QUARTERLY REPORT TO SHAREHOLDERS
for the Three Months Ended 31 March, 1997
High level of exploration activity maintained through internal funding and operating joint ventures - $7 million budget for 1997.
Exploration priority is Proterozoic Copper-Gold Ironstone Breccias.
The Company is maintaining a high level of exploration activity by both funding its own programs and through the careful structuring of joint ventures, mostly operated by Equinox during the exploration phase. As a consequence of this strategy, Equinox’s 1997 budget is for expenditure of about $7 million, including joint venture funds. This is a substantial budget for a company of Equinox’s capitalisation - our objective being to maximise the Equinox shareholder’s exposure to potential exploration success.
The Company is primarily focusing its exploration effort on Proterozoic Copper-Gold Ironstone Breccia mineralisation of the Ernest Henry - Olympic Dam style, in which its team has specific expertise. This style of mineralisation is the target of programs in :
Equinox intends to continue to expand its exploration effort for Proterozoic Copper-Gold Ironstone Breccia mineralisation, whilst maintaining its exploration activities for structurally controlled gold mineralisation in the Yilgarn of Western Australia.
Zambezi JV :
Zambezi JV has extensive landholdings :
Program commenced :
Kitwe / Luanshya South :
Kafue Park :
New Applications :
Exploration program :
Zambezi JV :
AFRICA : COPPER-GOLD EXPLORATION
ZAMBEZI JOINT VENTURE - Anglo American Corporation
The Zambezi Joint Venture between Equinox and Anglo American is primarily focusing its efforts on Zambia which is considered to have outstanding potential for copper and copper-gold mineralisation. The Zambian Copperbelt is one of the world’s great copper provinces, however there has been virtually no regional exploration undertaken in Zambia since the early 1970’s. The region’s outstanding exploration potential remains untapped by modern exploration philosophy and techniques.
Equinox has established an extensive land position in Zambia. The Zambezi Joint Venture has been granted 6 exploration tenements covering a total area of approximately 31,500 sq kms and has an additional 20,000 sq kms under application.
Equinox, as operator of the Zambezi Joint Venture has established a base in Kitwe and commenced a regional exploration program in late-1996. To date the program has consisted primarily of aeromagnetic data acquisition and the compilation of a database from previous exploration programs, mostly in the 1960’s and early-1970’s.
Progress on the Zambian projects is summarized as follows :
An interpretation of the aeromagnetic data has commenced and radiometrics, acquired concurrently with the aeromagnetics, has also proved useful in tracing the Lower Roan sequence. An assessment of previous exploration has identified several prospects for testing, particularly along the 50 kms strike length of the Lower Roan sequence on the Kitwe tenement, between Mufulira and Ndola.
In addition to the above projects a further 20,000 sq kms of tenement applications have been lodged by the Zambezi Joint Venture. Itezhi-Tezhi adjoins Kafue Park to the south and the Kasanka - Serenje tenements cover a number of gold prospects and ironstone occurrences within a major structural zone intruded by granites.
The Zambezi Joint Venture work program for the next Quarter will include :
The Zambezi Joint Venture will conduct SPECTREM surveys over some of the tenements in mid-1997. SPECTREM is a sophisticated high resolution airborne EM (electro-magnetic) system owned by Anglo American, used to identify sulphide mineralisation. Drilling of priority targets will commence in the second half of 1997.
Equinox is operating a major exploration program for the Zambezi Joint Venture over an extensive tenement package within a world class metallogenic province in Zambia. A series of highly prospective targets are being defined for initial drill evaluation in late-1997.
Gawler Craton - one of Australia’s most exciting exploration provinces.
Equinox is in an outstanding position :
SOUTH AUSTRALIA : COPPER, GOLD and DIAMOND EXPLORATION
Equinox was one of the first companies to identify the Gawler Craton as one of the most exciting exploration provinces in Australia and the Company has established a substantial land position controlling a total area of about 16,500 sq kms.
In South Australia the Company is primarily focusing its efforts on the Gawler Craton Joint Venture with Phelps Dodge Australasia Inc. ("Phelps Dodge"), however it has established a substantial ground position outside of this joint venture in other parts of the Gawler Craton. Equinox has also expanded its activities elsewhere in South Australia with a new project in the Curnamona Region in the northeast of the state. South Australia continues to be a priority exploration focus for Equinox.
Equinox focusing on Mount Isa - Cloncurry Region.
Exploration focus on Proterozoic Cu-Au Ironstone Breccia mineralisation.
Fort Constantine South covers targets located only 10 kms S of Ernest Henry.
Drilling of priority targets scheduled for mid-1997.
