EQUATORIAL RESOURCES LIMITED — Capital/Financing Update 2012

Aug 27, 2012

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ASX: EQX | 28 August 2012 | ASX RELEASE

40 METERS AT 65% IRON FROM SECOND DRILL HOLE AT BADONDO

HIGHLIGHTS

• The second drill hole at the Badondo Iron Project has been assayed and has returned exceptionally high iron grades including more than 65% Fe over more than 40 meters of the hole.

• The assay results of the high grade iron intercepts reveal low contaminant levels with combined silica and alumina below 6%, phosphorus below 0.06%, and sulphur below 0.003%.

• The encouraging results of the first two holes assayed from the Badondo drilling program are consistent with the results of the pre-drilling mapping program which identified an extensive high grade hematite cap at the Badondo Prospect which appears to be at least 50m thick and may extend over the entire 10km strike length of the main target prospect.

� The drilling program is progressing well and further results will be released when received.

Equatorial Resources Limited (“Equatori a l” or “the Company”) is pleased to release assay results received from the second diamond drill hole at its 100% ow n ed Badondo Iron Project (“Badondo” or “the Pr o ject”) in the North West of the Republic of Congo (“ROC”). The second h ole intersected two zones of high grade iron mineralisation including 40 meters averaging more than 65% Fe with low con t aminates.

Hole ID	From To	Interval	Fe SiO2 Al2O3 P S LOI
	Meters		% % % % % 1,000°C
BADDD00002	1.9 10.0	8.1	65.6 2.86 1.85 0.0 4 0.003 1.23
	43.8 92.4	48.6	64.2 4.42 2.24 0.0 5 0.002 1.05
including	52.0 92.4	40.4	65.6 2.61 2.01 0.0 6 0.002 0.97

Table 1: Summary assay results from the second drill hole at Badondo

Equatorial’s Managing Director and CEO, Mr John Welborn, said: “The second drill hol e is the first priority drill target tested along the main ridge line at Badon d o and the high iron grades and low levels of ph o sphorus and other deleterious elements in the drill core are very enco u raging. Results from Badondo continue to de m onstrate the potential for the Project to host a high quality iron deposit.”

EQUATORIAL RESOURCES LIMITED | ABN 50 009 188 694 Level 2, BGC Centre, 28 The Esplanade, Perth, WA, Australia 6 0 00 | Phone: +61 8 9466 5030 | Fax: +61 8 9466 5029 www.equatorialresources.com.au

ASX: EQX | 28 August 2012 | ASX RELEASE

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DRILLING PROGRAM AND INITIAL RESULTS

Equatorial is currently conducting a helicopter supported drilling program to test the thickness, quality, and extent of the high grade hematite cap identified at Badondo. The goal of the program is to demonstrate the potential for the project area to host significant quantities of high grade premium DSO iron mineralisation similar to other world class iron projects in the region. Drill core from the first holes at Badondo have been prioritised for analysis by SGS Laboratories and the assay results expedited by air freighting the samples to Perth for final processing.

On 12 July 2012 the Company released the results from an initial test drill hole which was drilled off the main ridge line at Badondo (refer ASX announcement 12 July 2012). This hole intersected a broad zone of high grade canga iron mineralisation which returned assay grades of 63% Fe over the first 42 meters of the hole from surface.

The second hole at Badondo was drilled on the main ridge line and targeted and intersected steeply dipping high grade in situ enriched hematite Banded Iron Formation. The hole was drilled at an azimuth of 220 degrees and dip of -60 degrees and intersected two zones of high grade iron mineralisation. The zones intersected are in situ high grade low contaminant hematite/martite mineralisation. Petrology testing of the drill core is currently being performed to confirm the presence of microplaty hematite.

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Figure 1: Location of the second drill hole at Badondo

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ASX: EQX | 28 August 2012 | ASX RELEASE

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The assay results from the first two holes are highly encouraging as they confirm the presence of thick high grade iron mineralisation at, and close to, surface. The high iron grades in the first two holes are consistent with the rock samples that have been collected from the Badondo and Belinga North Prospects by Equatorial’s geological staff and as part of the pre-drilling mapping program.

The low levels of phosphorus and other contaminants encountered in the second drill hole are consistent with the results of the Company’s mapping program and with previously announced rock chip assays which returned low contaminant levels from samples of the in-situ hematite. While further drilling is required to confirm these initial interpretations, it appears that elevated phosphorus in the canga mineralisation is related to an organic source and is atypical of the deposit. The main target of the drilling program is the in-situ hematite which has been observed to be at least 50 meters thick and may extend over the entire 10km length of the Badondo Prospect.

