The company has entered into a US$5 million short-term working capital facility with Cupric. A condition to the facility agreement grants Cupric a period of exclusivity to allow it to complete due diligence, and to allow time for both Discovery Metals and Cupric to finalise and agree definitive terms of the potential transaction.
In a statement released on Wednesday, Discovery Metals country manager Botswana, Mokwena Morulane, said the exclusivity period extends until the execution of legally binding sale and purchase agreement with Cupric. “DML will be required to seek approval from its shareholders prior to any transaction with Cupric being finalised. These approvals will be sought from the relevant regulatory government authorities in Botswana and elsewhere,” he said. Cupric Canyon Capital LP, which is owned by its management and the Barclays Natural Resource Investments division of Barclays, is focused on acquiring interests in undeveloped copper assets with a known resource and adding value to them by assisting in the advancement of the projects through the stages of development, construction and operations. The company completed the acquisition of Hana mining, which controls five prospecting license blocks in Botswana covering 2,149 square kilometres in area, situated south of Maun. The facility will be used to provide support to DML’s current operations arising from operating cash-flow shortfalls in November 2014 and for working capital purposes. The company’s existing project finance lenders are supportive of both the potential transaction and their facility agreement.
