Boseto Mine gets approval to go underground

Brian Benza | Friday April 11, 2014 15:52

 

In a statement released yesterday, the company said that the Ministry of Minerals, Energy and Water Resources had amended the mining licence at Boseto to include the Zeta underground mine.

The approval comes shortly after Discovery clinched a $105 million recapitalisation deal with American investors.

“These are exciting times at DML, with the recapitalisation proposal with Montsant Partners and now this approval for amendment to the mining licence. This approval will allow the development of our underground mining programme to progress and is consistent with the new overall strategic direction of the company to develop our underground mineral resource,” said DML chief executive officer Bob Fulker.

In a recent interview with Business Week Discovery country manager, Mokwena Morulane was optimistic the recapitalisation deal would turnaround the fortunes of the troubled copper producer as a larger portion of the funds would be used to undertake underground mining which brings better ore grades and tonnage.

Morulane revealed that the $65 million of the funding would be used to discharge obligations under existing debt facilities, while a further $40 million would be used for working capital purposes.

“Part of the reason the company has not been doing so well is that we have not been able to recover good copper grades. Going underground means we immediately access the sulphide zone, which has good grades.  With copper prices still depressed, the re-capitalisation will also enable us to increase production to reach a certain level of revenues that covers our costs,” he said. The establishment of the Zeta underground mine would significantly lengthen the life of the Boseto operation while also providing a longer and consistent access to the high quality mineralisation.

At steady levels, the Zeta underground mine would produce about 1.5-million tonnes a year, at 1.3 percent copper.

DML’s plan is to be able to supply sufficient ore from three planned underground mines to keep the 3.2-million tonne a year Boseto concentrator at maximum throughput and efficiency.