Discovery Metals

Botswana copper play Discovery Metals expects an off-take deal with a major potential investor within a month.

Based in Brisbane and quoted Down Under and on AIM, Discovery is negotiating with ‘credible potential partners', says managing director Brad Sampson, who suggests an off-take deal for its Boseto project could be struck even before a current feasibility study is completed by March. The company, which is also interested in nickel, has already indicated Boseto could yield an 18 month-to-two year payback on £100m of capital expenditure, funded 60-40 debt/equity, and says product sales could start by late 2011, with estimated operating costs of $1 a lb, against current prices of around $3.20 a lb.

Sampson, an experienced figure in the mining world, says Discovery hopes Boseto’s estimated 10-year mine life as an open-cast operation could be significantly extended on the basis of an underground scoping study now under way. The company has £10m in the bank and awaits up to £4m more imminently on the exercise of ‘in the money’ options.

Highlighted by Growth Company Investor at 15.5p last year, the shares now trade at 37p, up from a low of 7p. With China and other markets keen to secure copper supplies, there could be more mileage yet for the brave.