Monday, January 18, 2021

Discovery Metals reports disappointing results as it ramps up Boseto

Discovery Metals, the Botswana Stock Exchange (BSE) listed mining outfit, has reported a higher loss compared to the prior year driven mainly by capital expenditure in the development of the Boseto Copper project.

The financial report for the half year ended December 2011 showed the company made a loss of a loss of US$6.966 million (about P50 million) worse than US$4.908 million (about P35 million) loss for the corresponding period in 2010.

“This result is consistent with the ramp up in activity, manning and costs by the Company as it moves through project development at Boseto and prepares for copper-silver concentrate production in the second quarter of 2012,” Discovery Metals said in a statement accompanying the results.

According to the results, plant and equipment increased to US$220.5 million as a result of Boseto construction activity with the appearance of Inventory of US$2.9 million reflects the purchase of initial spares and supplies for the Boseto operations.

The company also said it has invested US$45.8 million as it continued exploration and feasibility work at Boseto and other parts of the Kalahari Copperbelt.

The company added that salaries increased to US$3.9 million with a ramp up in project, exploration and corporate personnel to support the development and operation of the Boseto copper project.

There was an increase in trade and other payables to US$22.1 million, which was the accrued construction charge for Sedgman and other contractors at Boseto for the month of December 2011.

Sedgman Limited is the Engineering Procurement and Construction (EPC) contractors for the Boseto project.

However, the results exclude the US$51 million unrealised mark-to market gain (after tax) reported on the Boseto hedge book.

The company said the cash and cash equivalents balance at 31 December 2011 of US$98.9 million results from funds remaining from the 2010 equity raising and drawings on the Boseto project finance syndicated debt.

Discovery Metals’ Managing Director, Brad Sampson said the half year financial results of the Company reflect the continued progression of Discovery Metals towards becoming an operating copper and silver producer in the second quarter of 2012.

“We also continue to invest in the development of the Boseto copper project and exploration to find our next project in Botswana,” he said.

The Interim Financial Statements have been reviewed by the Company’s auditor, Ernst and Young in Australia and Botswana.

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