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Discovery Metals says Boseto Copper Project study on track, commences underground potential assessment

Last updated: 10:24 30 Oct 2009 GMT, First published: 11:24 30 Oct 2009 GMT

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Brisbane-based nickel and copper developer Discovery Metals (AIM: DME, ASX: DML) released its quarterly results today, saying the bankable feasibility study of its Boseto copper project in Botswana was 60% complete and remained on schedule.


While the BFS is 60% through and on track for completion in Q1 of calendar 2010, the ESIA (environmental and social impact assessment is now complete and is expected to be submitted to the government of Botswana following a review. The infill drilling programmes for the BFS, aimed at upgrading portions of the mineral resource to indicated and measured categories, were completed on schedule in September.


The latest update from the Boseto BFS showed 10 year average operating costs of US$1.04 per lb (pound) and capital costs of US$150 million, while net present value (NPV) range was between US$116 million to US$426 million at copper prices of US$2/lb and US$4/lb respectively.


Payback is expected within 2 years of the start of production.


Compared to the pre-feasibility study, which was completed in July, the average copper grade at the project has increased 20%, the capital and average operating costs have been reduced 19% and 27% respectively. The study has also identified significant new mineral resource prospects within 15 kilometres of the plant location.


The total JORC-compliant minerals resource at the Boseto gold project stood at 3.9Mt (million tones) at 1.6% Cu (copper) and 23 g/t (grammes per tonne) Ag (silver) in measures resource, 7.8Mt at 1.5% Cu and 22.8 g/t Ag in indicated resource and another 48.7Mt at 1.4% Cu and 18.7 Ag in the inferred category. The final assay results from the BFS final infill drilling programme at the Zeta prospect within the Boseto project is expected to be announced in the December quarter.


The company has recently raised A$13.1 million through a placing to fund the BFS as well as allow continued exploration and provide funds to place deposits on long lead items in the future. Discovery’s cash position at the end of September was at A$4.8 million.


Discovery Metals launched a joint venture with Japan Oil Gas and Metals National Corporation (JOGMEC) earlier this month for the Dikoloti nickel project in north-east Botswana, which has an inferred resource of 4.1Mt at 0.7% Ni (nickel), 0.5% Cu and 1.2 g/t PGE’s (platinum group of elements) at a cut off of 0.5% Ni for 28,700 tonnes of contained nickel. Discovery has earned a 85% interest in Dikoloti from Xstrata. JOGMEC will provide funds of A$3 million for exploration of the Dikoloti prospecting areas.

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