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Equinox Minerals Limited

Equinox Canada155 University Avenue, Toronto Ontario, Canada M5H 3B7Telephone: +1 (416) 865 3393 Facsimile: +1 (416) 865 3394

Equinox Australia50 Kings Park Road, West Perth Western Australia, Australia 6005Telephone: +61 (8) 9322 3318 Facsimile: +61 (8) 9324 1195

[email protected] www.equinoxminerals.com

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A copper growth story

Equinox Annual Report 2009

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Directors and Officers

BoardPeter Tomsett Chairman Craig Williams President and Chief Executive Officer David McAusland Director Dave Mosher Director Jim Pantelidis Director Brian Penny Director

Senior OfficersRalph Gibson Vice President Project Finance Carl Hallion Vice President Business Development Cobb Johnstone Chief Operating Officer Michael Klessens Vice President Finance and Chief Financial Officer Robert Rigo Vice President Project Development Sonya Stark Vice President Corporate Affairs and Corporate Secretary Kevin van Niekerk Vice President Investor Relations Adam Wright Managing Director, Lumwana Mining Company

Equinox Minerals Limited Offices

Canada155 University Avenue, Toronto, Ontario Canada M5H 3B7Telephone: +1 (416) 865 3393 Facsimile: +1 (416) 865 3394

Australia50 Kings Park Road, West Perth, Western Australia Australia 6005Telephone: +61 (8) 9322 3318 Facsimile: +61 (8) 9324 1195 Email: [email protected] Website: www.equinoxminerals.com

Stock SymbolEQN – Canada: Toronto Stock Exchange & Australia: Australian Securities Exchange

AuditorsPricewaterhouseCoopersQV1 Building, Levels 19 – 21, 250 St Georges Terrace Perth, Western Australia, Australia, 6000

Transfer AgentsCIBC Mellon Trust Company199 Bay Street, Commercial Court West, Securities Level, Toronto, Ontario, Canada M5L 1G9Telephone: +1 (416) 643 5500

Advanced Share Registry Services150 Stirling Highway, Nedlands, Perth, Western Australia, 6009, AustraliaTelephone: +61 (8) 9389 8033

Equinox Minerals Limited Corporate Directory

Contents

About Equinox Minerals 1

2009 Highlights 2

Objectives 3

Chairman’s Report 4

President’s Report 8

Activities Review 12 Lumwana overview 13 Mining 13 Processing 13 Offtake 14 Outlook 14 Copper market 14 Zambian Taxation Legislation 14 Uranium 15 Corporate 15 Capital raising 15 Phelps Dodge agreement 15

Reserves and Resources 16

Exploration 17

People 18 Our workforce 19 Developing and retaining a skilled workforce 19 Training and development 19

Sustainability 20 Environment 20 Community 20

Health and Safety 22 Performance 23 Emergency response 23 Employee consultation and training 23

Board and Executive Profiles 24

Management Discussion and Analysis 26

Financial Statements 49

Tenement Schedule 83

Additional ASX Information 84

Corporate Governance 84

Corporate Directory IBC

Company Contact Details IBC

Further Information

Copies of this report, or further information, can be obtained through requests in writing to Investor Relations, Equinox Minerals Limited, 155 University Avenue, Toronto, Ontario, Canada M5H 3B7 or emailing [email protected]

This report is also available in electronic form at www.equinoxminerals.com

Cautionary Language and Forward Looking StatementsCertain information contained or incorporated by reference in this Annual Report, including any information as to the Company’s strategy, projects, plans, prospects, future outlook, anticipated events or results or future financial or operating performance, constitutes ‘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’, ‘is expected’, ‘is expecting’, ‘budget’, ‘scheduled’, ‘estimates’, ‘forecasts’, ‘intends’, ‘anticipates’, ‘predicts’, ‘potential’, ‘continue’ or ‘believes’, or variation (including negative variations) of such words and phrases, or statements that certain actions, events or results ‘may’, ‘could’, ‘would’, ‘should’, ‘might’, ‘potential to’, or ‘will’ be taken, occur or be achieved or other similar expressions concerning matters that are not historical facts.

Forward-looking statements are necessarily based on a number of factors, estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic and competitive uncertainties and contingencies. 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, including costs, production and returns, to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements and the forward-looking statements are not guarantees of future performance.

Such factors, estimates and assumptions include, but are not limited to, 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 offtake arrangements and terms and/or enforcing such terms; insurance and uninsured risks; government regulation; titles, licences and permits; environmental risks; risks inherent in the estimation of reclamation costs; risks related to the Company’s hedging activities; estimation of asset carrying values; litigation; competition; reliance on key personnel; global financial conditions. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

These risks are discussed in the Company’s Annual Information Form dated March 15, 2010 under the section entitled ‘Risks and Uncertainties’ which can be found on the Company’s website at www.equinoxminerals.com and if also filed on SEDAR at www.sedar.com. All of the forward-looking statements made in this Annual Report are qualified by these cautionary statements.

Technical InformationCertain technical information in this Annual Report is summarized or extracted from the ‘‘Technical Report on the Lumwana Project, North Western Province, Republic of Zambia’’ dated June 2008 as re-filed in April 2009 (the ‘‘Technical Report’’), prepared by Ross Bertinshaw, Principal, Golder Associates Pty Ltd Daniel Guibal, Corporate Consultant, SRK Consulting (Australasia) Pty Ltd, Andrew Daley, Director, Investor Resources Finance Pty Ltd, and Robert Rigo, Vice-President – Project Development, Equinox, each of whom is a ‘Qualified Person’ in accordance with National Instrument 43-101 — Standards of Disclosure for Mineral Projects (NI 43-101). Information of a scientific or technical nature contained in this Annual Report arising since the date of the Technical Report is provided by Equinox management and was prepared under the supervision of Robert Rigo, Vice-President – Project Development or John Cooke, Exploration Manager, each of whom is a ‘Qualified Person’ in accordance with NI 43-101.

Readers are cautioned not to rely solely on the summary of such information contained in this Annual Report, 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 herein and therein.

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Annual Report 2009 1

Equinox Minerals Limited is an international mining company that is dual listed in Canada and Australia on the Toronto Stock Exchange and the Australian Securities Exchange.

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 decade.

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 west of the Zambian Copperbelt, Lumwana is now a major open-cut copper mine which will position 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. Internally, organic growth opportunities include the potential construction of a uranium plant to process the growing high grade uranium stockpile, as well as phased expansions of the Lumwana copper mine and plant to increase process throughput rates, maximizing the benefit of the large scale Lumwana copper resource. Externally, the Company is investigating international acquisition opportunities to grow the Company. Equinox is approaching the assessment of these internal and external growth opportunities with rigor and discipline to ensure that any investments are accretive.

About Equinox Minerals

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2009 Highlights

2 Equinox Minerals Limited

Operations

n Ore mined and copper concentrate produced demonstrates quarter on quarter improvements throughout the year as ramp up continued towards design production levels.

n Strong first annual copper production of 109,413 tonnes (241 million pounds) of copper in concentrate delivered with Lumwana steadily ramping up towards nameplate capacity.

n Annual operating profit achieved was $195.7 million. Operating profit is stated for the nine month period ended December 31, 2009 following the commencement of commercial production on April 1, 2009.

n Improved mine productivity, with total annual ore production of 13.1 million tonnes of copper ore being achieved plus the mining and stockpiling of 2.5 million tonnes of uranium-copper ore.

n Plant feed grade averaged 0.95% copper for the year.

n Average C1 operating cost per pound of copper of $1.49.

n Mining and stockpiling of uranium mineralization continued with the stockpile at year end standing at approximately 2.5Mt of 1,000ppm uranium and 0.8% copper.

n Continued development of a self sustaining Lumwana town site and advancement in the commercial and retail developments including the opening of the Lumwana supermarket.

n The Lumwana project achieved a sound health and safety record during development. This has continued into the operations phase and safety remains a key focus throughout Equinox’s operations.

Exploration

Though Equinox has been focusing on the commissioning and ramping up of production at the Lumwana mine, it has maintained an exploration program in Zambia primarily directed toward the 1,355 km2 large scale mining license LML-49 that surrounds the Lumwana operations. This program is focused on targets prospective for additional mineralization to feed the Lumwana mill.

Equinox was granted the 2,200 km2 Mufapanda licence, covering an iron oxide, copper, gold (IOCG) target some 200 kilometres west-north-west of Lusaka.

Corporate

In April, 2009 Equinox issued 102,235,000 common share shares of the Company which raised gross proceeds of Cdn$184.0 million ($148.3 million).

During the year, the Company exercised its option to extinguish Phelps Dodge Mining (Zambia) Limited’s (PD Zambia) right to receive a 1% net smelter return royalty from the Lumwana project at a cost of $12.8 million.

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Objectives


Operations

n Produce 135,000 tonnes (300 million pounds) of copper metal in concentrates in 2010 at a C1 operating cost of $1.35 per pound of copper.

n Achieve the plant design throughput rate of 20Mtpa for the mine and mill in the second half of 2010.

n Once design throughput for the mine and mill is achieved, optimize and de-bottleneck the plant to increase throughput to 24Mtpa over a subsequent 18 month timeframe.

n Given the large resource and long mine life at Lumwana, evaluate further expansion opportunities to increase throughput to greater than 30Mtpa.

n Continue to assess the development of a uranium process plant, subject to offtake, marketing and financing arrangements.

Exploration

n Accelerate the exploration effort on the Lumwana mining licence to identify potential additional sources of ore for the Lumwana mill. Expand the regional exploration program in Zambia and consider opportunities elsewhere.

Corporate

n As the financial capacity of the Company grows, evaluate opportunities for accretive project or corporate acquisitions.

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Chairman’s Report


Opening Lumwana represented the culmination of nearly a decade’s work for Equinox, growing from a successful exploration company to a major copper producer.

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I am pleased to present to you the 2009 Equinox Minerals Limited Annual Report, my third as Chairman.

The past twelve months have been as exciting and challenging as 2008. Against the backdrop of global economic uncertainty Equinox was able to achieve a series of major milestones not the least of which was bringing the Lumwana copper mine into commercial production.

We were honored to welcome His Excellency Rupiah Banda, President of Zambia, to formally open our Lumwana copper mine in April 2009. This reflects both the strong support we have received from the Government over many years and recognition of the importance of Lumwana both regionally and at a national level.

Opening Lumwana represented the culmination of nearly a decade’s work for Equinox, growing from a successful exploration company to a major copper producer that is positioning itself as one of the top 20 copper miners in the world. It is a credit to all those involved and we offer them all our thanks.

As I reported last year bringing the mine and plant into production was hampered by a series of unforeseen events and the ramp up to full production was delayed. We did however produce a credible 109,413 tonnes of copper and recorded an operating profit of $195.7 million, and expect to see continuing improvement in our production and plant performance during 2010.

On the revenue side of the ledger the copper price has been volatile, as have most commodities. However, copper has improved throughout the year, from a low of $1.38/lb to finish at $3.33/lb. The outlook for the copper market remains positive with the steady recovery in global markets, in particular China, and ongoing supply restrictions.

We have had a number of ongoing matters under discussion with the Government of the Republic of Zambia including the revised taxation regime and the precedence of our Development Agreement over the taxation legislation. Though we have yet to see resolution of this we are confident that our ongoing discussions will achieve a satisfactory outcome.

Safety is an overarching value for Equinox and one that the Board remains focused on. The very good safety performance we achieved during construction has transitioned to our operations and everyone is to be commended for this. We cannot however be complacent, as evidenced by the unfortunate fatality suffered by one of our contractors, Mr Caser Coetzee. We extend our condolences to his family, and are making great efforts to ensure that such accidents will not recur.

Equinox has a clear commitment to the people of Zambia as a responsible operator. We recognise that we have the opportunity to help the community to grow and prosper now and into the future beyond Lumwana. Some of our initiatives have included infrastructure development, assisting small business and enabling local people to gain new skills. We will continue to work with our efforts to make sure that the programs we implement deliver the outcomes that provide the greatest benefit.

Equinox’s Board is committed to the highest standards of corporate governance and ethical behaviour. Our corporate governance policies are continually reviewed to best practice standards and underpin all of the Board’s activities and deliberations.

The Board’s focus, and that of the management and operations team, has been to ensure the delivery of the Lumwana copper mine in a cost effective and timely manner. We have encountered a number of challenges on this journey and the support we have

received from you, our shareholders, has been greatly appreciated. Our successful capital raising earlier in the year reaffirmed your support and the belief in our project.

We have delivered a major project in a difficult environment and with the strong platform that Lumwana’s operations provide we can now consider growth opportunities at Lumwana and beyond.

In conclusion I would like to thank my fellow Board members for their commitment and counsel during the year. Harry Michael, who had served as an Executive Director since 2005 decided to move on during the year, and we thank him for his vital contribution to the construction of the project. I also thank Craig Williams and his management team, and all of our people in Zambia, Australia and Canada for their dedication, professionalism and effort towards making Equinox a great copper company of the future.

Peter TomsettChairman


Chairman’s Report

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Lumwana

One of Africa’s largest copper producing mines.

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8 Equinox Minerals Limited8 Equinox Minerals Limited

President’s Report

Our first full year’s production of 109,413 tonnes of copper in concentrate ensured we moved progressively towards nameplate capacity.

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Annual Report 2009 9Annual Report 2009 9


There is no doubt that 2009 has been a significant year for Equinox and our flagship Lumwana Copper project.We started the year with a sense of achievement, bringing the plant into production after nearly ten years. Commercial production was reached in April 2009, and we continued to ramp up the mine and plant throughout the year.

The ramp up process was however not without its challenges and we have encountered a range of issues which we have worked hard to overcome. We also focused on containing our costs to ensure we can capitalise on an improving copper market.

FinancialIn our first year of commercial production we recorded an operating profit of $195.7 million and completed the year with cash reserves of $109.1 million, having repaid $138 million of debt during the year.

Our C1 operating costs for the year averaged $1.49 per pound of copper which were higher than originally forecast and we continue to focus on cost management initiatives as Lumwana ramps up to full production.

On the corporate front we completed a successful capital raising of Cdn$184 million and in February 2010 Equinox secured and closed a new $400 million corporate loan facility, replacing the existing Lumwana project senior and subordinated debt facilities. This is a considerable achievement in a tight financial market and stands us in good stead moving forward.

OperationsBoth mine and plant performance ramped up during the year and while production did not meet initial expectations, a solid operating performance was achieved.

Our first full year’s production of 109,413 tonnes of copper in concentrate

ensured we moved progressively towards nameplate capacity. Lumwana’s mine productivity steadily grew with total annual copper ore production of 13.1 million tonnes plus 2.5 million tonnes of uranium-copper ore to the ROM stockpile. A key to this was the improved availability and performance in the mine’s truck and shovel fleet. We anticipate that we will complete the ramp up in the second half of 2010.

Process plant recoveries achieved 92% in the final quarter, the improved performance reflecting the reduced proportion of transitional ore being processed, and plant feed grade averaged 0.95% copper for the year. Concentrate grades averaged a high 43% copper for the year.

The Company believes that once full production on a steady platform has been achieved we can look at further optimization opportunities, potentially further increasing throughput.

PeopleEquinox is striving to be an employer of choice in both our professional and operational staff. We are an equal opportunity employer and our focus is on establishing a stable workforce.

While we have been going through the transition from a construction team to an operations team, we anticipate that the workforce will stabilize as Lumwana continues to ramp up in 2010.

We are providing a solid training regime ensuring that we can provide a safe working environment where employees can acquire new skills. These skills will bring long-term benefits to the population of the region and Zambia over the many years Lumwana will be operating into the future.

Safety and environmentEstablishing a sustainable operation at Lumwana is the platform to Equinox’s future in Zambia.

The project achieved a sound health and safety record during development. This has continued into the operations phase and is the key focus throughout Equinox’s operations. However the unfortunate fatality is a reminder that we cannot be complacent and we will strive to provide a safer working environment.

Throughout the development of Lumwana, Equinox has focused on maintaining and preserving the physical environment, and remains committed to sustainable environmental practices across all its operating and exploration activities.

As we move to full production our impact on the environment is very much a day to day management activity. Each employee is aware that they have individual responsibility for how they can minimize disturbance of the environment in which we live and work.

CommunityEquinox seeks to be an integral part of the communities in which it operates. The Company is committed to ensuring that the impacts on these communities are positive and the legacies we leave will be sustainable. We look to make a difference to the lives and livelihoods of the people in the traditional chiefdoms which contain Lumwana’s mining lease.

In consultation with the local communities, we have developed programs that will make a difference implementing programs that deliver social development, health and education outcomes and building local infrastructure such as schools and clinics.

During 2009 the development of Lumwana town continued and by the end of the year 734 houses had been completed. These houses are the cornerstone of a modern and thriving community. Commercial and retail infrastructure to support the town is advancing and now includes a supermarket.

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Enabling the local people through education is also a key platform of the Company’s community programs providing university and high school scholarships and traineeships.

GrowthAs Lumwana moves to full production and a stable performance in both the mine and plant we will be able to turn our attention to growth opportunities.

Equinox has maintained an exploration program in Zambia primarily focusing on the Large Scale Mining License LML-49 that surrounds the Lumwana Mine. During 2009, exploration work continued to focus on evaluating and ranking targets at Lumwana.

In 2008, Equinox completed its uranium feasibility study designing a plant for the onsite treatment of discrete, high grade uranium mineralization contained within the Lumwana Mine copper pitshells. Stockpiling Lumwana’s uranium ore is ongoing and at December 31, 2009 the stockpile totalled 2.5Mt of 1,000 ppm uranium and 0.80% copper. The Company is evaluating the development of the Lumwana uranium project, and the decision to proceed with this will depend on a number of factors including satisfactory financing and the negotiation of offtake terms.

The Lumwana plant appears capable of treating up to 20% above its nameplate capacity of 20 million tonnes per year. We will work towards ramping up mine productivity to deliver up to 24 million tonnes per year to the mill as our Phase 1 expansion. But with such a large resource and long mine life there is opportunity for a Phase 2 expansion to in excess of 30 million tonnes per year. Studies have commenced to evaluate the viability of the Phase 2 expansion.

As the Company’s financial strength is now rapidly growing, we are starting to look for opportunities for growth through acquisition.

While we have established a strong operating presence in Zambia over the last decade, we are now looking further afield for geographic diversification. Copper will remain our priority with a corporate objective of developing a second producing mine for Equinox.

AcknowledgementsThe tireless efforts of our Chairman Peter Tomsett and his fellow Board members have ensured that Equinox and the Lumwana project have progressed successfully. I acknowledge and thank them for their commitment and support.

I also would like to thank my management team and all our employees in Zambia, Canada and Australia for their hard work and professionalism throughout a challenging year.

We have seen a number of highly talented people join our management team and they bring a new depth to Equinox as a successful copper producer. I would like to acknowledge and thank Harry Michael, Vice President, Operations and Chief Operating Officer who left us as the end of 2009. We wish him every success in his new endeavours and welcome Cobb Johnstone, our new Chief Operating Officer and Adam Wright as our Zambian managing director, leading Lumwana operations.

OutlookWe start 2010 with a sense of optimism. With strong cash reserves, improving and stabilising mine and plant production, strength in the copper market and a highly professional and motivated team, Equinox is well placed to take advantage of the opportunities both at Lumwana and elsewhere.

We will continue to focus on cost reductions and meeting our nameplate capacity at Lumwana while developing opportunities for both organic expansion at Lumwana and diversification through acquisition in our journey to build Equinox into a significant new-generation mining house.

Craig R. WilliamsPresident and Chief Executive Officer


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Activities Review

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Lumwana Overview

The Lumwana copper mine is located 220 kilometres west of the world-renowned Zambian Copperbelt. The mine is of significant scale with measured and indicated resources of 342.5 million tonnes of ore grading 0.74% copper, plus inferred resources of 563.1 million tonnes at 0.63% copper.

At initial design capacity, Lumwana will process in excess of 20 million tonnes of ore each year, mined at an average mine strip ratio of 4.2:1 over a mine life of 37 years. Steady state initial design capacity is expected to be achieved in the second half of 2010.

Lumwana ore, which is predominantly sulphide, is treated through a large, yet conventional sulphide floatation plant, producing copper concentrate for smelting.

The project is making a significant positive impact on Zambia, being the largest new mine in a generation and the largest single capital investment in Zambian history. At full capacity, it is expected that Lumwana will provide around 20 per cent of the country’s total metal copper output.

Lumwana is a major copper project which has established Equinox as one of the world’s top 20 copper producers.

MiningDuring 2009 total mine material moved was 81.2 million dry metric tonnes. The strip ratio averaged 5.2:1 and 13.1 million tonnes of ore were mined at an average head grade of 0.95% copper.Mining and stockpiling of uranium mineralization continued throughout the year. At year end the uranium ore stockpile on the ROM pad was approximately 2.5 million tonnes of 1,000ppm uranium and 0.8% copper.

Lumwana’s mining activities were affected by a number of factors including an unusually severe wet season, lower than expected availability and productivity of the mining fleet,

and the processing of a substantial proportion of transitional ore (mixed oxide and sulphide ores) which resulted in reduced copper metal recoveries. Though further transitional ore will be encountered in the weathered zones of each new sub-pit to be developed at Lumwana, the proportion of transitional ore to sulphide ore is reducing as the mining operation deepens along the length of the ore body. In 2009 transitional material comprised around 30% of the process plant ore feed, whereas in 2010 it is expected to reduce to 15%. The Lumwana orebody comprises around 95% sulphide ore and 5% mixed transitional material.

In the latter half of the year Hitachi initiated measures to improve their maintenance performance of the mining fleet and agreed to mobilize an additional five EH4500 trucks to expedite recovery of lost availability of the existing fleet. The additional trucks are expected to be available at Lumwana by mid 2010. The Company has extended the trolley assist infrastructure from the main ramp to the starter pit, enhancing trucking ramp speeds, reducing cycle times and lowering hybrid diesel-electric truck operating costs.

The Company also purchased additional mobile mining fleet equipment that included sixteen 40 tonne articulated dump trucks, five 100-tonne dump trucks, two excavators and three bulldozers. This equipment is primarily being used in pre-stripping weathered material.

ProcessingThe Lumwana processing plant commenced commercial production in April 2009 and a total of 13.7 million tonnes of ore were processed during the year. The plant produced 109,413 tonnes of copper in concentrate in 2009 at a grade of 43% copper. Copper recovery from the plant averaged 85%.


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Metallurgical recoveries were impacted by the proportion of transitional ore being processed. For Lumwana ore, recoveries in transitional material typically range between 50-60% whereas the sulphide recoveries typically range from 90-95%.

The plant performed well during the year and based upon achieved throughput rates in 2009, has demonstrated a capability to produce in excess of its 20 Mtpa design capacity.

OfftakeLumwana has two primary offtake agreements in place, one with the Chambishi Copper Smelter Ltd. (CCS) and one with Konkola Copper Mines Plc (KCM).

CCS has an agreement to take up to 230,000 dry tonnes of copper concentrate under a five-year take or pay arrangement. During the year KCM entered into a five-year offtake agreement with LMC to treat 70-80,000

dry tonnes of copper concentrate at their recently commissioned Nchanga smelter. The offtake agreement with Mopani Copper Mines Plc was terminated during the year.

The CCS and KCM offtake agreements cover the majority of Lumwana production and any overflow is expected to be taken up by metal traders with logistics on the Copperbelt.

OutlookThe ramp up of production at Lumwana will continue through the first half of 2010, with a target of achieving a plant design throughput rate of 20 Mtpa for the mine and mill in the second half of the year.

The Company expects that it will produce 135,000 tonnes (297.6 million pounds) of copper metal in concentrates in 2010 at a C1 operating cost of $1.35 per pound.

Copper marketThe copper market recovered throughout the year, influenced by increasing Chinese demand, positive sentiment about future global economic expansion and continued constraints on the global supply of copper. The copper price commenced the year at $1.38 per pound and was $3.33 per pound at December 31, 2009. The average price of copper during 2009 was $2.34 per pound.

