Quarterly Activities Report - 1 July to 30 September 2011 - Discovery ...

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Drilling at the Mango Prospect has confirmed a new discovery of copper‐silver mineralisation
at both ends of what is believed to be a 36 kilometre prospective horizon.
Mid Kalahari Zone (targeting new standalone mining operation)
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The seven Ghanzi district prospecting licences (first granted in 2008) have been renewed for
two years.
o Initial drill testing of Ourea, Kronos, Notus and Hemera Prospects was completed. Assay
results are anticipated to be available for release in the December quarter.
South‐west Kalahari Zone (targeting new standalone mining operations)
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Corporate
Soil sampling continued at the Hermes target.
The project finance package was completed and US$115 million of $205 million available drawn down
in three tranches during the quarter to meet expected payments until the end of October.
The Company entered into a commodity price protection strategy by hedging 40% of forecast copper
income and 65% of forecast silver income for the period from July 2012 to March 2015 at average
future strike prices of US$4.01/lb for copper and US$36.07 for silver.
Discovery Metals had US$118 million in cash and had drawn down US$115 million of Boseto project
financing at 30 September.
1. Boseto Copper Project Development Progress (‘Boseto’ or ‘the
Project’)
The Engineering Procurement and Construction (EPC) contract to construct the 3 million tonnes per annum
Boseto processing plant and related works commenced in September 2010. Activities in the September 2011
quarter included finalisation of off‐site engineering and procurement with most items delivered to site. Onsite
works included erection of structural steelwork, installation of plant, equipment, piping and electrical
works. The construction timeline remains on schedule to allow commencement of commissioning of the
process plant in first half of 2012. Boseto project progress for the quarter was:
o Engineering and procurement neared completion;
o Toteng housing contracts awarded and works commenced;
o Delivery of mine mobile equipment (including spare parts and tyres) commenced to enable ontime
commencement of mining operations;
o Structural concrete for the process plant has been completed;
o Erection of structural steelwork for the process plant continued;
o Installation of plant, equipment, piping and electrical commenced;
o Construction of the mine offices & workshops continued;
o Pipe and power lines for the Project’s water supply progressed;
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