Equatorial Resources Ltd : Exxaro Signs Mining Convention for Mayoko-Lekoumou

HIGHLIGHTS

ASX: EQX | 12 February 2014 | ASX RELEASE

EXXARO SIGNS MINING CONVENTION FOR MAYOKO-LEKOUMOU

 Exxaro Resources Limited and the Republic of Congo Government have signed a Mining Convention agreement for the development and management of the Mayoko-Lekoumou iron ore project which is immediately adjacent to Equatorial's 100% owned Mayoko-Moussondji Iron Project.

 Mining Convention agreements in the Republic of Congo specify the royalty, exchange control, fiscal and taxation terms of a mining project and usually include the terms of any required access to infrastructure.

 Equatorial is pleased to note the positive progress towards first production being made by Exxaro and that

the Mining Convention agreement is consistent with Equatorial's development strategy.

 Equatorial has completed and lodged with the Government a Mining Licence Application and Environmental and Social Impact Assessment for Mayoko-Moussondji and Exxaro's signing of a Mining Convention provides a positive precedent for the progression of the Company's permitting requirements.

MINING CONVENTION GRANTED TO EXXARO Equatorial Resources Limited ("Equatorial" or the "Company") is pleased to announce that Exxaro Resources Limited ("Exxaro") and the Government of the Republic of Congo ("ROC") have signed an agreement that sets the fiscal and legal terms ("Mining Convention") of the previously approved Mining Licence for Exxaro's Mayoko-Lekoumou iron ore project. Mayoko-Lekoumou is immediately adjacent to Equatorial's 100% owned Mayoko-Moussondji Iron Project ("Mayoko- Moussondji" or the "Project").

Under the ROC Mining Code of 2005 ("Mining Code"), the holder of an Exploration Licence has the exclusive right to apply for a Mining Licence by submitting a positive feasibility study for the project and an Environmental and Social Impact Assessment ("ESIA") that has been approved by the ROC Government. A Mining Licence for iron ore in the ROC is valid for 25 years and grants the holder the exclusive right to mine within the boundaries of the licence area. Upon the grant of a Mining Licence the Mining Code stipulates that a Mining Convention agreement is to be signed between the holder and the ROC Government.
The negotiation of a Mining Licence and Mining Convention agreement is carried out on an individual basis between the ROC Government and each mining company and is guided by the terms of the Mining Code and the precedent of previously granted conventions and legislation. The Mining Code has a number of favourable terms for miners. The Government is entitled to a 3% royalty on revenues and a 10% free carried interest in the mining project. The corporate tax rate for mining companies in the ROC is currently 30% and mining companies have been able to negotiate tax holidays of up to five years from first production and a range of other investment incentives.
The signing of Exxaro's Mining Convention follows government approval of an ESIA and the granting of a Mining Licence for Mayoko-Lekoumou. Equatorial is greatly encouraged by the ROC Government's strong commitment to the establishment of a mining industry in the country and the consistent application of the legislation. This support is highlighted by the signing of the Mining Convention with Exxaro and the on-going progress of Equatorial's development activities at Mayoko-Moussondji.

EQUATORIAL RESOURCES LIMITED | ABN 50 009 188 694 1

Level 2, BGC Centre, 28 The Esplanade, Perth, WA, Australia 6000 | Phone: [phone] | Fax : [phone] www.equatorialresources.com.au

ASX: EQX | 12 February 2014 | ASX RELEASE

Figure 1: Equatorial's and Exxaro's iron projects in the Mayoko region

RAIL AND PORT ACCESS

The Mining Convention signed by Exxaro is subject to the fulfilment of certain conditions precedent, notably in relation to the execution of definitive agreements for Exxaro's access to government owned rail and port facilities. Exxaro has announced that they will be considering the Mining Convention together with the rail and port agreements within its governance processes and will provide further detailed information at its annual results presentation on Thursday, 6
March 2014.
Both Mayoko-Moussondji and Mayoko-Lekoumou benefit from the operational bulk commodity railway line that intersects both projects and leads directly to the deep water port of Pointe-Noire. The railway is owned and operated by the state owned railway company Chemin de Fer Congo-Océan ("CFCO"). The port is operated by the state owned Port Authority of Pointe-Noire ("PAPN").
As part of Equatorial's Mining Licence Application ("MLA") for Mayoko-Moussondji the Company has submitted to the ROC Government, the CFCO and the PAPN, detailed Term Sheets which are intended to form the basis of commercial agreements in relation to the export of iron ore from Mayoko-Moussondji. These Terms Sheets were drafted in accordance with the principles of Equatorial's existing access and framework agreements with the CFCO and PAPN and reflect the ROC Government's commitment to multi-user open access infrastructure arrangements and the previous acknowledgement of Equatorial's initial transport requirements for initial production of 2Mtpa (refer ASX announcement
17 October 2013).

