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 –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
Progress continued on the ramp-up of production at the Boseto copper project in February 2013.

Mining production (waste plus ore) was 2.4-million tons. This was slightly above January’s mining production. The main contributor to the lower-than-planned production was the lack of blasted stocks at the beginning of the month, owing to rain.

To improve mining production and reduce dilution changes, drill-and-blast designs were implemented. Blasted stocks ahead of mining increased from nil at the start of February to an estimated 500,000 t by month end.

Further, the use of the 18-m3-capacity buckets on the 350 t excavators, as reported in January, has improved loading cycles and further improvement is expected.

In January, one 350 t excavator was moved to the Plutus openpit, in conjunction with the trucks hired from Basil Read. To date, about 380 000 t of material have been removed from the first stage of the Plutus openpit. 

Milled tonnage for the month was 187 994 t at an average daily rate of about 8 173 t/d for the 23 days operated in February. This rate is 91% of the overall mill design capacity.

Concentrate production in February was 3 834 t at 40% copper, containing 1 529 t of copper and 63 024 oz of silver. This was the highest monthly metal production figure from the Boseto copper project to date.

Mine production, concentrator feed and concentrate production are expected to increase further towards design rates in March 2013.

The mill continues to demonstrate its overall capability. In the three months since December 2012, the mill has processed 444 000 t over 54 operating days at an average rate of 8 222 t/d, which is equal to 98% of design capacity. Discovery remains confident that the mill will exceed design capacity when sufficient ore feed is available from the mine.

The key area being targeted to achieve the required amount of ore feed is the mine, where the company continues to advance initiatives for improving drilling, blasting and truck-loading cycles. The ability to increase blasted stocks in February is indicative of the improvements being made.

Cost management and cash generation are also key focus areas. Cost management is being assisted by the Company’s ERP system (Pronto), which is fully operational. Concentrate shipments are continuously being expedited to minimise working capital requirements.

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.