ASX RELEASE 28 February, Half Year Ended 31 December 2006

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1 Half Year Ended ember This document provides a review of the financial results and operations of Equigold NL for the half year ended ember. Highlights Profit before tax and hedge accounting adjustments $14.4 million (HY 05: $13.5 million). Half Year Ended ember $ 000 $ 000 % Change Total revenue 53,697 52,152 +3% EBITDA 20,037 20,135 0% Profit before tax (pre-hedging adjustment) 14,402 13,471 +7% Hedge accounting adjustment 6,996 (11,734) N/A Net profit after tax 15,164 1,349 1,024% Gold production 74,297 ounces at a cash cost of $386 per ounce (HY 05: 81,631 ounces at $344/oz). Interim dividend of 3.5 cents per share, fully franked (HY 05: 3.0 cps) declared. Record date for entitlements 23 March 2007, payable 3 April Significant progress made on the development of the Bonikro Gold Project in Ivory Coast, including: - granting of the mining permit. - completing all financing arrangements required to fund the development. - indication that political risk insurance for the project will be available at a quantum and on terms satisfactory to the company. Agreement reached to terminate a third party royalty obligation on the Bonikro project, generating savings in excess of US$2.0 million against the feasibility study financial model. Sale of Western Queen South tenements held by the Dalgaranga Gold Mines Joint Venture (EQI 50.1%, AXG 49.9%) to Mount Magnet Gold Ltd. The proceeds from this sale will be received on a deferred settlement basis between May 2007 and September Total proceeds may vary depending on the gold price but are forecast at $1.0 million. Page 1

2 Financial Equigold NL recorded a profit before tax (pre hedge accounting adjustments) of $14.4 million, up 7% from $13.5 million in the prior period and a profit after tax (pre-hedging) of $10.3 million, up 7% from $9.6 million in the prior period. This increased profit was achieved despite the 9% lower gold production of 74,297 ounces, due to the sale of gold production at a higher profit & loss delivery price of $684 per ounce (HY 05: $616/oz). Revenue from ordinary activities for the half year was $53.7 million (HY 05: $52.2 million). After the hedge accounting adjustment net profit after tax (NPAT) was $15.2 million (HY 05: $1.3 million). This significant improvement in NPAT was the result of the hedge accounting adjustment for the period increasing from a loss of $8.2 million after tax in the prior period to a gain of $4.9 million after tax in the current period. This turnaround in the hedge accounting adjustment was due to the fact that there was a slight drop in the spot gold price in the current period compared to a substantial increase in the prior period. Accordingly the mark to market valuation on the financial instruments moved in favour of the Company over the period. Earnings per share for the half year were 8.9 cents (HY 05: 0.8 cps). Earnings per share (pre hedge accounting) were 6.0 cents (HY 05: 5.6 cps). Dividend The directors have declared a fully franked interim dividend of 3.5 cents per share (HY 05: 3.0 cps). The record date for the dividend is 23 March 2007 and it will be paid on 3 April Operations Gold production for the half year ended ember is summarised as follows: Mt. Rawdon (100% Equigold) Production (oz) 54,856 54,689 Cash Cost ($/oz) Kirkalocka (100% Equigold) Production (oz) 19,441 26,942 Cash Cost ($/oz) Equigold Production (oz) 74,297 81,631 Cash Cost ($/oz) Page 2

3 Mount Rawdon Operational performance for the half year ended ember at the Mount Rawdon project in south east Queensland is shown below: Ore mined (tonnes) 1,710,267 1,742,249 Ore milled (tonnes) 1,747,325 1,724,768 Head grade (g/t) Recovery (%) Total production (oz) 54,856 54,689 Cash cost (A$/oz) Gold production at the Mount Rawdon project was 167 ounces higher than the prior period. The mined tonnes of 1,710,267 produced a 5% positive reconciliation to the geological reserve for the areas of the open pit mined during the period. The cash cost of production for the half year, at $375 per ounce, was 14% higher than the prior period. This was primarily the result of the final estimation of life of mine mining costs for the full stage 2 open pit. Strong cost control enabled processing costs to remain at similar levels to the previous period despite continued upward cost pressure experienced throughout the industry. The project is on schedule to produce approximately 111,000 ounces for the year ended 30 June Kirkalocka A summary of production statistics at the Kirkalocka project in the Murchison region of Western Australia for the half year ended ember is as follows: Ore mined (tonnes) - 577,761 Ore milled (tonnes) 594, ,175 Head grade (g/t) Recovery (%) Total production (oz) 19,441 26,942 Cash cost (A$/oz) Gold production at the Kirkalocka project at 19,441 ounces was 7,501 ounces (28%) lower than the prior period. Mining of the open pits at Kirkalocka was completed in October and since that time the operation has been milling ore from the broken ore stockpiles. These stockpiles are lower grade than the ore milled directly from open pit mining in the prior period. Page 3

