EQUATORIAL RESOURCES LIMITED — Capital/Financing Update 2012

Jul 11, 2012

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ASX: EQX | 12 July 2012 | ASX RELEASE

BADONDO DRILLING CONFIRMS HIGH GRADE IRON ORE

HIGHLIGHTS

• Assay results have been received from the first drill hole at the Badondo Iron Project and have returned high iron grades of 63% Fe over the first 42 meters of the hole from surface.

• The drilling program is progressing as planned and the initial results have confirmed the positive interpretations of the recent geological mapping program.

• Petrographic analysis of the drill core and rock samples from the Badondo prospect has identified the presence of high grade microplaty hematite as the main style of the mineralisation, which indicates the potential for a premium quality Direct Shipping Ore (“DSO”) product.

• Drilling is continuing and further results will be released when received.

Equatorial Resources Limited (“Equatorial ” or “the Company”) is pleased to announce assay results received from the first diamond drill hole at its 100% owned Bad o ndo Iron Project (“Badondo” or “the Project”) in t he North West of the Republic of Congo (“ROC”). This first hole was drill e d vertically and averaged 62.9% Fe over the firs t 42 meters from surface.

Hole ID	From To	Interval	Fe SiO2 Al2O3 P S LOI
	Metres		% % % % % 1,000°C
BADDD00001	0 42	42	62.9 2.6 2.97 0.1 6 0.02 3.9
Including	4 40	36	63.8 1.3 2.97 0.1 7 0.02 3.9

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

Equatorial’s Managing Director and CEO, Mr John Welborn, said: “We are pleased by t h ese initial assay results which confirm the presence of high grade D S O iron at Badondo. To encounter thick, co n tinuous high grade hematite mineralisation during testing of our drill rig at a low priority location is extremely encouragin g .”

Dr John Clout, Equatorial’s Chief Metallur g ical Consultant commented: “Detailed metallur g ical and petrographic analysis of rock chip samples and drill core from t h e test drill hole has confirmed the presence of m icroplaty hematite at Badondo as the main style of mineralisation. Microplaty hematite occurs very rarely as the main min e ralisation style in iron deposits with other examples including BHP Billito n ’s Mount Whaleback mine and Rio Tinto’s Mou n t Tom Price mine in Australia. Microplaty hematite mineralisation syste m s tend to extend to greater depth and strike e xtent and typically produce a premium quality product compared with the more typical supergene iron ore systems. This is an extremely positive discovery for Equatorial Resources as it indicates the potential for high grade iron miner a lisation to occur at depth and along strike at Badondo.”

EQUATORIAL RESOURCES LIMITED | ABN 50 009 188 694 1 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 | 12 July 2012 | ASX RELEASE

The drilling program at Badondo consists of 20 to 30 holes for approximately 5,000 meters of diamond drilling. These holes have been targeted based on a detailed mapping program conducted by SRK Consulting (“SRK”) in late 2011.

The first hole drilled at Badondo was located next to a helicopter landing pad some 400 meters below and to the east of the main ridge line of the Badondo Prospect in a low priority drill target area. The hole was drilled vertically for approximately 62 meters primarily to test the functionality of the purpose-built diamond drill rig after it had been reassembled on site. Upon completion of the test hole the drill rig was redeployed onto the ridge line of the Badondo Prospect where it is currently drilling the intended high priority in situ enriched hematite Banded Iron Formation (“BIF”) targets.

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Figure 1: Location of the first drill hole at Badondo

Drill core from Badondo was transported to the Company’s Sample Preparation Laboratory at Equatorial’s 100% owned Mayoko-Moussondji Iron Project in the South West of ROC. The laboratory facility at Mayoko-Moussondji is independently operated by SGS Laboratories (“SGS”). Subsequent to initial processing the samples were air freighted to Perth, Australia and assayed by SGS.

