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Discovery Metals tipped by Shares magazine

African focused mineral explorer and mine developer Discovery Metals (AIM: DME) was tipped in this week’s Shares magazine. The weekly said that the news flow stemming from development of the Boseto copper mine in Botswana will drive the company’s share price in the coming months.

First up, it expects that the next batch of exploration results will be announced, which Shares believes will coincide with a resource upgrade.

Among the other potential developments, Discovery is expected to sign an off-take deal for the Boseto production. The magazine believes that Discovery may want a potential off-take partner to also acquire an equity stake in the company. The off-take agreement would be expected to generate a proportion of the capital required to take Boseto into production.  The magazine also noted that Boseto’s overall financing will likely consist of both equity and debt, split 50:50.

Later a final feasibility study, with more accurate project costing, is expected to be announced in April, subsequently followed by a US$50-US$60m equity-based fundraising.

The Dikoloti nickel project in Botswana is also seen as a potential catalyst for Discovery’s share price growth. State-funded Japanese mining group JOGMEC, is supporting the project. JOGMEC is providing US$3m in funding in return for a 60% interest in the property, Shares added.

Disclosure: The author holds no positions in the company