4 The cash cost of production for the half year was $418 per ounce (HY 05: $373/oz). This increase in operating costs is the result of the lower grade of the ore treated and the increase in milling costs, particularly diesel fuel generated power. Broken ore stocks at ember were 1.8 million tonnes at a grade of 1.29g/t. This stockpile will supply milling operations until around June Development The following is a summary of the progress made during the half year in relation to the development of the Bonikro Gold Project in Ivory Coast. Mining Permit Equigold was very pleased that shortly after the end of the half year the Government of Ivory Coast awarded a Mining Permit to the Company s 94% owned subsidiary Equigold Cote d Ivoire SA in relation to the Bonikro Gold Project. This is a major step towards the commencement of the development of the Bonikro Gold Project. The permit terms include provision for the permit to be immediately transferred to the special purpose entity Equigold Mines Cote d Ivoire SA, in which the Government of Ivory Coast will take up its 10% free carried interest. Finance The forecast capital cost of developing the project is US$73.8 million (A$94.6 million). Equigold has received a committed offer from Macquarie Bank Limited for a corporate loan facility of $40 million. This funding is in addition to the Company s current cash and bullion holdings of $44 million. Equigold expects to receive upto a further $59 million in equity funding in May 2007 through the exercise by holders of 41.8 million options to acquire shares at $1.40 each. As noted in the Finance section below, the Company has secured underwriting for 15 million ($21 million) of these options. Political Risk Insurance Negotiations have concluded with a syndicate of political risk insurance underwriters in relation to providing PRI for the Bonikro Gold Project. It is expected that PRI cover of a quantum and on terms satisfactory to the board will be made available for the project. Mining Investment Convention Negotiations with the Government of Ivory Coast in relation to the investment convention are continuing. The investment convention sets out the key rights and obligations of the Company and the Government and documents the investment terms granted to the project. It is expected that an agreement will be finalised in the short term. Page 4

5 Engineering and Site Works Engineering, design and drafting works continued during the quarter along with the procurement of long lead capital items. Clearing of the plant site area at Bonikro commenced shortly after the end of the half year. Exploration Ivory Coast The Company s tenement holdings in Ivory Coast currently comprise eight granted exploration permits covering 5,400 square kilometres and approximately 440 kilometres of prospective Birrimian strike. A further seven exploration permits (totalling 5,400 square kilometres and 210 kilometres of prospective strike) were under application and expected to be granted in due course. During the half year, an additional six applications (5,300 square kilometres and 240 kilometres of Birrimian strike) were made. The Company has taken initiatives to overcome the lack of high quality drilling services in Ivory Coast. Equigold has acquired a RAB rig and has formed an alliance with another Australian expatriate driller to import an RC rig for the Company s projects. These initiatives have given Equigold access to two rigs providing RAB and RC drilling. This will enable substantial and systematic drilling capacity at competitive prices for the Company s numerous high gold potential targets in Ivory Coast. The RAB rig will be used to test high priority regional geochemical targets. The RC rig will initially be used on drilling programs at Akissi-So (Hiré Permit), Assonji-So (Hiré Permit) and Dougbafla East (Oume) permit. Akissi-So Drilling during the half year focused largely on the Akisso-So deposit. This deposit is located on the Hiré exploration permit, approximately 12 kilometres south east of Bonikro. The Akissi-So deposit contains an inferred resource of 3.24 g/t gold for a total of 148,300 ounces. Two (2) shallow RC holes and six (6) deeper diamond holes (with RC precollars) were completed to extend the known mineralisation along strike and to a vertical depth of 150 metres. Significant assays received during the quarter include (>1.0 g/t gold): Hole No. Northing Easting Az Dip Final Depth From To Interval Gold Grade g/t HRC HRD HRC Page 5

6 There are still a number of assays to be received for diamond core drilled during the half year. Results to date are encouraging with holes HRC111 and HRC115 (both on the same section) adding 50 metres of mineralised strike to the west of the deposit. Most of the holes intersected the Akissi-So structure and the mineralisation remains open in all directions. A 62 hole (5,475 metre) RC drill program is currently underway to upgrade the oxide resource from Inferred to Measured and Indicated. Additional drilling along strike and to a vertical depth of 100 metres will also be completed to increase the known extent of mineralisation. An updated resource calculation will be undertaken at the completion of this programme and an increase in the resource is expected. Finance As at ember Equigold had $43.9 million (HY 05: $32.6 million) in cash and bullion holdings. During the half year the Company s cash flows from operations (prior to payment of Income tax) was $18.9 million, up strongly from $14.4 million in the prior period. Subsequent to the reporting date, the Company secured agreement with Euroz Securities Limited for them to partially underwrite the exercise of share options with an exercise price of $1.40 per share expiring on 31 May 2007, completing the funding required for the development of the Bonikro project. Euroz has underwritten the exercise of 15 million options (at $1.40 each) of the total number outstanding of 41.4 million, or the equivalent of $21 million upon conversion into ordinary shares. Gold Hedging Equigold s total hedging position as at ember is summarised below: Volume (Oz) Forward Sale Contracts Flat forward sales 237, Spot deferred sales 27, Price (A$/oz) 264, Volume (Oz) Strike Price (A$/oz) Sold Call Options Expiry , The forward sales contracts represent coverage of approximately 16% of the Company s total gold reserves and provide an appropriate balance between risk management and exposure to favourable movements in the gold price. Page 6

7 Outlook Operations & Financial Gold production for the second half of the /2007 financial year is forecast at approximately 76,000 ounces at a cash cost similar to that achieved in the first half. Profit before tax and IFRS hedging adjustments for the second half is forecast in the range of $20 - $21 million. This may vary depending on movements in the gold price. The Company has been advancing development of the Bonikro Gold Project on a staged approval basis and is currently on schedule for commencement of production in March The remaining condition before the board grants full approval for the development is the finalising of the investment convention with the Government of Ivory Coast. The investment convention sets outs the key rights and obligations of the Company and the Government and establishes the fiscal terms under which the project will operate. Negotiations with the Government in relation to the investment convention are well advanced and it is expected to be completed shortly. For further information contact: Mark Clark, Managing Director (61 8) Qualification Statement The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Glyn Evans. Mr Evans is a full-time employee of Equigold NL. Mr Evans 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 Evans consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Page 7