Boseto Copper Project

1
Boseto Copper Project

• Botswana Resources Conference
• July 2008

2
Cautionary Statement

• The information contained in this document
  (Presentation) has been prepared by Discovery
  Metals Limited (Company).
•  
• This Presentation does not constitute an offer or
  invitation to any person to subscribe for or
  apply for any securities in the Company.
•  
• While the information contained in this
  Presentation has been prepared in good faith,
  neither the Company nor any of its shareholders,
  directors, officers, agents, employees or
  advisers give any representations or warranties
  (express or implied) as to the accuracy,
  reliability or completeness of the information in
  this Presentation, or of any other written or
  oral information made or to be made available to
  any interested party or its advisers (all such
  information being referred to as "Information")
  and liability therefore is expressly disclaimed.
  Accordingly, to the full extent permitted by law,
  neither the Company nor any of its shareholders,
  directors, officers, agents, employees or
  advisers take any responsibility for, or will
  accept any liability whether direct or indirect,
  express or implied, contractual, tortious,
  statutory or otherwise, in respect of, the
  accuracy or completeness of the Information or
  for any of the opinions contained in this
  Presentation or for any errors, omissions or
  misstatements or for any loss, howsoever arising,
  from the use of this Presentation.
•  
• Neither the issue of this Presentation nor any
  part of its contents is to be taken as any form
  of commitment on the part of the Company to
  proceed with any inaccuracies in, or omissions
  from, this Presentation which may become
  apparent. transaction and the right is reserved
  to terminate any discussions or negotiations with
  any person. In no circumstances will the Company
  be responsible for any costs, losses or expenses
  incurred in connection with any appraisal or
  investigation of the Company. In furnishing this
  Presentation, the Company does not undertake or
  agree to any obligation to provide the recipient
  with access to any additional information or to
  update this Presentation or to correct any
•  
• This Presentation should not be considered as the
  giving of investment advice by the Company or any
  of its shareholders, directors, officers, agents,
  employees or advisers. Each party to whom this
  Presentation is made available must make its own
  independent assessment of the Company after
  making such investigations and taking such advice
  as may be deemed necessary. In particular, any
  estimates or projections or opinions contained in
  this Presentation necessarily involve significant
  elements of subjective judgment, analysis and
  assumptions and each recipient should satisfy
  itself in relation to such matters.
•  
• This Presentation may include 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
  the Company expects, are forward-looking
  statements. Although the Company 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. The Company, its
  shareholders, directors, officers, agents,
  employees or advisers, do not represent, warrant
  or guarantee, expressly or impliedly, that the
  information in this Presentation is complete or
  accurate. To the maximum extent permitted by
  law, the Company disclaims any responsibility to
  inform any recipient of this Presentation of any
  matter that subsequently comes to its notice
  which may affect any of the information contained
  in this Presentation. 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 forward-looking
  statements are not guarantees of future
  performance and that actual results or
  developments may differ materially from those
  projected in forward-looing statements.

3
Outline

• Discovery Metals
• Boseto Copper Project
• Pre Feasibility Study
• Mineral Resource base
• PFS base case outcomes
• Infrastructure
• Sensitivity and Opportunities
• Conclusion

Boseto Copper Project PFS Results - July 2008
4
Company Snap Shot

• Botswana focussed emerging copper producer
• ASX (DML), AIM (DME) BSE (DML) listed
• Substantial and expanding Mineral Resource base
• Boseto Copper Project 49.1Mt _at_ 1.2 Cu
  including
• Indicated Mineral Resource of 8.9 Mt_at_1.4 Cu
• Highly prospective, 100-owned 12,100 km2
  tenement position
• Operationally experienced Board and Management

Focused Emerging Copper Producer
5
Company Structure

• Market Cap and Enterprise Value
• Shares on Issue at 18-July-08 130.1m
• Share Price at 18-July-08 0.50
• Market Cap 65.1m
• Net Cash at 18-July-08 4.2m
• Enterprise value 60.9m

• Significant Shareholders
• Macquarie Bank 10.0
• Taurus Fund 8.2
• Investec (Botswana) 7.4
• Mr R.A. Healy 6.2
• Trafigura 3.6

Boseto Copper Project PFS Results - July 2008
6
Boseto Copper Project Location
Boseto Copper Project PFS Results - July 2008
7
Exploration potential first 7 tenements
The Start of a New Copper Province
8
Boseto whats in a name?

