6 November 2009
In a quarterly update as required by the government authorities, Discovery Metals says its Boseto Copper Project's Bankable Feasibility Study (BFS) was approximately 60 percent complete by the end of September.
The BSE-listed company, which hopes to open the copper mine in Maun by June 2011, says finalisation of the BFS remains on schedule for the end of the first quarter 2010 and that the timetable is driven by the need to complete the infill drilling programme that has significantly extended existing mineral resources.
"The infill drilling programme was completed at the end of September and final assay results are expected by the end of the year," Discovery said in a statement this week.
"The programme is expected to improve confidence in portions of the Zeta, Plutus and Petra Inferred Mineral Resources and was designed to upgrade portions of this mineralisation from Inferred Mineral Resource to Indicated and Measured Mineral Resource categories.
"The updating of the current mineral resources is set to continue with the completion of the Zeta Resource model in October 2009 and the Plutus and Petra Resource models scheduled for completion in December 2009."
The company further said a major milestone for the Boseto Copper Project was achieved during the quarter with the completion of a groundwater resource study and that confirmation of water availability significantly exceeded the requirements of planned operations.
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.
In addition to the reported Mineral Resources, Zeta and Plutus/Petra remain open at depth and along strike. Mineralised prospects not yet included in the Mineral Resource include Quirinus, South-West Petra, Nexus and north-east extensions of Plutus, Nexus and Zeta.
Capital costs for the feasibility study at Discovery Metals' Boseto copper and silver projects in Maun has ballooned to US$150 million from US$131 million in January.
In the update, the company says although capital costs have increased, operating costs continue to be in the middle of the copper producer's cost curve, with the updated 10-year average cost of US$1.04/pounds (lb) from January's US$1.06/lb.
The company says while they have not re-estimated any costs, they have added an extra allowance of US$19m as contingency while the base case includes US$10m for a power line from Maun to the Boseto site.
"Overall project economics have improved despite including additional capital contingency and exploration expenditure, with the break even copper price at which the project provides a 10-percent discounted cash flow rate of return now being less than US$1.53/lb," the company says.
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.
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