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ASX: EQX | 12 February 2014 | ASX RELEASE

The ROC Government has indicated that the commercial terms of use for rail and port access will be consistently applied across all agreements between government and mining companies. Equatorial continues to negotiate definitive agreements for access to the government owned rail and port facilities and is confident the previous agreements and assurances received from the ROC government remain valid.

POSITIVE IMPACT FOR EQUATORIAL

On 11 December 2013, Equatorial announced that it had lodged a MLA for Mayoko-Moussondji with the Ministry of Mines and Geology in the ROC. The MLA followed completion and lodgment of an ESIA for the Project.
Mayoko-Moussondji is immediately adjacent to Exxaro's Mayoko-Lekoumou iron project (refer Figure 1 above) and the Company is pleased to note the positive progress towards first production being made by Exxaro and specifically the successful granting of environmental approval, a Mining Licence, and now the signing of the related Mining Convention. Exxaro's operational and permitting progress provides a positive precedent for Equatorial to follow. The ROC government's approach with regard to Exxaro's Mining Convention agreement is consistent with Equatorial's development strategy.

ABOUT EXXARO

Exxaro is one of the largest South Africa-based diversified resources groups, with interests in coal, titanium dioxide, ferrous and energy commodities. The group is listed on the Johannesburg Stock Exchange and as at today's date has a market capitalisation of R53.09 Billion (AUD5.3 Billion).
Exxaro's ferrous interests include a 19.98% stake in the Sishen Iron Ore Company Ltd which is Africa's largest iron ore
mine currently producing approximately 35 million tonnes per annum.

For further information contact:

John Welborn Managing Director & CEO

Telephone: [phone]

Email : [e-mail]

Web : www.equatorialresources.com.au

For the latest news from Equatorial, subscribe to our email bulletin service via our website at http://www.equatorialresources.com.au/display/index/subscribe

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ASX: EQX | 12 February 2014 | ASX RELEASE

ABOUT EQUATORIAL RESOURCES

Equatorial Resources Limited (ASX:EQX), is focused on the exploration and development of two 100% owned 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, currently has total Indicated and Inferred Resources of 917 million tonnes at 31.4% Fe which includes a Hematite Resource of 182 million tonnes at 35.7% 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. A Scoping Study1 completed for the project has delivered excellent results demonstrating
low capital intensity and an initial mine life of 23 years for production of 2Mtpa of "Mayoko Prem ium Fines", a 64.1% Fe product, with operating costs expected to average $41 per tonne FOB. Equatorial has completed an ESIA and applied for a Mining License for the Project and now intends to secure project funding, or the support of a suitable strategic partner, to enable the development of the Company's preferred production scenario for Mayoko-Moussondji.
The Badondo Iron Project, in the northwest region of ROC, has a global Exploration Target of between 2.8 and 4.6 billion tonnes of iron mineralisation at a grade of 35% to 67% Fe which includes a DSO Hematite Exploration Target of between 370 to 620 million tonnes at a grade of 58% to 67% Fe. It should be noted that the potential quantity and grade of the Exploration Target is conceptual in nature, that there has been insufficient exploration to estimate a Mineral Resource, and that it is uncertain if further exploration will result in the estimation of a Mineral Resource. The project is located within a regional cluster of world-class iron ore exploration projects including Sundance Resources' Mbalam- Nabeba project, Core Mining's Avima project, and the Gabonese Belinga iron project.

1The Company has concluded it has a reasonable basis for providing the forward looking statements above. The detailed reasons were in the section headed "Forward Looking and Cautionary Statements" of the Company's ASX announcement of 16 July 2013. The Scoping Study results and Production Targets above are preliminary in nature as conclusions are drawn partly from Indicated Resources (25%) and Inferred Resources (75%) based on the maiden MRE announced in February 2013. The Scoping Study is based on lower-level technical and economic assessments that are insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case. There is a low level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target itself will be realised.

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