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ASX: EQX | 12 July 2012 | ASX RELEASE

The zone of mineralisation intersected is interpreted to represent detrital canga iron mineralisation (or “cemented scree”) consisting of clasts of high grade hematite and hematite BIF cemented by a hematite/goethite/limonite matrix (refer Figure 2 and Figure 3 below). The canga has formed by erosion of high grade mineralisation fragments from higher up on the Badondo ridge line which moved down the slope by gravity and were deposited at the base of the hill as an ‘apron’ or talus breccia scree deposit. This scree deposit has subsequently been enriched and cemented into a coherent rock by dissolved iron minerals, leached by groundwater from the outcropping BIF higher up the ridge.

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Figure 2: Close up of cemented detrital canga iron mineralisation from hole BADDD00001

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Figure 3: Close up of massive hematite from hole BADDD00001

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ASX: EQX | 12 July 2012 | ASX RELEASE

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M
mplh
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Figure 4: Microplaty Hematite (mphl) with hematite (M) from Badondo rock samples (Sample K104, reflected light image)

Targeting of the canga mineralisation on the flanks of the Badondo ridge line was not considered a priority of the initial drilling program, as the expectation was that it was relatively thin. The results from this first hole indicate however that the canga mineralisation potentially represents an additional significant exploration target in its own right: the SRK mapping identified extensive canga mineralisation that extends along the entire strike of the Badondo prospect on both sides of the main ridge line.

The high iron grades in this first hole are consistent with the rock samples that have been collected from the Badondo and Belinga North Prospects by Equatorial geological staff and as part of the SRK mapping program. These surface rock samples were assayed by SGS in Johannesburg, South Africa. The rock samples returned grades up to 64% Fe from the hematite blanket, up to 69% Fe from the hematite and up to 65% Fe from the canga mineralisation. Attached in Appendix 2 are selected high grade rock sample assay results (provided in Table 3) and a detailed table of rock sample assay results (provided in Table 4).

While further drilling is required to confirm these initial interpretations, the results from the first hole are highly encouraging as they confirm the presence of thick high grade iron mineralisation from surface. The elevated phosphorus levels in the drill core are not considered a concern at this early stage. Only two of the 140 rock chip samples previously collected by SRK and Equatorial at Badondo have recorded similarly elevated phosphorus assays. Only eleven of these samples have recorded elevated phosphorus assays above 0.1% P. All eleven of these samples were collected from the canga mineralisation. No elevated phosphorous rock chip assays were recorded from the insitu hematite. There are some indications the phosphorus may have an organic source, however this is yet to be confirmed by planned further mineralogical analysis.

The drill rig has now been moved to the priority drill targets towards the top of the Badondo ridge line where SRK identified an outcropping hematite BIF cap with lenses of massive hematite at least 50 meters thick in visible cliff exposures and which appeared to extend over the entire strike length of the main target prospect.

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ASX: EQX | 12 July 2012 | ASX RELEASE

The goal of the current drilling program at Badondo 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. Drilling is continuing and further results will be released to the market when received.

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Figure 5: Badondo Project Location Plan

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Figure 6: 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 | 12 July 2012 | ASX RELEASE

