London, England — MININGREVIEW.COM — 02 December 2008 – Exploration company Discovery Metals Limited may delay its flagship copper project in Botswana to take account of a weaker copper price, a better cost structure and an expected expansion of resources.
Revealing this in an address to a mining conference here, managing director Brad Sampson said the company was revising a feasibility study to incorporate a decline in capital and operating costs, after metals and share markets had tumbled amid the global economic downturn.
“We think there may be some value in slowing down a little bit,” he added.
The company — listed in Australia, London and Botswana — had been hoping to commission its Boseto project in Botswana in late 2010. The project has a resource of 50 million tonnes of ore at 1.3% copper.
“With costs sliding it might be worth extending the timeline of the project,” Sampson said.
A preliminary feasibility study earlier this year had pegged capital costs at US$185 million (R1.9 billion) and unit cash costs at $1.43 a pound for an operation producing 23 500 tonnes of copper a year.
“Since then, not only has the copper price fallen, but key input costs have dropped quite dramatically as well,” he said. The copper price has tumbled 60% since touching a record in July, while shipping costs are down 80% and oil prices are off by more than half.
Discovery plans to produce a 42% concentrate at a plant with a capacity of 2 million tonnes of ore a year.