7 JUNE 2006FIRST INFERRED JORC RESOURCE ESTIMATEFOR DISCOVERY’S...

7 JUNE 2006
FIRST INFERRED JORC RESOURCE ESTIMATE
FOR DISCOVERY’S MAUN COPPER PROJECT
HIGHLIGHTS
• Inferred Mineral Resource of 20 Mt
• 1.2% Cu at a cut-off grade of 0.6% Cu
• Resource defined at the G Grid South Prospect
• G Grid North Prospect has the potential for a larger and higher grade
resource
• Resource compiled by Snowden Mining Industry Consultants
• Planning is underway for a drill program to:
i. Extend resource at G Grid South
ii. Infill promising G Grid North Prospect to Inferred Resource Status
• Drill schedule to be determined in June
• First exploration drilling program by DNL on the Maun Copper Project
Discovery Nickel Limited (ASX: DNL) has defined an Inferred Resource of 20 Mt @
1.2% Cu at a cut-off grade of 0.6% at its G Grid South Prospect within the Company’s
wholly owned Maun Copper Project in north west Botswana (Figure One). The G Grid
South Inferred Resource – the Company’s first for Maun - was compiled following a
review of previous drilling on the Project, located 60 km to the south west of the town
of Maun in north west Botswana. Previous drilling on the project has defined over 300
strike-km of copper-silver mineralisation interpreted as having strong similarities with
the giant Zambian copper deposits.
INITIAL RESULTS
The Maun Copper Project comprises seven granted prospecting licences covering an
area of 6333 km2 within the Kalahari Copper Belt in north west Botswana. The most
significant occurrences of known copper-silver mineralisation occur at the G and P
grids where DNL has been concentrating the majority of its assessment work. A
summary of the results of this assessment work is as follows:
• An Inferred Mineral Resource of 20.1 Mt @ 1.2% Cu at a cut-off of 0.6% has
been defined at the G Grid South Prospect, to a depth of 300m, within a 3.2
km strike length of the known 25.5 strike-km of copper-silver mineralisation.
• Similar grades and tonnages to those already defined are being targeted to
extend the Inferred Resource at G Grid South
• The G Grid North Prospect has the potential for the definition of a larger and
higher grade copper-silver resource than occurs at G Grid South
• Exploration is required at the P Grid prospect where limited drilling to date
has delivered results such as 15m @ 2.2% Cu and 4 m @ 3.2% Cu.
Discovery Nickel’s Managing Director, Mr Jeremy Read, said today that the definition
of the G Grid South copper-silver inferred resource is the first major step in the
advancement of the Maun Copper Project towards determining if the project has
the potential to support a medium scale copper-silver operation.
“The definition of the 20 Mt copper resource at Maun provides an excellent platform
upon which to build, and drilling will be undertaken to test new geological models not
previously applied to the Maun Project, and which could potentially extend the sections
of the Inferred Resource above 2% copper,” Mr Read said.
“Drilling will be undertaken at G Grid in order to increase the Inferred Resource and to
allow the mineralisation at G Grid North to be classified in the Inferred Category. In
addition work has commenced on an exploration program for the P Grid mineralisation
which includes some of the best intersections within the entire project,” he said.
… continues
G GRID INFERRED COPPER RESOURCE
DNL compiled an extensive database of historical exploration work on the Maun Project and commissioned Snowden
Mining Industry Consultants (“Snowden”) to prepare a resource statement (Appendix One). Snowden has reported a
resource for G Grid South of 20 Mt @ 1.2% Cu at a cut-off grade of 0.6% Cu which has been classified in the Inferred
category according to the guidelines of the 2004 JORC code (Table One). This resource covers a strike length of 3.2
km, to a vertical depth of 300m, in the south-west of G Grid where mineralisation extends for 25.5 strike-km. A
significant amount of copper-silver mineralisation exists at G Grid which due to a lower density of drilling can not
currently be classified as an Inferred Resource. Snowden evaluated this mineralisation and generated grade and
tonnage block models in order to evaluate the exploration potential. Utilising the block models DNL is targeting
additional exploration potential of 20-30 Mt @ 0.9-1.1% Cu at G Grid South and 20-70 Mt @ 1.2-2.0% Cu at G Grid
North. The known copper mineralisation at G Grid North extends over 38 strike-km. Infill drilling will be required in
order to be potentially able to classify this mineralisation in the Inferred Mineral Resource category.
