Discovery Metals inks offtake for Boseto Copper Project and raises A$19m

Discovery Metals (ASX/BSE: DML; AIM: DME) has awarded the Boseto copper concentrate sales contract to Transamine, a global nonferrous raw materials trading company.

The agreement will cover 100% of the Boseto concentrate for a minimum five year period. The deal will minimise Discovery Metals’ risk exposure and enhance the Company’s working capital.

Transamine will subscribe for 25 million Discovery Metals’ shares at A$0.7623 per share, which is an 11% premium to the 4 week VWAP. The A$19 million will be paid by Transamine within 5 business days.

Funds raised will be used towards the construction of the Boseto Copper Project after internal and external approvals.

The five year offtake contract has been agreed in anticipation of a decision to proceed with the construction of the Boseto Copper Project.

The Bankable Feasibility Study for the Boseto Copper Project is nearing completion and remains on track for end of March 2010.

Discovery Metals’ managing director, Brad Sampson said, “Over the last 2 years we have been in the fortunate position of having very wide interest in securing concentrate offtake from the Boseto Copper Project."

"The establishment of this strategic alliance with Transamine represents delivery of another significant milestone in the development of the Boseto Copper Project, he added.”

Mr Sampson said the company was delighted to work with with Transamine, a large concentrate trader with excellent experience, reputation and capability to perform this vital function for Discovery Metals.

In 2009, Transamine entered similar arrangements which included Citadel Resource Group Limited’s (ASX:CGG) Jabal Said copper project in Saudi Arabia, Terramin Australia’s (ASX: TZN) Tala Hamza lead and zinc project and Kagara Zinc Limited (ASX KZL).

Transamine is one of the oldest, independent, privately held commodities trading companies in the world specialising in raw materials.

http://www.proactiveinvestors.co.uk/companies/news/14174/discovery-metals-inks-offtake-for-boseto-copper-project-and-raises-a19m-14174.html