Discovery inks deal with Swiss firm

Staff Writer | Friday March 12, 2010 00:00

The Australian mining company has established the long term strategic alliance with Transamine, ahead of its expected mine opening in 2012

According to a press release from Discovery, the companies have agreed on an initial five year off take contract in anticipation of a decision to proceed with the construction of the Boseto Copper Project in Maun. Transamine will purchase 25m shares in DML in recognition of the strategic relationship between the parties.

The shares will be priced at an 11 percent premium to the volume weighted average market price over the four weeks prior to the execution of the agreement between the parties.  DML plans to use the AUD 19m raised from the share placement to finance the development of the Boseto Copper Project, with the share subscription not being conditional upon the completion of the Bankable Feasibility Study.

DML Managing Director, Brad Simpson commented that the company has been in the fortunate position of having wide interests in securing concentrate off take from the Boseto Copper Project, and that the establishment of the alliance with Transamine presents another milestone in the development of the project. The BSE-listed company says finalisation of the BFS remains on schedule for the end of the first quarter of 2010 and that the timetable is driven by the need to complete the infill drilling programme that has significantly extended existing mineral resources.

Discovery's Botswana copper tenements comprise 14 prospecting licences covering 10,100 square kilometres in northwest Botswana. They extend from 60 kilometres southwest of Maun to the Namibian border, a distance of over 300 kilometres.

These tenements contain approximately 1,300 strike kilometres of potential copper-silver mineralisation across the Kalahari Copperbelt.  To-date, less than 150 kilometres have been explored by Discovery Metals' soil sampling programme, with the reported Mineral Resources contained within 18 kilometres of the strike length. 

Capital costs for the feasibility study at the Boseto copper and silver projects has ballooned to US$150 million from US$131 million in January last year.

Another component of the anticipated capital costs is the alternative power generation mooted for the Project. While the Botswana Power Corporation has indicated that Boseto will likely link up to the national grid by 2012, DML also has plans for self generation, which could include diesel generators or a small coal-fired power station.

Annual production from the Boseto copper concentrator is planned to average approximately 25,000 tonnes of copper and nearly 700,000 ounces of silver contained in a high-grade concentrate.