Management believes that the outlook for the copper market remains positive with the steady recovery in global markets, in particular China, and ongoing supply restrictions.

Zambian Taxation LegislationIn 2005 Equinox entered into a development agreement (the Lumwana Development Agreement) with the Government of the Republic of Zambia (GRZ) for the Lumwana project. The Lumwana Development Agreement provided a ten year stability period


Activities Review

The Lumwana processing plant commenced commercial production in April 2009 and performed wellduring the year.

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for the regulatory and taxation regime and includes the right for independent arbitration in the event of a dispute.

In 2009, the GRZ enacted a number of changes to the Zambian taxation regime including increasing corporate tax from 25% to 30%, increasing the mining royalty form 0.6% to 3%, introducing a ‘variable profit tax’ and a 15% concentrate export tax.

Following local and international legal advice, the Company believes that the Lumwana Development Agreement overrides the changes to the Zambian tax regime. The Company is in discussion with the GRZ in relation to the application of its Development Agreement.

UraniumIn 2008, Equinox completed a uranium feasibility study (UFS) investigating the onsite treatment of discrete, high grade uranium mineralization contained within the Lumwana mine copper pitshells.

The UFS confirmed the potential viability of onsite uranium treatment, producing about 2 million pounds of uranium per year over a six to seven year period.

Should Equinox be successful in negotiating viable uranium offtake agreements and securing the requisite project capital financing, the Company estimates plant construction to take approximately 18 to 24 months.

Corporate

Capital raisingIn April, 2009 Equinox issued 102,235,000 common shares of the Company at Cdn$1.80 per share raising gross proceeds of Cdn$184.0 million ($148.3 million). This capital raising enabled the Company to extinguish the Phelps Dodge agreement, provide funds for expansion and growth opportunities and provide ongoing working capital during the ramp up phase at Lumwana.

Phelps Dodge agreementIn September the Company exercised its option, at a cost of $12.8 million, to extinguish the Phelps Dodge Zambia right to receive a 1% net smelter return royalty from the Lumwana project. The royalty had been a part of the original sale agreement between Equinox and Phelps Dodge Zambia.

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Notes to Resources & Reserves Tables

The Mineral Reserves and Resources within engineered pits were determined by Golder on the basis of 12.5mx12.5mx4m block models, including mining dilution and recovery, and optimized by Whittle 4X software with associated pit designs generated using Vulcan software. The cut-offs applied were based on $1.20/lb Cu, resulting in sulphide cut-off grades of 0.16% for Malundwe and 0.21% for Chimiwungo. These pit designs constitute the Development Case. The copper reserves and resources within the engineered pits have been depleted to account for material mined and processed or stockpiled to December 31, 2009.

The Lumwana uranium resource estimate was based on ‘Leapfrog’TM 3D grade interpolation at a 0.01% uranium cut off. The Lumwana uranium resource and reserve estimate is based on a 0.02% uranium cut off. The uranium mineral resources and reserves have not been depleted; 2.51 million tonnes at an average grade of 1006ppm uranium and 0.82% copper have been mined and stockpiled to December 31, 2009.

Competent PersonsThe estimates of mineral resources and ore reserves were prepared in accordance with the standards set out in the Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves (The JORC Code) and in accordance with CIM standards as prescribed by National Instrument 43-101. Mineral resource and reserve data is based on information compiled by persons who are members of the Australasian Institute of Mining and Metallurgy or the Australian Institute of Geoscientists and who have the relevant experience as ‘competent persons’ as defined in the JORC Code and as a ‘Qualified Person’ in accordance with National Instrument 43-101 in relation to the mineralization being reported on.

Technical information in this publication is summarized or extracted from the ‘Technical Report on the Lumwana Project, North Western Province, Republic of Zambia’ dated June 2008 (Refiled April 2009), prepared by Ross Bertinshaw, Principal of Golder Associates Pty Ltd., Daniel Guibal, Corporate Consultant (Geostatistics & Resources) of SRK Consultants (Australasia) Pty Ltd, Andrew Daley, Director, of Investor Resources Finance Pty Ltd, and Robert Rigo, Vice President – Project Development, of Equinox Minerals Limited, each of whom is a ‘Qualified Person’ who is either a corporate member of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists or the CIM.

Forward Looking StatementsStatements within this publication are forward looking, which are subject to various risks and uncertainties that could cause actual results and future events to differ materially from those expressed or implied by such statements. Investors are cautioned that such statements are not guarantees of future performance and results. Risks and uncertainties about the Company’s business are more fully discussed in the Company’s disclosure documents filed from time to time with the Canadian and Australian securities authorities. See the June 2008 (Refiled April 2009) Technical Report and the last Annual Information Form on SEDAR at www.sedar.com for further details.

The Lumwana Project includes the Malundwe and Chimiwungo deposits. The Lumwana resource, estimated by Golder Associates Pty. Ltd. (‘Golder’) in accordance with the JORC Code and CIM Standards NI43-101, using a 0.2% copper cut-off and depleted for material mined to December 31, 2009 is estimated as follows:

Lumwana Resources: Measured + Indicated + Inferred

Class Tonnes Cu Co Au (Mt) (%) (ppm) (g/t)

Measured 113.9 0.84 244 0.03Indicated 228.6 0.68 153 0.02Total (Measured and Indicated) 342.5 0.74 184 0.02Inferred 563.1 0.63 46 0.01

Uranium within the Malundwe and Chimiwungo copper deposits occurs as discrete uranium-enriched zones that will be separately mined and stockpiled during the copper mining operation. The Lumwana uranium resource has been estimated using a 0.01% uranium cut-off grade as shown below:

Lumwana Uranium Mineral Resources (2008 UFS)

Class Tonnes Grade Contained Metal (Mt) U3O8 % U3O8 lbs

Indicated 4.7 0.095 9,920,000Inferred 6.1 0.050 6,669,000

Lumwana Uranium Resources within the Copper Pits (2008 UFS)

Class Tonnes Grade Contained Metal (Mt) U3O8 % U3O8 lbs

Probable 3.3 0.123 9,006,000Inferred 2.4 0.078 4,093,000

Lumwana Sulphide Reserves & Resources within Designed Pits –Development Case

Class Tonnes Cu (Mt) (%)

Malundwe Proved 29.5 1.05Probable 76.3 0.79Total Mineral Reserves 105.7 0.86Inferred Resource 4.2 0.77 Chimiwungo Proved 81.5 0.70Probable 118.7 0.57Total Mineral Reserves 200.2 0.62Inferred Resource 413.0 0.60 Combined Malundwe + Chimiwungo Proved 111.0 0.79Probable 195.0 0.66Total Mineral Reserves 305.9 0.70Total Inferred Resource 417.2 0.60


Lumwana Reserves & Resources

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Exploration

Though Equinox has been focusing on the commissioning and ramping up of production at the Lumwana Mine, it has maintained an exploration program in Zambia primarily directed towards the 1,355 km2 LML-49 that surrounds the Lumwana mine. This program is focused on targets regarded as prospective for additional mineralization to feed the Lumwana mill.

Exploration work continued to focus on evaluating and ranking targets at Lumwana:

n At Chimiwungo, an induced polarization (IP) survey identified significant chargeability anomalies over the down dip portion of Chimiwungo East. This area has not been drill tested by the Company in the past and was only poorly tested with historical drilling in the 1960s. This is interpreted to indicate a highly prospective plunging shoot of sulphidic mineralization which will be drill tested in 2010, potentially providing an extension to the Chimiwungo Deposit.

n On the west side of the Mwombezhi Dome, anomalous copper geochemistry and geophysics has defined the Odile Prospect, west of Malundwe. Further geophysics and drilling is planned for this target in 2010.

n IP surveying confirmed the presence of plunging shoots of chargeable material, possibly sulphides, at Lubwe West, northeast of Chimiwungo. Ground spectrometer work targeting uranium was also completed at Lubwe. Further target definition at this target may justify drilling.

Equinox has been granted the 2,200 km2 Mufapanda licence, an iron oxide-copper-gold target some 200 km west-north-west of Lusaka. A reconnaissance field visit identified an outcropping zone over 8 km of hematite-magnetite breccias above a magnetically active granitoid. Following anomalous assay samples from this zone the Company plans to undertake an airborne magnetic and radiometric survey of 10,820 line kilometres to provide the foundation for future exploration activities in 2010.

The Company holds additional regional exploration tenements and applications elsewhere in Zambia that have been affected by the introduction of new legislation in 2008 which governs the title and commitments on prospecting licenses. The Company is working closely with the GRZ to resolve the inconsistencies and ambiguities in the legislation before committing expenditure to the regional tenements.

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People

Equinox’s people underpin the Company’s operations and are its most important asset.

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People

Our workforceEquinox’s people underpin the Company’s operations and are its most important asset. We are an equal opportunity employer and at our Lumwana operations we actively recruit people from the three chiefdoms in which we operate.

Lumwana currently employs 1,347 of which 1,225 were recruited locally. In addition we have a further 1,764 contractors on site many of whom are recruited locally. During the year employees on site reduced as the construction phase was completed and production ramped up.

Developing and retaining a skilled workforceEquinox recognizes the business need to attract and retain employees with the technical skills and expertise to deliver across all aspects of the Company’s operations. We aim to create a work environment and introduce programs to underpin high performance, foster cultural and gender diversity, and build internal capacity.

To ensure Equinox can attract the right people at all levels, the Company has a range of programs and incentives in place. This includes:

n Competitive salaries and conditions of service

n Incentive schemes related to safety, cost and production results

n Permanent employment to offer job security and support succession planning

n Pensionable contracts with an additional co-contributory pension scheme

n Company housing in a modern town development with power, water and services

n Mortgage facilities at low interest rates to facilitate home-ownership

n Subsidised schooling onsite

n Medical facilities and medical insurance for employees and their families

n Support for education and personal development

During the second half of 2009 the Company commenced negotiations with the Mine Workers Union of Zambia (‘MUZ’) and National Union of Miners and Allied Workers (‘NUMAW’) for a Collective Bargaining Agreement (CBA). Agreement was reached in January 2010 with the CBA ensuring that Equinox reaffirms its status as an employer of choice, particularly amongst Zambian employees. This negotiation, concluded in record time in the context of Zambian industrial relations, laid the foundation for a strong and collaborative relationship with the two unions going forward.

Training and developmentEquinox is committed to developing the skills of its workforce, particularly at Lumwana where the majority of the people employed have previously worked in traditional roles, primarily subsistence agriculture.

Lumwana offers a broad range of employment opportunities with varying skill levels. The skills have generally been new to those employed from the communities surrounding the operations. As a result the Company has invested and continues to invest considerably in training and up-skilling workers.

During the year the Company undertook the following training initiatives:

n General and area specific inductions for all employees, contractors and visitors

n Safety training (first aid, fire fighting, working at heights, isolation)

n Environmental and radiation awareness programs

n Intercultural competency training to ensure a harmonious yet diverse workforce

n Mine and Process operations and maintenance training including the use of state-of-the-art equipment simulators, technical skills and on-the job training

n Supervisory and management skills training

n Industrial relations training and awareness programs

Equinox’s commitment to training is critical to ensure that we can provide a safe working environment where employees can acquire new skills. Development plans for each employee are developed through training needs analysis in support of a structured succession planning program. These skills will bring long-term benefits to the region and Zambia over the many years Lumwana is operating, and into the future.

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Equinox is committed to the principles and practices of good corporate and environmental citizenship and a sustainable approach to all its activities.

The Company recognizes that its long-term success is dependent upon best practice environmental performance and strong community relations.

EnvironmentEquinox is committed to world class environmental management, driven by the Company’s Board of Directors. There are ongoing challenges managing the operations to ensure that Lumwana has limited environmental impact.

Throughout the development of Lumwana, Equinox has focused on maintaining biodiversity and preserving the environment, and remains committed to sustainable environmental practices across all its operating and exploration activities.

With the mine and plant now ramping up to full production the impact on the environment is very much a day to day management activity. Each employee is aware that they have individual responsibility for how they can minimize disturbance of the environment.

To ensure this takes place the Company has implemented a range of programs as part of its Environmental Management Plan (EMP). This plan was developed as a component of the Environmental Impact Assessment (EIA) required for permitting of the project. Major components of the EMP include:

n Collection of meteorological data in support of engineering and design work

n Air and water quality monitoring programs

n Waste management, recycling and bio-remediation facilities

n Land management through the use of clearing permits

n Nursery operations and a progressive rehabilitation program

Stockpiling of uranium ore continued in the period and strict environmental guidelines are in place to manage any impact this may have.

Lumwana operates under the Environmental Protection and Pollution Control Act (Cap 12, 1990). A strict reporting process is in place under this Act and any incidents are fully investigated and remediated. Monitoring programs in 2009 have not indicated any problematic trends and no material instances of non-compliance with permit conditions have occurred.

CommunityEquinox seeks to be an integral part of the communities in which it operates. The Company is committed to ensuring that the impacts on these communities are positive and the legacies we leave will be sustainable.

Our corporate social responsibilities extend beyond providing sponsorships and community partnerships. We look to making a difference to the lives and livelihoods of the people in the traditional chiefdoms which contain Lumwana’s mining lease.

Since Equinox commenced developing the Lumwana project, the Company has had a direct positive impact which will continue long after the mine is exhausted. In consultation with the local communities, we have developed programs that will make a difference.

The Company’s commitment to these communities has included infrastructure, institutional capacity building, social development and health and education initiatives.During 2009 the development of Lumwana town continued and by the end of the year 734 houses had


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been completed. These houses are the cornerstone of a modern and thriving community. Commercial and retail infrastructure to support the town is advancing and now includes a supermarket and several other commercial developments.

These activities are all directed to grow the community, provide employment opportunities and develop a sustainable town which supports, not only the Lumwana operations, but also the wider regional communities.

Enabling the local people through education is also a key platform of the Company’s community programs. Equinox provides 14 scholarships to the University of Zambia and 92 high school scholarships and traineeships.

In addition, through the establishment of the Lumwana Development Trust Fund, twelve community infrastructure projects were completed in 2009 covering the following areas:

n School classroom construction and upgrades

n Rural healthcare centre improvements

n Teacher and health worker housing

n Economic / livelihood improvement infrastructure

These projects were completed with a high level of community engagement, with local people fabricating bricks, providing labor, and supervising the work. Equinox and local government officials provided project management and resource utilization controls and support.

Local economic development is anchored in the pursuit of diversification and introducing new industries. This is a key driver for Equinox, the regional community and the Zambian Government. During the year the Ministry of Commerce Trade

and Industry approved the Lumwana Multi Facility Economic Zone (MFEZ) master plan. This paves the way for declaration of the MFEZ through issuance of a Statutory Instrument early in 2010. This is a significant milestone as the MFEZ will underpin the establishment of a broad based economy for the surrounding Lumwana area, and provide opportunities for this previously undeveloped region.

During December, Lumwana joined in the commemoration of World AIDS Day as an information platform to the rapidly developing local communities. With such an economically driven high influx into the area, the Company is committed to mitigating against any potential increase in the rate of infection.

First republican president Dr Kenneth Kaunda was guest of honour at the commemoration, which is one of the most visible opportunities for public and private partners to spread awareness about the status of the pandemic and encourage progress in HIV/AIDS prevention, treatment and care.

Our corporate social responsibilities extend beyond providing sponsorships and community partnerships.

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Health & Safety

Health and Safety in the workplace has unconditional priority in any business activity and cannot be compromised.

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Health and Safety

Health and Safety in the workplace has unconditional priority in any business activity and cannot be compromised.Equinox has a team of dedicated professionals committed to supporting health and safety management throughout all areas of the business.

This team, through education and training, ensure everyone including employees, contractors and site visitors are aware of their personal responsibility to their own safety and the safety of others.

The Company is working constantly to eliminate or manage hazards and practices that could cause accident and injury or illness to people.

PerformanceIn 2009 Equinox’s safety performance was monitored and measured against a Lost Time Injury Frequency Rate (LTIFR) for every 200,000 hours worked. The operation achieved an LTIFR of 0.10 against a target of 0.13, and at one stage during 2009 a total of over 5,000,000 hours were recorded without a lost time injury (LTI). A total of four LTIs were reported in 2009 which is a reduction from nine recorded in 2008, and the fourth consecutive year in which the number of LTIs has been reduced.

Unfortunately however one of the LTIs resulted in a fatality when a contractor was struck by the boom of an excavator. This incident was thoroughly investigated in collaboration with Zambian authorities and remedial action taken to prevent a reoccurrence.

This outcome underlines the need to maintain our commitment to achieve a zero harm workplace and Equinox will continue to pursue a range of initiatives to this end.

Emergency responseLumwana has a fully trained emergency response team. This team is responsible for any emergency response situations that occur at the mine or plant and is available to provide support in the event of an emergency in the community.

The majority of the emergency response team have been recruited locally and have received training in all aspects of effective emergency response on a large open-cut mine, including fire fighting, first aid, vehicle extrication, rope rescue and other specialised skills training.

Employee consultation and trainingHealth and Safety is the first topic for discussion with each shift change meeting and is the first agenda item at the daily management and planning meetings. Incentive programs have been introduced with safety outcomes as one of the main performance measures.

During the year numerous Health and Safety initiatives have been instigated and almost 8,000 individuals have received some form of Health and Safety training, this includes over 6,000 people who attended either new or refresher induction training.

All statistics mentioned are inclusive of contractor employees, and Equinox makes no distinction between employees and contractors with respect to the application standards and systems for safety management.

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Board and Executive Profiles

The board of directors of Equinox (the Board) and a focused management team comprise the blend of corporate experience, financial management, project management, technical expertise, mine development, operational experience and financing expertise required for the success and dynamic growth of the Company in Africa and beyond.

BoardPeter Tomsett (Chairman) is a mining engineer with over 30 years of experience in the mining industry, including 20 years with Placer Dome Inc. He served as President and Chief Executive Officer of Placer Dome Inc, until its acquisition by Barrick Gold in January 2006. After starting his career with CRA Ltd at Broken Hill, Mr Tomsett joined Placer in 1986 in the Project Development group and subsequently held senior executive roles including responsibility for Placer’s Asia Pacific region as Executive Vice-President and later also took on responsibility for Placer Dome Africa, which operated mines in South Africa and Tanzania. He was appointed as President and Chief Executive Officer of Placer Dome in September 2004. Peter joined the Equinox board as Chairman in July 2007.

Craig Williams (President and Chief Executive Officer) is a geologist involved in mineral exploration and development for over 35 years, co-founding Equinox in 1993 along with the late Dr Bruce Nisbet. He has been directly involved in several significant discoveries, including the Ernest Henry Deposit in Queensland and a series of gold deposits in Western Australia. Mr Williams and the late Dr Nisbet were jointly awarded ‘Prospector of the Year’ in 1994 by the Australian Association of Mining and Exploration Companies in recognition of their track record of discovery. Mr Williams has extensive corporate management and financing experience.

David McAusland (Director and Chair of the Corporate Governance and Nominating Committee) is a highly experienced senior executive, lawyer and corporate executive. From 1999 to February 2008, he held the position of Executive Vice-President, Corporate Development and Chief Legal Officer of Alcan Inc. Prior to joining Alcan, Mr McAusland was the managing partner of a major Canadian law firm. Mr. McAusland holds a Bachelor of Law and a Bachelor of Civil Law and has had global responsibilities including strategy, major transactions, legal and regulatory affairs, and government relations.

David Mosher (Director and Chair of the Health, Safety, Environment and Sustainability Committee) is a former gold mining company CEO experienced in operations in Canada, Russia and Burkina Faso. He has over 35 years as a geologist and mining executive with experience in Australia, North America, Russia, Asia and Africa with extensive experience in mine development, corporate management and financing.

Jim Pantelidis (Director and Chair of the Compensation and Human Resources Committee) is a highly experienced senior executive and is currently Chairman of the Board of Parkland Income Fund and has served as a director of Parkland since 1999. Mr Pantelidis is Chairman and Director of The Consumers Waterheater Income Fund since 2002. From 1999 to 2002 he served as Chairman and Chief Executive Officer for the Bata Shoe Organization. He also spent 30 years in the petroleum industry and was at one time President of both the upstream and downstream divisions of Petro-Canada.

Brian Penny (Director and Chair of the Audit Committee) is Executive Vice President Finance of New Gold Inc and Vice President Finance and CFO of Silver Bear Resources and formerly Chief Financial Officer of Western Goldfields Inc.; Vice President, Finance and Chief Financial Officer of Toronto based Kinross Gold Corporation. He is a Certified Management Accountant (Ontario) and has in excess of 20 years experience of accounting, financial and corporate management, and corporate governance within the mining industry.

ManagementMichael Klessens (Vice President Finance and Chief Financial Officer) has over 22 years of experience in the mining industry, particularly directing corporate and financial management, project financing and the development and establishment of mining operations.

Robert Rigo (Vice President Project Development) is an engineer with over 32 years experience in the mining and mineral processing industry and particularly the management of major open pit mining operations and feasibility studies. At Lumwana he managed the feasibility study that was completed in 2003 and has had ongoing responsibility for project implementation, project studies and offtake management.

Cobb Johnstone (Chief Operating Officer) is a mining engineer with over 25 years experience in the copper, gold and metalliferous mining industries, including both large open cut and underground operations. Mr Johnstone has extensive operational experience and a strong track record in improving financial returns at operations.

Ralph Gibson (Vice President Project Finance) has extensive experience in mining project finance, having worked for financial institutions in Australia and the UK providing debt and hedging facilities to mining companies in Australia, Africa, the former Soviet Union and the Americas. Mr Gibson manages the Company’s banking syndicate, debt facilities and hedging transactions.

Kevin van Niekerk (Vice President Investor Relations) is an engineer with substantial African experience who manages the Toronto office and the Company’s investor relations in North America and Europe.

Carl Hallion (Vice President Business Development) is a chartered accountant who has worked in the mining industry for over 10 years and has extensive experience in global copper M&A transactions and strategic development. Mr Hallion has spent a number of years living and working in South and North America.

Sonya Stark (Vice President Corporate Affairs and Corporate Secretary) has over 18 years experience directing corporate governance, regulatory compliance, legal affairs, risk management, corporate administration and acting as Corporate Secretary for public companies, with significant experience in the mining industry.

Adam Wright (Managing Director, Lumwana Mining Company) is a mineral processing engineer with over 21 years experience working in copper, gold and silver mines in roles including both mine and mill management, maintenance and business development. Mr Wright has a strong track record of mine and processing operations, safety improvement, asset value optimization, community engagement and strategy implementation for both open pit and underground mine operations.

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December 31, 2009 and 2008 Expressed in thousands of US dollars, except where indicated


Consolidated Financial Statements

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INTRODUCTION

This document provides management’s discussion and analysis (‘MD&A’) of the financial condition and results of operations of Equinox Minerals Limited (‘Equinox’ or the ‘Company’) to enable a reader to assess material changes in financial condition and results of operations as at and for the 12 months ended December 31, 2009, in comparison to the corresponding prior year.

This MD&A, which has been prepared as at March 10, 2010, is intended to supplement and complement the audited consolidated financial statements and notes thereto, prepared in accordance with Canadian generally accepted accounting principles (‘GAAP’), for the 12 months ended December 31, 2009 (collectively the ‘Financial Statements’). All amounts in this MD&A are expressed in U.S. dollars, unless identified otherwise. Certain notes to the Financial Statements are specifically referred to in this MD&A and such notes are incorporated by reference herein. References to ‘C$’ in this MD&A refer to Canadian dollars.

This MD&A should be read in conjunction with the interim financial statements and the annual audited consolidated financial statements for the years ended December 31, 2009 and 2008, and the related 2008 annual MD&A dated March 27, 2009 which have been filed electronically through the System for Electronic Document Analysis and Retrieval (‘SEDAR’) and are available online at www.sedar.com.

Additional information relating to the Company is available online at www.sedar.com. Readers are also directed to the cautionary notices and disclaimers contained herein.