The assessment of the exploration potential at the G Grid North and G Grid South prospects, outside of the Inferred
Resource, is conceptual in nature and insufficient drilling has been conducted at these prospects to currently define a
Mineral Resource. Further drilling at G Grid North and South may or may not allow the definition of further mineral
resources to add to the existing Inferred Resource at G Grid South. An extensive exploration program will be an
important component of fully understanding the potential of the Maun Copper Project.
Potential exists to increase the G Grid copper-silver resource through exploration drilling to the north east. Infill drilling
within the currently defined resource will also be conducted in order to more accurately define the sections of the G
Grid resource above 2% Cu. In recent years, new geological models have been developed for the formation of
Zambian style copper mineralisation and in particular a better understanding has developed as to what controls the
higher grade sections of these copper deposits. This new understanding of the controls of the high grade copper
mineralisation has not yet been applied to the Maun Copper Project. By applying these new models to the project,
drilling will be focussed on areas with the potential for higher grade mineralisation. The aim of both the infill and
exploration drilling will be to assess the potential of G Grid to support a stand-alone medium scale copper-silver
operation. It is anticipated that this drilling will commence in July.
A compilation of key historical drill holes is given in Table Two.
Table One – Grade – Tonnage figures for the G Grid South Inferred Mineral Resource
Cut-Off Grade
(% copper)
Tonnes
(Millions) Copper Grade (%)
0.2 30.6 1.0
0.6 20.1 1.2
0.8 17.3 1.3
1.2 11.0 1.5
DNL has extended its check sampling program of previous drilling completed on the project to investigate any biases in
the previous geochemical assay data. It is anticipated that the results from this program will be available later this
month.
REGIONAL GEOLOGY
The Kalahari Copperbelt in northwest Botswana occurs as a linear belt trending northeast across central Namibia and
into northern Botswana, over a distance in excess of 600 km. The Copperbelt forms a part of the Damaran mobile belt
which occupies most of northern and western Botswana. Much of the Damaran is obscured by younger Karoo age
rocks and superficial cover sequences. Exposures principally occur along the “Ghanzi Ridge” where large tight fold
structures crop out through thinner sand cover.
The Ghanzi Ridge or Ghanzi-Chobe Fold Belt contains the copper-bearing rocks assigned to the Kalahari Copperbelt.
The oldest rocks are rhyolites and metasedimentary rocks of the Kgwebe Formation, dated at around 1102 Ma. The
Kgwebe Formation forms large lenticular fold structures which are overlain by thick sequences of weakly
metamorphosed sandstones, argillites and limestones of the Ghanzi Formation which can be correlated with the
Dobrdabis Supergroup in Namibia.
The Lower Ghanzi Formation is 1 to 3.5 km thick and is composed of reddish-gray, purple or reddish-brown oxidised
metasediments. A grit bed marks the stratigraphic top of the Lower Ghanzi Formation. The Middle Ghanzi Formation
conformably overlies the Lower Ghanzi Formation and is 1 to 2 km thick. The basal units of the Middle Ghanzi
Formation are gray and green-gray reduced metasediments while the upper units consist of intermixed gray reduced
metasediments and reddish oxidised metasediments. The Upper Ghanzi Formation consists of only reddish, oxidised
siliclastic metasediments.
The majority of the known copper mineralisation occurs within the lowermost 25 m of the Middle Ghanzi Formation.
The highest grade mineralisation occurs within a 10-15 km strike segment around Ngwako Pan, parallel to the strike of
the steeply folded rocks.
Deformation of the Ghanzi-Chobe fold belt occurred during the Pan-African orogenic event, 510-650 Ma. The
Proterozoic rocks of the Ghanzi Formation were deformed in to isoclinal and angular synforms and antiforms trending
northeast-southwest. The major fold axes are spaced 2 to 8 km apart and can be traced over distances of 10 to 50 km.
