PERTH (miningweekly.com) - Chinese bidder Cathay Fortune Investment has extended its A$824-million takeover offer for ASX-listed Discovery Metals by seven days as it evaluates a significant write-down in reserves at the Zeta openpit, in Botswana.
In its second target statement, Discovery Metals indicated that an ore reserve model had overestimated the amount of sulphide ore and underestimated the amount of oxide and transitional ore in the Zeta openpit orebody, for the material mined to the end of December last year.
It was reported that the grade of sulphide material mined was 15% lower than the ore reserve model as a result of mining dilution, and Discovery Metals said at the time that management was focused on improving mining to reduce dilution and to minimise ore losses.
Cathay said on Wednesday that the new material disclosures, which included the write-down of reserves in the Zeta openpit, the higher ratio of oxide/transitional ore, the lower ore grades and ore grade dilution, were now being considered.
The Chinese bidder said that the seven-day extension would provide it time to discuss its requirements to conduct a due diligence, in order to understand and address its concerns.
The takeover offer was now expected to close on February 15.