PERFORMANCE HIGHLIGHTS FOR THE YEAR

Financialn In its first year of production at Lumwana Equinox has achieved a solid financial performance.n The Company recorded an operating profit(1) for the year of $195.7 million and at year end held cash reserves

of $109.1 million.n C1 operating costs(1) for the year averaged $1.49 per pound of copper. The Company is continuing to focus on cost

management initiatives as Lumwana ramps up to full production.n The Company secured and closed a new $400.0 million corporate loan facility in February 2010 replacing the existing

Lumwana project senior and subordinated debt facilities (see ‘Subsequent Events’).n The Company raised C$184.0 million through the issuance of 102,235,000 common shares of the Company.

Lumwana MineFollowing handover to the Company of the Lumwana copper plant and other associated infrastructure from the engineering contractor in late 2008, mine commissioning and ramp up commenced and Lumwana transitioned from a development project to a producing copper mine. Some of the key highlights and activities throughout the year included:

n Ore mined and copper concentrate produced demonstrates quarter on quarter improvements throughout the year as ramp-up continued towards design production levels.

n Strong first annual copper production of 109,413 tonnes of copper in concentrate delivered with Lumwana steadily improving towards nameplate capacity.

n Operating profit achieved was $195.7 million. Operating profit is stated for the nine month period ended December 31, 2009 due to commercial production commencing April 1, 2009.

n Operating profit was offset by non-cash derivative instrument losses resulting from the rising copper price leading to a net loss, after tax, of $183.1 million. This is primarily related to the remaining hedge book being marked to market at a copper price that has strengthened throughout the reporting period. Revenue was positively impacted by the same rising copper price.

n Realized copper price, net of smelter treatment charges, was $2.61 per pound and 20,402 tonnes of payable copper was provisionally priced at $3.33 per pound ($7,356 per tonne) and remained subject to final pricing adjustment during Q1-10.

(1) C1 operating cost and operating profit are non-GAAP financial measure. See ‘Non-GAAP Financial Measures’ for more details.

Management’s Discussion and Analysis of Financial ConditionFor the year ended December 31, 2009


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n Improved mine productivity, with total annual ore production of 13.1 million tonnes being achieved.n Process plant recoveries achieved 92% in the final quarter, the improved performance reflecting the reduced proportion of

transitional ore being processed.n Plant feed grade averaged 0.95% copper for the year.n Average C1 operating cost per pound of copper of $1.49.n Mining and stockpiling of uranium mineralization continued with the stockpile at year end standing at approximately 2.5Mt

of 1,000ppm uranium and 0.8% copper.n A steady improvement occurred in the Hitachi mine truck and shovel availability and performance.n Hitachi has agreed to deliver five additional EH4500 dump trucks (240 tonnes) by mid-2010 to expedite the recovery of lost

availability hours on the existing fleet. n An additional Caterpillar light mining fleet including 16 x 40-tonne dump trucks, 5 x 100-tonne dump trucks, 2 x excavators

and 3 x bulldozers was acquired to help accelerate stripping of weathered material.n Continued development of a self sustaining Lumwana town site and advancement in the commercial and retail

developments including the Lumwana supermarket. n The Lumwana project achieved an excellent health and safety record during development. This has continued into the

operations phase and Lumwana recorded a lost-time-injury frequency rate for every 200,000 man hours worked of 0.10 to December 31, 2009. Safety remains a key focus throughout Equinox’s operations.

Summary of Results Fourth Quarter Financial Year(thousands of dollars, except otherwise noted) 2009 2008 2009(2) 2008

Gross sales revenue $233,431 — $531,962 —Net income/(loss) ($27,465) $183,296 ($183,063) $172,681Earnings/(loss) per share ($0.04) $0.31 ($0.27) $0.30Copper produced in tonnes 34,626 — 87,150 —Copper produced in pounds (millions) 76.3 — 192.1 —Copper sold in tonnes 31,410 — 81,520 —Copper sold in pounds (millions) 69.24 — 179.72 —Realized copper price per pound (net of smelter charges) $2.97 — $2.61 —C1 operating cost per pound of copper $1.53 — $1.49 —Cash and cash equivalents $109,130 $51,327 $109,130 $51,327Weighted average shares outstanding (000s) 706,210 593,651 670,385 583,800

(2) Production and sales related figures are for the nine month period ended December 31, 2009 due to commercial production commencing April 1, 2009.

At the end of Q4-09, the Company had, 20,402 tonnes of payable copper provisionally priced at $3.33 per pound ($7,356 per tonne) remain subject to final pricing adjustment during Q1-10. The final pricing adjustments recognized during the quarter from the Q3-09 provisionally priced copper sales was revenue of $5.5 million which is included in the gross sales for the quarter.

BUSINESS, MARKET & OUTLOOK

BackgroundEquinox is an international mining and exploration company, dual listed on the Toronto Stock Exchange (the ‘TSX’) and the Australian Securities Exchange (the ‘ASX’) under the symbol ‘EQN’. The Company was formed pursuant to Articles of Incorporation under the Canada Business Corporations Act on January 19, 2004 for purposes of becoming the Canadian holding company and to carry on the business of Equinox Resources Limited (‘Equinox Resources’), its 100% owned subsidiary. The principal assets of Equinox include: (i) a 100% interest (held through its subsidiary) in the Lumwana copper mine in Zambia (the ‘Lumwana Mine’ or ‘Lumwana’), which consists of two major copper deposits, ‘Malundwe’ and ‘Chimiwungo’, located 220 km northwest of the Zambian Copperbelt, together with numerous exploration prospects; and (ii) interests in a number of exploration projects in Zambia.


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Core BusinessEquinox’s primary asset is the Lumwana copper mine in Zambia. Since 1999, Equinox has focused its efforts on the Lumwana Mine, completing a pre-feasibility study in 2000, a bankable feasibility study in 2003 and a definitive feasibility study in 2005. Equinox commenced the construction of the Lumwana Mine in the fourth quarter of 2005. In December 2008, the Lumwana Mine was commissioned at a nameplate capacity of 20 million tonnes per annum (‘Mtpa’) and copper sulphide concentrate production and sales commenced to off-takers. Commissioning of the Lumwana Mine completes the successful transition of Equinox from developing a major project to operating what management believes will become one of Africa’s largest copper mines when Lumwana achieves full production.

Significant opportunities exist at the Lumwana Mine following the completion of the ramp up to: (i) further expand and optimize the mine and concentrator throughput rate, (ii) to assess and evaluate the additional near mine deposits discovered to date, and (iii) to develop the Lumwana Mine uranium resource. In addition Equinox will continue to assess these opportunities for expansion and organic growth at the Lumwana Mine.

Equinox will continue to review and assess opportunities for organic growth and expansion, and corporate opportunities to grow the Company.

Copper MarketsCopper prices on average rose throughout the year, from a low of $1.38 per pound to a high of $3.33 per pound. The average price during the year was $2.34 per pound and closing price was $3.33 per pound. Copper prices have been influenced by increased Chinese demand, positive sentiment about future global economic expansion and continued constraints on and disruptions to the global supply of copper. It is expected that global recovery, in particular China, and supply restrictions will continue to support a positive outlook for copper markets.

OutlookThe ramp up of production at Lumwana will continue through the first half of 2010, with a target of achieving a plant design throughput rate of 20Mtpa for the mine and mill in the second half of the year.

The Company expects that it will produce 135,000 tonnes (297.6 million pounds) of copper metal in concentrates in 2010 at a C1 operating cost of $1.35 per pound. Meeting this target is dependent on a range of factors including mine and mill performance during the annual wet season, the improvement in the availability and utilization of the mining fleet and performance of the processing plant.

This ‘Outlook’ section is forward-looking information and readers are cautioned that actual results may vary. Refer to ‘Cautionary Statements – Forward-Looking Information’ and ‘Risk and Uncertainties’ sections in this MD&A.

OPERATIONS

An operating profit of $195.7 million was generated at the Lumwana Mine for the year ended December 31, 2009. Operating profit is stated for the nine month period ended December 31, 2009 due to commercial production commencing April 1, 2009. This operating profit was offset by a non-cash hedging instrument loss of $329.8 million related to the remaining hedge positions which no longer qualify for hedge accounting, leading to a net loss, after tax, for the year of $183.1 million or $0.27 per share. See ‘Financial and Other Instruments’.

During the year, mine and process plant operations continued to ramp up at the Lumwana Mine. Ore processed at the Lumwana Mine for the year was 13.7 million dry metric tonnes of ore, producing 253,917 dry metric tonnes of concentrate at an average copper grade of approximately 43.09%. This resulted in copper produced in concentrate of 109,413 tonnes (241.2 million pounds) at an average C1 operating cost of $1.49 per pound.

During the quarter ended December 31, 2009, Lumwana continued the ramp up phase for both the mine and process plant operations. The production results have shown continued improvement quarter on quarter over 2009, an improvement of copper in concentrate production of 23% between the third and fourth quarters of 2009. This was achieved notwithstanding the onset of the wet season, which impacted productivity during the fourth quarter.


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The Lumwana operations team has continued to focus on the availability and utilization of mining equipment. Progress has been made with equipment suppliers on improving their maintenance and repair contract performance. Further improvement is necessary to meet equipment availability requirements, however it is expected these issues will be resolved over the coming quarters. The wet season has had a negative impact on equipment utilization and this is reflected in the reduced total material movement during the fourth quarter of 2009. The mining team is working on a number of strategies to improve performance and mine productivity. Process plant recoveries during the quarter have shown marked improvement to 93%, reflecting the reduced proportion of transitional ore processed during the fourth quarter.

Mining and stockpiling of uranium mineralization also continued during the fourth quarter of 2009. The uranium ore stockpile on the ROM pad currently stands at approximately 2.5Mt of 1,000 ppm uranium and 0.8% copper. This copper-uranium ore is being diverted away from the copper concentrator, and is being classified as ‘waste’ to the copper project. This uranium-rich copper ore stockpile may be treated at a later date, if and when the Company builds a uranium processing plant.

The 20Mtpa copper processing plant continues to perform to expectation and is capable of producing in excess of its design capacity based on achieved throughput rates to date.

Lumwana Mine Production Statistics

Production Statistic Measure 2009 2008 2007

Total mine material movement Tonnes (m) 81.21 — —Ore mined Tonnes (m) 13.09 — —Ore processed Tonnes (m) 13.69 — —Head grade Copper % 0.95 — —Copper recovery Copper % 84.51 — —Concentrate grade Copper % 43.09 — —Copper produced in concentrate Tonnes 109,413 — —Copper produced in concentrate Pounds 241,214,541 — —Average C1 operating cost Per Pound $1.49 — —

OfftakeDuring the year, concentrate delivery was predominantly directed to the Chambishi Copper Smelter Limited (‘CCS’) operated by China Non-ferrous Metal Mining and Yunnan Copper, and the Konkola Copper Mines Plc (‘KCM’) smelter at Nchanga on the Zambian Copperbelt, which when combined, account for a large majority of Lumwana’s forecast production.

In May 2009, the Company signed a five year concentrate offtake agreement with KCM for the smelting at KCM’s new Nchanga smelter on the Zambian Copperbelt, of annual quantities of between 70,000 and 80,000 dry metric tonnes of concentrates from the Lumwana Mine. The agreement also permits an option by mutual agreement for the smelting of additional annual quantities of Lumwana Mine copper concentrates under the same terms. KCM is majority owned by Vedanta Resources Plc, a London listed metals and mining company. During the second quarter of 2009, the Company terminated its offtake with Mopani Copper Mines Plc. The KCM offtake supplements the Company’s primary long-term offtake agreement with CCS, which when combined, will account for a large majority of Lumwana’s forecast production.

Town DevelopmentThe Lumwana town development continues to advance with 734 houses completed as at December 31, 2009. The commercial and retail developments, including the recently opened Lumwana supermarket, are advancing and a self-sustaining modern town environment is being developed.


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Corporate ActivitiesDuring the year Mr. Harry Michael, Vice President, Operations and Chief Operating Officer resigned, effective December 2009. In October 2009, Mr. Adam Wright commenced in the position of Managing Director, Lumwana Mining Company Limited (‘LMC’). In December 2009, Mr. Cobb Johnstone was appointed Chief Operating Officer for Equinox effective January 2010. Both Mr. Wright and Mr. Johnstone bring extensive mining and plant operating experience to Lumwana and Equinox.Also during the year Mr. Carl Hallion was appointed as Vice President, Business Development and Ms. Sonya Stark joined the Company as Vice President, Corporate Affairs and Corporate Secretary.

In April 2009, Equinox announced and completed an offering of common shares for gross proceeds of C$184.0 million. The net proceeds of the offering were used to strengthen the cash position of the Company, to fund expansion opportunities, to extinguish the PD Zambia royalty and general corporate purposes.

In September 2009, Equinox’s wholly-owned subsidiary LMC exercised its option to extinguish Phelps Dodge Mining (Zambia) Limited’s (PD Zambia) right to receive a 1% net smelter return royalty from the Lumwana project at a cost of US$12.8 million. The royalty had been a part of the original sale agreement in respect of Lumwana between Equinox and PD Zambia.

In February 2010, Equinox secured commitments from four leading commercial banks for a new $400.0 million corporate loan facility (the ‘Corporate Facility’). The Corporate Facility affords Equinox greater flexibility than the existing Lumwana Project debt facilities therefore the Company will utilize the Corporate Facility to repay its existing senior and subordinated project debt facilities. The key features of the corporate facility are a three year US$220.0 million term loan (the ‘Term Loan’) with quarterly principal and interest repayments and a five year US$180.0 million revolving facility (the ‘Revolving Facility’) that allows the Company to repay and redraw up to the facility limit over its term. This new corporate loan facility will provide the much greater flexibility than the project debt facility, reducing the number of restrictive covenants and eliminates the requirements for a cash sweep, the cost overrun facility and hedging. Financial close under the Corporate Facility was achieved on March 9, 2010. See ‘Subsequent Events’ in this MD&A for further details on the Corporate Facility.

Expansion and Optimization PlansSignificant opportunities exist at the Lumwana Mine following the completion of ramp up: (i) to further expand and optimize the mine and concentrator throughput rate, (ii) to assess and evaluate the additional near mine deposits discovered to date, and (iii) to develop the Lumwana Mine uranium resource. Equinox will continue to assess these opportunities for expansion and organic growth at the Lumwana Mine.

The Lumwana processing plant is capable of treating ore at rates above the design capacity of 20 Mtpa and management believes it is capable of treating about 24 Mtpa without any significant modification. Once Lumwana reaches design capacity, it is the Company’s objective over an expected period of 18 months, to increase mine output to achieve this 24 Mtpa target. However, given the very large resource and long mine life of the Lumwana project, there is potential to increase mine output further to in excess of 30 Mtpa. Such an increase will require expansion of the processing plant and mining fleet. Studies have commenced to optimize the expanded throughput rate and determine the scale and cost of such an expansion.

Details with respect to the resources at Luwmana are contained in the Technical Report (as defined below). See Cautionary Statements – Technical Information’.

In 2008, Equinox completed its uranium feasibility study (‘UFS’) investigating the onsite treatment of discrete and high grade uranium mineralization contained within the Lumwana Mine copper pitshells. The UFS confirmed the potential viability of onsite uranium treatment.

Should Equinox be successful in negotiating viable uranium offtake agreements and securing the requisite project capital financing, the Company estimates uranium plant construction to take approximately 18 to 24 months. The decision to proceed with the development of the Lumwana uranium project will depend, subject to approval by the Equinox board of directors, on a number of factors including satisfactory financing and the negotiation of offtake terms. The stockpiling of Lumwana Mine uranium ore is ongoing and at December 31, 2009 the stockpile totalled 2.5Mt of 1,000 ppm uranium and 0.8% copper.

Equinox will continue to review and assess opportunities for organic growth and expansion, and corporate opportunities to grow the Company.


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Exploration ActivitiesThough Equinox has been focusing on the commissioning and ramping up of production at the Lumwana Mine, it has maintained an exploration program in Zambia primarily directed towards the 1,355 km2 Large Scale Mining License LML-49 that surrounds the Lumwana Mine. During 2009, exploration work continued to focus on evaluating and ranking targets at Lumwana:

n At Chimiwungo, an IP survey of 114 line kilometres covering an area of 22 km2 identified significant chargeability anomalies over the down dip portion of Chimiwungo East. This area has not been drill tested by the Company in the past and was only poorly tested with historical drilling in the 1960s. This is interpreted to indicate a highly prospective plunging shoot of sulphidic mineralization which will be drill tested in 2010, potentially providing an extension to the Chimiwungo Deposit.

n On the west side of the Mwombezhi Dome, anomalous copper geochemistry and geophysics has defined the Odile Prospect, west of Malundwe. Further geophysics and drilling is planned for this target in 2010.

n IP surveying confirmed the presence of plunging shoots of chargeable material, possibly sulphides, at Lubwe West, northeast of Chimiwungo. Further target definition at this target may justify drilling.

n Ground spectrometer work targeting uranium was also completed over 230 line kilometres at Lubwe.

Equinox has been granted the 2,200 km2 Mufapanda licence, an iron oxide-copper-gold target some 200 km west-north-west of Lusaka. A reconnaissance field visit identified an outcropping zone over 8 km of hematite-magnetite breccias above a magnetically active granitoid. Following anomalous assay samples from this zone the Company plans to undertake an airborne magnetic and radiometric survey of 10,820 line kilometres to provide the foundation for future exploration activities in 2010.

The Company holds additional regional exploration tenements and applications elsewhere in Zambia that have been affected by the introduction of new legislation in 2008 which govern the title and commitments on prospecting licenses. The Company is working closely with the Government of the Republic of Zambia (‘GRZ’) to resolve the inconsistencies and ambiguities in the legislation before committing expenditure to the regional tenements.

ZESCO UpdateThe Company previously announced that it is in dispute with ZESCO Limited (‘ZESCO’), Zambia’s national power supply utility, over electricity charges believed by ZESCO to be incurred by the Company between 2007 and 2008. ZESCO has claimed invoice values totalling $9.0 million for the period up to December 31, 2008. However, based on legal advice, the Company has determined a value of $2.0 million is payable based on the terms of the contract. The Company disputes ZESCO’s claim, and has paid $2.0 million to ZESCO while conducting negotiations in an effort to resolve the matter. As a result of internal management changes at ZESCO discussions have been ongoing with the utility’s new management and Equinox believes that the matter will be resolved in a reasonable manner. Continuity of power supply has not been affected by this dispute.

Zambian Tax LegislationThe GRZ enacted a number of changes to the Zambian tax regime, particularly in relation to mining companies on April 1, 2008. This includes changes to the tax treatment that would increase corporate tax from 25% to 30%, the mining royalty from 0.6% to 3%, and a number of other proposed additional imposts including a ‘variable profit tax’, a 15% export tax on concentrate, a ‘windfall tax’ and treatment of hedging income as separate source income.

On January 30, 2009, the Minister of Finance of the GRZ announced changes to the 2009 budget which included the abolition of a number of changes enacted in 2008, including the removal of the windfall tax, 15% export tax and the hedging activity quarantine provisions.

In 2005 the Company entered into a Development Agreement with the GRZ for its Lumwana Mine which provides LMC with a 10 year stability period in the regulatory environment, including taxation, and rights of independent arbitration in the event of any dispute. Following local and international legal advice, the Company believes that the Development Agreement overrides the changes to the Zambian tax regime enacted on April 1, 2008. Until it has resolved the uncertainty surrounding the application of the Development Agreement, the company has measured in the current year its taxation balances on the basis of the enacted legislation.


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If the Company had calculated its taxation related balance based on the terms of the Development Agreement the royalty expense for the year ended December 31, 2009 would have reduced by an estimated $11.3 million and the income tax benefit for the year ended December 31, 2009 would have reduced by an estimated $12.2 million. The retained earnings loss position at December 31, 2009 would have reduced by an estimated $11.2 million.

The Company continues to hold discussions with the GRZ to ratify the terms of the Development Agreement.

FINANCIAL PERFORMANCE

FINANCIAL CONDITIONAs at December 31, 2009, Equinox had cash resources of $109.1 million, an increase of $57.8 million from December 31, 2008 due to the April 2009 common share offering and operating cash flows from the Lumwana Mine. In addition, the Company had capital assets of $1,102.8 million which consist primarily of the Lumwana assets compared to $1,067.3 million at December 31, 2008 due to the capitalization in 2009 of Lumwana development costs prior to achieving commercial production and the ongoing construction of the Lumwana village. As at December 31, 2009, long-term debt, consisting of outstanding amounts under project and fleet debt facilities was $518.7 million compared to $613.4 million as at December 31, 2008 due to principal repayments made during 2009.

Financial Position

As at December 31(thousands of dollars, except as otherwise noted) 2009 2008 2007

Cash and cash equivalents 109,130 51,327 73,367Property, plant and equipment 1,102,773 1,067,290 684,249Total assets 1,457,674 1,471,131 828,002Long-term debt 518,652 613,407 276,573Total liabilities 777,102 760,923 409,664Shareholders’ equity 680,572 710,208 418,338Weighted average number of outstanding shares (000’s) 670,385 583,800 538,313

Increasing cash and trade receivables from operations offset by derivative movementsTotal assets, year on year, have remained steady ($1,457.7 million as at December 31, 2009 compared to $1,471.1 million as at December 31, 2008) despite positive operating cash flows, increasing trade receivables and inventory build-up as a result of the ramp up of the Lumwana Mine. This is primarily due to the copper price increasing during the year from $1.38 per pound at January 1, 2009 to close at $3.33 per pound at December 31, 2009. As a result the derivative instrument copper contracts (the ‘hedge book’ or ‘hedging’) closed the 2009 financial year out of the money, the value declining by $364.0 million and switching from an asset of $256.7 million at December 31, 2008 to a liability of $107.3 million at December 31, 2009. Revenue was positively impacted by the strengthening copper price.

Reductions in long term debt offset by derivative movementsNet long term debt repayments of $134.9 million made during the year reduced the total long term debt balance at December 31, 2009. This reduction has been partially offset by the inclusion of $18.6 million of break fees associated with the refinancing of the Lumwana senior and subordinated project debt facilities and the resultant accelerated write down of previously capitalised loan origination costs. The long term debt balance at December 31, 2009 is $518.7 million, a reduction of $94.8 million from the prior year.

The increasing copper price during the year has resulted in the Company’s hedge book closing the year out of the money and in a liability position of $107.3 million as discussed above.

The income tax benefit of $56.9 million recorded on the loss for 2009 has resulted in a reduction of the future income tax liability from $62.8 million in 2008 to $5.9 million in 2009.


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Payment of mineral royalties, customs duties and withholding taxes totalling $36.2 million for 2009 have been deferred under the terms of the Development Agreement. Under the terms of the Development Agreement these amounts are deferred until the Lumwana debt is eliminated.

Shareholders’ equity decreases due to non-cash hedging lossesDespite recording an operating profit of $195.7 million for the year, the Company has posted a loss for the year of $183.1 million primarily due to non-cash hedging losses of $329.8 million related to the remaining hedge book being marked to market at the current strengthening copper price. Revenue has been positively impacted by the strengthening copper price.

Share capital increased over the year to $737.8 million at December 31, 2009 mainly due to the public offering of 102,235,000 common shares in April 2009, raising gross proceeds of C$184.0 million ($148.3 million).

CASH FLOW

Fourth Quarter (unaudited) Financial Year(in thousands of dollars) 2009 2008 2007 2009 2008 2007

Operating activities 36,858 (20,369) (18,569) 95,129 (81,631) (42,491)Financing activities (41,044) 85,767 158,330 12,641 386,898 470,185Investing activities (6,791) (64,259) (117,868) (50,252) (327,797) (421,648)Net increase / (decrease) in cash and cash equivalents (10,977) 1,139 21,893 57,518 (22,530) 6,046

Fourth QuarterPositive cash inflow from operating activities due to increased production and higher copper priceCash inflow from operating activities of $36.9 million for the quarter ended December 31, 2009, compared to $20.4 million of cash outflow for the same quarter in 2008, was significantly higher when compared with the same quarter in 2008 due to the Lumwana Mine commercial production commencing in 2009. Operating profit from mining activities was offset by working capital movements, primarily increases in accounts receivable of $55.0 million due to increased fourth quarter production and higher copper prices than prior quarters.