Other prospective magnetic targets at :
Base metal joint ventures.
Mt Oscar :
Geochemical - geophysical targets to be drilled by Pasminco in 1997.
Police Creek :
BHP has flown GEOTEM.
Dickson Creek :
QUEENSLAND : COPPER - GOLD EXPLORATION
Equinox’s Queensland exploration program is focusing on the Mount Isa - Cloncurry Region, although exploration programs have also been conducted in the Georgetown and Charters Towers regions of north Queensland.
MOUNT ISA - CLONCURRY REGION
The Company’s exploration efforts in the Cloncurry region have concentrated on Proterozoic Copper-Gold Ironstone Breccia deposits of the Ernest Henry type. Stratabound base metal (Zn-Pb-Ag) mineralisation in the Western Succession of the Mount Isa region represents a secondary exploration priority for Equinox and most of these projects have been joint ventured to other parties.
Exploration of the region has been severely constrained since late 1996 as a result of an exceptionally intense wet season, however exploration is now recommencing.
Cloncurry Region : Copper - Gold Exploration
The Company’s highest priority project in the Cloncurry region is the Fort Constantine South project, located 10 km south of the Ernest Henry Deposit. The property covers the same geological sequence and intrusives associated with Ernest Henry and some of the structures controlling the mineralisation at Ernest Henry can be traced through the Equinox tenement.
Programs conducted by Equinox at Fort Constantine South during 1996 included detailed aeromagnetics, geological mapping, soil geochemistry and reconnaissance RC drilling. These programs identified strongly magnetic, altered felsic volcanics equivalent to the Ernest Henry host rocks and delineated a series of about 20 high priority targets for further evaluation. Equinox will conduct a substantial RC drilling program at Fort Constantine South in mid-1997.
A series of intense magnetic anomalies are the priority targets at the Augustus Downs - Quinjerrie Creek, Roxmere, Bony Creek and Mort River tenements. A coincident geochemical / magnetic anomaly at Roxmere will be drilled in conjunction with Fort Constantine South and programs are being considered for the strong magnetic anomalies at Bony Creek, Augustus Downs and Mort River.
Mount Isa Region : Base Metal Exploration
The Company’s base metal exploration strategy in the Mount Isa Region has been to structure joint ventures with major mining companies, enabling Equinox to concentrate on the Cloncurry region copper-gold program.
At Mount Oscar, 30 kms north of the Century Zinc Deposit, Pasminco Australia Limited is operating an exploration program for the Company. Drilling of significant copper-zinc-arsenic anomalism at the Muswellbrook Prospect is planned by Pasminco following program approvals by the State Government.
BHP Minerals has flown a GEOTEM airborne geophysical survey over the Police Creek Project, 30 kms northeast of Mount Isa. Data is currently being processed for assessment and drill target generation.
The Browns Creek - Mica Creek Project is located 10 kms south of Mount Isa on extensions of the Mount Isa structures and stratigraphy. Equinox is planning further geochemical surveys of the property in mid-1997.
OTHER QUEENSLAND PROJECTS
The Dickson Creek project is located 70 kms southwest of Chillagoe in northeast Queensland. The tenement covers a series of intrusives prospective for Kidston style gold mineralisation. The Equinox program in late 1996 delineated a significant geochemical anomaly over an area of 600 m by 900 m, associated with an aeromagnetic anomaly. This anomaly and a number of additional zones will be the target of ongoing exploration in mid-1997. Discussions are underway with parties interested in a joint venture on Dickson Creek.
The Pallamana project is located 3 kms northeast of the Pajingo Mine near Charters Towers in northeast Queensland. The property is prospective for epithermal gold mineralisation of the Pajingo style, the region having been subjected to renewed interest since the Vera - Nancy discovery by Battle Mountain - PosGold Joint Venture (the Pajingo JV). Equinox has formed a joint venture with the Pajingo JV to explore Pallamana under which the Pajingo JV may earn a 70% interest by expending $300,000 over 4 years. Thereafter project funding will be in proportion to equity, with Equinox retaining the right to convert to a 15% interest free carried to completion of feasibility. Exploration activities conducted to date by the joint venture include aerial photography and gradient array resistivity. A program of geological mapping, geochemistry and drilling is planned for mid-1997.
Yilgarn is Equinox focus of Archean gold exploration.
Murrin Murrin :
Equinox controls 60 kms strike of Westonia Greenstone Belt - comparable to Southern Cross Belt (12 M ozs Au).
Equinox regional generative program continuing in Murchison.
New tenements granted.