Table Two – Summary of Drill Results from Past Exploration
Prospect Hole Depth
(m)
Intercept
thickness (m)
Cu
(%)
Ag
(g/t)
G Grid GD1 153 9.0 2.06 36.07
G Grid GD2 237.5 8.5 2.07 7.17
G Grid GD3 75 9.0 2.05 21.15
G Grid GD4 184.5 7.5 2.18 7.02
G Grid GD5 124.5 5.5 1.95 22.27
G Grid GD6 185.5 6.0 1.78 18.89
G Grid GR12 120.0 5.0 2.30 54.00
G Grid ZG10A 310.2 2.02 9.16 ^
P Grid ZP021 158.1 12.8 1.59 ^
P Grid ZP029 151.75 6.4 1.60 ^
P Grid PR2 32.0 4.0 3.20 ^
P Grid PR4 38.0 15.0 2.20 ^
Note: * crossing angle not currently available in database
^ silver assays not currently available in database
+ RC drill hole
For further information on Discovery Nickel Limited visit www.discoverynickel.com.au
The information in this report as it relates to Mineral Resources was compiled by Mr. Shaun Versace, a full time
employee of Snowden Mining Industry Consultants, who is a Competent Person as defined in the 2004 Edition
of the “Australasian Code for Reporting Mineral Resources and Ore Reserves” and who is a Member of the
Australasian Institute of Mining and Metallurgy with more than five years relevant experience. The information
in this report that relates to Exploration Results is based on information compiled by Mr. Jeremy Read who is a
Member of the Australasian Institute of Mining and Metallurgy. Mr Read is a full-time employee of the
Company. Mr. Read has sufficient experience which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in
the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves”. Mr. Read and Mr Versace consent to the inclusion in the report of the matters based on information
in the form and context in which it appears.

Appendix One
Resource Statement for Maun Copper Project – G Grid
Snowden Mining Industry Consultants Pty Ltd
Level 5/82 Eagle Street Brisbane QLD 4000
PO Box 2207 Brisbane QLD 4001
Telephone (+61 7) 3231 3800
Facsimile (+61 7) 3211 9815
Email: [email protected]
www.snowdengroup.com
Perth, Brisbane, Vancouver, Johannesburg, London
SNOWDEN MINING INDUSTRY CONSULTANTS PTY LTD ABN 99 085 319 562
5141_resource note-2_06_06_final.doc Page 1 of 3
2 June 2006
Jeremy Read
Managing Director
Discovery Nickel Limited
Level 8, 410 Queen Street
Brisbane QLD 4001
Dear Jeremy
RE: RESOURCE STATEMENT FOR THE MAUN PROJECT, G-GRID
Snowden performed and reported grade and tonnage estimates for Discovery Nickel’s Maun
project G-grid. This letter summarises the results and resource classifications for the G-grid
South and the G-grid North estimates. The work was carried out by Shaun Versace, Senior
Resource Geologist with Snowden.
Drillhole data
The drillhole data was supplied to Snowden by a representative of Discovery Nickel. The
collection and verification of all drillhole data was performed by a representative of Discovery
Nickel. Snowden did not review any quality control or quality assurance data for the assay data,
and no detailed validation of the drillhole data was undertaken. The collection and verification of
all drillhole data was performed by a representative of Discovery Nickel. Snowden proceeded
with the modelling and estimation on the assurance by Discovery Nickel of the data’s suitability to
be used for a resource estimate.
Drillhole summary
Sampling Number of
drillholes
Cu
Number of samples
Ag
Number of samples
G-grid North 17 87 40
G-grid South 38 611 526
Very limited weathering information is contained within the drillhole database. Consequently no
weathering profile has been modelled. Historical data does not suggest that a deep weathering
profile exists, or that the mineralisation is heavily oxidised.
Interpreted solid
Two solids were interpreted around mineralised drillhole intersections to limit the extents of the
estimation, one for G-grid South and another for G-grid North. The two interpreted solids
represent the northern and southern zones of mineralisation on the limbs of an anticline. The
solids were interpreted on drillhole grades (using an approximate interpretative Cu grade of
SNOWDEN MINING INDUSTRY CONSULTANTS PTY LTD ABN 99 085 319 562
5141_resource note-2_06_06_final.doc Page 2 of 3
greater than 0.3%), surface mapping, geochemical and geophysical features. These solids were
interpreted by a representative of Discovery Nickel.
Density
A dry bulk density value of 2.8 t/m3 has been applied as a constant for reporting the tonnes of the
estimates. Previous work used a range of density values from 2.6 t/m3 (Delta Gold NL and
Kalahari Mining NL) to 2.8 t/m3 (Delta Gold NL), including a calculation based on Cu grade
(density = (Cu % X 0.025) + 2.76) (Gencor Limited). The density of 2.8 t/m3 was accepted by
Discovery Nickel and Snowden as a fair representation for this estimate.
Inferred Mineral Resource
An Inferred Mineral Resource of 20 Mt at 1.2% Cu at a cut–off of 0.6% Cu has been defined for
G-grid South. No consideration has been given to the possible extraction of copper metal from
the estimated tonnage, although data suggests that the mineralisation is predominantly
chalcocite and no extraction problems are anticipated.
