Discovery Metals Limited (DML) has through its flagship Boseto Copper Operations in the North West recorded the best quarterly results since the commencement of mining operations with more than five tonnes of copper produced. This marks 25 percent increase in copper production compared to the third quarter of 2014.
According to the quarterly report released this week, copper in concentrate produced include record monthly copper production of two thousand tonnes achieved in April 2014. The Q4 FY14 is said to represent the best quarter for Boseto since inception on a production and unit cost basis.
The period under review, the company says, reflects the continued focus on initiatives to increase mined volumes, improve recoveries and reduce production costs. These will remain a priority for 2015. DML says mining costs per tonne of material mined were maintained at the level of the prior quarter while greater throughput and the process plant optimisation project delivered a 22 percent reduction in processing costs per tonne of material milled.
DML, dual listed on both Australia Stock Exchange (ASE) and Botswana Stock Exchange, has maintained that it has continued to focus on improving management of equipment and the workforce and these improvements are reflected in the positive production results. “Optimisation of resources continues to assist in improving productivity and operational costs,” says the statement.
Following the government’s approval of the amendment to mining license to incorporate the Zeta underground mine into the Boseto Copper Operation, the exploration company is now confident the project will now see the light of the day as the finalized construction designs for the initial two years of development for the Zeta Underground Mine Project are on track for completion in Q2 FY15.
The zeta mining is expected to increase DML revenue considering the fact that Total Discovery Group was USD160.4 million (USD153.9 million principal and US 6.5 million of outstanding interest), comprising the Project Fiance Facility of USD 134 million and a fully drawn Revolving Credit Facility of USD 26.4 million.
The debt compelled the group to come up with a new strategy to ease the debt burden which resulted in debt re-profiling and equity raising strategy. In May the company advised the market it has executed a Term Sheet with its lenders under which the company’s interest bearing debt would be reduced to USD100 million and repayments re-profiled subject to the parties entering into conclusive, long form documents. Last week the company issued a statement confirming that conditions precedent had been satisfied and that the debt re-profile was effective from 18 July 2014.
Discovery Metals’ ultimate objective was to be able to supply sufficient ore from three planned underground mines to keep the 3.2 million-tonne-a-year Boseto concentrator at maximum throughput and efficiency.
The company has in the past struggled, making a loss of USD18.9 million for the December 2013 half year from the USD14.6 million from the corresponding period in 2012. Discovery Metals has prospecting licenses covering approximately 26.919 km2 in Botswana.