EQUINOX PROVIDES LUMWANA MINE UPDATE

Equinox Minerals Ltd. is providing the following update for its flagship Lumwana copper mine in Zambia.

Project completion

During construction, the Lumwana project achieved an excellent health and safety record, achieving over five million hours without a lost-time injury and resulting in a lost-time injury frequency rate of 0.3 (per 200,000 hours), which management believes to be an outstanding result.

Subsequent to handover of the processing facilities late in November, 2008, final preparatory works were completed prior to the commencement of plant wet commissioning early in December.

Final project capital expenditure is estimated at $814-million (U.S.) consistent with previous company guidance.

December-to-date production

To the end of December, 2008, Lumwana had processed 1.07 million dry metric tonnes of ore producing 20,046 dry metric tonnes of concentrate at an average grade of approximately 40 per cent copper, with name-plate capacity of 2,450 tonnes per hour (equal to 20 million tonnes per year) being achieved on a 12-hour continuous-shift basis.

Concentrate deliveries have commenced, with 12,156 tonnes of concentrate dispatched to various destinations on the Copperbelt. Concentrate grade and specifications are both in accordance with design expectations, testwork and all offtake agreements. Throughput rates are now being progressively increased to test-processing plant capacity. Concentrate production continues to ramp-up toward steady-state commercial production.

Concentrate deliveries

Concentrate deliveries to offtakers commenced on Dec. 13, 2008. Long-term contract deliveries will commence later this month to Chambishi copper smelter (CCS), with interim deliveries of concentrate going to international metal traders' facilities on the Zambian Copperbelt under short-term contracts. Scheduled tonnages of concentrate presented to the Mufulira smelter of Mopani Copper Mines PLC (owned by Glencore/First Quantum Minerals), whilst in accordance with contract specifications, have not been accepted for delivery by Mopani and Glencore to date. Mopani and Glencore have claimed that the Lumwana concentrate does not meet contract specifications. The company maintains that the Lumwana concentrates are within the contract specifications and the shipments have been redirected to international traders. The company intends to pursue its rights under the contracts with Mopani and Glencore.

With CCS as the primary offtaker, Equinox has offtake flexibility with a number of other local Zambian and international buyers whose facilities may be used for any additional concentrate production.

2009 production forecast

With production ramp-up progressing smoothly, the company estimates production for 2009 will total 170,000 tonnes (375 million pounds) of copper metal in concentrates at a cash (C1) operating cost of $1.15 (U.S.) per pound.

As can be expected, unit production costs are anticipated to be higher in the early part of 2009 until steady-state production activities are reached, which is expected by mid-2009.

The company's objective is then to reduce operating costs over time and increase throughput from 20 million tonnes per year to 24 million tonnes per year over an 18-month expansion program through optimization and debottlenecking. A further medium-term expansion objective to 30-million-tonne-per-year throughput will be the subject of a feasibility study.

Town development

Housing development in the Lumwana town continues to grow with over 450 houses completed to date, of which 120 houses have already been allocated to local staff under a home ownership mortgage program. The commencement and establishment of schools as well as specific commercial and retail developments are expected to be operational this year, thus making the town a self-sustaining modern living environment.

To support this unique development, a new debt facility of $25-million (U.S.) has been established with Nederlandse Financierings-Maatshappij voor Ontwikkelingslanden NV (FMO), the Dutch development financing institution, to complete the financing of town construction by providing the infrastructure and services component required for the Lumwana town development. This debt facility is to be provided to the Lumwana Property Development Company (LPDC), a special-purpose vehicle established to own and manage the Lumwana town. The loan has a term of 15 years with principal repayments commencing in 2012, and an applicable interest rate of LIBOR plus 6.5 per cent. Drawdown on the FMO facility is subject to a number of conditions precedent that the company expects to meet in the first quarter of 2009. The conditions precedent include the submission of a business plan and financial model, legal opinions and other conditions precedent customarily associated with finance arrangements. Consents from the company's existing lenders will be required prior to drawdown under this facility.