Reduced cash inflow from financing activities due to long term debt repaymentsCash outflow from financing activities of $41.0 million for the quarter ended December 31, 2009 was the result of the $43.5 million net reduction in long term debt. Proceeds from the exercise of employee stock options at varying strike prices during the quarter contributed $2.5 million.

Cash outflows from investing activities lower due to completion of construction and commencement of operations at the Lumwana MineCash outflows from investing activities of $6.8 million for the quarter ended December 31, 2009 was due to payments for property plant and equipment and included the continued development of Lumwana town and Lumwana Mine capital expenditure, which included preparing the mine for the wet season. In 2008 cash outflows of $64.3 million were incurred for the construction and development of the Lumwana Mine.

Financial Year

Positive cash inflow from operating activities due to Luwmana commencing commercial productionCash inflow from operating activities of $95.1 million for the year ended December 31, 2009 was significantly higher when compared with $81.6 million cash used by operating activities in the 2008 financial year. The increase in the operating cash position for 2009, relative to the corresponding prior year period, was primarily due to an operating profit from mining activities which occurred following the commencement of commercial production at the Lumwana Mine. Working capital movements offset the operating cash flow primarily due to an increase in consumable stores of $36.7 million and an increase of $98.8 million in accounts receivable due to the ramp up of production. In addition proceeds of $34.2 million from derivative instruments settled during the year were received.


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Reduced cash inflow from financing activities due to long term debt repaymentsCash inflow from financing activities of $12.6 million for the year ended December 31, 2009 was the result of the $141.0 million, net of costs, common share offering in April 2009, $8.4 million contribution from the exercise of employee share options and a net reduction in long term debt of $134.9 million. In 2008, significant debt draw downs ($350.0 million) contributed to a larger cash inflow from financing activities of $386.9 million.

Cash outflows from investing activities lower due to completion of construction and commencement of operations at Lumwana MineCash outflows from investing activities of $50.3 million for the year ended December 31, 2009 was due to a $12.8 million payment to PD Zambia to extinguish their right to receive a 1% Lumwana Mine net smelter return royalty. In addition cash payments for property plant and equipment included the continued development of Lumwana town and Lumwana Mine capital expenditure, which included preparing the mine for the wet season. In 2008, cash outflows of $327.8 million were incurred for the construction and development of the Lumwana Mine. RESULTS OF OPERATIONS

An operating profit of $195.7 million for the year ended December 31, 2009 was achieved by the Company compared to nil in 2008 following the commencement of commercial production at the Lumwana Mine on April 1, 2009. The operating profit was generated at the Lumwana Mine based on 109,413 tonnes of copper produced during the year. The operating profit was offset by a non-cash loss on derivative instruments during the year leading to a loss for the year of $183.1 million.

Fourth Quarter (unaudited) Financial Year(in thousands of dollars except as otherwise noted) 2009 2008 2007 2009 2008 2007

Gross sales 233,431 — — 531,962 — —Smelter treatment charges (27,596) — — (63,483) — —Net sales revenue 205,835 — — 468,479 — —Cost of sales (110,443) — — (272,818) — —Operating profit 95,392 — — 195,661 — —Derivative (losses)/income (68,980) 262,545 — (329,826) 271,520 —Exploration (1,706) (2,977) (2,746) (5,119) (10,262) (7,114)Other operating costs (2,009) (314) — (5,870) (314) (145)General and administration (3,452) (2,393) (2,739) (10,241) (8,388) (11,194)Financing costs (44,465) (685) (2,595) (76,871) (3,660) (2,595)Incentive stock options expensed (579) (908) (2,083) (1,989) (4,953) (11,993)Other (expenses)/income (196) (7,339) 1,887 (5,708) (3,325) 4,805Future income tax benefit/(expense) (1,470) (64,632) (823) 56,900 (67,937) (312)(Loss)/Profit for the period (27,465) 183,297 (9,099) (183,063) 172,681 (29,415)Basic earnings/(loss) per share (0.04) 0.31 (0.02) (0.27) 0.30 (0.06)Diluted earnings/(loss) per share (0.04) 0.30 (0.02) (0.27) 0.29 (0.05)Weighted basic average shares (000s) 706,210 593,651 564,708 670,385 583,800 658,312Weighted diluted average shares (000s) 719,490 611,163 603,550 683,665 601,312 673,077

FOURTH QUARTERAn operating profit of $95.4 million was achieved by the Company for the quarter ended December 31, 2009. The operating profit from the Lumwana Mine was based on 34,626 tonnes of copper produced in concentrate during the quarter and represents a 23% increase in production over the prior quarter. The operating profit was offset by a loss on derivative instruments and financing costs associated with the debt refinancing in the first quarter of 2010 leading to a net loss for the quarter of $27.5 million.


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Major items affecting the net loss for the fourth quarter included the following:

1. Lumwana Mine Production The Lumwana Mine achieved an operating profit of $95.4 million for the quarter ended December 31, 2009 (2008: nil) due

to the increasing copper production and the high average copper price during the quarter of $3.01 per pound.

2. Non-cash Hedging Instrument Losses The Company’s derivative instrument position has created a non-cash hedging loss of $69.0 million during the quarter

ended December 31, 2009 (2008: gain of $262.5 million) as a result of revaluing the entire remaining hedge book to current market prices and the strengthening copper price from $2.78 per pound at September 30, 2009 to $3.33 per pound at December 31, 2009.

3. Financing Costs Debt servicing costs associated with the Lumwana Mine long term debt and lease facilities totalled $44.5 million for the

quarter ended December 31, 2009. The refinancing of the Lumwana Project debt senior and subordinated facilities has resulted in accelerated amortization of capitalized financed fees of $12.6 million as well as recording break fees of $18.2 million.

Financial YearAn operating profit of $195.7 million was achieved by the Company for the year ended December 31, 2009. The operating profit from the Lumwana Mine was based on 109,413 tonnes of copper produced in concentrate during the year. The operating profit was offset by a loss on derivatives instruments during the year ended December 31, 2009 leading to a net loss of $183.1 million.

Major items affecting the net loss for the financial year included the following:

1. Lumwana Mine Production The Lumwana Mine achieved an operating profit of $195.7 million for the year ended December 31, 2009 (2008: nil) largely

due to the increasing copper production and the increasing copper price. Operating profit is stated for the nine month period ended December 31, 2009 due to commercial production commencing April 1, 2009.

2. Non-cash Hedging Instrument Losses The Company’s derivative instrument position has created a non-cash hedging loss of $329.8 million during the year ended

December 31, 2009 (2008: gain of $271.5 million) as a result of revaluing the entire remaining hedge book to current market prices and the strengthening copper price from $1.38 per pound at December 31, 2008 to $3.33 per pound at December 31, 2009. The Company’s hedge book at December 31, 2009 consists of forward contracts totalling 41,360 tonnes of copper at an average strike price of $5,603 per tonne ($2.54 per pound) and put options totalling 29,400 tonnes of copper at an average strike price (net of premium payable) of $4,335 per tonne ($1.97 per pound).

3. Financing Costs Debt servicing costs associated with the Lumwana Mine debt and lease facilities totalled $79.9 million for the year ended

December 31, 2009. Finance costs consist of interest expense on the long term debt plus amortization of financing fees associated with establishing the Lumwana Mine debt facility. In addition break fees associated with the refinancing of the Lumwana Project senior and subordinated debt facilities of $18.2 million have been recognized for the year ended December 31, 2009.

4. Income Tax Benefit The income tax benefit of $56.9 million for the year ended December 31, 2009, compared to an expense of $67.9 million

for the year ended December 31, 2008, was largely the product of the $329.8 million derivative instruments losses. The Company’s effective tax rate for the year was 24% which is lower than the Canadian statutory rate of 33% due to permanent non-deductible costs of the Lumwana Mine and not recognizing tax benefits for a number of subsidiaries within the group. Also the statutory tax rate for the regions that the Company operates (other than Canada) have an income tax rate of 30%, which has lead to the lower effective income tax rate.


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SUMMARY OF QUARTERLY RESULTS

The following table sets out a summary of the quarterly results for the Company for the last eight quarters. The financial data is derived from the Company’s interim unaudited financial statements, which are prepared in accordance with GAAP.

2009 2009 2009 2009 2008 2008 2008 2008 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1

Total mine material movement (tonnes (m)) 22.23 29.30 20.80 8.88 — — — —Ore mined (tonnes (m)) 4.20 4.02 3.03 1.84 — — — —Ore processed (tonnes (m)) 3.96 3.82 3.03 2.88 — — — —Head grade (copper %) 0.94 0.92 0.98 0.93 — — — —Copper recovery (copper %) 93 80 82 83 — — — —Concentrate grade (copper %) 46 47 39 39 — — — —Copper produced in concentrate (tonnes) 34,626 28,111 24,413 22,263 — — — —Copper produced in concentrate (pounds (m)) 76.34 61.97 53.82 49.08 — — — —Copper sold (tonnes) 31,410 26,470 23,640 23,970 — — — —Copper sold (pounds (m)) 69.24 58.34 52.11 52.84 — — — —Average C1 operating cost(1) per pound ($) 1.53 1.46 1.46 — — — — —Copper sales revenue ($000’s) 233,431 170,798 127,734 — — — — —Smelter treatment charges ($000’s) (27,596) (20,517) (15,370) — — — — —Net sales revenue ($000’s) 205,835 150,281 112,364 — — — — —Cost of sales ($000’s) (110,443) (86,173) (76,269) — — — — —Operating profit ($000’s) 95,392 64,108 36,095 — — — — —Derivative gains/(losses) ($000’s) (68,980) (88,431) (74,312) (98,102) 262,545 13,736 — —Other income/(expense) ($000’s) (196) (1,142) (2,636) (999) (7,339) (3,987) 7,291 709Net income/(loss) ($000’s) (27,465) (56,266) (38,741) (60,591) 13,296 (680) (1,777) (8,159)Basic earnings/(loss) per share ($) (0.04) (0.08) (0.06) (0.10) 0.02 (0.00) (0.00) (0.01)Diluted earnings/(loss) per share ($) (0.04) (0.08) (0.06) (0.10) 0.02 (0.00) (0.00) (0.01)Basic weight average no. of shares (millions) 706.210 701.17 675.76 596.93 593.65 592.96 582.65 565.73Diluted weight average no. of shares (millions) 719.490 715.93 695.42 614.45 611.16 610.29 599.25 609.14

(1) C1 operating cost and operating profit are non-GAAP financial measures. See ‘Non-GAAP Financial Measures for more detail.

Further details regarding the Company’s results for 2009 are discussed throughout this document. Further information on Equinox’s quarterly results can be found in the respective quarterly financial statements and related management’s discussion and analysis on www.sedar.com.

OUTSTANDING SHARE DATA

The only class of equity securities of the Company outstanding as at December 31, 2009 is common shares. As at March 10, 2010, the Company had 707,511,545 common shares outstanding.

Equinox has a 2010 Long-Term Incentive Plan (the ‘Option Plan’). Options may be granted under the Option Plan to directors, officer, employees or service providers of Equinox. As at March 10, 2010, there were 16,006,086 incentive stock options outstanding with the exercise prices ranging from C$0.72 to C$4.96 per share.


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LIQUIDITY & CAPITAL RESOURCES

As at December 31, 2009, Equinox had cash resources of $109.1 million, an increase of $57.8 million in the year due to cash inflows from operations as well as the share capital raised during the year, offset by long term debt repayments and increases in trade receivable and inventory working capital balances.

The Company had outstanding project and fleet debt facilities totalling $518.7 million at December 31, 2009.

The Company estimates production guidance for the full 2010 calendar year should be 135,000 tonnes (297.6 million pounds) of copper metal in concentrates at an average estimated C1 operating cost of $1.35 per pound. Meeting this target is dependent on a range of factors including mine and mill performance during the annual wet season and the improvement in the availability and utilization of the mining fleet and performance of the processing plant. The London Metals Exchange spot price of copper at December 31, 2009 was $3.33 per pound. On this basis the Company expects to generate positive cash flow for 2010 sufficient to fund ongoing operations, including discharging the Company’s current obligations in the normal course of business.

In addition, under the terms of its new Corporate Facility the Company can request an increase in the amount available under the Term Facility by $100.0 million and/or the Revolving Facility by $100.0 million, subject to the approval of the lenders. See ‘Subsequent Events’ below for further information.

Contractual Obligations Payments Due by Period as at December 31, 2009 Total Less than 1 year to 4 years to After(in thousands of dollars) 1 year 3 years 5 years 5 years

Long term debt 523,147 113,229 220,191 9,727 180,000Operating leases 825 135 690 — —Finance leases 32,114 11,660 15,750 868 3,836Capital Commitments – Lumwana 12,339 12,339 — — —Asset Retirement Obligation 20,671 — — — 20,671

Total Contractual Obligations 589,096 137,363 236,631 10,595 204,507

The outstanding capital commitment of the Company relates to construction costs for the Lumwana town and capital commitments of the Lumwana Mine.

The contractual obligations of long term debt shown in the table above reflect the repayment profile of the refinanced corporate debt under the Corporate Facility. See ‘Subsequent Events’ below for further information.

During 2010, sustaining, development drilling and other discretionary minor capital projects at Lumwana Mine ($28 million) plus the completion of the Lumwana village ($18 million) are estimated at approximately $46 million. The capital expenditure program will be financed through operating cash flow.

SUBSEQUENT EVENTS

On February 24, 2010, the Company reached agreement with four leading commercial banks, Standard Bank Plc, Standard Chartered Bank, Industrial and Commercial Bank of China and BNP Paribas, to provide a new Corporate Facility totaling $400.0 million. The Corporate Facility affords Equinox greater flexibility than the existing Lumwana Project debt facilities therefore the Company will utilize the Corporate Facility to repay its existing senior and subordinated project debt facilities. Financial close under the Corporate Facility was achieved on March 9, 2010. The effect is that the 2010 calendar year principal repayments will total $113.2 million.


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The key features of the Corporate Facility are as follows:

n The three-year $220 million Term Facility with quarterly principal and interest repayments commencing on March 31, 2010. This facility attracts a credit margin of 4.00% over LIBOR and the 2010 principal repayments will total $61.0 million.

n The five year US$180.0 million Revolving Facility that allows the Company to repay and redraw up to the facility limit over its term. The credit margin is 4.75% over LIBOR for the first two years, thereafter reducing to 4.00% over LIBOR. Interest charges are payable quarterly in arrears commencing on March 31, 2010. Three years after the first drawdown and annually thereafter, the Company can request a 12 month extension to the expiry date of the Revolving Facility.

n The Company can request an increase in the amount available under the Term Facility by $100.0 million and/or the Revolving Facility by $100.0 million, subject to the approval of the lenders.

n The Corporate Facility contains certain financial covenants based on the consolidated accounts for Equinox that are considered to be typical for a facility of this nature. The Corporate Facility also contains covenants that are specific to the performance of the Lumwana copper project. The Corporate Facility is less restrictive than the Company’s existing project debt facilities and does not contain any cash sweep provisions, nor does it require Equinox to maintain the existing US$45.0 million cost overrun facility (that still remains undrawn).

n There are no mandatory hedging requirements attaching to the Corporate Facility.n The existing asset backed finance facilities for the mining fleet, currently totaling $99.0 million, will remain in place.

Equinox will incur certain break fees of $18.6 million under the existing project debt facilities as a result of the refinancing of which $18.2 million has been recorded as finance costs for the year ended December 31, 2009.

NON-GAAP FINANCIAL MEASURES

The term ‘C1 operating cost’ is a non-GAAP performance measure reported in this MD&A and prepared on a per pound of payable copper basis. The term C1 operating cost does not have any standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other issuers. C1 operating cost is a common performance measure in the copper industry and is prepared and presented herein on a basis consistent with the industry standard definitions. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Company. The term is intended to provide additional information and should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP. C1 operating costs includes all mining and processing costs, mine site overheads and realization costs through to refined metal.

The following table provides, for the periods indicated, a reconciliation of the Company’s C1 operating cost measures to GAAP income statement presented in the financial statements:

Year ended December 31(in thousands of dollars, except as otherwise noted) 2009(1) 2008 Costs as reported in the income statement: Direct and indirect mining costs 212,016 —Smelter treatment charges 63,483 —

Total C1 operating cost of production 275,499 —

Payable copper (tonnes) 83,888 —Payable copper (pounds) 184,941,163 —

C1 operating cost per pound of copper (whole dollars) 1.49 —

(1) The Lumwana Mine commenced commercial production on April 1, 2009. The 2009 year to date production and cost data contained in this table represents the period from April 1, 2009 to December 31, 2009.


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The term ‘operating profit’ is a non-GAAP performance measure reported in this MD&A and represents net sales revenue less cost of sales as reported on the GAAP income statement presented in the financial statements. The term operating profit does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use the above terms and information to evaluate the Company. It is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The following table provides, for the periods indicated, a reconciliation of the Company’s operating profit measures to GAAP income statement presented in the financial statements: Year ended December 31(in thousands of dollars) 2009(1) 2008 Revenue and costs as reported in the income statement: Copper sales revenue 531,962 —Smelter treatment charges (63,483) —

Net sales revenue 468,479 — Direct and indirect mining costs (212,016) —Amortization and depletion (46,688) —Royalties (14,114) —

Cost of sales (272,818) — Operating profit 195,661 —

FINANCIAL AND OTHER INSTRUMENTS

As at December 31, 2009, and pursuant to the lending requirements for the Lumwana Mine project debt facility, the Company has entered into a number of copper put options and forward contracts (the ‘hedge book’) relating to a proportion of its expected copper production at the Lumwana Mine designed to provide protection from exposure to unfavourable copper price movements.

Upon entering into the copper put option contracts, the Company incurred a premium of $86.5 million, due and payable on expiry of the underlying contracts. For the outstanding put options, expiring between January 2010 and March 2011, the fair value of the premium payable is $37.8 million. There is no premium or cost associated with the copper forward contracts.Changes in the fair value of derivatives are recognized in the income statement. For part of the 2008 financial year the Company satisfied the requirements of hedge accounting, where changes in the fair value of the derivatives were initially recorded in other comprehensive income. However this was discontinued in the fourth quarter of 2008.

The mark-to-market fair value of all contracts is based on independently provided market rates and determined using standard valuation techniques. These techniques include the impact of counterparty credit risk.

At December 31, 2008, the average contract price (‘strike price’) of the hedge book (net of put deferred premium payable) was $2.38 per pound versus a spot copper price of $1.38 per pound resulting in the hedge book being in the money with a mark-to-market asset fair value of $256.7 million.

At December 31, 2009, the spot copper price had increased to $3.33 per pound compared with an average strike price (net of put deferred premium payable) of $2.30 per pound resulting in the hedge book closing out of the money and dropping in value to a mark-to-market liability position of $329.8 million.


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The total decline in value of the hedge book for the year ended December 31, 2009 was $364.0 million of which $329.8 million represents non-cash mark-to-market losses which have been recorded in the income statement, reversing previous gains recognized in 2008. The remaining balance of $34.2 million represents the net cash received from hedge contracts maturing during the year, which is reflected in the cash flow statement.

Derivative instruments included in the balance sheet comprise:

December 31 December 31(in thousands of dollars) 2009 2008

Fair value of hedge book – start of period 256,679 (63,719)Hedge contracts matured during period resulting in cash payment / (receipt) (34,163) (13,342)Mark-to-market fair value gain / (loss) during period (329,826) 333,740

Fair value of hedge book – end of period (107,310) 256,679Less: current portion 85,179 (127,570)

Total non-current derivative instruments (22,131) 129,109

The following table summarizes the hedge book in place at December 31, 2009:

2010 2011 Total

Copper put options: Tonnes 24,400 5,000 29,400Average strike price ($/tonne) $5,673 $5,364 $5,620Average strike price ($/pound) $2.57 $2.43 $2.55

Copper forwards: Tonnes 33,080 8,280 41,360Average strike price ($/tonne) $5,663 $5,367 $5,603Average strike price ($/pound) $2.57 $2.43 $2.54

RISKS AND UNCERTAINTIES

The Company’s operations and results are subject to a number of different risks at any given time. These risk factors include, but are not limited to: unanticipated expenses or unforeseen delays and other contingencies that could have a material adverse effect on the ramp-up of the Lumwana Project; the exploration for, and development of, mineral deposits involves significant risks and there is no assurance that expenditures incurred in the search and evaluation of mineral deposits will result in discoveries of commercial quantities of ore; there is no assurance that production estimates can be achieved; there is no assurance that operating cost estimates can be achieved; Equinox has a substantial amount of indebtedness as a result of entering into the Lumwana Project debt facility and its ability to make principal and interest payments thereon depends on its ability to generate cash from mining operations; copper prices are subject to significant fluctuation and are affected by a number of factors which are beyond the control of Equinox; the development and success of the Luwmana Project is primarily dependent on the future price of copper; calculations of mineral reserves and mineral resources are estimates only; the quantity of mineral reserves and mineral resources may vary depending on, among other things, metal prices and any material change in the quantity of mineral reserves, mineral resources, classification of ore types, grade or stripping ratio may affect the economic viability of the Lumwana Project. As uranium material is being extracted from the Lumwana pits, stockpiled and potentially processed, uranium is a radio-active element and poses a long-term environmental hazard and a risk to the health of workers and although Equinox plans to take all reasonable precautions for the safe handling and disposal of this material, there can be no assurance that Equinox will not incur costs related to damage caused to workers and the environment by the


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radioactivity of the uranium. Equinox has entered into ‘take and pay’ concentrate off-take agreements for copper concentrates to be produced by the Lumwana Project, however there is no guarantee that Lumwana concentrates will always meet the required specifications, including the content of deleterious elements such as uranium, that the off-takers will perform to these contracts or could charge increased costs or penalties that could have a material adverse effect on project costs , that the Company will be able to negotiate additional off-take contracts or that the terms of such contracts will be economically viable; the Luwmana Project currently accounts for all of the Company’s mineral resources and reserves and, as such, Equinox’s performance is heavily dependent on the Luwmana Project; mining operations, such as those at the Luwmana Project, involve a high degree risks and operational hazards generally, including mining fleet availability and utliization, the performance of contractors and suppliers in maintaining and repairing the mining fleet, contract mining efficiency and cost effectiveness, adverse environmental conditions, industrial accidents, labour disputes, unusual or unexpected geological conditions, ground or slope failures, cave-ins, changes in regulations and natural phenomena such as inclement weather conditions, floods and earthquates; Equinox does not insure against all potential risks associated with its operations; the current global financial crisis may impact Equinox’s ability to obtain equity or debt financing in the future on favourable terms and may cause decreases in asset values that are deemed to be other than temporary, which may result in impairment losses; if Equinox fail to satisfy any covenant contained in the Lumwana Project debt facility, or if there is an event of default under the facility’s terms, there is no guarantee that Equinox will be able to obtain alternative financing on acceptable terms to satisfy the Company’s operating and development costs; Equinox’s operations and activities are subject to environmental laws and regulations, including the maintenance of air and water quality standards, land reclamation and the generation, transportation, storage and disposial of solid and hazardous waste; environmental legislation is evolving in a manner which will require stricter standards and assessments and greater enforcement; Equinox has assets and operations in certain countries where such assets and operations are subject to various political, economic and other uncertanties; in the event of a dispute arising from foreign operations, Equinox does not at present hedge currency futures and, although 30% of the first three years of copper production is hedged, there is no assurance that a commodity hedging program designed to reduce the risk associated with fluctuations in metal prices will be successful; Equinox is currently involved in certain legal disputes which, if unable to resolve favourably, may have a material adverse impact on its financial condition; Equinox’s title to its properties may be subject to challenge and the existence of possible undetected defects and the Company may be unable to operate its properties as permitted or may be required to enforce its rights with respect to its properties; and the Company’s ability to manage its operation, exploration and development activities depends on a small number of key employees, the loss of any of whom could have an adverse effect on the Company. The majority of Equinox’s workforce in Zambia are members of the Zambian mineworkers unions and, while the labour unions are generally supportive, their activities could lead to labour unrest, strikes and/or decreased productivityThere are also key risks specific to the Lumwana Project, which include, but are not limited to, the following: road access to the Luwmana Project is limited to a single road; a failure by ZESCO to provide adequate power on a continuous basis or the outcome of the legal dispute with ZESCO could materially affect operations at Lumwana; the Lumwana Project, which represents a majority of Equinox’s property, is located in Zambia which has historically experienced high levels of inflation;and proposed changes to the Zambian tax regime or failure by the Zambian Government to honour the Lumwana Development Agreement may have an adverse effect on the economics of the Lumwana Project.

