Discovery granted surface rights at Boseto project

Brian Benza
Staff Writer | Wednesday November 3, 2010 00:00

The rights cover an area of 4, 418 hectares. In a statement this week, Managing Director Brad Sampson said the Tawana Land Board had approved the granting of surface rights.

This was the last external approval required by the Department of Mines (DoM) for completing the processing of the Boseto mining lease application that was submitted on October 15.

'This approval means we can access the site as planned,' Sampson said in the statement. 'We remain on schedule for delivering the first production at Boseto in the first half of 2012.' According to the terms of the grant, Discovery will pay a land rent of P50 a year for each hectare of the 4, 418 ha project area, resulting in a charge of A$35, 000 a year.

Discovery expects to award a mandate to a bank to lead syndication of the project funding in November. The equity portion of the project finance will also be secured in coming months. At the end of the quarter, Discovery held A$36.3m in cash and had no debt. The bankable feasibility study showed a net present value (5 years) of $251m averaging 34, 400tpa of copper production at a C1 cash cost of $1.28/lb.

Boseto development plan's net present value (15 years) was $375m averaging 36, 400tpa of copper production at a C1 cash cost of $1.23/lb. Payback for both studies is less than two years after production commences. The demonstrated economic potential for operations is to continue beyond 15 years.

An initial ore reserve statement was released of 21.8 Mt at 1.4 percent copper and 18.2g/t silver.

The Boseto project, which will be developed at a cost of about $175-million, is expected to deliver between 34, 400 tonnes per year and 36 400 t/y of copper and between one million and 1,1 million ounces of silver a year.