DISCOVERY METALS LIMITED
DML - Africa Downunder Conference Presentation - Mr Brad Sampson, Managing Director
Mon, 8 Sep 2008 03:15AM
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DISCOVERY METALS LIMITED (DME)
Ticker code: DML,DME
Website: http://www.discoverymetals.com.au
Industry: Materials,Nonferrous Metals
Principal Activities:
Exploration for nickel and copper deposits in Botswana and Australia.
Address:
410 Queen Street, Level 8
BRISBANE
QLD
Phone: (07) 3218 0222
Fax: (07) 3218 0233
Executives & Directors
Mr Gordon Galt , Chairman
Mr Stuart Bradley Sampson , Managing Director
Mr Ribson Gabonowe , Director
Mr Jeremy Read , Non Exec. Director
Mr Morrice Cordiner , Non Exec. Director
Mr John Shaw , Non Exec. Director
Mr Paul Fulton , CFO
Mrs Roslynn Shand , Company Secretary
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Company ASX Announcements
Company ASX announcements can be viewed on the ASX website.
Announcements from the preceding six months are shown below.
Please refer to the relevant stock exchange if any of the above information is incorrect
DISCOVERY METALS LIMITED (DME) Events
Europe/London
DISCOVERY METALS LIMITED (DME)
| Appendix 3B | Wed, 31 Dec 2008 |
| Change in substantial holding from MQG | Wed, 31 Dec 2008 |
| Copper Grade increased 22% upgraded Zeta Mineral Resource | Thu, 18 Dec 2008 |
| Appendix 3B | Mon, 15 Dec 2008 |
| Change of Director`s Interest Notice x 3 | Mon, 15 Dec 2008 |
| New geochemical anomaly - extension of Petra Prospect | Wed, 26 Nov 2008 |
| Results of 2008 AGM | Tue, 18 Nov 2008 |
| Quarterly Activities Cashflow reports 30 September 2008 | Fri, 31 Oct 2008 |
| Notice of AGM and Annual Report | Wed, 22 Oct 2008 |
| Renewal of Tenements for Boseto Copper Project | Tue, 21 Oct 2008 |
Please note: This company appears on this website as a result of its listing on the Australian Securities Exchange. Boardroom Radio does not claim any association with any company listed on this site.
PRESENTATION BY BRAD SAMPSON, MANAGING DIRECTOR OF DISCOVERY METALS LIMITED (DML)
“Africa Down Under Conference Presentation”
http://www.brr.com.au/event/51101
MONDAY, SEPTEMBER 8, 2008, 1:15 PM.
DML Good afternoon, everybody. The normal cautionary statement that you can read sometime at your leisure. What I’d like to do today is take you through
10 the Discovery Metal story. I’d like to talk you about a mine asset, now mine area, our focus at the moment, which is the Boseto Copper Project in northwest Botswana. I’ll talk to you about the geology, explain to you a little bit of what we’ve been doing in the pre-feasibility study for that project, where we’re headed with the bankable feasibility study, talk about the resource
15 there, try and convince you that there’s more to come, and then talk about our regional exploration program, and where we’re headed with a very extensive tenement package that we have in Botswana.
So Discovery Metals listed on the Australian Stock Exchange, Botswana
20 Stock Exchange, the AIM in London, have a current mineral resource at Boseto of 49 million tonnes at 1.2% copper and within that is an Indicated resource of just under 9 million tonnes at 1.4% copper and 20 grams per tonne silver. So you’ll see as I go through the presentation that the Boseto project has nice copper grade and has significant amounts of silver. I will also
25 give you some insights into the prospectivity of our extensive tenement position on the Kalahari Copper Belt in northwestern Botswana where we have some 12,100 square kilometres tenements.
So very clearly, our company strategy is to become a copper producer as
30 quickly as possible and that is our primary focus. The company has 150 million shares on issue, fully diluted, you’ve got another 10 million to that. Share price on the 3rd was 43 cents, gives us a market capitalisation of around A$64, A$65 million sitting with a nice amount of money in the bank, just under A$11.5 million in the bank. On our share register, I guess our
35 shares our tightly, fairly tightly held by a number of institutions primarily in Australia and in Botswana and we have very good support from Botswana institutions.
Yes so, tightly held stock by a number of institutions in Australia and
40 Botswana and what’s important is that shareholders understand that the timelines that we’re working to understand the Boseto project and our committed to working with us through the development of our project.
The other take away from this slide and for me, personally very important is
45 we have 30% of our company held in Botswana, so very good retail and institutional support in Botswana. It’s not uncommon for me to go into meetings in Botswana and sit with accountants or lawyers and find out that they’re actually shareholders in Discovery Metals, so that’s very pleasing.