The Company’s risk factors are discussed in detail in the Company’s Annual Information Form which is available on SEDAR at www.sedar.com and should be reviewed in conjunction with this document.

CRITICAL ACCOUNTING ESTIMATES

The accounting policies that involve significant management judgment and estimates are discussed in this section. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and related notes. For a complete list of the significant accounting policies, reference should be made to note 2 of the 2009 audited consolidated financial statements.

Mineral reserve estimates used to measure amortisation of property, plant and equipmentThe amortisation expense is based on the estimated useful economic life of the mine reserves. The estimate which will most significantly affect the measurement of amortisation is quantities of proven and probable copper reserves. This estimate is complex and requires significant subjective assumptions that arise from evaluation of geological, geophysical, engineering and economical data for the orebody.


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This data could change over time as a result of numerous factors, including new information gained from development activities, evolving production history and a re-assessment of the viability of production under different economic conditions. Such changes in the data and/or assumptions could cause reserve estimates to substantially change from period to period. Actual copper production could differ from expected copper production based on the reserves, and an adverse change in copper price could make a reserve uneconomic to mine.

Impairment of property plant and equipmentThe carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable. Impairment assessments are based on estimates of future cash flows, which include: the quantity of mineral reserves; future metal prices and future operating and capital costs to mine and process the Company’s reserves. The variability of these factors depends on a number of conditions, including the uncertainty of future events and, as a result, accounting estimates may change from one period to another. Asset balances could be materially impacted if other assumptions and estimates had been used. In addition, future operating results could be impacted if different assumptions and estimates are applied in future periods.

Revenue recognition The Company’s sales agreements require final prices to be determined in a future period. For this purpose, it is necessary for management to estimate the final prices received based on current prices for copper. As a result of the significant volatility in current metal prices, actual results may materially differ from those initially recorded when final prices are determined. Management follows the industry practice of re-pricing any provisionally priced sales at the end of each reporting period based on published copper forward curve prices and any differences/adjustments are recorded in the current period’s earnings.

Derivative valuationThe Company enters into derivative instruments to mitigate exposures to copper commodity prices. Fair values for derivative instruments are determined using valuation techniques which use assumptions and estimates based on market conditions existing at reporting date. Realized gains and losses are recorded as a component of operating cash flow.

Future Income TaxesSee ‘Operations – Zambian Tax Legislation’ above for further information.

Asset Retirement ObligationThe Company records asset retirement obligations at fair value in the period in which the liability is incurred. Fair value is determined based on the estimated future cash flows required to settle the liability discounted at the Company’s credit adjusted risk free interest rate. The liability is adjusted for changes in the expected amounts and timing of cash flows required to discharge the liability and accreted over time to its full value. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset and amortized over the expected useful life of the asset.

Exploration and Evaluation CostsExploration and evaluation expenditure costs incurred by the Company are accumulated separately for each area of interest. Such expenditures are comprised of net direct costs and an appropriate portion of related overhead and foreign exchange movement on loans directly attributable to the project.

Exploration and evaluation expenditure for each area of interest are written off as incurred, unless such costs are expected to be recouped through successful development and exploitation of the area of interest or, alternatively, by its sale. Expenditure is not deferred in respect of any area of interest or mineral resource unless the Company’s rights of tenure to that area of interest are current. Although the Company has taken steps to verify title to its areas of interest, these procedures do not guarantee the Company’s title. Such areas of interest may be subject to prior undetected agreements or transfers and title may be affected by such defects.

Deferred exploration and evaluation costs are transferred to mine development once a development decision has been taken. Deferred exploration and evaluation costs are amortized over the estimated useful life of the ore body, on a units of production basis, from the commencement of commercial extraction, or written off it the property is sold or abandoned.


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Borrowing cost included in exploration and evaluation expenditure are those costs that would have been avoided if the expenditure had not been incurred.Where impairment indicators are present management assesses the recoverable value of mineral properties and where management believe those values to be lower than the carrying values, such expenditure will be written down to fair value accordingly. Management’s estimate of fair values is subject to risks and uncertainties affecting the recoverability of the Company’s investment in these areas. Although management have made their best estimate of these factors based on current conditions, it is possible that changes could occur in the near term which could adversely affect this estimate of the recoverability of mineral properties, deferred exploration and evaluation costs.

CHANGES IN ACCOUNTING POLICIES & INITIAL ADOPTION

Credit Risk and the Fair Value of Financial Assets and Financial LiabilitiesIn January 2009, the Emerging Issues Committee of the Canadian Institute of Chartered Accountants (the ‘CICA’) issued Abstract EIC-173 ‘Credit Risk and the Fair Value of Financial Assets and Financial Liabilities’, which applies to interim and annual financial statements for periods ending on or after January 20, 2009. The Company has adopted these recommendations and there was no material impact on the Company’s financial statements.

Mining Exploration Costs and Impairment Testing of Mineral Exploration PropertiesIn March 2009, the Emerging Issues Committee of the CICA approved Abstract EIC-174 ‘Mining Exploration Costs’, which provides guidance on capitalization of exploration costs related to mining properties and the analysis recommended to be performed to determine if there has been an impairment of mineral exploration properties. The Company has applied this new abstract for the year ended December 31, 2009 and there was no material impact on its financial statements as a result of applying this abstract.

Financial InstrumentsIn December 2008, the CICA issued amendments to Financial Instruments sections 3855, 3861 and 3862 permitting reclassification of a financial asset or liability out of the held-for-trading or available-for-sale category to other financial instruments categories in specified circumstances effective on or after July 1, 2008. The adoption of these amendments had no impact on the financial results of the Company.

In June 2009, the CICA amended the Financial Instruments – Disclosures section 3862 to require enhanced disclosure about the fair value assessments of the financial instruments. The new disclosures are based on a fair value hierarchy that categorizes financial instruments measured at fair value at one of three levels according to the reliability of the inputs used to estimate the fair values. The amendments apply to annual financial statements for fiscal years ending after September 30, 2009. The Company has adopted these disclosures effective in the December 31, 2009 annual financial statements (note 20).

In August 2009, the CICA amended Financial Instruments section 3855 to add guidance concerning the assessment of embedded derivatives upon reclassification of a financial asset out of the held-for-trading category. These amendments apply to reclassifications made on or after July 1, 2009. This Section has also been amended to change the categories into which a debt instrument is required or permitted to be classified, change the impairment model for held-to-maturity financial assets, and require reversal of previously recognized impairment losses on available-for-sale financial assets in specified circumstances. The Impaired Loans section 3025 was also amended to conform the definition of a loan to that in amended Section 3855 and to include held-to-maturity investments within the scope of the Impaired Loans section. The adoption of these amendments had no impact on the financial results of the Company.

Business Combinations and Consolidated Financial StatementsIn January 2009, the CICA issued three new accounting standards: Section 1582, ‘Business Combinations’, Section 1601, ‘Consolidated Financial Statements’ and Section 1602, ‘Non-Controlling interests’. These new standards will be effective for fiscal years beginning on or after January 1, 2011.

Section 1582 replaces section 1581 and establishes standards for the accounting for a business combination. It provides the Canadian equivalent to IFRS 3, ‘Business Combinations’. Sections 1601 and 1602 together replace section 1600, ‘Consolidated Financial Statements’. Section 1601 establishes standards for the preparation of consolidated financial statements. Section 1602 establishes standards for accounting for a non-controlling interest in a subsidiary in consolidated financial statements subsequent to a business combination.

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It is equivalent to the corresponding provisions of IFRS lAS-27, ‘Consolidated and Separate Financial Statements’. Management does not believe the new standards will have a material impact on Equinox Minerals financial statements.

International Financial Reporting StandardsIn 2008, the Canadian Accounting Standards Board announced its decision to replace GAAP with International Financial Reporting Standards (‘IFRS’) for Canadian publicly accountable enterprises.

The effective changeover date is January 1, 2011, at which time GAAP will cease to apply and will be replaced by IFRS. Following this timeline, the Company will issue its first set of interim financial statements prepared under IFRS in the first quarter of 2011, with one period of comparative information also compiled under IFRS.

Equinox has identified the relevant differences between GAAP and IFRS and an initial assessment was made of the impact of the required changes to the existing accounting systems, business processes, and requirements for personnel training and development. Based on the initial assessment of the differences applicable to Equinox, a conversion plan has been developed to manage the transition to IFRS. As part of the conversion plan, Equinox is in the process of analyzing the detailed impacts of these identified differences and developing solutions to address these differences. The Company is currently on target with its original conversion plan.

The major deliverables of the conversion project include:n diagnostic report to explore potential impact of changes in accounting standards (completed).n project plan (completed but will be updated as needed to reflect new developments).n analysis of impact of changes to each accounting standard (completed).n preparation of accounting policy and procedures manual; (in progress).n development of a process and system to prepare financial statements in accordance with both GAAP and IFRS (in progress).

The Company continues to work through the major deliverables of the conversion plan and estimates completion of this plan in the third quarter of 2010.

IFRS 1, ‘First time Adoption of International Financial Reporting Standards’, provides companies adopting IFRS for the first time with a number of optional exemptions and certain mandatory exception to facilitate the preparation of the opening balance sheet. The Company has reviewed the optional exemptions and will implement the exemptions in the first quarter of 2010. Set out below are the key areas identified to date where significant changes in accounting policy are expected.

Asset Retirement Obligation: Under IFRS, the Company will be required to continually update the amount of the asset retirement obligation (‘ARO’) liability recognized for changes in the discount rate whereas under GAAP, the existing present value of the estimated liability do not require subsequent adjustment for market interest changes in the discount rates. IFRS requires that an entity review the carrying amount of a non-financial liability at each balance sheet date and adjust to reflect the current amount that the entity would rationally pay to settle the present obligation or to transfer it to a third party on the balance sheet date. Under IFRS, constructive obligations must be considered in addition to legal obligations when determining the ARO. Under GAAP, only legal obligations are considered when determining the ARO. It is expected that these changes may result in an increase in the asset retirement obligation.

Borrowing Costs: Under IFRS, capitalization of borrowing cost for certain qualifying assets is required, whereas under GAAP capitalization of borrowing cost is optional. As per its current accounting policy, the Company does capitalize borrowing cost. It is expected that this accounting change will not impact the Company’s financial results.

Impairment of Non-Financial Assets: Under GAAP an impairment test is performed on assets using a two-step approach whereby assets are first tested for recoverability based on the undiscounted cash flows they are expected to generate. If the undiscounted cash flow is higher than the carrying amount of the asset, then no impairment charge is required to be recorded. If the undiscounted cash flow is lower than the carrying amount of the asset, the asset is written down to its estimated fair value. Under IFRS, impairment testing is done using a one-step approach for both testing and measurement of impairment, with asset carrying amounts compared directly with the higher of the fair value less cost to sell and value in use (which uses discounted cash flows). This might result in more frequent write-downs where carrying amounts of assets were previously supported under GAAP on an undiscounted cash flow basis, but could not be supported on a discounted cash flow basis.


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However, the extent of any asset write-downs may be partially offset by the requirement under IFRS to reverse any previously impaired losses where circumstances have changed such that the impairments have reduced. GAAP prohibits reversal of impairment losses.

Income Tax: GAAP requires the recognition of future income tax assets of both the acquirer and the acquiree in a business combination to be recorded as part of the purchase price allocation. IFRS requires the deferred tax assets of the acquirer to be recorded as a separate transaction from the purchase price allocation. As a result, under IFRS, any deferred tax assets of the acquirer would be recognized through earnings, instead of a reduction of goodwill. It is expected that this accounting change will not impact the Company’s financial results as no business combination transactions have been entered into.

The above disclosure related to IFRS is based on management’s current interpretation of requirements and may change as new information becomes available.

REGULATORY DISCLOSURES

Corporate Responsibility for Financial ReportsThe Company’s Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining the Company’s disclosure controls and procedures and internal control over financial reporting.

Disclosure Controls and ProceduresThe Company’s disclosure controls and procedures are designed to provide reasonable assurance that all relevant information is communicated to senior management, to allow timely decisions regarding required disclosure.

An evaluation of the effectiveness of the Company’s disclosure controls and procedures, as defined under National Instrument 52-109, was conducted as of December 31, 2009. Based on the results of that evaluation, the Chief Executive Officer and the Chief Financial Officer conclude that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this MD&A in providing reasonable assurance that the information required to be disclosed in the Company’s annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported in the securities legislation.

Since the December 31, 2009 evaluation, there have not been any adverse changes to the Company’s controls and procedures and they continue to be effective and continue to be enhanced.

Internal Control over Financial ReportingInternal control over financial reporting is designed to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of financial statements in compliance with GAAP. The Company’s internal control over financial reporting includes policies and procedures that:

n pertain to the maintenance of records that accurately and fairly reflect the transactions of the Company.n provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in

accordance with GAAP.n ensure the Company’s receipts and expenditures are made only in accordance with authorization of management and the

Company’s directors.n provide reasonable assurance regarding prevention of timely detection of unauthorized transactions that could have a

material affect on the annual or interim financial statements.

An evaluation of the effectiveness of the Company’s internal control over financial reporting was conducted as of December 31, 2009 by the Company’s management, including the Chief Executive Officer and the Chief Financial Officer. Based on this evaluation, management has concluded that the Company’s internal controls over financial reporting were effective.Since the December 31, 2009 evaluation, there have not been any material adverse changes to the Company’s internal controls over the Company’s financial reporting. The Company continues to monitor and enhance the control environment internally.


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Limitations of Controls and ProceduresThe Company’s management, including the Chief Executive Officer and the Chief Financial Officer, believe that any disclosure controls and procedures or internal control over financial reporting, no matter how well conceived and operated, can provide only reasonable and not absolute assurance that the objectives of the control system are met. Further, the design of a control system reflects the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additional, controls can be circumvented by the individual acts of some person, by collusion of two or more people, or by unauthorized override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.

Legal Proceedings, Disputes and Regulatory ActionsThe Company may be involved in legal proceedings from time to time, arising in the ordinary course of its business. Typically, the amount of ultimate liability with respect to these actions will not, in the opinion of management, materially affect Equinox’s financial position, statement of income or cash flows.

In assessing the loss contingencies related to legal proceedings that are pending against Equinox or unasserted claims that may result in such proceedings, the Company and its legal counsel evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency suggests that a loss is probable, and the amount can be reliably estimated, then a loss is recorded. When a contingent loss is not probable but is reasonably possible, or is probable but the amount of the loss cannot be reliably estimated, then details of the contingent loss are disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case we disclose the nature of the quantities. Legal fees incurred in connection with pending legal proceedings are expensed as incurred.

The Company has previously announced that it is in dispute with ZESCO, Zambia’s national power supply utility, over electricity charges believed by ZESCO to be incurred by the Company between 2007 and 2008. ZESCO has claimed invoice values totalling $9.0 million for the period up to December 31, 2008. However, based on legal advice the Company has determined a value of $2.0 million to be payable based on the terms of the contract. The Company disputes ZESCO’s claim, and has paid $2.0 million to ZESCO while conducting negotiations in an effort to resolve the matter. The ZESCO Notice of Termination has been withdrawn and management discussions continue with ZESCO. Equinox believes that the matter can be resolved in a reasonable manner.

Deed of Cross GuaranteeOn December 24, 2004, Equinox and certain Australian incorporated companies entered into a Deed of Cross Guarantee (the ‘Deed’) under which each company guarantees the liabilities of all other companies that are a party to the Deed. The companies which form this ‘Closed Group’ (as defined by Australian Securities and Investments Commission Class Order 98/1418) are Equinox Minerals Limited, Equinox Resources Limited and Equinox Peru Ventures Limited.

CAUTIONARY STATEMENTS

Forward-Looking InformationCertain information contained or incorporated by reference in this MD&A, including any information as to the Company’s strategy, projects, plans, prospects, future outlook, anticipated events or results or future financial or operating performance, constitutes ‘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’, ‘is expected’, ‘is expecting’, ‘budget’, ‘scheduled’, ‘estimates’, ‘forecasts’, ‘intends’, ‘anticipates’, ‘predicts’, ‘potential’, ‘continue’ or ‘believes’, or variation (including negative variations) of such words and phrases, or statements that certain actions, events or results ‘may’, ‘could’, ‘would’, ‘should’, ‘might’, ‘potential to’, or ‘will’ be taken, occur or be achieved or other similar expressions concerning matters that are not historical facts.

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Without limitation, statements that management expects the Lumwana plant to ramp up to 20 Mtpa in the second half of 2010, that 2010 production will be 135,000 tonnes of copper metal in concentrates at the average operating cost of $1.35 per pound; that the Company estimates uranium plant construction to take 18 to 24 months; that the Company will incur break fees of approximately $18.6 million; and that the Company believes that its Development Agreement with the Government of the Republic of Zambia overrides the current changes to the Zambian tax regime, including the timing and other related matters of such statements, are forward-looking statements. The purpose of forward-looking statements is to provide the reader with information about management’s expectations and plans for 2010 and subsequent years. Actual results may vary. See ‘Risks and Uncertainties’.

Forward-looking statements are necessarily based on a number of factors, estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Such factors, estimates and assumptions include, but are not limited to, anticipated financial or operating performances of Equinox, it 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 grade, quality and content of the concentrate produced; the sale of production and the performance of offtakers; capital, operating and exploration expenditures; costs and timing of the development of the Lumwana Mine, 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. Without limitation, in stating that management expects the Lumwana plant to ramp up to 20 Mtpa in the second half of 2010 and that 2010 production should be 135,000 tonnes of copper metal in concentrates at the average operating cost of $1.35 per pound, the Company has assumed improvements in mine productivity and that the onset of the wet season will not impact operations more than expected. In stating that the Company estimates uranium plant construction to take 18 to 24 months, the Company has assumed that the costs of building such a plant will be feasible, that the materials, labour, regulatory approvals and other requirements will be available and that the price and demand for uranium will be profitable and that the underlying assumptions and information in the uranium feasibility study are correct. Further in relation to the mining of the orebody, it assumes that it will successfully segregate the uranium mineralization within the copper orebody at the lower 200 ppm uranium cutoff grade and produce concentrates that meet smelter specifications. In stating that the Company will incur break fees of $18.6 million, it has assumed that its calculations of break fees in accordance with the terms of the existing facilities is accurate and complete and that the legal and accounting advice received is correct. In stating that the Company believes that its Development Agreement overrides the current changes to the Zambian tax regime the Company has assumed that the legal advice received from its local and international legal advisors is correct.

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, including costs, production and returns, to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These factors include, but are not limited to, 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 offtake arrangements and terms and/or enforcing such terms; insurance and uninsured risks; government regulation; titles, licences and permits; environmental risks; risks inherent in the estimation of reclamation costs; risks related to the Company’s hedging activities; estimation of asset carrying values; litigation; competition; reliance on key personnel; global financial conditions. These risks are discussed in this MD&A under the section entitled ‘Risks and Uncertainties’. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made in this MD&A are qualified by these cautionary statements.

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Although Equinox has attempted to identify statements containing important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking information contained herein are made as of the date of this document based on the opinions and estimates of management on the date statements containing such forward looking information are made, and Equinox disclaims any obligation to update any forward-looking information, whether as a result of new information, estimates or opinions, future events or results or otherwise. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward looking information.

Technical InformationCertain technical information in this MD&A is summarized or extracted from the ‘Technical Report on the Lumwana Project, North Western Province, Republic of Zambia’ dated June 2008 as re-filed in April 2009 (the ‘Technical Report’), prepared by Ross Bertinshaw, Principal, Golder Associates Pty Ltd Daniel Guibal, Corporate Consultant, SRK Consulting (Australasia) Pty Ltd, Andrew Daley, Director, Investor Resources Finance Pty Ltd, and Robert Rigo, Vice-President – Project Development, Equinox, each of whom is a ‘Qualified Person’ in accordance with National Instrument 43-101 — Standards of Disclosure for Mineral Projects (‘NI 43-101’). Information of a scientific or technical nature contained in this MD&A arising since the date of the Technical Report is provided by Equinox management and was prepared under the supervision of Robert Rigo, Vice-President – Project Development or John Cooke, Exploration Manager, each of whom is a ‘Qualified Person’ in accordance with NI 43-101. Readers are cautioned not to rely solely on the summary of such information contained in this MD&A, but should read the 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 and therein.


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Management’s Responsibility for Financial Reporting

The accompanying consolidated financial statements of Equinox Minerals Limited (‘the Company’) were prepared by management in accordance with Canadian generally accepted accounting principles. Management acknowledges responsibility for the preparation and presentation of the consolidated financial statements, including responsibility for significant accounting judgments and estimates and the choice of accounting principles and methods that are appropriate to the Company’s circumstances. The significant accounting policies of the Company are summarized in note 2 to the consolidated financial statements.

Management has established systems of internal control over the financial reporting process, which are designed to provide reasonable assurance that relevant and reliable financial information is produced.

The Board of Directors is responsible for reviewing and approving the consolidated financial statements and for ensuring that management fulfils its financial reporting responsibilities. An Audit Committee assists the Board of Directors in fulfilling this responsibility. The members of the Audit Committee are not officers of the Company. The Audit Committee meets with management as well as with the independent auditors to review the internal controls over the financial reporting process, the consolidated financial statements and the auditors’ report. The Audit Committee also reviews the Annual Report to ensure that the financial information reported therein is consistent with the information presented in the financial statements. The Audit Committee reports its findings to the Board of Directors for its consideration in approving the consolidated financial statements for issuance to the shareholders.

Management recognizes its responsibility for conducting the Company’s affairs in compliance with established financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.

Craig Williams Mike KlessensPRESIDENT AND CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICERMarch 10, 2010

Equinox Minerals Limited Consolidated Financial StatementsDecember 31, 2009 and 2008 Expressed in thousands of US dollars, except where indicated

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Auditors’ Report to the Shareholders of Equinox Minerals Limited

We have audited the consolidated balance sheets of Equinox Minerals Limited (‘the Company’) as at December 31, 2009 and 2008 and the consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2009 and 2008 and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles.

