Discovery pursuing new funding options for Botswana copper mine
PERTH (miningweekly.com) – Australian junior Discovery Metals is pursuing alternative funding and transaction options for its Boseto copper mine, in Botswana, after discussions regarding the potential sale of the mine failed to result in a binding transaction.
Discovery Metals said on Tuesday that the exclusivity period for negotiations with Cupric Canyon Capital had expired at the end of January. The company would repay Cupric $5-million in interim funding, by the end of March.
Discovery said it had started re-engaging a number of parties that had previously shown interest in the project. These discussions included the provision of short-term working capital funding.
Discovery reported that, in the last 24 hours, the company had been approached by a group seeking to finalise a term-sheet agreement within the coming days, which would likely allow for the settlement of all existing debt facilities and would provide the required capital to allow Discovery to expedite the progression of the Zeta underground mine development, as well as working capital.
The development of the Zeta underground mine was deferred in September last year, after the company failed to raise the necessary funding for the project.
Discovery did not release the name of its suitor.
The Boseto mine was expected to be mothballed in the next six months, after a review of the openpit operations determined that the prevailing high strip ratio would result in a high operating cost environment, which was not sufficiently cash flow positive in light of the prevailing copper price.
The company announced in December that it would implement cost management and reduction strategies in order to reduce the operating costs at Boseto.
Discovery confirmed that it remained committed to unlocking value from the Zeta underground development, and as such would continue to pursue options that would allow for the project to be funded.
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