Drilling is continuing at Badondo and further results will be released to the market when received.

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Figure 2: Close up of high grade hematite mineralisation in BADDD0002

(83 to 85m returned 66.2% Fe, 2.31% SiO2, 1.73% SiO2, 0.053% P and 0.85% LOI)

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ASX: EQX | 28 August 2012 | ASX RELEASE

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Figure 3: Badondo Project Location Plan

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Figure 5: The Iron Mountains of the Congo Craton

For further information contact:

John Welborn Managing Director & CEO Telephone : +61 8 9466 5030 Email : info@equatorialresources.com.au Web : www.equatorialresources.com.au

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ASX: EQX | 28 August 2012 | ASX RELEASE

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APPENDIX 1: DIAMOND DRILL CORE ASSAY RESULTS FOR HOLE BADDD00002

Sample Number	From m	To m	Rock Type	Fe %	SiO 2 %	Al2O 3 %	P %	LOI100 0 %	TiO 2 %	Ca O %	K2 O %	MgO %	Mn O %	Na2 O %	S %
G0025	0	1.9	HEMCOL	46.4	21.2	7.06	0.084	4.12	0.48	0.01	0.04	0.06	0.03	0.01	0.022
G0026	1.9	3.6	HEMTAL	66.7	1.95	1.48	~~5~~ 0.031	0.849	0.02	0.01	0.01	~~5~~ 0.03	0.02	0.02	0.001
G0027	3.6	5.15	HEMTAL	67.6	1.31	1.06	0.036	0.832	0.04	0.02	0.01	0.03	0.02	0.01	0.002
G0029	5.15	6.55	HEMTAL	56.4	10.3	5.55	0.056	2.84	0.19	0.01	0.03	0.02	0.03	0.01	0.008
G0030	6.55	8	HEMTAL	68.6	0.63	0.39	0.028	0.66	0.01	0.02	0.01	0.03	0.01	0.01	0.001
G0031	8	10	HEMBIF1	67.3	1.26	1.26	0.046	1.14	0.06	0.02	0.01	0.02	0.02	0.02	0.004
G0032	10	12.2	HEMBIF1	54.3	11.9	6.51	0.062	3.22	0.32	0.01	0.05	0.04	0.05	0.02	0.007
G0033	12.2	14.25	HEMBIF2	43.7	25.8	7.88	0.054	3.46	0.37	0.01	0.09	0.08	0.03	0.02	0.004
G0034	14.25	16.25	HEMBIF2	35.9	30.9	11.5	0.117	4.8	0.49	0.01	0.25	0.06	0.06	0.01	0.001
G0036	16.25	18.3	HEMBIF2	26	39.9	15.5	0.1	5.91	0.63	0.01	0.17	0.11	0.07	0.02	0.001
G0037	18.3	20.4	HEMBIF2	43.4	31.7	3.89	0.048	1.8	0.14	0.01	0.01	0.02	0.04	0.01	0.001
G0038	20.4	22.45	HEMBIF2	29.9	52.3	3.56	0.011	1.53	0.04	0.01	0.01	0.02	0.05	0.01	0.001
G0039	22.45	25	HEMBIF2	39.2	40.4	2.14	0.011	1.02	0.02	0.01	0.01	0.01	0.04	0.01	0.001
G0040	25	27	HEMBIF2	42.1	38.1	0.91	0.015	0.534	0.02	0.01	0.01	0.01	0.01	0.01	0.001
G0041	27	29	HEMBIF2	40.1	37.7	3.34	0.031	1.49	0.04	0.01	0.01	0.02	0.02	0.01	0.001
G0042	29	31	HEMBIF2	44.9	23.3	8.62	0.06	3.37	0.11	0.01	0.03	0.05	0.04	0.01	0.002
G0043	31	33	HEMBIF2	44.7	34.2	1.18	0.012	0.647	0.01	0.01	0.01	0.02	0.03	0.01	0.001
G0044	33	35	HEMBIF2	40.3	33	6.08	0.049	2.52	0.06	0.01	0.1	0.04	0.07	0.01	0.001
G0045	35	37	HEMBIF2	49.4	19.6	6.13	0.096	2.73	0.07	0.01	0.13	0.06	0.05	0.01	0.003
G0046	37	38.6	HEMBIF2	38	33.8	7.87	0.051	3.14	0.1	0.01	0.27	0.09	0.05	0.01	0.002
G0047	38.6	40.75	SCHIST	23.6	38.7	18.8	0.078	7.37	0.17	0.01	0.26	0.11	0.43	0.02	0.006