PricewaterhouseCoopersPerth, AustraliaMarch 10, 2010

Equinox Minerals Limited Consolidated Financial StatementsAs at December 31, 2009 and 2008

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Equinox Minerals Limited Consolidated Balance SheetsAs at December 31, 2009 and 2008

Notes 2009 2008

ASSETS $000 $000Current assets Cash and cash equivalents 109,130 51,327 Accounts receivable 6 134,193 35,409 Prepayments 16,080 6,471 Inventories 7 67,428 27,473 Current portion of derivative instruments 11 — 127,570 326,831 248,250 Restricted cash 8 26,164 26,076Property, plant and equipment 9 1,102,773 1,067,290Derivative instruments 11 — 129,109Other financial assets 10 1,906 406

1,457,674 1,471,131

LIABILITIES Current liabilities Accounts payable and accrued liabilities 62,504 65,816 Current portion of long term debt 12 113,229 138,367 Current portion of finance leases 18 9,339 923 Current portion of derivative instruments 11 85,179 — Current other liabilities 160 — 270,411 205,106 Long term debt 12 405,423 475,040Finance leases 18 16,762 3,418Income tax liability 5 6,727 6,727Future income tax liability 5 5,938 62,838Asset retirement obligation 13 7,504 5,358Long term compensation 14 2,469 269Derivative instruments 11 22,131 —Other payables 15 39,737 2,167 777,102 760,923

SHAREHOLDERS’ EQUITY Share capital 16 737,838 581,477Retained (deficit)/earnings (74,720) 108,343Contributed surplus 15,966 20,400Accumulated other comprehensive income/(loss) (net of tax) 1,488 (12) 680,572 710,208

1,457,674 1,471,131

Contingencies 17 Commitments for expenditure 18

APPROVED BY THE BOARD

Craig Williams, Director Peter Tomsett, DirectorThe accompanying notes are an integral part of these consolidated financial statements.

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Notes 2009 2008

$000 $000 Copper sales revenue 531,962 —Smelter treatment charges (63,483) —Net sales revenue 468,479 —

Direct and indirect mining costs 212,016 —Amortization and depletion 46,688 —Royalties 14,114 —Cost of sales 272,818 — 195,661 —

Expenses Derivative loss/(gain) 329,826 (271,520)Exploration 5,119 10,262Other operating costs 5,870 314General and administration 10,241 8,388Financing costs 4 76,871 3,660Incentive stock options expensed 1,989 4,953Other expense 3 5,708 3,325

435,624 (240,618) (Loss)/income before income tax and non controlling interest (239,963) 240,618 Income tax benefit / (expense) 5 56,900 (67,937) Net (Loss)/income for the period (183,063) 172,681

Basic (loss)/earnings per share (0.27) 0.30Diluted (loss)/earnings per share (0.27) 0.29 Weighted average number of shares outstanding (000’s) 670,385 583,800Diluted average number of shares outstanding (000’s) 683,665 601,312

Consolidated Statement of Comprehensive IncomeFor the years ended December 31, 2009 and 2008 2009 2008

$000 $000 (Loss)/Income for the period (183,063) 172,681Other comprehensive income/(losses) Losses on derivatives designated as cash flow hedges (net of tax) — (40,197) Gains on derivatives designated as cash flow hedges transferred to net income in the current period (net of tax) — 86,862 Fair value movements in available-for-sale securities 1,500 (2,521) Impairment loss on available-for-sale securities transferred to net income (net of tax) — 946

Total comprehensive (loss)/gain (181,563) 217,771

The accompanying notes are an integral part of these consolidated financial statements.

Equinox Minerals Limited Consolidated Statements of IncomeFor the years ended December 31, 2009 and 2008

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2009 2008

$000 $000Share capital Balance at start of period 581,477 499,715 Issue of shares 148,325 8,628 Share issue costs (7,356) — Conversion of stock options 15,392 1,400 Conversion of warrants — 71,734

Balance at end of period 737,838 581,477

Retained earnings/(deficit) Balance at start of period 108,343 (64,338) Net (loss)/income for the period (183,063) 172,681

Balance at end of period (74,720) 108,343

Contributed surplus Balance at start of period 20,400 15,941 Stock based compensation 2,516 5,040 Transferred to share capital on conversion of stock options (6,424) (494) Forfeited stock options (526) (87)

Balance at end of period 15,966 20,400

Warrants Balance at start of period — 12,122 Transferred to share capital on conversion of warrants — (12,121) Forfeited warrants — (1)

Balance at end of period — —

Accumulated other comprehensive income/(loss) Balance at start of period (12) (45,102) Net unrealised derivative instrument gains (net of tax) — 46,665 Net unrealised gain/(losses) on available-for-sale securities 1,500 (2,521) Impairment loss on available-for-sale securities transferred to net income (net of tax) — 946 Balance at end of period 1,488 (12)

The accompanying notes are an integral part of these consolidated financial statements.

Equinox Minerals Limited Consolidated Statements of Changes in Shareholder’s EquityFor the years ended December 31, 2009 and 2008

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Notes 2009 2008

$000 $000 Cash flows (used in) / provided by operating activities Net (loss)/income for the period (183,063) 172,681 Items not affecting cash: Depletion and amortisation 50,179 314 Unrealised foreign exchange loss/(gain) 787 (903) Incentive stock option expense 1,989 4,953 Income tax (benefit)/expense 5 (56,900) 67,937 Net financing costs 24,274 (33,003) Long term compensation expense/(benefit) 14 2,200 (152) Mark-to-market changes in derivative instruments 11 329,826 (347,656) Proceeds from settlement of derivative instruments 11 34,163 89,478 Impairment loss on available for sale securities and other financial assets — 2,318 Accretion expense 372 — Deferred payments 30,163 — Other — 4 Changes in non-cash working capital Increase/(decrease) in accounts payable and accrued liabilities 9,488 (646) Increase in inventories (39,954) (27,473) Increase in accounts receivable and prepayments (108,395) (9,483)

95,129 (81,631)

Cash flows (used in) / provided by financing activities Issue of share capital 16 157,293 60,518 Share issue costs 16 (7,356) — Proceeds from borrowings 4,470 349,967 Repayment of borrowings (139,323) (23,587) Finance lease principal repayments (2,443) —

12,641 386,898

Cash flows (used in) / provided by investing activities Increase in restricted cash (88) (475) Payments for property, plant and equipment (50,164) (327,322) (50,252) (327,797)

Net increase/(decrease) in cash and cash equivalents 57,518 (22,530)Cash and cash equivalents – start of period 51,327 73,367Effects of exchange rate changes on cash held in foreign currencies 285 490

Cash and cash equivalents – end of period 109,130 51,327

Total interest payments made 44,121 31,466 The accompanying notes are an integral part of these consolidated financial statements.

Equinox Minerals Limited Consolidated Statements of Cash FlowsFor the years ended December 31, 2009 and 2008

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Equinox Minerals Limited Notes to the Consolidated Financial StatementsFor the years ended December 31, 2009 and 2008


1. BASIS OF PREPARATION The preparation of the financial statements is in accordance with the requirements of Canadian generally accepted accounting

principles (‘Canadian GAAP’). Equinox Minerals Ltd (‘EQN’ or the ‘Company’) is engaged in the production of copper, and related mining activities including exploration within Zambia.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) PrinciplesofConsolidation The consolidated financial statements incorporate the assets, liabilities and results of all entities controlled by the Company. The effects of all transactions between entities in the consolidated group are eliminated in full. Where control of an entity is obtained during a financial year, its results are included in the consolidated statements of income

from the date on which control commences. Where control of an entity ceases during a financial year its results are included for that part of the year during which control exists.

(b) UseofEstimates The preparation of financial statements in conformity with Canadian GAAP requires management to make estimates and

assumptions that affect the amounts reported in the consolidated financial statements and related notes. Significant areas where management’s judgement is applied include reserve and resource estimation, employee stock options, future income taxes, fair values of derivative instruments, asset retirement obligations and contingent liabilities. Actual results may differ from those estimates.

(c) IncomeTaxes The Company accounts for income taxes in accordance with the liability method. The determination of future tax assets and

liabilities is based on the differences between the financial statement carrying amounts and the income tax bases of assets and liabilities, using substantively enacted tax rates in effect for the period in which the differences are expected to reverse. Future tax assets are recorded to recognize tax benefits only to the extent that, based on available evidence, it is more likely than not they will be realized.

(d) ExplorationandEvaluationCosts Exploration and evaluation expenditure costs incurred by the entity are accumulated separately for each area of interest. Such

expenditure comprises net direct costs and an appropriate portion of related overhead and foreign exchange movement on loans directly attributable to an exploration project.

Exploration and evaluation expenditure for each area of interest is written off as incurred, unless such costs are expected to be

recouped through successful development and exploitation of the area of interest or, alternatively, by its sale. Expenditure is not deferred in respect of any area of interest or mineral resource unless the Company’s rights of tenure to that area of interest are current. Although the Company has taken steps to verify title to its areas of interest, these procedures do not guarantee the Company’s title. Such areas of interest may be subject to prior undetected agreements or transfers and title may be affected by such defects.

Deferred exploration and evaluation costs are transferred to mine development once a development decision has been

taken. Deferred exploration and evaluation costs will be amortised over the estimated useful life of the ore body, on a units-of-production basis, from the commencement of commercial extraction, or written off if the property is sold or abandoned.

Borrowing costs included in exploration and evaluation expenditure are those costs that would have been avoided if the

expenditure had not been incurred. Where impairment indicators are present management assesses the recoverable value of mineral properties and where they

believe those values to be lower than the carrying values, such expenditure will be written down to fair value accordingly. Management’s estimate of fair value is subject to risks and uncertainties affecting the recoverability of the Company’s investment in these areas. Although management have made their best estimate of these factors based on current conditions, it is possible that changes could occur in the near term which could adversely affect this estimate of the recoverability of mineral properties, deferred exploration and evaluation costs.

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(e) ForeignCurrencyTranslations The Company employs the current rate method of translation for its self-sustaining operations. Under this method, all assets

and liabilities are translated at the year-end rates and all revenue and expense items are translated at the average monthly exchange rates for recognition in income. Differences arising from these foreign currency translations are recorded in accumulated other comprehensive income as a cumulative translation adjustment until they are realized by a reduction in the net investment.

The Company employs the temporal method of translation for its integrated operations. Under this method, monetary assets and liabilities are translated at the year-end rates and all other assets and liabilities are translated at applicable historical exchange rates. Revenue and expense items are translated at the rate of exchange in effect at the date the transactions are recognized in income. Realized exchange gains and losses and currency translation adjustments are included in income.

(f) Revenue Revenue from sales of copper concentrate is recorded net of smelter treatment charges and deductions. Copper products

are sold under pricing arrangements whereby final prices are determined at a specified future date based on market copper prices. Revenue is recognised when title and risk pass to the customer using forward prices for the expected date of final settlements. Changes between the price recorded upon recognition of revenue and the final price due to fluctuations in copper market prices result in the existence of an embedded derivative in the accounts receivable. This embedded derivative is recorded at fair value, with changes in fair value classified as a component of revenue.

(g) Property,PlantandEquipment Property, plant and equipment are recorded at cost less accumulated depletion and amortization. Interest and financing costs

that relate to the project and are incurred during the construction period are capitalized. The cost of each item of buildings, fixed plant, mobile machinery and equipment is written off over its expected useful life. Either the units-of-production or straight line method may be used. The units-of-production basis results in an amortization charge proportional to the depletion of the proven and probable reserves. Each item’s economic life has due regard to both its own physical life limitations and to present assessments of the proven and probable reverse resources of the mine property at which the item is located, and to possible future variations in those assessments. Estimates of remaining useful lives are made on a regular basis for all mine buildings, fixed plant and mobile machinery and equipment, with annual reassessments for major items.

Mine property, plant and equipment amortization is calculated using the units of production method or on a straight line basis over the estimated useful life of the asset if the asset’s useful life is less than the life of mine. The useful lives for each asset category of property, plant and equipment are detailed in the table below:

Asset Category Useful life Mine Development Units of Ore Production Process Plant Units of Ore Production Mining Mobile Equipment 10 years Ancillary Mobile Equipment 6 – 10 years Buildings & Infrastructure 10 – 15 years Light Vehicles 5 years Office Equipment 3 years

Major spares purchased specifically for particular plant are capitalized and amortized on the same basis as the plant to which they relate.

The Company reviews property, plant and equipment for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable based on future undiscounted cash flows. When assets are determined to be impaired, recorded asset values are revised to fair value and an impairment loss is recognized. This fair value is determined based on discounted cash flows, with the impairment loss being calculated as the excess of the carrying amount over the fair value.


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Construction in progress is accumulated and carried forward at cost until the construction is complete. On completion the asset is transferred to property, plant and equipment and is amortized over its expected useful life. Mine development costs are accumulated and carried forward at cost until the completion of the mine. On completion, the asset is amortized on a units-of-production basis.

(h) DerivativesandHedging The Company periodically enters into derivative instruments to mitigate exposures to copper commodity prices. Embedded

derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related.

Cash flow hedges are recognised initially at fair value, and attributable transaction costs are recognized in the income statement when incurred. Subsequent to initial recognition, changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognized directly in equity to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognised in income statement.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognized in other comprehensive income remains there until the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, the cumulative gain or loss that was recognized in other comprehensive income is immediately transferred to the income statement.

Fair values for derivative instruments held for trading are determined using valuation techniques. Valuations use assumptions based on market conditions existing at the balance sheet date. Realized gains and losses are recorded as a component of operating cash flow.

(i) Cash and Cash Equivalents Cash and cash equivalents are comprised of highly liquid investments with maturity of three months or less at the date of

original issue. It excludes cash subject to restrictions under long term debt facilities. (j) Earnings per Share Basic earnings per share is determined by dividing the net profit/(loss) by the weighted average number of ordinary shares

outstanding during the financial period. Diluted earnings per share is calculated using the ‘treasury stock’ method. Under this method, dilution is calculated based upon the net number of common shares issued, assuming ‘in the money’ options were exercised and the proceeds used to repurchase common shares at a weighted average market price.

(k) AssetRetirementObligations The Company records asset retirement obligations at fair value in the period in which the liability is incurred. Fair value

is determined based on the estimated future cash flows required to settle the liability discounted at the Company’s credit adjusted risk free interest rate. The liability is adjusted for changes in the expected amounts and timing of cash flows required to discharge the liability and accreted over time to its full value. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset and amortized over the expected useful life of the asset.

(l) Long-termdebt Long-term debt instruments are initially recognized at fair value, net of debt issuance costs incurred. Debt instruments are

subsequently valued at amortized cost. Debt issue costs are included in the balance of the underlying debt and amortized using the effective interest rate method.

(m)Stock-basedCompensation The Company may issue stock based compensation to directors, employees and external parties under the terms of its stock

option plans, deferred share unit (‘DSU’) plan and restricted share units (‘RSU’) plan. The Company expenses the intrinsic value of stock options granted over the applicable vesting period. DSU’s vest immediately and the initial intrinsic value is recognised as directors’ fees within general and administrative costs in the consolidated statement of income. RSU’s vest on the third anniversary of their grant date and the initial intrinsic value is recognised within general and administrative costs in the consolidated statement of income.

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Stock options granted to directors, employees or external parties are recognized at fair value as an expense in equal instalments over the vesting period (except where the expense constitutes a borrowing cost and is deferred in accordance with note 2 (d)) and credited to the contributed surplus account. The expense is determined using an option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the current price and expected volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. Cash received from the exercise of options for common shares is credited to share capital.

The fair value of DSU’s at grant date is determined by reference to the average market share price of the Company over the five trading days immediately preceding the date of grant. Changes in their fair value are recorded in other income/expenses. The fair value of DSU’s is marked to the quoted market share price of the Company at each reporting date.

The fair value of RSU’s at grant date is determined by reference to the average market share price of the Company over the twenty trading days immediately preceding the date of grant. Changes in their fair value are recorded in other income/expenses. The fair value of DSU’s is marked to the quoted market share price of the Company at each reporting date.

(n) Receivables Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective

interest rate method, less any provisions for impairment. Trade receivables are generally due for settlement within 180 days. The collectability of trade receivables is reviewed on an ongoing basis. Accounts which are known to be uncollectible are written off. A provision for impairment is raised when there is evidence that the Company will not be able to collect all amounts due.

(o) Inventories Inventories of broken ore and concentrate are physically measured or estimated and valued at the lower of cost and net

realizable value. Cost represents weighted average cost and includes direct costs and an appropriate portion of fixed and variable overhead expenditure, including depreciation and amortization.

Inventories of consumable supplies and spare parts to be used in production are valued at weighted average cost. Obsolete or damaged inventories are valued at net realizable value. A regular and ongoing review is undertaken to establish the extent of surplus items, and a provision is made for any potential loss on their disposal.

(p) TradeandOtherPayables These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which

are unpaid. The amounts are unsecured and are usually paid within 90 days of recognition.

(q) Investments Available-for-sale investments Investments are classified as available-for-sale and recorded at fair value. Changes in their fair value net of tax are recorded in

other comprehensive income. The change in fair value of an investment appears in net income only when it is sold or impaired. Valuations of the investments have been determined based on a hierarchy of valuation principles, which have been applied based on publicly available information. The valuation approach applied is as follows:

n fair values of instruments traded in active markets are based on quoted market prices at the reporting date. n where instruments are not traded in an active market, fair value is determined using valuation techniques taking into

account market information for financial instruments with similar characteristics as the underlying instrument being valued.

n where there is no comparable market information to determine the fair value of the instrument, fair value is calculated using other techniques, such as estimated discounted cash flows using contractual terms of the instrument, discount rates considered appropriate for the credit risk of the instrument and the current volatility in the market place.

When information or events indicate other than a temporary decline in value, the impairment loss is taken to the income statement in the period in which such events occur. Impairment losses recognized in net income for an equity financial instrument classified as available for sale are not reversed. Impairment losses on available-for-sale debt financial instruments are reversed in the income statement when the events or circumstances leading to the impairment subsequently reverse.

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(r) Contingentliability In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that

may result in such proceedings, the Company and its legal counsel evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency suggests that a loss is probable, and the amount can be reliably estimated, then a loss is recorded. When a contingent loss is not probable but is reasonably possible, or is probable but the amount of loss cannot be reliably estimated, and then details of the contingent loss are disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case we disclose the nature of the quantities. Legal fees incurred in connection with pending legal proceedings are expensed as incurred.

(s) Recentaccountingpronouncements In December 2008, the Canadian Institute of Chartered Accountants (‘CICA’) issued amendments to Financial Instruments

sections 3855, 3861 and 3862 permitting reclassification of a financial asset or liability out of the held-for-trading or available-for-sale category to other financial instruments categories in specified circumstances effective on or after July 1, 2008. The adoption of these amendments had no impact on the financial results of the Company.

In January 2009, the Emerging Issues Committee of the CICA issued EIC-173, ‘Credit Risk and the Fair Value of Financial Assets and Financial Liabilities’, which applies to interim and annual financial statements for periods ending on or after January 20, 2009. The Company has adopted these recommendations and there was no material impact on the Company’s financial statements.

In March 2009, the CICA issued an EIC Abstract on Impairment Testing of Mineral Exploration Properties, EIC-174. This Abstract discusses the analysis recommended to be performed to determine if there has been an impairment of mineral exploration properties. The Company considered the recommendations, when testing for impairment of mineral exploration properties in the period and no impairment adjustments were required.

In June 2009, the CICA amended the financial instruments – Disclosures section 3862 to require enhanced disclosure about the fair value assessments of the financial instruments. The new disclosures are based on a fair value hierarchy that categorizes financial instruments measured at fair value at one of three levels according to the reliability of the inputs used to estimate the fair values. The amendments apply to annual financial statements for fiscal years ending after September 30, 2009. The Company has adopted these disclosures effective in the December 31, 2009 annual financial statements (note 20).

In August 2009, the CICA amended Financial Instruments section 3855 to add guidance concerning the assessment of embedded derivatives upon reclassification of a financial asset out of the held-for-trading category. These amendments apply to reclassifications made on or after July 1, 2009. This Section has also been amended to change the categories into which a debt instrument is required or permitted to be classified, change the impairment model for held-to-maturity financial assets, and require reversal of previously recognized impairment losses on available-for-sale financial assets in specified circumstances. The Impaired Loans section 3025 was also amended to conform the definition of a loan to that in amended Section 3855 and to include held-to-maturity investments within the scope of the Impaired Loans section. The adoption of these amendments had no impact on the financial results of the Company.

(t) FutureAccountingChanges

Business Combinations In October 2008, the CICA issued Handbook Section 1582, ‘Business Combinations’, which establishes new standards for

accounting for business combinations. This is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2011. Should the Company engage in a future business combination, it would consider early adoption to coincide with the adoption of IFRS.

Non-controlling Interests Also in October 2008, the CICA issued Handbook Section 1602, ‘Non-controlling Interests’, to provide guidance on accounting

for non-controlling interests subsequent to a business combination. This is effective for fiscal years beginning on or after January 2011.


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3. OTHER EXPENSES 2009 2008

$000 $000 Foreign exchange loss 1,864 4,159 Loss on available-for-sale securities — 632 Impairment loss on available-for-sale securities — 1,320 Impairment loss on other financial assets — 366 Interest income (642) (2,233) Long term compensation mark-to-market expense/(income) 1,485 (779) Town costs1 3,119 — Other income (118) (140) Total other expenses 5,708 3,325

1 Town costs include the costs of housing employees at Lumwana.

4. FINANCE FEES 2009 2008

$000 $000 Finance fees 74,442 — Other 2,429 3,660

Total finance fees 76,871 3,660

5. INCOME TAX

(a) Income tax benefit

The income taxes shown in the consolidated statement of income differ from the amounts obtained by applying statutory rates to the earnings before provision for incomes taxes due to the following:

2009 2008

$000 $000 (Loss)/profit from ordinary activities before income tax (239,963) 240,618 Income taxes at Canadian statutory rates – 33.0 % (2008: 33.5%) 79,188 (80,607) Difference in tax rates (8,194) 7,840 Non-deductible expenses (12,668) 9,088 Tax benefits not recognized (2,894) (4,258) Under/over’s from prior years 1,468 —

Income tax benefit/(expense) for the period 56,900 (67,937)

Comprising: Current income tax (expense)/benefit (47,906) (5,099) Future income tax (expense) 103,338 (62,838) Prior year under/(over) provisions 1,468 —

56,900 (67,937)

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Management estimate the Company’s tax losses carried forward at December 31, 2009 where no income tax benefit has been brought to account are $48.4 million (2008: $40.4 million). No income tax benefit has been brought to account in respect of these losses, as this benefit is not considered more likely than not to be realized.

The Government of the Republic of Zambia (‘GRZ’) enacted on April 1, 2008, a number of changes to the Zambian tax regime, particularly in relation to mining companies. This includes changes to the tax treatment that would increase corporate tax from 25% to 30%, the mining royalty from 0.6% to 3%, and other proposed additional imposts including a ‘variable profit tax’, and treatment of hedging income as separate source income.

On January 30, 2009, the Minister of Finance of the GRZ announced changes to the 2009 Budget which include the abolition of a number of changes enacted in 2008, including the removal of the hedging activity quarantine provisions. The Company has applied the tax changes for the 2009 tax year.

In 2005 the Company entered into a Development Agreement with GRZ for its Lumwana Mine which provides LMC with a 10 year stability period in the regulatory environment, including taxation, and rights of independent arbitration in the event of any dispute. Following local and international legal advice, the Company believes that its Development Agreement overrides the current changes to the Zambian tax regime. Until it has resolved the uncertainty surrounding the application of the Development Agreement, the company has measured in the current year its taxation balances on the basis of the enacted legislation.

If the Company had calculated its taxation related balance based on the terms of the Development Agreement the royalty expense for the year ended December 31, 2009 would have reduced by an estimated $11.3 million and the income tax benefit for the year ended December 31, 2009 would have reduced by an estimated $12.2 million. The retained earnings loss position at December 31, 2009 would have reduced by an estimated $11.2 million.

(b) Future income tax liability

The Company records future income tax assets and liabilities where temporary differences exist between the carrying amounts of assets and liabilities in the balance sheet and their tax bases. The measurement and recognition of future income tax assets and liabilities takes into account: enacted (and substantively enacted) rates that will apply when temporary differences reverse; interpretations of relevant tax legislation; tax planning strategies; estimates of the tax bases of assets and liabilities; and the deductibility of expenditures for income tax purposes.

