Goldman Sachs Investor Research - Discovery Metals Limited

More documents

Recommendations

Info

7 October 2010 Discovery Metals Limited Source: Company data Boseto Copper Project (BCP) Highlights • Located in north-west Botswana, DML commenced a pre-feasibility study in August 2007 and announced the outcomes of the BFS at the end of August 2010. A summary of the project is included below: − Extended Pre-Feasibility Study update in January 2009. − Definitive Feasibility Study and Development Plan September 2010. − − − − Open pit mine with 15-year mine life through a combination of open pit and underground mining. 3mtpa conventional flotation concentrator-Recoveries of 83.6% Cu and 61% Ag. To produce 36.4kt Cu and 1.1moz Ag per annum (in concentrate 41% Cu grade). CAPEX of US$175m and net cash cost US$1.23/lb. − NPV of US$375m at a copper price of US$3.00lb and US$17/oz silver at a 10% discount rate and inclusive of coal-fired power. • Three strike zones containing 102.8mt of Mineral Resources: − Zeta: 35.4mt @ 1.4% Cu and 22.3g/t Ag − Plutus: 22.6mt @ 1.5% Cu and 15.3g/t Ag − Plutus (NE): 14.9mt @ 1.2% Cu and 12.5g/t Ag − Petra: 12.7mt @ 1.3% Cu and 15.0g/t Ag − Petra (SW): 17.2mt @ 1.4% Cu and 17.3g/t Ag Introduction Discovery Metals' Boseto Copper Project (100% owned) is located in north-west Botswana, approximately 80km south-west of the town of Maun, within the district of Namaqualand. A seven-tenement package was granted to Discovery Metals in September 2005 and fieldwork on this tenement package commenced in October 2005. The Government of Botswana approved the company's renewal of these tenements in September 2008 and all prospective areas were retained by the company. In June 2008, Discovery Metals was granted an additional seven tenements extending from the south-west boundary of the original 2005 granted tenements through to the Namibian border, adding 5,700km 2 to the area held under prospecting licences, to bring the total tenement area to 10,100km 2 . In September 2010, DML relinquished 444km 2 as required to Goldman Sachs & Partners Australia Investment Research All figures in A$ unless otherwise advised 6
7 October 2010 Discovery Metals Limited have a current exploration tenement package of 9,656km 2 . The outer limit of the exploration licence area starts approximately 60km south-west of Maun and stretches in a south-westerly direction for approximately 300km to the Namibian border. The Boseto Copper Project is located within a belt of significant copper-silver mineralisation that extends from the well known and more highly developed Zambian Copperbelt across north-west Botswana and into Namibia. The poorly explored and undeveloped portion of this 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. At shallow depths, malachite and chrysocolla exist in significant proportions within some areas of the mineral resource. Resources and Reserves Both the current resources and reserve estimates for Boseto have been used as a base input for the completion of recent studies by DML. The BFS has taken into account the reserves, with the development plan utilising additional material in the mineral resource category. Resources This resource has been generated from infill drilling associated with the BFS and is current as at 31 August 2010. We have reproduced the resource below: Boseto Mineral Resource Tonnes Grade Metal Zeta mt Cu (%) Ag (g/t) Cu kt Ag moz Measured 3.9 1.6 23.0 62.4 2.9 Indicated 7.0 1.5 23.8 105.0 5.4 Inferred 24.5 1.4 21.8 343.0 17.2 Total 35.4 1.4 22.3 510.4 25.4 Plutus and Petra Measured 0.1 1.3 11.4 1.3 0.0 Indicated 11.5 1.4 14.1 161.0 5.2 Inferred 55.8 1.4 14.8 781.2 26.6 Total 67.4 1.4 14.7 943.5 31.8 Total 102.8 1.4 17.3 1454 57 Source: Company data Reported at a cut-off grade of 0.6% Cu Reserves Following the release of the BFS on 31 August 2010, we have included the resultant ore reserves. Key assumptions used by DML include: ‣ Copper price US$3.00/lb ‣ Silver price: US$17/oz ‣ Copper cut-off grade of 0.6% Cu ‣ Only those portions of the resource amenable to open pit mining have been included in the ore reserve statement. The ore reserve statement is: Boseto Ore Reserve Tonnes Grade Metal Zeta mt Cu (%) Ag (g/t) Cu kt Ag moz Proved 4 1.6 22.1 64 3 Probable 6.5 1.5 23.6 98 5 Total 10.5 1.5 23.0 158 8 Plutus and Petra Proved 0.2 1.3 11 3 0 Probable 11.1 1.36 14.5 151 5 Total 11.3 1.3 14.5 147 5 Total 21.8 1.4 18.5 305 13 Source: Company data Reported at a cut-off grade of 0.6% Cu Goldman Sachs & Partners Australia Investment Research All figures in A$ unless otherwise advised 7
Page 1 and 2: INITIATION 7 October 2010 Discovery
Page 3 and 4: 7 October 2010 Discovery Metals Lim
Page 5: 7 October 2010 Discovery Metals Lim
Page 27 and 28: No part of this material may be (i)

Goldman Sachs Investor Research - Discovery Metals Limited

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?