G0049	40.75	42	HEMART	56.7	15.2	2.1	0.025	1.07	0.09	0.01	0.01	0.03	0.06	0.02	0.001
G0050	42	43.85	HEMART	67.7	2.3	0.34	0.023	0.348	0.01	0.01	0.01	0.03	0.17	0.01	0.002
G0051	43.85	46	HEMART	65.4	4.15	1.18	0.031	0.691	0.02	0.01	0.01	0.04	0.13	0.02	0.002
G0052	46	48	HEMART	56.8	14.9	2.26	0.036	1.01	0.04	0.01	0.01	0.03	0.04	0.01	0.001
G0053	48	50	HEMART	48.7	21.9	5.88	0.051	2.25	0.07	0.01	0.01	0.03	0.08	0.01	0.001
G0054	50	52	HEMART	55.6	13.5	4.35	0.076	1.91	0.04	0.01	0.01	0.03	0.16	0.02	0.001
G0056	52	54	HEMART	64.7	4.7	1.95	0.028	0.912	0.02	0.01	0.01	0.03	0.01	0.01	0.001
G0057	54	56	HEMART	65.4	2.76	2.41	0.049	1.08	0.01	0.02	0.01	0.03	0.01	0.01	0.007
G0058	56	58	HEMART	66.8	1.71	1.41	0.034	0.762	0.01	0.01	0.01	0.02	0.22	0.02	0.006
G0059	58	60	HEMART	66.4	1.42	1.48	0.081	0.919	0.01	0.02	0.01	0.03	0.67	0.02	0.002
G0060	60	62.95	HEMART	66.1	2.18	1.815	0.061	0.804	0.04	0.03	0.01	0.03	0.29	0.01	0.001
G0061	62.95	65	HEMART	~~5~~ 66.6	1.58	1.3	0.058	0.731	0.03	0.02	0.01	0.03	0.39	0.01	0.001
G0062	65	67	HEMART	64.4	3.17	2.57	0.065	1.26	0.09	0.02	0.01	0.03	0.43	0.01	0.001
G0063	67	69	HEMART	58.1	7.34	6.17	0.104	2.57	0.11	0.03	0.01	0.06	0.11	0.02	0.001
G0064	69	71	HEMART	67	1.58	1.32	0.066	0.743	0.04	0.02	0.01	0.04	0.09	0.01	0.001
G0065	71	73	HEMART	66.6	1.96	1.62	0.053	0.826	0.05	0.02	0.01	0.05	0.06	0.01	0.001
G0066	73	75	HEMART	65.1	2.77	2.3	0.059	1.05	0.07	0.02	0.01	0.05	0.23	0.02	0.001
G0067	75	77	HEMART	66.6	2.24	1.45	0.035	0.696	0.05	0.02	0.01	0.05	0.04	0.01	0.001
G0069	77	79	HEMART	64.7	3.15	2.5	0.043	1.12	0.08	0.02	0.01	0.06	0.04	0.01	0.001
G0070	79	81	HEMART	66.2	2.39	1.82	0.055	0.882	0.05	0.02	0.01	0.05	0.02	0.02	0.001
G0071	81	83	HEMART	65.9	2.67	2.01	0.044	0.922	0.07	0.02	0.01	0.06	0.01	0.01	0.001
G0072	83	85	HEMART	66.2	2.31	1.73	0.053	0.848	0.06	0.02	0.01	0.06	0.03	0.02	0.001
G0073	85	87	HEMART	66.9	1.8	1.4	0.053	0.746	0.05	0.03	0.01	0.05	0.02	0.01	0.001
G0074	87	89	HEMART	65.8	2.48	1.92	0.075	0.947	0.06	0.02	0.01	0.05	0.03	0.03	0.001
G0076	89	91	HEMART	67.1	1.74	1.29	0.047	0.715	0.05	0.02	0.01	0.04	0.04	0.02	0.001
G0077	91	92.45	HEMART	65.9	2.4	1.89	0.04	0.939	0.07	0.02	0.01	0.05	0.12	0.01	0.001
G0078	92.45	96	HEMBIF3	53.9	21.7	0.45	0.02	0.378	0.01	0.01	0.01	0.02	0.03	0.015	0.001
G0079	96	100	HEMBIF3	38.3	~~5~~ 44.1	0.45	0.029	0.329	0.01	0.01	0.01	~~5~~ 0.02	0.01	0.01	0.001
G0080	100	103.1	HEMBIF3	29.6	50.7	3.68	0.027	1.31	0.15	0.04	0.52	1.06	0.02	0.01	0.002
G0080	103.1	104	SED	9.04	56.2	15.6	0.024	4.91	0.46	0.16	2.92	6.29	0.04	0.02	0.001
G0081	104	106.8	SED	7.34	62.6	12.8	0.022	4.38	0.25	0.28	2.26	6.59	0.04	0.02	0.001
G0082	106.8	~~6~~ 109	SED	8.12	53.8	12.7	0.02	7.81	0.39	2.94	1.6	8.56	0.19	0.03	0.001
G0083	~~6~~ 109	110.4	SED	3.64	67.3	14.4	0.016	3.52	0.13	0.37	5.13	3.36	0.03	0.06	0.001
G0084	110.4	112.1	SED	6.96	48.6	11.1	0.018	11.6	0.4	5.15	1.5	10.7	0.29	0.01	0.001
G0085	112.1	114.3	SED	7.16	45.1	7.97	0.014	14.4	0.35	6.65	0.03	14.4	0.29	0.01	0.003