The significant components of the Company’s future income tax assets and liabilities are as follows:

2009 2008

$000 $000 Future income tax asset Derivative instruments losses 32,193 — Non-capital losses carry forwards 260,055 303,806 Provisions — 2,737 Other 1,355 4,701 293,603 311,244 Future income tax liability Property, plant and equipment 296,535 292,187 Unrealised gains on derivative instruments — 78,982 Other 3,006 2,913 299,541 374,082 Net future income tax liability (5,938) (62,838)


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6. ACCOUNTS RECEIVABLE December 31 December 31 2009 2008

$000 $000

Trade accounts receivable 127,957 27,556 VAT receivable 3,765 7,220 Other receivables 2,471 633

Total accounts receivable 134,193 35,409

7. INVENTORIES December 31 December 31 2009 2008

$000 $000

Consumable stores – at cost 51,695 15,016 Run of mine stockpile – at cost for 2009 and net realisable value for 2008 10,819 5,844 Crushed ore stockpile – at cost for 2009 and net realisable value for 2008 1,522 178 Copper in circuit stockpiles – at cost for 2009 and net realisable value for 2008 144 515 Copper concentrate stockpile – at cost for 2009 and net realisable value for 2008 3,248 5,920

Total inventories 67,428 27,473

8. RESTRICTED CASH December 31 December 31 2009 2008

$000 $000

Cash deposits held as security 26,164 26,076

As at December 31, 2009, $25.3 million (2008: $25.3 million) plus accumulated interest is deposited in a demobilisation cost reserve account as required under the terms of the Lumwana mining fleet finance agreement and will remain for the duration of the debt facility. In addition, cash deposits were held as security in relation to office premises and exploration tenements.


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9. PROPERTY, PLANT AND EQUIPMENT December 31 December 31 2009 2008

$000 $000 Buildings Buildings – at cost 107,221 6,426 Less: accumulated amortization (8,866) (155) 98,355 6,271 Plant & equipment Plant & equipment – at cost 674,573 200,731 Less: accumulated amortization (72,671) (30,588) 601,902 170,143 Construction in progress – at cost 37,191 548,271 Mine development Mine development – at cost 378,708 342,605 Less: accumulated amortization (13,383) — 365,325 342,605

Total property, plant and equipment 1,102,773 1,067,290

Mine development includes finance costs for the first three months of the year ended December 31, 2009 of $13.3 million (for

the year ended December 31, 2008: $36.2 million). Capitalization of interest costs ceased on April 1, 2009, once the Lumwana mine achieved commercial production.

(a) Leased Assets

Plant and equipment includes the following amounts where the Company is a lessee under a finance lease:

December 31 December 31 2009 2008

$000 $000 Leased equipment Plant & equipment – at cost 30,492 6,289 Less: accumulated amortization (3,721) (2,017)

Total leased plant and equipment 26,771 4,272

10. AVAILABLE-FOR-SALE INVESTMENTS December 31 December 31 2009 2008

$000 $000

Balance – start of period 406 4,344 Mark to market fair value adjustments 1,500 (3,938)

Balance – end of period - available-for-sale securities at fair value 1,906 406

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11. DERIVATIVE INSTRUMENTS

As at December 31, 2009 and pursuant to the lending requirements for the Lumwana Project $582.7 million debt facility, the Company has entered into a number of copper put options and forward contracts relating to a proportion of its expected copper production at the Lumwana mine designed to provide protection from exposure to fluctuations in the copper price.

Upon entering into the copper put option contracts, the Company incurred a premium of $86.5 million, to be due and payable on expiry of the underlying contracts. For the remaining put options, expiring between January 2010 and March 2011, the fair value of the premium payable is $37.8 million. There is no premium or cost associated with the copper forward contracts.

Changes in the fair value of derivatives are recognized in the income statement. For part of the 2008 financial year the Company satisfied the requirements of hedge accounting, where changes in the fair value of the derivatives were initially recorded in other comprehensive income. However this was discontinued in the fourth quarter of 2008.

The mark-to-market fair value of all contracts is based on independently provided market rates and determined using standard valuation techniques. These techniques include the impact of counterparty credit risk.

A mark-to-market loss of $329.8 million on the put options and forward contracts has been recorded in the income statement in the current year. The spot price of copper at December 31, 2009 used for the mark-to-market valuations was $3.33 per pound (December 31, 2008; $1.38 per pound).

The following table summarizes the copper derivatives in place:

2010 2011 Total

Copper put options: Tonnes 24,400 5,000 29,400 Average price ($/tonne) $5,673 $5,364 $5,620 Average price ($/lb) $2.57 $2.43 $2.55 Copper forwards: Tonnes 33,080 8,280 41,360 Average price ($/tonne) $5,663 $5,367 $5,603 Average price ($/lb) $2.57 $2.43 $2.54

Derivative instruments included in the balance sheet comprise: December 31 December 31 2009 2008

$000 $000 Fair value of derivative instruments – start of period 256,679 (63,719) Copper contracts matured during period resulting in cash receipt (34,163) (13,342) Mark-to-market fair value (loss)/gain during period (329,826) 333,740 Fair value of derivative instruments – end of period (107,310) 256,679 Less: current portion 85,179 (127,570)

Total non-current derivative instruments (22,131) 129,109


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12. LONG TERM DEBT

The following table summarizes the Company’s long term debt:


$000 $000 EIB €7 million unsecured loan (a) 9,561 7,400 Lumwana Project finance facility (b) 509,091 606,007 Balance – end of period 518,652 613,407 Less: current portion (113,229) (138,367)

Total non-current long term debt 405,423 475,040

(a) EIB loan – unsecured

The Euro based loan, issued by the European Investment Bank (‘EIB’), has a thirteen year term, expiring in 2014. Under the terms of the loan facility, the repayment of the principal will be in eight annual equal instalments until September 2014, the first instalment of $1.2 million was paid in September 2007. Interest is paid annually on September 30, and was fixed at 5.26% per annum up to September 30, 2007 after which it has converted to a variable rate that adjusts on a sliding scale related to the price of copper from time to time. Interest on the loan for the year ended December 31, 2009 was $1.25 million (2008: $1.5 million) with interest paid up to December 31, 2009 of $1.25 million (2008: $1.5 million). The carrying value has been adjusted in accordance with the Company’s foreign exchange accounting policy.

(b) Lumwana Project financing facility

In December 2006, Equinox signed a US$582.7 million senior and subordinated Project finance facility for the completion of development and construction of the Lumwana Project located in the North Western Province of the Republic of Zambia. The facility is comprised of three tranches, $54.0 million subordinated debt facility, $364.0 million senior debt facility and $164.7 million asset backed facility. In response to the delay in commencement of commercial production caused by the fire incident at the Lumwana Project, the Company signed an $80.0 million extension to the above senior debt facility in September 2008.

The different tranches of the Project debt facility carry interest rates of LIBOR plus a margin range of between 85 – 490 basis points during the construction period, then 85 – 440 basis points subsequent to the completion of construction pursuant to the relevant Facility Agreements. The debt facilities have tenure of between 7-9 years, with scheduled repayments that commenced in December 2007. The security for the debt facilities includes a fixed and floating charge over the assets and assignment of all contract agreements of Lumwana Mining Company Limited. In addition, a parent company guarantee is in place that requires Equinox to do all things necessary to cause the Project to achieve Project completion by no later than March 31, 2010.

As a result of the refinancing disclosure in note (c) below, the Company will incur break fees on its existing facilities. These contractual amounts have therefore been recognised in the measurement of the related loan balance at December 31, 2009 and expensed within financing fees (note 4).

Interest on the facility for the year ended December 31, 2009 was $42.1 million (2008: $34.7 million) with interest paid of $42.8 million (2008: $29.7 million).

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(c) Corporate finance facility

On February 24, 2010, the Company reached agreement with four commercial banks to provide a new corporate loan facility (the ‘Corporate Facility’) totalling $400 million. The Corporate Facility affords Equinox greater flexibility than the existing Lumwana Project debt facilities therefore the Company will utilize the Corporate Facility to repay its existing senior and subordinated portions of the Lumwana Project debt facilities as well as the unsecured EIB loan. As a result of the refinancing certain amounts, that would otherwise have been payable within 12 months of balance sheet date, have been rescheduled and are therefore included in long term debt due after December 31, 2010. Refer to note 22 for further details.

(d) FMO financing facility

The FMO facility will not be drawn down on and will lapse as a result of the refinancing disclosure in note (c) above. The schedule of combined future repayment dates of the long term debt are as follows:


$000 $000

Within 1 year 113,229 138,367 Within 1 to 2 years 113,363 136,598 Within 2 to 3 years 106,828 127,855 Within 3 to 4 years 9,727 113,576 Within 4 to 5 years — 75,462 Thereafter 180,000 47,873

523,147 639,731

Balance of finance fees – end of period (4,495) (263,24)

518,652 613,407

13. ASSET RETIREMENT OBLIGATION

The Company has restoration and remediation obligations associated with its Lumwana Mine. The following table summarizes the movements in the asset retirement obligation:


$000 $000 Balance – start of period 5,358 3,025 Recognition of new obligation 1,774 1,963 Accretion expense 372 370

Balance – end of period 7,504 5,358

The asset retirement obligations have been recorded as a liability at fair value at inception based on the estimated future cash flows required to settle the liability discounted at the Company’s credit adjusted risk free interest rate. The fair value has been calculated assuming a credit adjusted risk free discount rate of between 6.95% and 7.11% as at December 31, 2009 and an inflation factor of 2.5%. Although the ultimate amount to be incurred is uncertain, management has at December 31, 2009 estimated the asset retirement cost of work completed to date using an expected mine life of 15 years and a total undiscounted estimated cash flow for the asset retirement obligation of $20.7 million ($15.7 million in 2008).

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14. LONG TERM COMPENSATION

(a) Deferred Share Unit

The Company established a Deferred Share Unit (‘DSU’) Plan for its directors with each DSU having the same value as one Equinox common share.

Under the DSU Plan, effective July 1, 2007, directors can elect to receive a portion of their annual compensation in the form of DSU’s. The DSU’s vest immediately and are redeemable in cash on the date the director ceases to be a director of the Company. During the year, 391,939 DSU’s were granted under the DSU Plan and $0.7 million was recognized as directors’ fees within general and administrative costs. Outstanding DSU’s were marked-to-market at December 31, 2009, and as a result of the increase in the market value of the Company’s shares $1.5 million was expensed (note 3).

Year ended Year ended December 31, 2009 December 31, 2008 Deferred Share Units Number $000 Number $000 Balance – start of period 241,291 269 75,581 421 Issued during the period 391,939 715 165,710 627 Mark-to-market fair value adjustments — 1,485 — (779)

Balance – end of period 633,230 2,469 241,291 269

(b) Restricted Share Units

During 2009, the Company established a Restricted Share Unit (‘RSU’) Plan for its employees with each RSU having the same value as one Equinox common share.

The RSU’s vest on the third anniversary of the grant date and are redeemable in cash immediately on vesting. On December 28, 2009 the Company granted 661,610 RSU’s under the RSU Plan relating to 2010 compensation packages. The RSU’s granted in 2009 will be expensed from January 1, 2010.

Year ended Year ended December 31, 2009 December 31, 2008 Restricted Share Units Number $000 Number $000

Balance – start of period — — — — Issued during the period 661,610 — — —

Balance – end of period 661,610 — — —


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15. OTHER PAYABLES


$000 $000 Deferred royalty 18,233 158 Deferred withholding tax 3,566 1,916 Deferred customs duty 16,461 — Other provisions 1,477 93

Balance – end of period 39,737 2,167

As set out in note 5, there is uncertainty surrounding the application of the Development Agreement with the GRZ. Under the terms of the Development Agreement certain amounts, including royalties, withholding taxes and import duties are deferred until the Lumwana debt is eliminated. Until this uncertainty has been resolved the Company will measure its taxes in accordance with the enacted legislation, but will continue to present the associated liabilities as non-current in accordance with the terms of the Development Agreement.

16. SHARE CAPITAL

(a) Authorised capital

The number of authorised ordinary shares of the Company is unlimited.

(b) Movement in ordinary share capital:

Date Details No. of Shares Issue Price C$000 $000

Balance at December 31, 2008 596,933,212 581,477 April 2009 Stock options exercised 40,000 38 April 2009 Issue of shares 102,235,000 C$1.80 184,023 148,325 Less: Share issue costs (7,356) May 2009 Stock options exercised 155,000 269 August 2009 Stock options exercised 3,805,000 6,167 September 2009 Stock options exercised 1,450,000 4,655 October 2009 Stock options exercised 1,635,000 3,045 November 2009 Stock options exercised 333,333 505 December 2009 Stock options exercised 291,667 713 Balance at December 31, 2009 706,878,212 737,838F

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(c) Stock Options Equinox established an Employee Incentive Plan in June 2004 (the ‘Plan’). Options may be granted under the Plan to such

directors, officers, employees or service providers of Equinox and its subsidiaries as the Compensation Committee of the Board of Directors may from time to time designate. The exercise price of any options granted under the Plan shall be not less than the average market price over the five trading days immediately preceding the date of grant. The Plan provides that the total number of Equinox common shares which may be issued pursuant to the Plan shall not exceed a number of common shares equal to 10% of the estimated number of issued and outstanding shares. The number of Equinox common shares which may be reserved for issuance pursuant to the Plan (or any other employee-related plan or options for services) must not exceed 10% of the total number of issued shares in the same class at the time of offer and must not exceed 5%, to any one person, of the Equinox common shares issued and outstanding on a non-diluted basis from time to time.

All options granted prior to December 2008 vest in three tranches, one third of any options granted may be exercised immediately, another third during the period commencing 12 months after the date of grant, and the final third after 24 months from the date of grant. Options granted from December 2008 vest in three tranches, one third of any options granted may be exercised 12 months after the date of grant, another third during the period commencing 24 months after the date of grant, and the final third after 36 months from the date of grant. Options granted from December 2009 cliff vest after three years and if the performance hurdles set have been achieved. The performance hurdles and vesting conditions are based on total shareholder return and the company’s performance compared to a peer group. Options granted under the Plan are not transferable or assignable other than by the prior written consent of the Board of Directors of Equinox and subject to the rules of the relevant stock exchange.

The following table summarizes the stock options outstanding and exercisable at December 31, 2009: Outstanding Options Exercisable Options Number Weighted Weighted Average Number Weighted of Average Remaining of Average Options Exercise Price Contractual Life Options Exercise Price (Years) Outstanding at December 31, 2008 22,675,003 C$1.63 7.6 17,511,655 C$1.44 Options granted – vesting over 3 years 1,075,000 C$2.62 9.5 — — Options granted – vesting over 3 years 1,303,324 C$3.86 7.0 — — Options vested — — — 3,693,343 C$2.40 Options exercised (7,710,000) C$1.23 — (7,710,000) C$1.23 Options forfeited or expired (285,000) C$3.03 — (215,000) C$3.03

Outstanding at December 31, 2009 17,058,327 C$2.00 7.0 13,279,998 C$1.80

Available for grant at December 31, 2009 53,629,494

The fair value of the 2,378,324 options granted during the year under the terms of the 2008 Incentive Stock Option Plan has been estimated at the date of grant using the Black-Scholes option pricing model using the following assumptions: risk-free interest rate of 1.79% to 3.13%; no dividend yield; volatility factor of the expected market price of the Company’s common stock of 60% to 70%; and an expected life of options of between 3 and 8 years. The estimated fair value of the 2,378,324 options granted amounts to $4.2 million and is charged to expense, and contributed surplus over the period the options vest.

Stock-based compensation charged to earnings amounts to $2.0 million for the year ended December 31, 2009 (2008: $4.9

million). As at December 31, 2009, the aggregate fair value of unvested stock options granted and to be charged to income in future periods amounted to $4.2 million (2008: $2.5 million).


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17. CONTINGENT LIABILITIES

(a) Contingent liabilities December 31 December 31 2009 2008

$000 $000 The Company has contingent liabilities as follows: Bank guarantees and letters of credit in respect of Leased premises – secured by cash deposits 86 28 Exploration permits – secured by cash deposits — 23

Total contingent liabilities 86 51

The Company announced on January 7, 2009 that it is in dispute with ZESCO Limited (‘ZESCO’), Zambia’s national power supply authority, over electricity charges believed by ZESCO to be incurred by the Company since late 2007. ZESCO have claimed invoice values totalling $9.0 million for the period up to December 31, 2008. However based on legal advice the Company has determined a value of $2.0 million is payable based on the terms of the contract. The Company is disputing ZESCO’s claim, and has paid $2.0 million to ZESCO whilst conducting negotiations in an effort to resolve the matter.

The Company and ZESCO are continuing to negotiate the matter. 18. COMMITMENTS FOR EXPENDITURE

(a) Lumwana Mine and Town capital commitments

The outstanding capital commitments of the Company relating to the construction of the Lumwana town and Lumwana Mine ongoing commitments at December 31, 2009 are:


$000 $000

Within 1 year 12,339 14,962

Total commitments 12,339 14,962


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(b) Lease commitments


$000 $000 Operating leases

Commitments for minimum lease payments in relation to non cancellable operating leases are payable: Within 1 year 135 227 Within 1 to 2 years 434 205 Within 2 to 3 years 256 208 Within 3 to 4 years — 86 Total commitments 825 726

These operating leases are for office premises and office equipment and expire between 2010 and 2012.

Finance Leases

The Company leases various plant and equipment with a carrying amount of $26.1 million (2008: $4.3 million) under finance leases expiring between 2 and 14 years.


$000 $000 Commitments for minimum lease payments in relation to finance leases are payable: Within 1 year 11,660 1,269 Within 1 to 2 years 9,585 485 Within 2 to 3 years 6,165 434 Within 3 to 4 years 434 434 Within 4 to 5 years 434 434 5+ years 3,836 4,270 Total commitments 32,114 7,326 Future finance charges (6,013) (2,985) Recognised as a liability 26,101 4,341

Representing lease liabilities classified as: Current 9,339 923 Non-current 16,762 3,418

26,101 4,341


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19. SEGMENT INFORMATION The Company’s reportable operating segments are based on strategic business units that are managed separately.

Lumwana Construction of the Lumwana Copper Plant and other associated infrastructure was completed in November 2008. Production

commenced early in December 2008 and Equinox Minerals Limited achieved commercial production at the Lumwana mine on April 1, 2009.

Exploration The Company is exploring for copper and uranium resources in the North West of Zambia and on the Zambian Copperbelt.

Corporate The corporate segment is responsible for regulatory reporting and corporate administration.

For the year ended December 31, 2009 segment information is presented as follows:

Lumwana Exploration Corporate Total

$000 $000 $000 $000 Net sales revenue 468,479 — — 468,479 Cost of sales (272,818) — — (272,818) Interest received 44 (2) 600 642 Derivative instrument loss (329,826) — — (329,826) Other income/(expense) (13,599) 3,883 3,366 (6,350) Financing costs (63,856) — (13,015) (76,871) Other expenses (18,869) (2,398) (1,952) (23,219) Segment profit/(loss) before income tax (230,445) 1,483 (11,001) (239,963) Income taxes 56,900 — — 56,900 Segment profit/(loss) (173,545) 1,483 (11,001) (183,063) Property, plant and equipment 1,075,774 689 26,310 1,102,773 Total assets 1,358,848 901 97,925 1,457,674 For the year ended December 31, 2008 segment information is presented as follows: Lumwana Exploration Corporate Total

$000 $000 $000 $000 Interest received 1,226 3 1,004 2,233 Derivative instrument loss 271,520 — — 271,520 Other income/(expense) (11,882) (775) 7,099 (5,558) Financing costs (2,494) — (1,167) (3,661) Operating expenses (2,517) (9,269) (12,130) (23,916) Segment loss before income tax 255,853 (10,041) (5,194) 240,618 Income taxes (67,473) — (464) (67,937) Segment loss 188,380 (10,041) (5,658) 172,681 Property, plant and equipment 1,065,517 528 1,245 1,067,290 Total assets 1,444,692 1,205 25,234 1,471,131



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Geographical Reporting The Company’s Lumwana Mine and active exploration programs are both located in Zambia. The Canadian segment is entirely

corporate whilst the Australian segment carries out corporate activities and manages engineering studies.

The total assets located by geographical areas are as follows: December 31 December 31 2009 2008

$000 $000 Geographical Reporting Zambia 1,359,749 1,445,896 Australia 38,342 6,088 Canada 59,583 19,147

1,457,674 1,471,131

20. FINANCIAL INSTRUMENTS

The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. The Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial performance of the Company. The Company uses derivative financial instruments such as bought copper put options and forward contracts to hedge certain market risks. Derivatives are exclusively used for commercial hedging purposes. The Company does not use derivatives to engage in any trading or other speculative activities.

The Company uses various methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks and aging analysis for credit risk.

Risk management is carried out by management in conjunction with an outsourced treasury management organization.

(a) Market risk

(i) Foreign exchange risk The Company operates internationally and is exposed to foreign exchange risk arising from various currency exposures. Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities denominated in a

currency that is not the Company’s functional currency.

The Company’s risk management policy is to review its exposure to non-US Dollar forecast operating costs on a case by case basis. Revenue from forecast copper sales is denominated in US Dollars, as is the majority of the Company’s forecast operating costs. The risk is measured using sensitivity analysis and cash flow forecasting.


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The carrying amount of the Company’s foreign currency denominated monetary assets and liabilities at the reporting date is as follows:

December 31, 2009 December 31, 2008 Assets Liabilities Assets Liabilities

$000 $000 $000 $000 Australian Dollar 7,937 1,902 1,320 2,037 Zambian Kwacha 9,030 40,555 13,033 1,760 Euro — 6,271 — 3,954 South African Rand — 929 — 489 Canadian Dollar 3,034 2,469 500 269 Other — 68 — 14

20,001 52,194 14,853 8,523

Sensitivity Based on the financial instruments held at December 31, 2009, had the US Dollar weakened/strengthened by 10% against

these foreign currencies with all other variables held constant, the Company’s after-tax loss for the year to date would have been $3.4 million higher/lower as a result of foreign exchange gains/losses on translation of non-US dollar denominated financial instruments as detailed above. Total equity would have been $0.2 million higher/lower had the US Dollar weakened/strengthened by 10% as a result of foreign exchange gains/losses on translation of non-US dollar denominated available-for-sale investments held by the Company.

(ii) Price risk

Commodity price risk Commodity price risk is the risk of financial loss resulting from movements in the price of the Company’s commodity inputs

and outputs. The Company is exposed to commodity price risk arising from revenue derived from forecast future copper sales. Commodity risk is managed through the use of derivative instruments such as forward and option contracts to economically

hedge a proportion of its forecast production. The Company has hedged a portion of expected Lumwana copper production with a mix of forward contracts and put options. At the reporting date the Company had outstanding derivative instruments of 57,480 tonnes for 2010 and 13,280 tonnes for 2011. The hedging tonnes are equal to approximately 40% of the production guidance for 2010.

Sensitivity At December 31, 2009, if the spot price of copper had been 10% higher/lower while all other variables were held constant

after-tax loss for the year to date would increase/decrease by $32.3/$33.7 million as a result of changes in the fair value of the derivative instruments.

Other price risk The Company is exposed to equity price risks arising from equity investments. Equity investments are held for strategic

rather than trading purposes. The Company does not actively trade these investments, therefore does not actively manage the associated price risk.

Sensitivity At December 31, 2009, if the inputs into the valuation model had been 10% higher/lower while all other variables were held

constant, equity would increase/decrease by $0.2 million as a result of the changes in fair value of the available-for-sale securities.



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(iii) Cash flow fair value interest rate risk The Company’s main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the

Group to cash flow interest rate risk. The Company’s risk management policy is to review its exposure to interest rates on a case by case basis. Current long term

debt is a mix of fixed and variable interest rate loans.

As at the reporting date the Company had the following variable rate borrowings outstanding:

December 31, 2009 Weighted average Carrying interest rate value % $000 Long term debt (variable interest component) 4.63 506,014

December 31, 2008 Weighted average Carrying interest rate value % $000

Long term debt (variable interest component) 4.85 478,895

In addition, the interest rate applicable on the €7 million loan, issued by the European Investment Bank, is variable and adjusts on a sliding scale related to the price of copper from time to time.