An estimate was completed for G-grid South and G-grid North using a combination of kriging and
inverse distance interpolation techniques; this was required due to inconsistency in the sample
spacing. Separate interpreted solids for G-grid South and G-grid North were used to limit the
extents of the estimation.
Only parts of G-grid South are considered to be of suitable confidence to be reported as an
Inferred Mineral Resource according to the guidelines of the 2004 JORC code. The estimate for
Ag within this area has not been classified as an Inferred Mineral Resource, since there are less
data points and increased uncertainty in the Ag assays.
The grade and tonnage values listed in Table 1 are an accumulation of blocks above the given
cut-off within the Inferred Mineral Resource area. The resolution of the grade tonnage data is
defined by the block size of the model for G-grid South, which is 100 mE by 10 mN by 10 mRL.
Table 1 Inferred Mineral Resource for Cu grade and tonnage in G-grid South
Cut-off
Cu (%)
Cu
(%)
Tonnes
(Mt)
0.0001 0.9 31.7
0.2 1.0 30.6
0.3 1.0 28.5
0.6 1.2 20.1
0.8 1.3 17.3
1.0 1.4 13.5
1.2 1.5 11.0
1.4 1.7 5.9
1.6 1.8 2.9
1.8 2.0 1.2
2.0 2.3 0.5
2.2 2.4 0.2
2.4 2.5 0.2
The weighted average Ag grade in the 32 Mt area of the Cu Inferred Mineral Resource is
7.5 ppm Ag. The average Ag grade is effectively a summary of the exploration results and is not
classified as part of the Inferred Mineral Resource estimate.
SNOWDEN MINING INDUSTRY CONSULTANTS PTY LTD ABN 99 085 319 562
5141_resource note-2_06_06_final.doc Page 3 of 3
Advanced exploration results (Table 2 and Table 3)
The G-grid South exploration results suggest a global grade range of 0.5% to 0.8% Cu, 2.4 ppm
to 2.9 ppm Ag and a tonnage range of 50 Mt to 80 Mt for the exploration targets.
The grade and tonnage ranges for the advanced exploration area listed in Table 2 and Table 3
have been weighted with a combination of kriging and inverse distance interpolation techniques.
Separate interpreted solids for G-grid South and G-grid North were used to limit the extents of
the target areas for reporting.
The grade and tonnage ranges listed in Table 2 and Table 3 are an accumulation of blocks
above the given Cu cut-off. The resolution of this data is defined by the block size which is 100
mE by 10 mN by 10 mRL for the G-grid South model and 100 mE by 5 mN by 10 mRL for the Ggrid
North model. These selective estimates are consequently highly speculative and conceptual
in nature only. There is currently insufficient drillhole data to define a Mineral Resource. It is
uncertain that further exploration will result in the determination of a Mineral Resource.
The grade and tonnage reported as advanced exploration target ranges are exclusive of the
figures quoted as Inferred Mineral Resources.
Table 2 Advanced exploration results for Cu and Ag grade and tonnage in G-grid South
Cut-off range
Cu (%)
Cu range
(%)
Ag range
(ppm)
Tonnes range
(Mt)
0.0 – 0.3 0.5 – 0.8 2.4 – 2.9 50 – 80
0.6 – 0.8 0.9 – 1.1 2.5 – 3.3 20 - 30
Table 3 Advanced exploration results for Cu and Ag grade and tonnage in G-grid North
Cut-off range
Cu (%)
Cu range
(%)
Ag range
(ppm)
Tonnes range
(Mt)
0.0 – 0.3 0.9 – 1.1 5.3 – 4.6 80 - 100
0.6 – 1.4 1.2 – 2.0 4.3 – 6.0 20 - 70
S Versace
BSc(Hons), MAusIMM
Senior Resource Geologist
The information in this report that relates to Exploration Results or Mineral Resources is based
on information compiled by Shaun Versace, who is a Member of The Australasian Institute of
Mining and Metallurgy. Shaun Versace is employed by Snowden Mining Industry Consultants Pty
Ltd.
Shaun Versace has sufficient experience which is relevant to the style of mineralisation and type
of deposit under consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Shaun Versace consents to the
inclusion in the report of the matters based on his information in the form and context which it
appears.
issued through
FIELD PUBLIC RELATIONS PTY LTD ABN 74 008 222 311
231 South Road, MILE END SA 5031
Ph: 08 8234 9555 Fax: 08 8234 9566
[email protected]
N E W S
• R E L E A S E •
Wednesday, 7 June 2006
FIRST JORC RESOURCE AND DRILLING PROGRAM
FOR DISCOVERY NICKEL’S MAUN COPPER PROJECT
Discovery Nickel Limited (ASX Code ‘DNL’) plans to commence its maiden
exploration drilling on the Maun Copper Project in Botswana in July after
today announcing a 20 million tonne copper resource for the project.
