Discovery Metals Limited: Half Year Financial Report
23 February 2012 - 1:26PM
UK Regulatory
TIDMDME
22 February 2012
AIM ANNOUNCEMENT
Discovery Metals Limited
HALF YEAR FINANCIAL REPORT
Highlights
* The Company's half year financial results reflect the continuing development
and progress of the Boseto copper project in north-west Botswana, including:
* Raising the debt component of the project finance;
* Placing the hedging protection for project revenue;
* Continued Boseto zone exploration success at Mango, Zeta North-East,
Selene and Plutus underground targets;
* Commencement of open pit mining at Boseto in September 2011.
* The Company reports in US Dollars to better reflect the Company's activities
and cost and revenue exposure.
* The Company held US$98.9 million in cash at 31 December 2011.
* The Boseto copper project remains on track for production in the second
quarter of 2012.
Financial Results
The Discovery Metals consolidated group reported a loss of US$6.966 million for
the December 2011 half year, up from the US$4.908 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. These results exclude the US$51
million unrealised mark-to- market gain (after tax) reported on the Boseto hedge
book.
Discovery Metals' Managing Director, Brad Sampson, commented, "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."
Detailed Commentary on Financial Results
Items of note in the Half Year Financials and Directors Report are:
Assets:
* 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;
* Trade and other receivables reflect the usual 3 month processing time for
VAT refunds in Botswana;
* The appearance of the derivative financial assets reflects the
mark-to-market positive valuation of the Boseto hedging protection
placed in July 2011. The current portion of US$13.2 million
reflects the positive value of the hedges to be closed out in the 2012
calendar year;
* Plant and equipment increased to US$220.5 million as a result of Boseto
construction activity;
* The appearance of Inventory of US$2.9 million reflects the purchase of
initial spares and supplies for the Boseto operations;
* The US$45.8 million exploration asset comprises continued investment in the
exploration and feasibility work at Boseto and other parts of the Kalahari
Copperbelt.
Liabilities:
* The increase in trade and other payables to US$22.1 million is the accrued
construction charges for Sedgman and other contractors at Boseto for the
month of December 2011.
Income:
* The non-cash gain of US$51.0 million in Other Comprehensive Income is the
result of the mark-to-market unrealised gain on the Boseto project hedging
protection placed in July 2011.
Costs:
* 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;
* A non-cash cost of US$0.7 million for unrealised foreign exchange loss on
funds held in other than US dollars to be applied largely to Australian
corporate costs in 2012 (the Australian Dollar devalued in relation to the
US Dollar in the last six months of 2011, but has since rebounded);
* A non-cash cost of US$1.4 million for employee benefits relates to the
expensing of share based payments.
The Interim Financial Statements have been reviewed by the Company's auditor,
Ernst and Young in Australia and Botswana.
Competent Person Statement
The information in this report that relates to Exploration Results is based on
information compiled by Mr Wallace Mackay who is a Member of the Australian
Institute of Geoscientists (AIG). Mr Mackay is a full-time employees of
Discovery Metals Limited. Mr Mackay has sufficient experience which is relevant
to the style of mineralisation and type of deposit under consideration and to
the activity which they are undertaking to qualify as a Competent Person as
defined in the 2004 Edition of the "Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves" (JORC Code). Mr Mackay
consents to the inclusion in this report of the matters based on information
provided by him and in the form and context in which it appears.
Forward Looking Statements
This release includes certain statements that may be deemed "forward-looking
statements". All statements in this discussion, other than statements of
historical facts, that address future activities and events or developments that
Discovery Metals expects, are forward-looking statements. Although Discovery
Metals believes the expectations expressed in such forward-looking statements
are based on reasonable assumptions, such statements are not guarantees of
future performance and actual results or developments may differ materially from
those in the forward-looking statements. Factors that could cause actual results
to differ materially from those in forward-looking statements include market
prices, continued availability of capital and financing, and general economic,
market or business conditions. Investors are cautioned that any such
statements are not guarantees of future performance and that actual results or
developments may differ materially from those projected in forward-looking
statements.
Discovery Metals Background
Discovery Metals is an ASX/AIM/BSE listed copper exploration and
development company focused on the emerging Kalahari Copperbelt in north-
west Botswana. The Company is a near-term copper producer currently developing
its 100% owned Boseto Copper Project towards production in the first half of
2012. The Company is in the process of de-listing from the AIM market.
The Kalahari Copperbelt sediment-hosted mineralisation of the Boseto Copper
Project is similar in style to the well-known and large deposits of the Central
African Copperbelt of Zambia and the Democratic Republic of the Congo.
Discovery Metals has prospecting licences covering 11,872 km2 along the Kalahari
Copperbelt.
Further information on the Company including Mineral Resources and Ore Reserves
is available on our website: www.discoverymetals.com
For further information on this release and Discovery Metals Limited, please
contact: Brad Sampson Managing Director Ph: +61 7 3218 0222
brad@discoverymetals.com
AIM Nominated Advisor - Fairfax I.S. PLC, Contact Ewan Leggat/Laura Littley Ph:
+44 20 7460 4389 or 7460 4387
UK PR - Tavistock PR, Contact Jos Simson/Emily Fenton Ph +44 207 920 3150 or
+44 778 855 4035
Attachment: Half Year Financial Report:
http://hugin.info/137928/R/1588416/498473.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Discovery Metals Limited via Thomson Reuters ONE
[HUG#1588416]
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