INTRODUCTION

Equatorial’s 100% owned Badondo Iron Project (“Badondo”) is located in the northwest of the Republic of Congo within a regional cluster of world-class iron ore exploration projects including Sundance Resources’ Mbarga and Nabeba projects, Core Mining’s Avima project and CMEC’s Belinga Project.

In early 2011, Equatorial completed a detailed airborne geophysics program over Badondo that identified magnetic anomalies with a combined strike in excess of 22km prospective for iron mineralisation and resulted in the estimation of a global Exploration Target at Badondo of between 1.3 and 2.2 billion tonnes* of iron mineralisation at a grade of 30% to 65% Fe.
The Global Exploration Target at Badondo comprises:

• 200 to 300 MILLION TONNES* of potentially enriched “hematite cap” iron mineralisation at a grade of 40% to 65% Fe; and
• 1.1 to 1.9 BILLION TONNES* of primary magnetite BIF mineralisation at a grade of 30% to 45% Fe.

Badondo is comprised of three main target prospects including the Badondo Prospect, originally identified by BRGM during a field program in 2007; the Belinga North Prospect which is believed to be an extension of CMEC’s Belinga Project in Gabon; and the Belinga North Extension Prospect.

* Exploration Target: The estimates of exploration target sizes mentioned above 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.