PERTH (miningweekly.com) – ASX-listed Discovery Metals, which owns the Boseto copper project in Botswana, has launched a new search for a buyer, after Cathy Fortune Investment’s A$824-million offer was scrapped in February.

Discovery said on Tuesday it had signed a number of confidentiality agreements with interested parties, some of which also launched due diligence proceedings, which could take up to four weeks to complete.

Binding proposals have to be in by June 10, the base metals company stated.

Discovery commissioned its Boseto copper project, in Botswana, in 2012. However, the ramp-up took longer than expected, and with rain and drill performance impacting on the operation in the March 2013 quarter, a loss of some A$25-million in revenue was reported.

Shareholder Cathy Fortune in February scrapped its A$824-million takeover offer, citing concerns over the Boseto project.

Cathy Fortune also blasted Discovery’s subsequent attempts at a A$75-million capital raising, saying the refinancing of the company’s debt could force the company into receivership.

The shareholder, which holds a 13.7% stake in Discovery, said that it would relaunch a takeover bid if the capital raising did not proceed.

Discovery told shareholders on Tuesday that subsequent to that announcement, Cathay Fortune sent a new proposal that could result in a takeover offer. However, it noted that the proposal was indicative, conditional and subject to a due diligence review.

The takeover price range was between 35c and 40c a share, which was significantly lower than the initial takeover offer of A$1.70 a share.

A formal offer from Cathay Fortune was only expected after June 16, owing to provisions in the Corporations Act, unless the firm obtained a waiver from the Australian Securities and Investment Commission.

On May 17, Discovery had some A$23.7-million cash on hand, with total debt of A$176-million, comprising the A$151-million project financing facility and a fully drawn down working capital facility of A$25-million.

The company’s hedge book had a marked to market valuation of around A$39-milion.

Meanwhile, costs reductions were also expected at the Boseto project after the June quarter, as the operation continued to ramp-up to full production.

At full production, the long-term C1 cash cost was estimated at between A$1.87/lb and A$2/lb.