The Brisbane-based Discovery said an independent evaluation of historical
drilling data at Maun revealed a Joint Ore Reserves Committee (JORC)
Inferred Resource of 20.1 million tonnes at 1.2% copper – the first JORC
resource calculation for the project, located in north-west Botswana.
Analysis of the earlier data – generated during exploration by mining giants
Anglo America and BHP Billiton predecessor, Gencor Limited, in the 1980s-
1990s – also showed higher than expected indications of silver.
“The JORC-compliant resource for Maun is the first major step towards
determining if the project has the potential to support a medium scale coppersilver
operation,” Discovery Managing Director, Mr Jeremy Read, said today.
“The definition of the 20 million tonne copper resource provides an excellent
platform upon which to build.
“Drilling will be undertaken to test new geological models not previously
applied to the Maun Project that could, potentially, extend sections of the
Inferred Resource above 2% copper.
“The exploration program will further define the mineralisation in the G Grid
South Prospect – the subject of the Inferred Resource reported today – and
extend to the G Grid North Prospect which has the potential for a larger and
higher grade copper-silver resource than occurs at G Grid South,” he said.
issued through
FIELD PUBLIC RELATIONS PTY LTD ABN 74 008 222 311
231 South Road, MILE END SA 5031
Ph: 08 8234 9555 Fax: 08 8234 9566
[email protected]
Initial results of analysis of historical data:
�� An Inferred Resource of 20.1 million tonnes @ 1.2% copper, at a cutoff
of 0.6%, has been defined at the G Grid South Prospect within a 3.2
kilometre strike length of the known 25.5 strike kilometres of coppersilver
mineralisation (see Figure One)
�� Similar grades and tonnages to those already defined are being
targeted to extend the Inferred Resource at G Grid South
�� The G Grid North Prospect has the potential for the definition of a
larger and higher grade copper-silver resource than occurs at G Grid
South
�� Further work is required at the P Grid prospect where limited drilling to
date has delivered results such as 15 metres @ 2.2% copper and 4
metres @ 3.2% copper.
Background:
The Maun Copper Project comprises seven granted prospecting licences
covering an area of 6,333 square kilometres within the Kalahari Copper Belt in
north-west Botswana (see Figure Two).
The most significant occurrences of known copper-silver mineralisation occur
at the G and P grids where Discovery has been concentrating the majority of
its assessment work.
Previous drilling on the project has defined over 300 strike kilometres of
copper-silver mineralisation interpreted as having strong similarities with the
giant Zambian copper deposits.
Media contacts:
Jeremy Read Peter Gill
Managing Director, Discovery Nickel Limited Field Public Relations
Tel: (07) 3218 0202 Tel: (08) 8234 9555
Mob: 0409 484 322 Mob: 0417 784 059
For further information on Discovery Nickel Limited visit www.discoverynickel.com.au
The information in this report as it relates to Mineral Resources was compiled by Mr. Shaun Versace, a full time
employee of Snowden Mining Industry Consultants, who is a Competent Person as defined in the 2004 Edition
of the “Australasian Code for Reporting Mineral Resources and Ore Reserves” and who is a Member of the
Australasian Institute of Mining and Metallurgy with more than five years relevant experience. The information
in this report that relates to Exploration Results is based on information compiled by Mr. Jeremy Read who is a
Member of the Australasian Institute of Mining and Metallurgy. Mr Read is a full-time employee of the
Company. Mr. Read has sufficient experience which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in
the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves”. Mr. Read and Mr Versace consent to the inclusion in the report of the matters based on information
in the form and context in which it appears.
issued through
FIELD PUBLIC RELATIONS PTY LTD ABN 74 008 222 311
231 South Road, MILE END SA 5031
Ph: 08 8234 9555 Fax: 08 8234 9566
[email protected]
Figure One – G Grid South JORC Inferred Resource
issued through
FIELD PUBLIC RELATIONS PTY LTD ABN 74 008 222 311
231 South Road, MILE END SA 5031
Ph: 08 8234 9555 Fax: 08 8234 9566
[email protected]
Figure Two – Maun Copper Project - Location