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

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o 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) o 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) o 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; Page 2 of 18
o Delivery and commissioning of mobile equipment commenced; and o The first two of the eight 2.5 megawatt diesel powered generators arrived on site in early October. Construction of the project has been significantly advanced over the quarter. Photographs included in this release show that the primary, secondary and tertiary crushers have been installed, the screening plant is erected, the ball mill is in place and float cells have been placed upon their concrete support structures. All major components are on site and work has commenced on the electrical and piping packages of work. Work continues to complete erection of the fine ore bin and the concentrate shed and work has commenced to construct the Run Of Mine (ROM) ore pad adjacent to the primary crusher. The latest estimate to complete the Boseto capital works project show that the project is expected to be completed within the US$175 million approved budget. The separate estimate of US$75 million for the procurement and delivery of the mobile mine equipment is also in line with budget estimates. The Company has maintained progress in line with the schedule set in August 2010. Monthly progress of the Boseto construction can be tracked pictorially on the Company’s website. Aerial view of construction site – plant site (lower), infrastructure area (middle). Page 3 of 18
Page 1: 20 October 2011 ASX ANNOUNCEMENT Li
Page 5 and 6: 2. Boseto Operational Progress Temp
Page 7 and 8: Liebherr 9350 loading a Caterpillar
Page 9 and 10: Exploration in the Kalahari Copperb
Page 11 and 12: diamond holes were drilled over a s
Page 13 and 14: In the Kanye Basin in Botswana, fou
Page 15 and 16: As the Company’s assets and prosp
Page 17 and 18: Mineral Resources The total Mineral
Page 19 and 20: Appendix 5B Mining exploration enti

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

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