Name and Location
Boseto copper project, Botswana.

Client
Discovery Metals. The company recently became the takeover target of a Chinese bidder, which was offering shareholders A$824-million for their shares in the company.

Project Description
The Boseto copper project is located on one of 14 prospecting licences, covering an area of about 10 100 km² within the Kalahari Copperbelt – a previously poorly explored extension of the Zambian Copperbelt.

The project consists of three main prospects – Zeta, Plutus and Petra.

A bankable feasibility study (BFS) has indicated that the resources and reserves can support a three-million-ton-a-year copper/silver operation over a five-year life-of-mine.

The development plan includes the establishment of openpit and underground mining operations to feed a three-million-ton-a-year concentrator for a 15-year period. Yearly production is forecast at more than 35 000 t of copper and one-million ounces of silver.

Value
$175-million.

Duration
Steady-state production is expected in the second quarter of 2012. Underground mining is expected to start from the Zeta prospect in 2014, with production expected in 2015.

Latest Developments
Progress continues on the ramp up of production at the Boseto copper project.

During December 2012, the mine produced 3.2-million tons, including waste ore.

The initiatives for improving mining production announced in November increased production and will help ensure consistent supply of ore to the concentrator in future. Further initiatives to improve mining productivity are continuing.

The temporary suspension of pit deepening at the Zeta pit in late November was lifted on December 24, 2012. The suspension restricted mining to the lower-grade, transitional ore near the ends of the Zeta pit. Mining of the thicker, mainly sulphide ore at deeper levels of the Zeta pit restarted when the suspension was lifted.

Waste removal began at the Plutus pit in December and progressed to an estimated depth of 5 m, along a strike length of 500 m by the end of the month.

The Boseto concentrator lost the equivalent of 14 working days during December, owing to insufficient ore at the start of the month and failure of the ball mill gearbox. Milled tonnage for December was 118 000 t at an average daily rate of 8 432 t/d for the days operated, representing 100% of the design production rate.

The ball mill gearbox failure did not affect ore crushing in the last nine days of December, so crushed ore stocks at month end exceeded 40 000 t and run-of-mine stocks have also built up significantly.

The gearbox has since been reinstalled and mill operations restarted on January 8.

With crushed ore stocks of more than 40 000 t at the end of December, the Boseto concentrator is expected to maintain or exceed design throughput rates, as enough ore feed is expected to be available under normal circumstances. Ore to be processed during January is expected to comprise a significant amount of sulphide ore.

Debottlenecking investigations are continuing, so that the upside capacity of the currently installed plant can be more accurately determined and included in ongoing production and expansion planning. Indications are that a higher-than-design processing rate may be obtainable.

The mining rate is expected to continue to improve as the various initiatives outlined in previous announcements by the company are implemented. The large capacity buckets are expected on site by mid-January.

Key Contracts and Suppliers
Sedgman (engineering procurement and construction management); Transamine (concentrate offtake agreement); GRD Min-proc (BFS) and Standard Bank Chartered, Standard Bank, Credit Suisse and Caterpillar Finance (banking syndicate lead financial arrangers).

On Budget and on Time?
Yes.

Contact Details for Project Information
Discovery Metals, tel +61 7 3218 0222, fax +61 7 3218 0233 or email info@discoverymetals.com.au; or Discovery Metals Botswana, tel +267 318 0751 or fax +267 318 0752.