APPENDIX 1: DIAMOND DRILL CORE ASSAY RESULTS FOR HOLE BADDD00001

Sample No.	From	To	Rocktype	Fe	SiO2	Al2O3	P	S	CaO	MgO	TiO2	MnO	**K2O **	**Na2O **	LOI1000
	m	m		%	%	%	%	%	%	%	%	%	%	%	%
G0001	0	2	Canga	56.2	10.7	3.58	0.149	0.041	0.01	0.01	0.15	0.03	0.01	0.01	4.81
G0002	2	4	Canga	58.7	10.5	1.97	0.063	0.040	0.01	0.01	0.07	0.02	0.01	0.01	3.53
G0003	4	6	Canga	67.4	1.2	1.05	0.052	0.021	0.01	0.01	0.03	0.04	0.01	0.01	1.04
G0004	6	8	Canga	65.8	1.5	2.15	0.044	0.023	0.01	0.02	0.06	0.05	0.01	0.01	2.21
G0005	8	10	Canga	61.6	1.0	4.17	0.196	0.056	0.01	0.01	0.16	0.01	0.01	0.01	5.93
G0006	10	12	Canga	66.9	0.9	1.41	0.070	0.020	0.01	0.01	0.05	0.01	0.01	0.01	1.67
G0007	12	14	Canga	63.7	1.5	3.43	0.141	0.018	0.01	0.02	0.13	0.01	0.01	0.02	3.54
G0009	14	16	Canga	60.0	1.2	5.39	0.241	0.029	0.01	0.01	0.18	0.01	0.01	0.01	6.84
G0010	16	18	Canga	64.7	0.6	2.66	0.173	0.017	0.01	0.01	0.09	0.02	0.01	0.01	3.66
G0011	18	20	Canga	65.0	0.8	2.33	0.155	0.021	0.01	0.01	0.11	0.01	0.01	0.02	3.31
G0012	20	22	Canga	61.7	1.2	4.05	0.255	0.024	0.01	0.01	0.15	0.01	0.01	0.01	5.56
G0013	22	24	Canga	61.9	1.6	4.13	0.200	0.020	0.01	0.01	0.16	0.01	0.01	0.01	5.11
G0014	24	26	Canga	63.2	0.9	3.23	0.201	0.022	0.01	0.01	0.15	0.01	0.01	0.01	4.72
G0016	26	28	Canga	62.4	1.0	3.45	0.257	0.018	0.01	0.01	0.13	0.01	0.01	0.02	5.6
G0017	28	30	Canga	66.3	1.1	1.75	0.115	0.009	0.01	0.01	0.05	0.01	0.02	0.02	1.87
G0018	30	32	Canga	63.4	1.8	2.96	0.207	0.017	0.01	0.02	0.08	0.01	0.01	0.02	3.95
G0019	32	34	Canga	65.4	0.9	1.74	0.178	0.012	0.01	0.01	0.08	0.02	0.01	0.01	3.16
G0020	34	36	Canga	62.9	1.6	3.37	0.192	0.012	0.01	0.02	0.16	0.01	0.02	0.01	4.29
G0021	36	38	Canga	63.6	1.8	2.95	0.177	0.010	0.01	0.02	0.10	0.02	0.02	0.02	3.73
G0022	38	40	Canga	62.9	2.7	3.22	0.160	0.009	0.01	0.02	0.13	0.02	0.05	0.02	3.56
G0023	40	41.9	Canga	57.1	10.6	3.49	0.200	0.007	0.01	0.02	0.16	0.03	0.11	0.02	3.33
G0024	41.9	42.95	Schist	3.8	64.4	19.90	0.021	0.001	0.01	0.69	0.92	0.01	4.19	0.20	4.29
	42.95	61.45	Schist						Not sampled
Total	0	41.9	41.9m	62.9	2.6	2.97	0.16	0.02	0.01	0.01	0.11	0.02	0.02	0.01	3.9

Table 2: Assay results for Hole BADDD00001

Notes

1. Tenement: 2009/72

2. Collar Coordinates: 304643E, 170067N, 619RL, UTM_WGS84_Zone 33N, surveyed by handheld GPS

3. Hole dip: Vertical

4. All samples half sawn NQ3 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 | 12 July 2012 | ASX RELEASE

APPENDIX 2: ROCK SAMPLE ASSAY RESULTS FROM BADONDO

Sample #	Fe (%)	SiO2 (%)	Al2O3 (%)	P (%)
K0104	68.3	2.2	0.20	0.03
K0105	69.1	0.5	0.26	0.05
K0106	68.8	0.5	0.40	0.06
K0118	60.8	0.6	6.90	0.12
K0123	63.6	7.0	0.79	0.06
K0125	66.6	2.2	1.63	0.07
K1030	65.3	1.6	3.13	0.02

Table 3: Selected high grade rock sample assay results from Badondo

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Figure 7: Significant Rock Chip Samples locations at Badondo