Lumwana uranium project

In April, 2008, Equinox released the results of a feasibility study on the design of a treatment facility for the uranium ore stockpile that will result from the selective mining of the discrete, high-grade uranium zones within the Lumwana copper orebodies. Subsequent to the release of this feasibility study, the government of the Republic of Zambia (GRZ) has implemented its guidelines for uranium mining, processing and export that are consistent with International Atomic Energy Agency guidelines and the nuclear non-proliferation treaty. The GRZ has recently approved the Lumwana uranium environmental impact assessment. However, due to current difficulty in international project financing as well as current market prices for uranium oxide, the company believes it prudent to defer the implementation of this uranium project until such conditions improve sufficiently to deliver appropriate shareholder value. In the interim, high-grade uranium ore will be stockpiled at Lumwana in accordance with Zambian legislation and international best practice.

Dispute with Zesco

The company is in dispute with Zesco, the Zambian power utility that is providing power to Lumwana, over electricity charges believed by Zesco to be incurred by the company since late 2007. Zesco claims that charges of about $12-million (U.S.) are owed by the company, which the company disputes. The company has given notice of arbitration to the London court of arbitration to commence arbitration proceedings in an effort to resolve the matter. Zesco has given notice of termination of the parties' power supply agreement which could take effect on Jan. 26, 2009. To ensure continued electricity supply and allow the arbitration process to proceed, the company has applied for protective relief in the High Court of Zambia to prevent the notice of termination from taking effect, with a hearing scheduled for Jan. 14, 2009.

The company remains confident of a positive outcome with respect to both submissions, anticipating that continuity of supply will not be affected given contractual due process being allowed to take place.

Fiscal policy

As the company has highlighted in previous guidance, it remains confident that the material components of its development agreement with the GRZ will be honoured. The company continues to work closely with GRZ to secure the relevant incentives to ensure the fundamental economics of Lumwana remain intact. To that extent, the company has recently secured a statutory instrument for exemption of the concentrate export tax recently legislated by the GRZ for Lumwana concentrate production that may be exported. The company has previously been granted statutory instruments for exemptions from import duty and for excise applicable to fuel and electricity consistent with the Lumwana development agreement, and continues to work with relevant ministries in realizing the remaining incentives as they may be required. The recent international financial crisis has reinforced the company's consultative approach with the government as being in the best interests of its shareholders as well as the people of Zambia.

Insurance claim

As a consequence of the transformer fire in July, 2008, the company has submitted claims under its material damage and delay in start-up insurance policies. The insurance syndicate has accepted indemnity for the incident and the claim process is well under way, with interim payments received and indicative receipts from the underwriters, subject to final confirmation, being in the vicinity of $10-million (U.S.) to $15-million (U.S.).

Hedging

The company has hedging in place, comprising forwards and deferred premium puts, for about 30 per cent of its first three years of production. The company's hedging book covering the period from January, 2009, to March, 2011, currently totals 124,585 tonnes of copper at an average price of $2.65 (U.S.) per pound of copper ($2.39 (U.S.) net of put-option premiums). Note that the hedging contracts between October, 2008, to December, 2008, have been closed out/matured, realizing a net benefit of $22.4-million (U.S.) for the company. As an indication of the current value of the remaining hedge book as of Jan. 5, 2009, the mark-to-market value, net of costs, at a copper price of $1.45 (U.S.) per pound is $243-million (U.S.).

Conference call

The company will host a conference call to discuss this press release. The call will take place on Thursday, Jan. 8, 2009, hosted by Equinox president and chief executive officer, Craig R. Williams; with participation by Harry Michael, vice-president of operations and chief operating officer; and Michael Klessens, vice-president of finance and chief financial officer.

Date: Thursday, Jan. 8, 2009

Time: 8 a.m. PT; 11 a.m. ET; 4 p.m. (Greenwich mean time)

Dial-in: The local number is 1-647-427-3420

0-800-051-7107 (United Kingdom); 1-800-287-011 (Australia)

1-888-300-0053 (Canada and United States)

Code: 80142046

Participants are welcomed to begin calling in to register for the call 20 minutes prior to the call.

Replay: 402-220-2887 or 1-800-395-0403

Replay pass code: 80142046

The conference call replay will be available until 11:59 a.m. ET on Jan. 15, 2009.

An archived transcript of the call will also be available on the company's website.

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