• Bo for Botswana , and
• Bodibeng a local village
• Bothlathogo a local village
• Se for Sehitwa a local village
• To for Toteng a local village

Working with our Community to Deliver Positive
Outcomes
9
Timetable to Production
10
The Boseto PFS Base Case

• 2Mtpa Concentrator
• 18 month construction period
• Commissioning Q1 2011
• Conventional comminution and floatation flow
  sheet
• Wet tailings disposal
• Financial modelling based on 10 years open pit
  production
• Plant operating costs include maintenance and
  power costs
• Self generate power first 12 months
• Open pits mined via mining contractor
• Updated Zeta Resource Model (drilling results to
  Feb 08)

Boseto Copper Project PFS Results - July 2008
11
Boseto Resource Base
Plutus Inferred Resource 14.5 Mt _at_ 1.3 Cu
13g/t Ag
Nexus prospect
Petra Inferred Resource 4.5 Mt _at_ 1.1 Cu
NE Zeta prospect
Total Inferred Resource 49.1 Mt _at_ 1.2 Cu.
Zeta Inf. Ind. Resource 30 Mt _at_ 1.2 Cu 18 g/t
Ag
5km
Quirinus prospect
12
Proposed 2Mtpa Boseto Processing Plant
Boseto Copper Project PFS Results - July 2008
13
Boseto Project PFS Summary
Boseto Copper Project PFS Results - July 2008
14
Headline PFS Base Case Financial Outcomes
Conservative Base Case Robust Outcomes
Boseto Copper Project PFS Results - July 2008
15
Capital Costs
Boseto Copper Project PFS Results - July 2008
16
Boseto Plant Flow Sheet
Reclaim Feeder
Boseto Copper Project PFS Results - July 2008
17
Operating Costs
1 Average for the first 10 years of 2011 to 2020
in 2008 dollars
Boseto Copper Project PFS Results - July 2008
18
Infrastructure
Boseto Copper Project PFS Results - July 2008
19
Copper Price Scenarios
US/lb
US/lb
Boseto Copper Project PFS Results - July 2008
20
Headline Upside Potential
Note modelling represents 10 years only (2011
to 2020)
Boseto Copper Project PFS Results - July 2008
21
Capex EBITDA
USD millions
Boseto Copper Project PFS Results - July 2008
22
Upside Not Included in PFS Base Case
Resource Growth Potential
Boseto Copper Project PFS Results - July 2008
23
Conclusions

• Project Economically viable
• Base case NPV of 115 Million
• Conservative base case demonstrates robust
  project
• Significant Upside potential
• Resource growth
• Copper price
• Proceeding quickly to Bankable Feasibility Study

The Board has approved moving to the BFS stage
Boseto Copper Project PFS Results - July 2008
24
Contact

• Brad Sampson
• Managing Director
• Ph 61 7 3218 0200
• Email brad_at_discoverymetals.com.au
• ASXDML BSEDML AIMDME

25
Discovery Metals Limited

• Calculation of Copper Equivalent
• The Inferred mineral resources have been reported
  in this presentation in copper equivalent terms
  (ECu) which were calculated using the following
  criteria
• Copper price US2/lb
• Silver price US12/oz
• Copper recovery 94
• Silver recovery 83
• The copper and silver recovery values have been
  determined from historical metallurgical test
  work on samples of representative copper-silver
  mineralisation from the Zeta, Plutus and Petra
  prospects. This work was completed by Outokumpu
  in 1978 and concentrated on determining the
  flotation characteristics of the copper-silver
  mineralisation. The metallurgical test work
  indicates that the copper and silver have a high
  probability of being able to be economically
  recovered.
• The copper equivalent value was calculated for
  each block within the resource models using the
  following formula
• ECu () Cu () (Ag (g/t) 0.0077)
• The grade and tonnage values in copper equivalent
  terms represent the same portion of the resource
  block model as was calculated by Snowden from the
  individual copper and silver assay values. The
  block model was calculated using ordinary kriging
  with the assay data from 70 diamond drill holes
  drilled by Discovery Metals and 56 historical
  drill holes (38 diamond and 18 RC holes).

The information in this report as it relates to
the Plutus and Petra Mineral Resources for the
Boseto Copper project was compiled by Mr Stefan
Mujdrica and Mr Jason Hosken, who are Members of
The Australasian Institute of Mining and
Metallurgy. Mr Mujdrica and Mr Hosken are full
time employees of Snowden Mining Industry
Consultants. Mr Mujdrica has sufficient
experience which is relevant to the style of
mineralisation and type of deposit under
consideration and to the activity which he is
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. The
information in this report as it relates to the
Zeta Mineral Resources for the Boseto Copper
project was compiled by Mr Ferdinando Camisani,
who is an Honorary Life Fellow of The South
African Institute of Mining and Metallurgy. Mr
Camisani is an Associate of AB Global Mining.
Mr Camisani has sufficient experience which is
relevant to the style of mineralisation and type
of deposit under consideration and to the
activity which he is 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. The information in this report that
relates to Exploration Results is based on
information compiled by Mr Fred Nhiwatiwa who is
a Member of the Australasian Institute of Mining
and Metallurgy. Mr Nhiwatiwa is a full-time
employee of the Company. Mr Nhiwatiwa has
sufficient experience which is relevant to the
style of mineralisation and type of deposit under
consideration and to the activity which he is
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. Mr Mujdrica,
Mr Camisani and Mr Nhiwatiwa consent to the
inclusion in the report of the matters based on
information provided by them and in the form and
context in which it appears.
26
Additional Slides
27
Indicated and Inferred Mineral Resource
- All Mineral resources reported at cut off
grade of 0.6 Cu - Silver grades ignore
resource at Petra where a JORC compliant silver
model is yet to be developed
Indicated Resource Reported at Zeta
Boseto Copper Project PFS Results - July 2008
28
Base Case Assumptions
Boseto Copper Project PFS Results - July 2008