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ASX: EQX | 12 July 2012 | ASX RELEASE

Sample	Location	Location	Fe	SiO2	Al2O3	P	MnO	LOI
Number	Northing	Easting	%	%	%	%	%	%
K0101 K0102 K0103 K0104 K0105 K0106 K0107 K0108 K0109 K0110 K0111 K0112 K0113 K0114 K0115 K0116 K0117 K0118 K0119 K0120 K0121 K0122 K0123 K0124 K0125 K0126 K0127 K0128 K0129 K0130 K0131 K0132 K0133 K0134 K0135 K0136 K0137 K0139 K0140	172906 168989 168982 169149 168874 168720 168334 168388 168391 168400 168241 167475 167533 167514 167550 168029 168007 171471 171471 171023 171041 170456 170477 170497 170432 169973 169983 169995 169952 169502 169152 167411 167174 166984 167025 136512 136645 138937 138557	301262 304956 304902 304397 304508 304099 304512 304902 304913 304992 305005 305077 305169 305224 305762 305200 305130 303473 303473 303912 303590 303849 304139 304238 304452 304887 304822 304294 304080 304805 305099 305080 305089 305092 305282 301854 301847 302846 302357	39.3 46.6 38.6 68.3 69.1 68.8 41.3 41.7 40.1 39.4 48.3 37.3 38.0 37.6 40.9 41.4 40.6 60.8 51.4 56.1 51.6 41.4 63.6 40.6 66.6 34.5 45.5 31.5 34.7 65.3 36.4 41.9 37.8 34.3 39.1 34.4 33.4 36.9 36.6	40.3 33.6 44.5 2.2 0.5 0.5 39.5 39.8 41.0 42.6 30.4 46.0 44.7 44.2 40.2 40.1 42.3 0.6 1.9 19.8 24.4 38.1 7.0 40.4 2.2 49.2 34.2 54.0 48.6 1.6 45.9 39.5 45.4 49.3 42.4 48.7 50.1 45.2 12.9	1.34 0.11 0.39 0.20 0.26 0.40 0.59 0.21 0.06 0.07 0.10 0.07 0.22 0.25 0.25 0.05 0.05 6.90 15.00 0.10 0.47 0.93 0.79 0.19 1.63 0.18 0.18 0.60 0.23 3.13 0.15 0.14 0.19 0.33 0.06 0.11 0.22 0.23 18.60	0.04 0.02 0.01 0.03 0.05 0.06 0.03 0.04 0.03 0.07 0.03 0.02 0.04 0.04 0.03 0.03 0.02 0.12 0.09 0.03 0.09 0.06 0.06 0.02 0.07 0.36 0.06 0.07 0.05 0.02 0.02 0.03 0.02 0.09 0.03 0.09 0.02 0.04 0.17	0.02 0.01 0.01 0.02 0.01 0.02 0.02 0.01 0.01 0.01 0.01 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.01 0.01 0.02 0.02 0.02 0.01 0.08 0.01 0.03 0.06 0.09 0.01 0.05 0.01 0.01 0.03 0.03 0.01 0.01 0.01 0.06	2.1 0.6 0.2 0.4 0.3 0.6 0.8 0.4 2.1 0.9 0.4 0.5 0.8 1.1 0.7 0.9 0.6 5.6 9.6 0.4 2.1 0.9 0.7 0.3 1.1 0.5 0.5 0.7 0.9 1.9 0.7 0.3 1.3 1.7 2.3 1.6 2.6 2.2 13.4

Table 4: Detailed assay results from rock samples collected during SRK Mapping Program at Badondo

Notes

1. Assayed by X-ray fluorescence by SGS Johannesburg 2. Datum- UTM WGS (84) Z 33N

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ASX: EQX | 12 July 2012 | ASX RELEASE

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 Sean Halpin, who is a member of the Australian Institute of Geoscientists. Mr Halpin is a full time employee of Equatorial Resources Limited. Mr Halpin 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 Halpin 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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