Discovery Metals Limited, the ASX/BSE listed copper mining Group, has indicated that as a result of lack of capitalisation on exploration and construction assets during the full year ended June 2012, the Group has reported a huge financial loss amounting to P21.1 million.
“The reported loss reflects the expensing of costs not capitalised in the exploration and construction assets,” reads company financial statements for the year ended June 2012.
According to the statements released this week, total assets grew by 116 percent to US$491 million at 30 June 2012. “ Property, Plant and Equipment grew to US$288 million, reflecting the completion of the construction of the Boseto project in the year. Cash at 30 June 2012 was US$60 million,” reads the statement in part. It added that US$205 million was raised in Project Finance and spent on the debt portion of the Boseto construction.
In an interview with this publication on Friday, the Managing Director of the company, Brad Sampson, said the financial loss, which exclude the US$48 million unrealised hedging gain “is consistent with the ramp up in activity, manning and costs by the Company as it moves through project development and production for its Boseto mine.”
The Company said it has completed construction of the Boseto copper project on-time and on-budget. “This has been a pivotal year for Discovery Metals with the successful completion of construction at Boseto. The commissioning at Boseto continues in an upward trend and the next monthly commissioning update will be released at the end of August.”
“As we ramp up production, we should produce and export about 300wmt of copper concentrate on a daily basis. Our group costs will average about $30 million dollars a month,” said Sampson. He added that it is expected that the company will pay off its debt within two years at current metal prices and will start generating positive cash flows.
He said 560wmt of copper concentrate were sold as at end June 2012 and it was the 1st production sold. “This achieved revenues of about US$700,000. Once we reach steady stage this will equate to about 2 days of sales.”
Sampson added that the company has reserved US$50m for the production phase and in addition, internal revenues will be generated from sale of concentrate during the year.
Discovery Metals has prospecting licences covering 11,872 km2 along the Kalahari Copperbelt. The company is focussing on the emerging Kalahari Copperbelt in north-west of this country.