Botswana, we heard the Minister for Mines yesterday, Mr. Kedikilwe talking to us about Botswana thinking we did a fantastic job of talking about why Botswana is an attractive investment destination. Watching them, I realized as Canadian Institute, the Fraser Institute conducts annual multifaceted
5 surveys trying to identify where the best places are in the world to invest and resource projects, and Botswana ranked no. 11 in the world. I guess, it ranked high than every state in Australia, so in terms of attracting just to resource investment, Botswana is a better place than Western Australia or Queensland. In Queensland, we changed the role to regime with the drop of
10 hat, they certainly don’t do in Botswana. It’s a stable democratic government, A+ credit rated economy, a very wealthy country, GDP per capital is approaching the US$15,000 mark, and good social programs that place very literate population, so something like, an 82% literacy in Botswana. It’s a nation that has different psyche and a different agenda and a different plan
15 from pretty much all of the states in Africa, and it’s a country that I think is outstanding as a destination for resource investment.
We have Dikoloti Nickel Project in the eastern part of the country near Selebi-Phikwe and a tenement package there where we have a JORC compliant
20 resource, I’m not going to talk more about that today. Today, the focus is on Boseto Copper Project. So it sits in the northwestern part of the country, we have fourteen tenements between Maun and the Namibian border and we sit on what is called the Kalahari Copper Belt. That part of Botswana now is very well serviced by infrastructure visit, good quality picture inroad that lives
25 around Botswana and links all the way through to the port in Walvis Bay at Namibia linked back through Gaborone to manufacturing hubs in Johannesburg and ultimately to not so many manufacturing hubs in South Africa and ultimately to ports on the eastern coast of Africa and have an international airport at Maun. So if somebody looks in Brisbane, I’ll find it
30 easier to get to Maun, it’s two flights and sitting on the plane doing some e-mails, and it’s a little easier to get there than it is to get to many places in Western Australia.
Okay, the Kalahari Copper Belt runs right across northwestern Botswana and
35 often to Namibia and it essentially an extension of the Zambian Copper Belt exhibiting lower grade metamorphism and lower tenor but overall grade. It’s an area that’s been explored extensively over more than 30-year history. It’s been well documented in comparison to the Zambian Copper Belt, is very underexplored. It’s important to understand that we’re sitting in a major
40 copper belt. It’s a copper province, so our resource doesn’t sit, doesn’t exist as a discreet and isolated zone of mineralisation. It exists in an area that we’ve developed up within an overall context of significant copper mineralisation.
45 Style of mineralisation, it’s acidic soil deposit so we have copper and silver mineralisation, copper predominantly in chalcocite, deposited or precipitated at the (inaudible) (00:06:12) boundary between footwall sandstones and then hangingwall, siltstones and mudstones, so subsequent to the formation of the deposit, we’ve had extensive folding and we’re left with a plainer, tabular strike extensive style of mineralisation typically with a grade enriched against (inaudible) (00:06:31) footwall contact and graying off into the hangingwall. Typical widths of the mineralised zones in the Zeta area, that I’ll show you in a minute around the 10-meter mark and Plutus of 7-meter marking. A very
5 simple geometry, it’s large strike extends and certainly suggest that as we progress our drilling program that we’ll see a significant proportion of material shifting from Inferred to Indicated along to Measured status.
If you look at a cross section through Plutus deposit, these are some recent
10 drillhole results and it’s important here that there are some intersections here that are particularly interesting, and 9.6 meters at 1.9% copper, 22 grams per tonne silver in that same section. There’s another intersection just on 7 meters at 2.7% copper, and it’s quite indicative of the style or type of the drillhole results that we get, although we have on overall resource grade of
15 you know, 1.2% copper, there are zones, clearly zones with the significantly higher grades.
This cross section is about as complicated as I’ve seen, so far with any of their resources, so it’s simple geometry and mends itself well to the mining
20 techniques.
Our current resource base sits in three areas, the Zeta in the right hand, bottom right hand corner of this slide, then Plutus and Petra combined gives a total just over 49 million tonnes of 1.2% copper. You’ll notice no silver grade
25 attached to the Petra resource. When Petra was modelled more than a year ago, there were some quality issues on silver, we’re in the process of process of remodelling Plutus and then ultimately Petra, and then there’ll be a silver grade attached to the Petra model. We remodelled the Zeta resource during the pre-feasibility phase and we saw an increase in tonnage at 0.1%
30 decrease in the copper grade. In the last twelve months, we have completed extensive diamond drilling to infill the Plutus resource and extend the Plutus resource, so you’ll notice a gap there between Plutus and Petra. We’ve been infill drilling that area and we’ve put a number of announcements out highlighting very significant intersections between those two resources, so
35 I’ve every expectations as we complete the remodelling of the Plutus resource then we’ll see grow towards the southwest.
None of these resources are closed down at depth. The deepest holes drilled anywhere on the property, we have Zeta, some 350 meters deep by and
40 large, the majority of the holes drilled are no deeper than 160 meters, no holes deeper than 160 meters in Plutus or Petra at all. So all resources remained open at depth and that bodes well for some potential underground operations in the future. We also have a number of other prospects in the area that we’ll follow up on in the future. We have Nexus in northeast Zeta
45 and there’s also the Quirinus Prospect just off the slide in the bottom left hand corner. I’ll talk more about that in a moment.
