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Company News
Discovery Metals (ASX:DML) – grade and production improve as copper mine goes through commissioning
• Discovery Metals has updated the market on progress at the new Boseto copper / silver mine in Botswana .
• The mine is still in its commissioning phase and good progress is apparent despite the distraction of an unwanted and hostile bid from an opportunistic Chinese group.
• The Chinese were not able to gain access to detailed information on the mine due to the hostile nature of their bid. Management were understandably otherwise engaged as they worked through the busiest part of the construction and commissioning of the new mine.
• We were pleased to see Discovery hold their ground and not simply cave into the opportunistic offer as we believe there is unrealised value to be gained from the mine once it has passed through its commissioning phase.
• The formal drop off date for the Chinese hostile offer is tomorrow though the bid is announced to have already failed.
• January’s grade and tonnage figures are substantially better than Decembers
• In January some 3,281t of concentrate was produced grading 38% cu and containing 1,262t of payable copper and 52,786oz silver
• December saw 925t copper from 2,345t of concentrate and 41513oz silver
• Copper recoveries are at 80% from sulphide ores with the concentrator running at 95% capacity for 17 days operated.
• Silver recoveries are at 83%
• The process plant lost 8 days through gear-box failure and repair – these things seem to happen through the commissioning phase as the machinery beds down.
• Management expect mine production and concentrator feed and recovery rates to improve through February and beyond
• The mine was hit by heavy rain with rainfall in excess of 50% of that normally seen through the wet season. This flooded access roads and caused significant water inflow into the pit causing 0.6mt of lost mine production.
Conclusion: We expect Discovery Metals to attract a premium rating as one of few mid-tier copper producers and to attract further M&A interest this year assuming all goes well with the mine, plant and recoveries. The team are already planning expansion of the plant to around 50,000tpa and for the construction of a new coal fired power station to reduce power costs and create better flexibility and power reliability for the region.