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 about 10 100 km² within the Kalahari Copperbelt –previously a 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 15 years. 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
In the quarter to September 30, 2013, Discovery reported a 5% quarter-on-quarter decline in concentrate production from its Boseto project.

For the quarter under review, the volume of material mined was down by 4.5% to 8.96-million tonnes, with the company milling about 615 000 t to produce 11 943 t of concentrate.

Copper in concentrate production was down 6.5% on the previous quarter to 4 705 t, while silver-in-concentrate production declined by 8% to 196 816 t.

The copper and silver production reduced marginally, as a result of the lower-than-planned metal production during the month of September. Average copper recovery in September was 56%, compared with the expected 64%.

Investigations into the cause of this recovery decline are under way and initial indications show that the underperformance is related to the management of grind size and reagent levels, particularly when treating charging blends of Zeta sulphides and Plutus transitional ores.

Efforts to optimise copper recovery continue.

Meanwhile, in September, Discovery signed a $108-million recapitalisation deal with Singapore-listed investment holding company Blumont Group. The deal consists of an A$8.75-million share placement and a $100-million convertible bond placement and will conclude with Blumont owning a 60% interest in DML.

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.