Sensitivity At December 31, 2009, if interest rates had increased/decreased by 100 basis points from the year-end rates with all other

variables held constant, after-tax loss for the year to date would have been $3.7 million lower/higher, as a result of lower/higher interest income from long term debt and offset in the movements of cash and equivalents and restricted cash. .


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(iv) Summarized sensitivity analysis The following table summarizes the sensitivity of the Company’s financial assets and financial liabilities to interest rate risk,

foreign exchange risk and commodity price rise:

December 31, 2009 Interest rate risk Foreign exchange risk Price risk Carrying -100 bps +100 bps -10% +10% -10% +10% Amount Profit Equity Profit Equity Profit Equity Profit Equity Profit Equity Profit Equity $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000

Financial assets Cash and cash equivalents 109,130 (1,091) — 1,091 — (1,360) — 1,360 — — — — — Restricted cash 26,164 (262) — 262 — (9) — 9 — — — — — Receivables 134,193 — — — — (440) — 440 — — — — — Other financial assets 1,906 — — — — — (191) — 191 — (191) — 191 Financial liabilities Accounts payable 62,504 — — — — 417 — (417) — — — — — Long term debt 518,652 5,091 — (5,091) — 626 — (626) — — — — — Employee benefits 999 — — — — 100 — (100) — — — — — Derivative instruments 107,310 — — — — — — — — 33,742 — (32,321) — Long term compensation 2,469 — — — — 247 — (247) — — — — — Other payables 39,737 — — — — 3,829 — (3,829) — — — — — Total increase/(decrease) 3,738 — (3,738) — 3,410 (191) (3,410) 191 33,742 (191) (32,321) 191

December 31, 2008 Interest rate risk Foreign exchange risk Price risk Carrying -100 bps +100 bps -10% +10% -10% +10% Amount Profit Equity Profit Equity Profit Equity Profit Equity Profit Equity Profit Equity $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000

Financial assets Cash and cash equivalents 51,327 (513) — 513 — (713) — 713 — — — — — Restricted cash 26,076 (261) — 261 — (5) — 5 — — — — — Receivables 35,409 — — — — (726) — 726 — — — — — Derivative instruments 256,678 — — — — — — — — (26,295) — 25,886 — Other financial assets 406 — — — — — (41) — 41 — (41) — 41 Financial liabilities Accounts payable 65,816 — — — — 76 — (76) — — — — — Long term debt 613,407 4,789 — (4,789) — 740 — (740) — — — — —

Total increase/(decrease) 4,015 — (4,015) — (628) (41) 628 41 (26,295) (41) 25,886 41



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(b) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the group. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions as well as credit exposures to outstanding receivables.

The Company primarily sells its copper concentrate to two major customers on the Zambian copperbelt and as a result there is a concentration of credit risk. This risk is mitigated where possible by policies in place to ensure that sales of products are made to customers with an appropriate credit rating and where necessary credit risk is effectively eliminated or substantially reduced by using bank instruments to secure payment. The Company has off-take arrangements in place with metal traders and has the flexibility to divert concentrate sales to these parties should the need arise.

Derivative counterparties and cash transactions are limited to high credit quality financial institutions. The carrying amounts of derivative assets are adjusted to reflect counterparty credit risk.

The carrying amounts of financial assets recorded in the financial statements are adjusted for any impairment and represent the Company’s maximum exposure to credit risk.

Credit risk further arises in relation to the financial guarantees given to certain parties. Such guarantees are only given in exceptional circumstances and are subject to specific board approval.

(c) Liquidity risk

Prudent liquidity risk management implies maintaining at all times sufficient cash, liquid investments and committed credit facilities to meet the Company’s commitments as they arise.

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The following table analyses the Company’s financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to contractual maturity. The amounts disclosed in the table are the contractual undiscounted cash flows.

December 31, 2009 Within Between Between Between Between Total 1 year 1 and 2 2 and 3 3 and 4 4 and 5 Over contractual Carrying years years years years 5 years cash flows amount $000 $000 $000 $000 $000 $000 $000 $000

Non-interest bearing 62,504 — — — — 39,737 102,241 102,241 Fixed rate 10,796 1,235 619 — — — 12,650 12,638 Variable rate 102,433 112,128 106,209 9,727 — 180,000 510,497 506,014 Derivatives (net) 88,388 23,654 — — — — 112,042 107,310

December 31, 2008 Within Between Between Between Between Total 1 year 1 and 2 2 and 3 3 and 4 4 and 5 Over contractual Carrying years years years years 5 years cash flows amount $000 $000 $000 $000 $000 $000 $000 $000

Non-interest bearing 65,816 — — — — 2,167 67,983 67,983 Fixed rate 27,644 26,185 24,503 22,204 19,904 25,513 145,953 134,512 Variable rate 110,723 110,413 103,352 91,372 55,558 22,360 493,778 478,895


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(d) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

The fair value of financial instruments traded in active markets (such as publicly traded available-for-sale securities) is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Company is the closing price.

The fair value of other financial assets and liabilities (excluding derivative instruments) are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions.

The fair value of derivative instruments are calculated using quoted prices. Where such prices are not available, use is made of discounted cash flow analysis using the applicable yield curve for the duration of the instruments for non-optional derivatives, and option pricing models for optional derivatives.

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Company for similar financial instruments.

During 2009, CICA Handbook Section 3862, Financial Instruments – Disclosures (‘Section 3862’), was amended to require disclosures about the inputs to fair value measurements, including their classification within a hierarchy that prioritizes the inputs to fair value measurement. The three levels of the fair value hierarchy are:

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and Level 3 - Inputs that are not based on observable market data. Level 1 Level 2 Level 3 Total $000 $000 $000 $000

Available-for-sale financial assets 1,906 — — 1,906 1,906 — — 1,906

Level 1 Level 2 Level 3 Total $000 $000 $000 $000 Long term debt — 518,652 — 518,652 Derivative instruments — 107,310 — 107,310

— 625,962 — 625,962


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21. CAPITAL MANAGEMENT The Company’s objective when managing capital is to maintain adequate levels of funding to support development of

its Lumwana Mine, to expand regional exploration activities within Zambia and to maintain corporate and administrative functions.

The Company manages its capital structure in a manner that provides sufficient funding for development and operational activities. Funds are primarily secured through a combination of equity capital raised by way of private placements, public offerings and external debt. There can be no assurances that the Company will be able to continue raising equity capital and external debt in this manner.

The Company invests all capital that is surplus to its immediate needs in short-term, liquid and highly rated financial instruments, such as cash and other short-term guaranteed deposits, all held with major Canadian, European and Australian financial institutions.

22. SUBSEQUENT EVENT

On February 24, 2010, the Company reached agreement with four leading commercial banks, Standard Bank Plc, Standard Chartered Bank, Industrial and Commercial Bank of China and BNP Paribas, to provide a new corporate loan facility (the ‘Corporate Facility’) totaling $400 million. The Corporate Facility affords Equinox greater flexibility than the existing Lumwana Project debt facilities. Therefore the Company will utilize the Corporate Facility to repay the majority of its existing senior and subordinated project debt facilities. Financial close under the Corporate Facility was achieved on March 9, 2010. The effect is that the 2010 calendar year principal repayments reduce to $113.2 million.

The key features of the Corporate Facility are as follows:

n A 3 year $220 million term loan (the ‘Term Facility’) with quarterly principal and interest repayments commencing on March 31, 2010. This facility attracts a credit margin of 4.00% over LIBOR and the 2010 principal repayments will total $61 million.

n A 5 year $180 million revolving facility (the ‘Revolving Facility’) that allows the Company to repay and redraw up to the facility limit over its term. The credit margin is 4.75% over LIBOR for the first two years, thereafter reducing to 4.00% over LIBOR. Interest charges are payable quarterly in arrears commencing on March 31, 2010. Three years after the first drawdown and annually thereafter, the Company can request a 12 month extension to the expiry date of the Revolving Facility.

n The Company can request an increase in the amount available under the Term Facility by $100 million and/or the Revolving Facility by $100 million, subject to the approval of the lenders.

n The existing assets backed by financing facilities for the Lumwana mining fleet will remain in place.

The schedule of future repayments for all long term debt facilities is as follows:

$000 Within 1 year 113,229 Within 1 to 2 years 113,363 Within 2 to 3 years 106,828 Within 3 to 4 years 9,727 Within 4 to 5 years — 5+ years 180,000

523,147


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23. DEED OF CROSS GUARANTEE

Information in relation to the Deed of Cross Guarantee is presented for the purposes of the Company’s reporting obligations in Australia which requires a disclosing entity, which is a registered foreign holding company to disclose condensed statements of earnings and balance sheets of both ‘the Closed Group’ and ‘the Extended Closed Group’ as defined by the Australian Securities and Investments Commission (‘ASIC’) Class Order 98/1418.

On December 24, 2004, Equinox Minerals Limited, Equinox Resources Limited and Equinox Peru Ventures Limited (together the ‘Closed Group’) entered into a Deed of Cross Guarantee under which each company guarantees the liabilities of all other companies that are party to the Deeds. A benefit arising from the Deeds is to relieve eligible entities from the requirements to prepare audited financial reports under the Australian Corporations Act 2001 and ASIC accounting and audit relief Orders.

The following entities form part of the consolidated entity but are not members of the Closed Group:

Lumwana Mining Company Limited, Equinox Zambia Limited, Equinox Overseas Pty Ltd, Equinox Africa Limited, Lumwana International School Limited, Lumwana Property Development Company Limited and Equinox Nickel Ventures Pty Ltd (together the ‘Extended Closed Group’).

Set out below are the condensed statements of earnings, comprehensive income and balance sheets for the years ended December 31, 2009 and 2008 of the Closed Group and the Extended Closed Group:

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Condensed statement of earnings Closed Group Extended Closed Group(1)

2009 2008 2009 2008

$000 $000 $000 $000 Copper sales revenue — — 531,962 — Smelter treatment charges — — (63,483) — Net sales revenue — — 468,479 — Direct and indirect mining costs — — 212,016 — Amortization & depletion — — 46,688 — Royalties — — 14,114 — Cost of sales — — 272,818 — Expenses Derivative loss/(gain) — — 329,826 (271,520) Exploration (income)/expense (7) 2,321 5,119 10,262 Other operating costs — 62 5,870 314 General and administration 8,886 7,288 10,241 8,388 Financing costs 834 1,006 76,871 3,660 Incentive stock options expensed 1,989 4,953 1,989 4,953 Other (income)/expense (6,743) (9,705) 5,708 3,325 4,959 5,925 435,624 (240,618) (Loss)/profit for the period before tax (4,959) (5,925) (239,963) 240,618 Income tax benefit/(expense) — (797) 56,900 (67,937) (Loss)/profit for the period after tax (4,959) (6,722) (183,063) 172,681

Retained (deficit)/profit – beginning of period (47,805) (41,083) 108,343 (64,338) Retained (deficit)/profit – end of period (52,764) (47,805) (74,720) 108,343

Condensed statement of Closed Group Extended Closed Group(1)

comprehensive income 2009 2008 2009 2008

$000 $000 $000 $000 (Loss)/Income for the period (4,959) (6,722) (183,063) 172,681 Other comprehensive income/(losses) Losses on derivatives designated as cash flow hedges (net of tax) — — — (40,197) Gains on derivatives designated as cash flow hedges transferred to net income in the current period (net of tax) — — — 86,862 Fair value movements in available-for-sale securities (net of tax) 1,500 (2,521) 1,500 (2,521) Impairment loss on available-for-sale securities transferred to net income (net of tax) — 946 — 946

Total comprehensive (loss)/gain (3,459) (8,297) (181,563) 217,771


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Condensed balance sheet Closed Group Extended Closed Group(1)

December 31 December 31 December 31 December 31 2009 2008 2009 2008

$000 $000 $000 $000ASSETS Current assets Cash and cash equivalents 71,972 23,348 109,130 51,327Accounts receivable 110 908 134,193 35,409Inventories — — 67,428 27,473Current portion of derivative instruments — — — 127,570Prepayments 146 62 16,080 6,471 72,228 24,318 326,831 248,250 Receivables from subsidiaries(2) 632,155 530,126 — —Restricted cash 92 51 26,164 26,076Investments in associates — — — —Property, plant and equipment 1,569 1,245 1,102,773 1,067,290Derivative instruments — — — 129,109Other financial assets 1,906 406 1,906 406

707,950 556,146 1,457,674 1,471,131

LIABILITIES Current liabilities Accounts Payable and accrued liabilities 2,911 1,711 62,504 65,816Current portion of long term debt — — 113,229 138,367Current portion of finance leases — — 9,339 923Current portion of derivative instruments — — 85,179 —Current other liabilities — 160 — 2,911 1,711 270,411 205,106 Long term debt — — 405,423 475,040Finance leases — — 16,762 3,418Income tax liability — — 6,727 6,727Future income tax liability — — 5,938 62,838Asset retirement obligation — — 7,504 5,358Long term compensation 2,469 269 2,469 269Derivative instruments — — 22,131 —Other payables 30 94 39,737 2,167

5,410 2,074 777,102 760,923

SHAREHOLDERS’ EQUITY Share capital 737,838 581,477 737,838 581,477Retained profit/(deficit) (52,764) (47,805) (74,720) 108,343Contributed surplus 15,966 20,400 15,966 20,400Accumulated other comprehensive income/(loss) (net of tax) 1,500 — 1,488 (12)

702,540 554,072 680,572 710,208

707,950 556,146 1,457,674 1,471,131

(1) The members of the consolidated entity comprising the Extended Closed Group are the same as those entities, which comprise the consolidated entity, as Equinox Minerals Limited is the ultimate parent entity.(2) These long-term receivables relate to receivables from controlled entities, which are outside the Closed Group, as is listed above.

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Equinox Minerals Limited Tenement Schedule

PROJECTS TENEMENTS EQUINOX INTEREST JOINT VENTURE PARTNER

ZAMBIA

Lumwana LML49 100% Mwombezhi Dome Former PLLS148Ngala Appln Sailunga Appln 100%# * Kabompo Gorge Appln West Lunga Appln Mutapanda PLLS: Mufapanda N To be advised 100%†

Mufapanda S To be advised 100%†

AUSTRALIA Curnamona Craton Ethiudna EL3714 100% Uranium One Australia Pty Ltd Ethiudna

EL = Exploration Licence; PLLS = Prospecting Licence; LML = Large scale Mining Lease

# Anglo American have a 70% clawback option should a mineral resource > 3 million tonnes copper metal (or equivalent) be discovered.

* Prospecting Licences are in the process of being converted to comply with the Mines Act 2008, final approval is pending.

† Mutapanda was granted November 9, 2009, but was subsequently been split into two tenements Mufapanda North and South, to comply with Mines Act 2008

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STATEMENT OF ISSUED CAPITAL AT MARCH 19, 2010 Distribution of fully paid ordinary shareholders:

Size of Holding Number of shareholders Number of Common Shares

1 – 1,000 2,495 1,289,985 1,001 – 5,000 3,718 10,249,807 5,001 – 10,000 1,169 9,205,455 10,001 – 100,000 841 22,198,613 100,001 – and over 86 664,383,339

8,309 707,511,545

Number of shareholders holding less than a marketable parcel 173 10,249

NUMBER OF EQUINOX SECURITIES QUOTED ON ASX There are 707,511,545 common shares of Equinox Minerals Limited quoted on ASX and Toronto Stock Exchange (‘TSX’).

NUMBER OF EQUINOX SECURITIES NOT QUOTED ON ASX There are 16,006,086 unlisted employee incentive options allotted for issuance under the Equinox Employee Incentive Plan.

VOTING RIGHTS All Equinox common shares carry one vote per share. Each CHESS Depositary Interest (‘CDI’) represents one Equinox common share. CDI holders are the beneficial owner of common shares and although they are not entitled to attend and vote at the Equinox shareholder meetings, CDI holders may direct CHESS Depositary Nominees Pty Ltd, as the legal holder of their Equinox common shares, to cast proxy votes at the relevant meeting.

QUOTATION Equinox Common Shares are quoted as ‘EQN’ on TSX and CDIs are quoted as ‘EQN’ on ASX.

SUBSTANTIAL SHAREHOLDERS NAME No. of Common Shares %

First Quantum Minerals Ltd. (held in the name of CDS & Co) 114,132,300 16.13

TOP 20 SHAREHOLDERS As at March 19, 2010 the twenty largest shareholders as known by the Company, held 91.92% of the total common shares in the Company as follows:

NAME No. of Common Shares %

CDS & Co* 468,185,169 66.17 National Nominees Limited 39,342,786 5.56 J P Morgan Nominees Australia Limited 34,637,867 4.90 HSBC Custody Nominees (Australia) Limited 20,873,928 2.95 ZCCM Investment Holdings Plc 20,061,757 2.84 Merrill Lynch (Australia) Nominees Pty Limited 14,267,503 2.02 Citicorp Nominees Pty Limited 12,431,893 1.76 ANZ Nominees Limited 7,637,833 1.08 Cogent Nominees Pty Limited 5,886,142 0.83 Australian Reward Investment Alliance 4,923,739 0.70 UBS Nominees Pty Ltd 4,731,803 0.67 Mr Harry Nicholas Michael 3,150,000 0.45 European Investment Bank 2,713,341 0.38 Debortoli Wines Pty Limited 2,211,702 0.31 Queensland Investment Corporation 2,027,279 0.29 RBC Dexia Investor Services Australia Nominees Pty Limited 1,942,890 0.27 AMP Life Limited 1,674,823 0.24 Sneath & King Pty Ltd 1,616,165 0.23 Finisterre Investments Pty Ltd 1,000,000 0.14 Trust Company Limited 910,317 0.13

* CDS & Co hold shares on behalf of Canadian shareholders.

ON-MARKET BUY-BACK There is no current on-market buy-back of the Company’s shares in place.

CORPORATE GOVERNANCE Equinox complies with ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations (‘Recommendations’), however to the extent that the Recommendations require certain corporate governance information be included in a specific section within the annual report, Equinox has instead included such information in the Management Circular, as is customary and appropriate for a Canadian company.

Equinox Minerals Limited Additional Australian Securities Exchange Information

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Directors and Officers

BoardPeter Tomsett Chairman Craig Williams President and Chief Executive Officer David McAusland Director Dave Mosher Director Jim Pantelidis Director Brian Penny Director

Senior OfficersRalph Gibson Vice President Project Finance Carl Hallion Vice President Business Development Cobb Johnstone Chief Operating Officer Michael Klessens Vice President Finance and Chief Financial Officer Robert Rigo Vice President Project Development Sonya Stark Vice President Corporate Affairs and Corporate Secretary Kevin van Niekerk Vice President Investor Relations Adam Wright Managing Director, Lumwana Mining Company

Equinox Minerals Limited Offices

Canada155 University Avenue, Toronto, Ontario Canada M5H 3B7Telephone: +1 (416) 865 3393 Facsimile: +1 (416) 865 3394

Australia50 Kings Park Road, West Perth, Western Australia Australia 6005Telephone: +61 (8) 9322 3318 Facsimile: +61 (8) 9324 1195 Email: [email protected] Website: www.equinoxminerals.com

Stock SymbolEQN – Canada: Toronto Stock Exchange & Australia: Australian Securities Exchange

AuditorsPricewaterhouseCoopersQV1 Building, Levels 19 – 21, 250 St Georges Terrace Perth, Western Australia, Australia, 6000

Transfer AgentsCIBC Mellon Trust Company199 Bay Street, Commercial Court West, Securities Level, Toronto, Ontario, Canada M5L 1G9Telephone: +1 (416) 643 5500

Advanced Share Registry Services150 Stirling Highway, Nedlands, Perth, Western Australia, 6009, AustraliaTelephone: +61 (8) 9389 8033

Equinox Minerals Limited Corporate Directory

Contents

About Equinox Minerals 1

2009 Highlights 2

Objectives 3

Chairman’s Report 4

President’s Report 8

Activities Review 12 Lumwana overview 13 Mining 13 Processing 13 Offtake 14 Outlook 14 Copper market 14 Zambian Taxation Legislation 14 Uranium 15 Corporate 15 Capital raising 15 Phelps Dodge agreement 15

Reserves and Resources 16

Exploration 17

People 18 Our workforce 19 Developing and retaining a skilled workforce 19 Training and development 19

Sustainability 20 Environment 20 Community 20

Health and Safety 22 Performance 23 Emergency response 23 Employee consultation and training 23

Board and Executive Profiles 24

Management Discussion and Analysis 26

Financial Statements 49

Tenement Schedule 83

Additional ASX Information 84

Corporate Governance 84

Corporate Directory IBC

Company Contact Details IBC

Further Information

Copies of this report, or further information, can be obtained through requests in writing to Investor Relations, Equinox Minerals Limited, 155 University Avenue, Toronto, Ontario, Canada M5H 3B7 or emailing [email protected]

This report is also available in electronic form at www.equinoxminerals.com

Cautionary Language and Forward Looking StatementsCertain information contained or incorporated by reference in this Annual Report, including any information as to the Company’s strategy, projects, plans, prospects, future outlook, anticipated events or results or future financial or operating performance, constitutes ‘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’, ‘is expected’, ‘is expecting’, ‘budget’, ‘scheduled’, ‘estimates’, ‘forecasts’, ‘intends’, ‘anticipates’, ‘predicts’, ‘potential’, ‘continue’ or ‘believes’, or variation (including negative variations) of such words and phrases, or statements that certain actions, events or results ‘may’, ‘could’, ‘would’, ‘should’, ‘might’, ‘potential to’, or ‘will’ be taken, occur or be achieved or other similar expressions concerning matters that are not historical facts.

Forward-looking statements are necessarily based on a number of factors, estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic and competitive uncertainties and contingencies. 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, including costs, production and returns, to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements and the forward-looking statements are not guarantees of future performance.

Such factors, estimates and assumptions include, but are not limited to, 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 offtake arrangements and terms and/or enforcing such terms; insurance and uninsured risks; government regulation; titles, licences and permits; environmental risks; risks inherent in the estimation of reclamation costs; risks related to the Company’s hedging activities; estimation of asset carrying values; litigation; competition; reliance on key personnel; global financial conditions. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

These risks are discussed in the Company’s Annual Information Form dated March 15, 2010 under the section entitled ‘Risks and Uncertainties’ which can be found on the Company’s website at www.equinoxminerals.com and if also filed on SEDAR at www.sedar.com. All of the forward-looking statements made in this Annual Report are qualified by these cautionary statements.

Technical InformationCertain technical information in this Annual Report is summarized or extracted from the ‘‘Technical Report on the Lumwana Project, North Western Province, Republic of Zambia’’ dated June 2008 as re-filed in April 2009 (the ‘‘Technical Report’’), prepared by Ross Bertinshaw, Principal, Golder Associates Pty Ltd Daniel Guibal, Corporate Consultant, SRK Consulting (Australasia) Pty Ltd, Andrew Daley, Director, Investor Resources Finance Pty Ltd, and Robert Rigo, Vice-President – Project Development, Equinox, each of whom is a ‘Qualified Person’ in accordance with National Instrument 43-101 — Standards of Disclosure for Mineral Projects (NI 43-101). Information of a scientific or technical nature contained in this Annual Report arising since the date of the Technical Report is provided by Equinox management and was prepared under the supervision of Robert Rigo, Vice-President – Project Development or John Cooke, Exploration Manager, each of whom is a ‘Qualified Person’ in accordance with NI 43-101.

Readers are cautioned not to rely solely on the summary of such information contained in this Annual Report, 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 herein and therein.

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Equinox Minerals Limited

Equinox Canada155 University Avenue, Toronto Ontario, Canada M5H 3B7Telephone: +1 (416) 865 3393 Facsimile: +1 (416) 865 3394

Equinox Australia50 Kings Park Road, West Perth Western Australia, Australia 6005Telephone: +61 (8) 9322 3318 Facsimile: +61 (8) 9324 1195

[email protected] www.equinoxminerals.com

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A copper growth story

Equinox Annual Report 2009

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