Fox-Davies Capital issued a note on Discovery Metals (AIM, ASX: DME)in London in response to a recent resource update for the junior nickel and copper miner’s Boseto copper project in Botswana, calling it “excellent news” with an emphasis on the increase in measured and indicated resource.
The new estimate reflects all the drill results since the last resource estimate from October 2009 and contains an upgrade to the resource estimate for the Plutus and Petra prospects as well as for the South West Petra and North East Plutus.
The total resources jumped 68%, while the measured and indicated resources were upped from 11.7 Mt (million tonnes) to 22.5 Mt, while the grade has been maintained at 1.5% copper.
The Bankable Feasibility Study (NYSE:BFS), which is due later this month, is based on 2 Mtpa (million tonnes per annum). FD Capital said that the current BFS was always planned for an easy expansion to 3 Mtpa with the addition of a second ball mill and some floatation cells.
“With the Resource base expanding, a 3Mt pa option, either at the commencement of operations or through a scaling up of the project at an early stage in the project life is being considered in more detail,” said the report.
FD Capital has also noted that there are another 5 drill holes at Zeta, drilled to test the potential below that in the recent underground scoping study and extending to a depth of 650 metres, which are currently being reviewed and quality assured. These holes were designed to infill between the existing diamond drill holes and give more clues about copper grade distribution within the prospect.
Disclosure: The author holds no positions in the company