I’ll show a couple of cross sections to give you an idea of strip ratios and how extensive the mineralisation….this is through Zeta. You can actually see two domains of mineralisation here, the main domain is one that’s most important and it extends basically outcrops… extends almost all the way to the surface. We have long strike lengths, left of mine strip ratios, we expect to be around 7 although because of the long strike length, significant opportunity to mine it to
5 lower strip ratios early on the project life.
Plutus, similar cross section and then there’s on the right hand side of the slide, you’ll see this long skinny thing that you might fail to understand and why would you put up a slide like that. I don’t know how to put a pit 5
10 kilometres long on a PowerPoint slide so that people can understand it and that’s kind of the point I wanted to make…the pits are long. It’s 5 kilometres long in the bottom of the southern corner of that Plutus pit on the right hand side. You may notice it bulbs out indicating that it’s deeper and we’ve conducted or completed extension drilling outside of that pit to the south so I
15 would expect that that will continue to grow to the south as we remodel and re-optimize.
So over the last year in a bit, we have completed the pre-feasibility study on time on June, released the results in July, around at that time that we started
20 the pre-feasibility study on the Boseto project. We also commenced environmental studies and they’re obviously important, they’re important from a number perspectives including that for us to apply for a mining lease, we have to complete the environmental studies that well on track to be completed by the end of calendar year. We’ve commenced the bankable
25 feasibility work and now expect that that will be completed by the middle of next year. We then aim to move on as quickly as possible to detail design and the construction and commissioning of the plant, and envisage earliest commissioning at this stage at the start of 2011.
30 We completed the pre-feasibility study on the basis of 2-million tonne per annum throughput concentrate and on open pit mining, so it didn’t consider any underground operations in the pre-feasibility base case. We believe we’ve adopted a very conservative base case for the pre-feasibility study and delivered what we think as very robust outcomes giving us a capital
35 investment of around US$195 million, pay back the project in a little over three years at a net cash cost of a bit $0.43 a pound. That’s an average cash cost.
We’ve commenced the bankable feasibility study, very happy to have
40 announced recently the appointment of GRD Minproc as our engineering partner for that study. Snowden were involved with our project, in fact right through earlier on did resource modelling during the pre-feasibility, acted as independent reviewer and will now conduct the resource modelling, the geotechnical work and the mining engineering aspects of the bankable
45 feasibility study.
SRK will continue on with the environmental and community work. SRK working with an extensive team of consultants from Botswana and South Africa, and we expect to have that bankable feasibility completed in the middle of 2009.
Now, one of the things that we will consider as part of the bankable feasibility
5 study although its’ based on open pit mining only, we believe there is extensive underground potential. Here are some of the came out of the pre-feas -- potential underground operation underneath the open pit so we will complete the bankable feasibility study. We’re aiming to have ten years of open pitiable resources and also demonstrate that there’s future for the
10 project to grow either for upscaling or for longer life.
In terms of exploration potential, we also believe that in the future there’s an opportunity to not only increase the resource base for the Boseto Project, but to replicate the project down strike. So they become our key goals; develop
15 the project, become a copper producer, increase our resource base, and then replicate the project down strike.
This line….the red lines on this slide indicate the exploration targets for us. The area has been explored over more a than 30-year history. All of our
20 current resource sits in the single tenement….there were Petra, Plutus, and Zeta. Recently, we went over to Quirinus and commenced the original exploration program at Quirinus to demonstrate that the model we show the world is, in fact, very valid, and at Quirinus, we conducted original soil geochemical program over some 40 strike kilometres. The red areas on this
25 slide, copper anomalies to find in the soils from the soil geochem work. We have one anomaly there that’s 8 kilometres long, and another one, that’s more than 3 kilometres long.
On every occasion, so far, where we’ve had anomalies and copper anomalies
30 in soils, we’ve had mineralisation underneath. These top anomalies have already been drilled tested, very early on, as soon as we identified….started to identify the anomaly, we put through reverse circulation holes into. Those results have been published, similar tenor of grades, similar style of mineralisation, similar thicknesses to what we’ve found elsewhere, and we’ve
35 now put four diamond holes in and awaiting on results from those.
So to wrap it up, we now …..we’ve got an exciting project. We’re sitting, you know, in a dominant land position in the Kalahari Copper Belt of Botswana. It’s a great jurisdiction to operate in. Our game plan is pretty simple, to
40 develop copper project, focus on open pit mining to start with, get the bankable fees completed mid year, middle of 2009, look to grow the resource base, and there’s plenty of opportunity to do that. We expect the resource extension of Plutus. We have the Quirinus discovery and anticipate more that those all sorts of things and that we believe there’s underground potential in
45 places like Zeta, and then get on and discover the next Boseto Project, and we believe there’s significant potential once we got Boseto right to replicate down strike.
Thank you very much.
PRESENTATION CONCLUDED
Contact brr@brr.com.au for more information
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