Homestake JV :
WESTERN AUSTRALIA - GOLD EXPLORATION
Archean structurally controlled gold mineralisation in the Yilgarn Craton is Equinox’s continuing focus in Western Australia. The Company is exploring in the Leonora, Murchison-Yalgoo and Southern Cross regions, has commenced programs at Nyabing in the South West Mineral Field and Nabberu in the Jundee Belt and has lodged tenement applications in the Gascoyne and Ashburton regions.
(Equinox 51%, earning to 75%)
Hunter Exploration NL has withdrawn from the Murrin Murrin Joint Venture and Equinox has been reinstated as operator of the joint venture with Samson Exploration NL. A review of exploration by Hunter has been completed and a number of targets proposed for drill testing, including the MiG, Far East, North Star, Sukhoi and Nangaroo prospects. A RAB/aircore drilling program is planned for mid-1997.
SOUTHERN CROSS REGION
(Equinox 51%, earning to 75%)
Equinox controls the majority of the Westonia Greenstone Belt through its joint ventures with Rhodes Mining NL and Cambrian Resources NL, with tenements covering a strike length of about 60 km. The Westonia Greenstone Belt is geologically similar to the Southern Cross Belt, 40 km to the east, which has production and reserves of more than 12 million ounces of gold. However, the extensive surficial cover in the Westonia Belt has limited the effectiveness of previous exploration. Equinox is applying exploration techniques such as aeromagnetics, structural analysis, geochemistry and RAB drilling to define drill targets through this surficial cover.
During the Quarter a substantial geochemical database was compiled from previously unavailable data reported by earlier explorers of the region. This data has been integrated with the Equinox geochemical / aeromagnetic database and has delineated a series of high priority exploration targets. These targets are scheduled for RAB/aircore drill evaluation by mid-1997.
MURCHISON - YALGOO REGION
Equinox is continuing its regional program in the Murchison - Yalgoo region and has been granted tenements at Milliwarrie and Little Millie Well which are being targeted for Big Bell style structurally controlled gold mineralisation. At Lakeside, southwest of the Cuddingwarra deposit, the Company has won the title ballot on the adjoining tenement and will commence a program when the tenement is granted. Joint venture discussions are underway with parties interested in farming in to the Lakeside project.
Equinox is operating a joint venture with BHP Minerals at Perenjori and has completed a program of geochemistry, geology and RAB drilling. Data is currently being assessed to plan the next phase of exploration at Perenjori.
At Weebacarry the Company has formed a joint venture with Homestake Gold of Australia Limited (Homestake) under which Homestake may earn a 51% interest by expending $750,000 within 3 years and a further 19% interest by spending an additional $1,000,000 within 5 years of commencement, provided that Equinox and Whim Creek Consolidated (a subsidiary of Plutonic) do not elect to contribute at 49% interest. On completion of Homestake’s earning phase project equities will be Homestake 70%, Plutonic 6.29% and Equinox 23.71%. Homestake has commenced a program of geochemistry and approximately 10,000 m of RAB drilling.
Equinox team expanded :
Cash on Hand : $6.88m
Exploration for Quarter : Equinox $0.24m
+ JV funds $0.94m
Annual budget : $2.50m
including JV funds : $7.00m
Equinox is in a sound financial position.
FINANCIAL STATUS and CORPORATE MATTERS
The Company’s high level of exploration activity has necessitated an expansion of the Equinox team. Mike Richards has been appointed Exploration Manager and John Cooke has joined the team to run the WA exploration effort. John Parker will continue to manage SA, Dick Cayzer - Queensland and Barry Van der Stelt - Africa. The Equinox team currently comprises 17 technical staff and 4 administrative personnel.
Equinox remains in a strong financial position with cash on hand at 31 March, 1997 of $6,883,000. During the Quarter the Company received a total of $224,700 from the exercise of employee options.
Equinox exploration expenditure for the March Quarter was $240,000 and expenditure including joint ventures totalled $942,000. This expenditure is lower than normal due to the wet seasons in northern Australia and southern Africa limiting field programs.
Equinox is maintaining a total annual expenditure of approximately $2.5 million, whereas effective annual exploration expenditure on Company projects will be more than $7.0 million through the application of joint venture funds. Most of this expenditure will be on programs operated by Equinox, but funded by joint venture partners.
Equinox is focusing on Ernest Henry style Cu-Au with exploration programs :
also exploring in WA -Yilgarn region
Equinox is maintaining a high level of exploration activity as a consequence of a carefully structured exploration strategy. The Company is focusing its efforts on exploration for Proterozoic Copper-Gold Ironstone Breccia style mineralisation (Ernest Henry type), in which the Equinox team has specific exploration expertise. For this style of mineralisation Equinox is exploring :