential Decree 2009-72 was granted to Congo Mining Limited (CML) on 17 March 2009 to explore for iron ore. CML is a 100% owned subsidiary of Australian resources company Equatorial Resources Limited (“Equatorial, EQX”). On 20 August 2012, under Presidential Decree 2012/937 the Mineral Research Permit was renewed for a further period of 2 years.  The permit is located in the extreme north western corner of the Republic of Congo within equatorial rainforest. No settlements or farms are located within the project.  No historical sites have been located within the permit.  The permit is located with the Tri-National-Dja-Odzala-Minkebe (TRIDOM) Forest Landscape.  The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.  The Mineral Research Permit was renewed for a further period

• f 2 years on 20 August 2012.

 The permit is considered secure. Exploration done by other parties  Acknowledgment and appraisal of exploration by other parties.  No modern exploration has been conducted within the permit prior to EQX’s exploration. Geology  Deposit type, geological setting and style of mineralisation.  The Badondo Project is an arcuate Archaean Hematite- Magnetite banded iron formation located within the Archaean Central African Congo Craton, the Chaillu Block.

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Criteria JORC Code explanation Commentary Drill hole Information  A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:  easting and northing of the drill hole collar  elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar  dip and azimuth of the hole  down hole length and interception depth  hole length.  Table is attached.  If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.  All required drill hole information is included in this Announcement. Data aggregation methods  In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.  Grade intersections are reported as >60% Fe with minimum internal dilution of 40% Fe.  Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.  The nominal sample length was 2 metres. Maximum internal waste was 2 metres. All grades are sample length weighted.  The assumptions used for any reporting of metal equivalent values should be clearly stated.  No metal equivalents were used. Relationship between mineralisation widths and intercept lengths  These relationships are particularly important in the reporting of Exploration Results.  All drilling is planned in such a way as to intersect mineralisation in a perpendicular manner. Drill holes are oriented as close as practical to be orthogonal to the general strike and dip of the iron

• re mineralisation.

 If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.  The regional geometry of Badondo varies from steep NE dipping to more easterly dipping in the central and southern part of Badondo Hill. The average dip of the measured foliation (from mapping) is ~550.  If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true width not known’).  Geometry of Badondo is known.

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Criteria JORC Code explanation Commentary Diagrams  Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view

• f drill hole collar locations and appropriate sectional views.

 Drill hole maps and sections are included. Balanced reporting  Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting

• f Exploration Results.

 All drilling is reported within the Announcement. Other substantive exploration data  Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.  Geological mapping and rock chip sampling which was conducted ahead of diamond drilling has been previously reported. Further work  The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).  The Airborne Magnetic signature shows large areas of potential iron ore mineralisation and as such the mineralisation at Badondo remains open in all directions.  Further exploration efforts have been focused on studying road access into the project ahead of any further drilling.  Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.  No detailed future drill planning has been carried out as yet. The airborne magnetic signature shows areas of potential iron ore mineralisation in all directions.