Table 2: Assay results for Hole BADDD00002

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ASX: EQX | 28 August 2012 | ASX RELEASE

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APPENDIX 1: DIAMOND DRILL CORE ASSAY RESULTS FOR HOLE BADDD00002 (cont.)

Notes

1. Tenement: 2009/72

2. Collar Coordinates: 304477E, 170027N, 725RL, UTM_WGS84_Zone 33N, surveyed by handheld GPS

3. Hole dip -60 degrees towards 220 degrees

4. All samples half sawn NQ drill core sampled in 2m composites, crushed and ground to pulps by SGS Mayoko sample preparation laboratory

5. Sample pulps assayed by X-ray fluorescence (XRF) by SGS Limited Newburn laboratory, Perth Australia

6. All holes geologically logged by qualified geologists

7. Quality control standards and field duplicates included with drill samples prior to submission to the laboratory, where further laboratory control samples were added

8. All QA/QC data analysed to confirm assay precision.

9. Intervals are downhole measurements and may not represent true thickness.

10. Reduced core recovery experienced in certain intervals but not considered to materially affect intersection grades.

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ASX: EQX | 28 August 2012 | ASX RELEASE

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ABOUT EQUATORIAL RESOURCES

Equatorial Resources Limited (ASX: EQX ), is focused on the exploration and development of two 100% owned potentially large-scale iron ore projects located in the politically stable and investment friendly Republic of Congo (“ ROC ”) in the emerging global iron ore province of Central West Africa.

The Mayoko-Moussondji Iron Project , located in the southwest region of the ROC, has an estimated global exploration target of between 2.3 and 3.9 billion tonnes[1] of iron mineralisation at a grade of 30% to 65% Fe. The project has access to a rail line running directly to the deep-water port of Pointe-Noire, where the Company’s administrative office is located.

The Badondo Iron Project , in the northwest region of ROC, has an estimated global exploration target of between 1.3 and 2.2 billion tonnes[1] of iron mineralisation at a grade of 30% to 65% Fe. The project is located within a regional cluster of world-class iron ore exploration projects including Sundance Resources’ Mbalam and Nabeba projects.

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For further information contact:

John Welborn Managing Director & CEO Telephone : +61 8 9466 5030 Email : info@equatorialresources.com.au Web : www.equatorialresources.com.au

1 Exploration Target: The estimates of exploration target sizes mentioned in this announcement should not be misunderstood or misconstrued as estimates of Mineral Resources. The potential quantity and grade of the exploration targets are conceptual in nature and there has been insufficient exploration to define a Mineral Resource in accordance with the JORC Code (2004) guidelines. Furthermore, it is uncertain if further exploration will result in the determination of a Mineral Resource.

The information in this report that relates to Exploration Results, other than Metallurgical Test Results and Geophysical Exploration Results, is based on information compiled by Mr Mark Glassock, who is a member of the Australasian Institute of Mining and Metallurgy. Mr Glassock is a full time employee of Equatorial Resources Limited. Mr Glassock has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Glassock consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Metallurgical Test Results is based on information compiled by Dr John Clout who is a Fellow of the Australasian Institute of Mining and Metallurgy. Dr Clout is a consultant to Equatorial Resources Limited. Dr Clout has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Clout consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this announcement that relates to Geophysical Exploration Results is based on information compiled by Mr Mathew Cooper (B.App.Sc (Geophysics) Hons.) of Resource Potentials Pty Ltd, who was engaged by Equatorial Resources Limited to provide geophysical consulting services. Mr Cooper is a member of The Australian Institute of Geoscientists and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Cooper consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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