Ngamiland based mine; Discovery Metals Limited has confirmed that no agreement has been reached with Cupric Canyon Capital in relation to a potential sale of DML’s Boseto Copper Mine.
Cupric Canyon Capital was established in 2010 to acquire undeveloped copper assets with a known resource, add value by taking the projects through the development process, and ultimately exit via a sale or IPO.┬á
The private equity company is backed by the investment banking division of Barclays Bank PLC through its Barclays Natural Resource Investments team.
Cupric owns a collection of copper assets in northeastern Namibia and northwestern Botswana, including the Khoemacau copper-silver project at the centre of the Kalahari Copper Belt through its acquisition of Hana Mining Ltd in February 2013.
Discovery Metals Limited first announced in December, 2014, that it was considering selling Boseto Copper Operation to Cupric Canyon Capital LP after the copper miner entered into a US$5 million short term working capital facility with the financier.
The troubled Australian company has been having a tough time with lenders and the facility will be used to provide support to DML’s current operations arising from operating cash-flow shortfalls in November 2014, and for working capital purposes.
According to the Botswana Stock Exchange (BSE) listed company, one condition to the facility agreement grants Cupric a period of exclusivity to allow it to complete due diligence and to allow time for both DML and Cupric to finalise and agree definitive terms of the potential transaction.
“The exclusivity period extends until the execution of a legally binding sale and purchase agreement with Cupric, and 31 January 2015 (or such other date as may reasonably be agreed between DML and Cupric). The Facility has a final termination date of 31 August 2015,” Discovery Metals said in December.
On Friday country manager, Mokwena Morulane confirmed the collapse of the talks, but stated that the Company is re-engaging with a number of parties with a view to source for funding.
The company needs money for the provision of short term working capital, settlement of all existing debt facilities, and provision of the required capital to allow the company to expedite the progression of the Zeta underground development.
“The Company will continue to pursue its current operating plan to place the current open pit operations at Boseto into care and maintenance. This will be achieved by running the current pits down in a structured fashion to allow the payment of creditors and employee entitlements. Simultaneously the Company will be actively pursuing funding to allow the commencement of the Zeta underground development.”