Quarterly Report - 1 April to 30 June 2008 - Discovery Metals Limited

1. Boseto Copper Project Pre‐Feasibility StudyThe Pre‐feasibility Study (PFS) for Discovery Metals’ newly named Boseto Copper Project (formerlyknown as Maun Project) in north west Botswana was the main focus of activity during the quarterwith the PFS results released on 18 July, 2008.The PFS demonstrated an economically and technically viable project and provided the green lightto commence the next stage in development of what will be Botswana’s largest copper mine.Highlights included:• PFS based on an open cut mine delivering 2Mtpa ore to a conventional flotation plant.Average plant production 23,500 tonnes of copper and 780,000 ounces of silver per annumcommencing January 2011. Average Net Cash Costs US$1.43/lb copper after silver creditsare forecast• Economic evaluation using US$2.38/lb Cu price delivers Internal Rate of Return (IRR) of 23%with an after tax NPV of US$115 million. NPV rises to US$220 million and IRR rises to 35%with US$3.50/lb Cu priceThe transition into a Bankable Feasibility Study (BFS) is complete in many areas with a targeted BFScompletion date of mid 2009.The company will continue to coordinate the use of leading industry specialist consultants for alltechnical areas of the study. An engineering consultant will be appointed in the September quarterof 2008 to finalise the plant and infrastructure design and scheduling for the Boseto Copper Project.(a) Resource EvaluationThe PFS was developed on the basis of open pit mining of the company’s existing Inferred MineralResources at Plutus and Petra of 14.5 Mt @1.3% Cu and 4.5Mt @1.1% Cu respectively and a newZeta Inferred and Indicated Mineral Resource of 30 Mt @1.2% Cu and 18.2 g/t Ag (all at a 0.6%copper cut off). The total Zeta Mineral Resource includes an Indicated Mineral Resource of 8.9Mt@1.4% Cu and 20.3 g/t Ag.(b) Mining StudyFor the purposes of the PFS it was assumed that the Boseto pits will be mined via conventionalbenching using an hydraulic excavator and diesel trucks. Other than a minor volume of Kalaharisands at the surface, all material has been assumed to require blasting. Studies undertakenrecommend one 250t excavator and an initial fleet of three 100t trucks to be appropriate at thestart of mining operations.(c) Processing StudyThe PFS plant design is for a comminution circuit with SAG mill and in‐circuit pebble crusher todeliver a 2 Mtpa throughput. The flotation circuit is a conventional rougher‐cleaner‐recleaner circuitthat has been designed to cater for sequential sulphide and oxide flotation. The flotation circuitincludes a fine grinding stage on the rougher concentrate that has been shown in the test work toimprove flotation grade and recovery. Adequate residence time has been allowed to facilitate thesecond stage addition of a sulphidising agent and secondary collectors to float the copper oxides.(d) Infrastructure StudyApplication for power supply was submitted to the Botswana Power Corporation (BPC) requesting a20MVA power supply by the first quarter of 2011. BPC confirmed that a probable power supplyPage 2 of 8