Boseto BFS Update report
(Thomson Reuters ONE) - AIM RELEASE6 October 2009 BOSETO COPPER PROJECT BFS EcONOMICS UPDATEDiscovery Metals Limited ("Discovery Metals" or "Company") (ASX/BSE:"DML", AIM: "DME") is pleased to report an update on the BankableFeasibility Study ('BFS') for its Boseto Copper Project.* The Bankable Feasibility Study ('BFS') remains on track for completion in the first quarter of 2010.* Final BFS Resource Model expected January 2010.* Updated financial evaluation of the Boseto Copper Project shows:o Operating costs continue to be in the middle of the copperproducer costs curve, with the updated 10 year average cost ofUS$1.04/lb (January 2009 - US$1.06/lb);o Capital costs have been increased to US$150 million (January2009 - US$131 million) based on contingency for capital componentprice changes;o Overall project economics have improved despite includingadditional capital contingency and exploration expenditure, with thebreak even copper price at which the project provides a 10%discounted cash flow rate of return now being less than US$1.53/lb;o Net Present Values ranging from US$116 million at a US$2.00/lbcopper price to US$426 million at a US$4.00/lb copper price;o Internal Rates of Return ranging from 18% at a US$2.00/lb copperprice to 57% at a US$4.00/lb copper price; ando Payback is expected within 2 years of production commencing.* 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.Discovery Metals' Managing Director, Brad Sampson said: "We remainvery bullish about the prospects for our Boseto Copper Projectsatisfying a very small part of the massive copper supply deficitthat is widely forecast by commodity experts in the years beyond2011. Market fundamentals indicate support for relatively high copperprices from 2010 onwards.""The BFS is progressing well and remains on track for completion inMarch 2010. Importantly, the extensive ongoing feasibility work hasresulted in a slight decrease in the estimated cash operating coststo an average US$1.04/lb. Whilst we do not believe there has beensignificant movement in capital costs this year, our capitalestimates will not be completed for a few months and therefore wehave prudently included a US$20 million contingency."A presentation of the BFS progress update can be found on theCompany's website athttp://www.discoverymetals.com.au/irm/content/reports_asx.It highlights the substantial progress made by the Discovery Metalsteam, in conjunction with a group of industry expert consultants andcontains details of cost estimates. The site location for theprocessing plant and associated infrastructure has been finalised andschematic diagrams of the project site are also included in thepresentation. It is expected that the next BFS economics update willbe announced in the second quarter of 2010, once the BFS isfinalised.BackgroundDiscovery Metals' Boseto Copper Project (100% owned) is located innorth-west Botswana, approximately 80 km south-west of the town ofMaun, within the district of Ngamiland. A seven tenement package wasgranted to Discovery Metals in September 2005 and fieldwork on thistenement package commenced in October 2005. The Government ofBotswana approved the Company's renewal of these tenements inSeptember 2008 and all prospective areas were retained by theCompany. In June 2008, Discovery Metals was granted an additionalseven tenements extending from the south-west boundary of theoriginal 2005 granted tenements through to the Namibian border,adding 5,700 km2 to the area held under prospecting licenses, tobring the total current tenement area to 10,100 km2. The outer limitof the exploration licence area starts approximately 60 km south-westof Maun and stretches in a south-westerly direction for approximately300 km to the Namibian border.The Boseto Copper Project is located within a belt of significantcopper-silver mineralisation that extends from the well known andmore highly developed Zambian Copper Belt across north-west Botswanaand into Namibia. The poorly explored and undeveloped portion ofthis belt in north-west Botswana is known as the Kalahari CopperBelt.Copper in the Boseto Project area occurs predominantly in chalcocite,with minor amounts of bornite and other copper sulphides present. Atshallow depths, malachite and chrysocolla exist in significantproportions within some areas of the mineral resource.The total Mineral Resource for the Boseto Copper Project, reported inaccordance with The Australasian Code for Reporting of ExplorationResults, Mineral Resources and Ore Reserves (The JORC Code, "2004Edition") at a cut off of 0.6% Cu is:50.2 Mt (at) 1.5% Cu and 17.8 g/t Ag containing 753 kt copper metal and 29 Moz silverconsisting of Indicated Mineral Resource of 4.7 Mt (at) 1.6% Cu and 24.0 g/t Ag, and Inferred Mineral Resource of 45.5 Mt (at) 1.4% Cu and 17.2 g/t AgA Pre Feasibility Study for the Boseto Copper Project was completedon time and on budget in July 2008. Discovery Metals is currentlyundertaking a Bankable Feasibility Study for the Boseto CopperProject which is planned for completion in March 2010.Competent Persons StatementThe information in this report as it relates to the Zeta, Plutus andPetra Mineral Resources for the Boseto Copper Project was compiled byMr Jason Hosken; and reviewed by David Arnott, both Members of TheAustralasian Institute of Mining and Metallurgy. At the time ofpreparing the reported Mineral Resource, Mr Hosken was employedfulltime by Snowden Mining Industry Consultants Pty Ltd (Snowden). Mr Arnott is a full time employee of Snowden and has sufficientexperience which is relevant to the style of mineralisation and typeof deposit under consideration and to the activity which he isundertaking to qualify as a Competent Person as defined in the 2004Edition of the "Australasian Code for Reporting of ExplorationResults, Mineral Resources and Ore Reserves". The information in thisreport that relates to Exploration Results is based on informationcompiled by Mr Fred Nhiwatiwa who is a Member of the AustralasianInstitute of Mining and Metallurgy. Mr Nhiwatiwa is a full-timeemployee of the Company. Mr Nhiwatiwa has sufficient experiencewhich is relevant to the style of mineralisation and type of depositunder consideration and to the activity which he is undertaking toqualify as a Competent Person as defined in the 2004 Edition of the"Australasian Code for Reporting of Exploration Results, MineralResources and Ore Reserves". Mr Arnott and Mr Nhiwatiwa consent tothe inclusion in the report of the matters based on informationprovided by them and in the form and context in which it appears.For further information contact:Discovery Metals LimitedBrad SampsonManaging DirectorTel: +617 3218 0200Fairfax I.S. PLCEwan Leggat / Laura LittleyTel: +44 (0)20 7598 5368Conduit PRJos Simson/Emily FentonTel: +44 (0) 20 7429 6603Mobile: +44 (0)7899 870 450Further information on the Company is available on its website:www.discoverymetals.com.au---END OF MESSAGE---This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 06.10.2009 - 08:00 Uhr
Sprache: Deutsch
News-ID 6599
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