* Barrick to pay C$8.15/share, or about C$7.3 bln
* Minmetals previously offered C$7/share
* Equinox to drop its bid for Lundin
* Equinox shares rise 12 pct; higher bid may emerge
* Barrick shares drop 6.4 pct; copper play concerns some (Recasts first sentence)
By Michael Erman and Pav Jordan
NEW YORK/TORONTO, April 25 (Reuters) - Barrick Gold Corp (ABX.TO) (ABX.N) has agreed to pay C$7.3 billion ($7.68 billion) for Equinox Minerals EQN.TO EQN.AX, pitting the world's largest gold miner against a unit of China's top metals trader in a battle for increasingly scarce copper assets.
Equinox shares jumped 11.6 percent in Toronto after the announcement on Monday, a signal that investors believe an even higher bid could emerge from China's Minmetals Resources (1208.HK) as copper prices keep pushing into record territory.
Barrick shares shed 6.7 percent as investors questioned whether a big move into the industrial metal would make the stock less attractive to those seeking exposure to gold prices.
"My attitude is that the Chinese are coming back higher, and I'd be surprised if Barrick played ball with the Chinese at a higher price because Barrick is already getting a lot of flak from its investor base for this deal," said an Equinox shareholder. He spoke on condition of anonymity because he was not authorized to speak about the deal.
Minmetals, whose shares are listed in Hong Kong, is majority-owned by China Minmetals, a state-owned company that is one of the largest metal traders in the world.
Barrick will double its position in copper with the acquisition. Prices have risen more than sevenfold in the past eight years as supplies lag the surging needs of China and other developing economies.
Equinox, a global miner listed in Toronto and Sydney, owns the Lumwana mine in Africa's rich Zambian copper belt and most of the Jabal Sayid project in Saudi Arabia.
Toronto-based Barrick offered to buy Equinox for C$8.15 a share, an 8.7 percent premium over its Thursday closing price. Barrick said the deal was worth about C$7.3 billion, including warrants and options.
The all-cash bid is 16 percent higher than the C$6.3 billion offer that Minmetals presented on April 3. The proposal underscored China's growing prominence in the global race for resources.
"I own a lot of Equinox but I was shocked - I was thrilled but I was shocked," the shareholder said, referring to the Barrick offer. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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Minmetals declined comment until it had a chance to study the details of Barrick's announcement.
Equinox had previously called the C$7-a-share Minmetals offer a low-ball bid. On Monday it said it believes the Barrick bid is superior in terms of price and its likelihood of completion.
Equinox shares on Monday closed in Toronto at C$8.37, about 3 percent higher than Barrick's offer.
"I suspect that there is room on the upside for this, and the stock is trading at a premium to the bid," said John Ing, analyst at Maison Placements in Toronto.
"In a world where commodities are trading at ever new highs, and you're looking at this project and the cash flow generated, the reality is today's prices may well be cheap in tomorrow's world," Ing said, referring to Equinox's Zambian project.
Barrick said its agreement for Equinox prevents the Australian miner from soliciting superior bids and gives Barrick the right to match any higher offers. Equinox would have to pay Barrick C$250 million to walk away from the deal, even if it accepts a higher bid.
"If the Chinese are going to respond with a higher offer ... then we'll just have to respond in due course," Barrick Chief Executive Aaron Regent told Reuters in an interview.
Regent, who has a background in base metals, sees the takeover bid as an opportunity to gain access to the Zambian copper belt at a time when copper prices are expected to keep climbing to fresh records.
"Clearly we are optimistic on the copper price, otherwise we wouldn't be doing this," Regent said, noting that existing copper mines cannot keep pace with some 800,000 tonnes a year in new demand for the red metal every year.
But the deal would also lower Barrick's exposure to gold to 80 percent from a current 90 percent.
"If you're an investor in Barrick, you're buying it for its gold leverage," said Dahlman Rose mining analyst Adam Graf. "So investors may not be pleased that Barrick is spending $7 billion of cash, levering up its balance sheet, to buy something that they don't want exposure to."
Equinox's Lumwana mine is Africa's third-largest copper operation by production and the Jabal Sayid development is due to start production next year.
The acquisition will double Barrick's current production to around 600 million pounds. Output would increase to more than 700 million pounds with the completion of Jabal Sayid in late 2012.
Barrick already owns the Zaldivar copper mine in northern Chile, the No. 1 copper-producing country, so the acquisition of Equinox would provide it with access to two of the most prolific copper-producing regions of the world.
As part of the Barrick agreement, Equinox will pull its unsolicited bid for Lundin Mining (LUN.TO). Equinox had been trying to take over the rival copper miner since February but conceded on Monday that its own shareholders would not likely have supported the deal.
Barrick said it has committed cash and financing in place for the transaction. It expects the deal to add to earnings per share and cash flow immediately.
Morgan Stanley and RBC Capital Markets advised Barrick on the deal, while CIBC World Markets, Goldman Sachs and TD Securities acted as financial advisers to Equinox. (Additional reporting by Julie Gordon; Editing by Frank McGurty)