Discovery Metals (DML) says it has failed to strike a deal with Cupric Canyon Capital LP over a potential transaction to sell Boseto mine in Botswana to the Barclays Capital supported private equity firm. The Australian company said it has started to re-engage with a number of parties with whom it was in discussions prior to entering into the Exclusivity Period with Cupric.

“DML and Cupric have been unable to agree the terms of a binding Terms Sheet Agreement by 31 January 2015 and accordingly the Exclusivity Period is now at an end,” the Botswana focused company said.

“The expiry of the Exclusivity Period with Cupric allows DML to now fully and openly consider and pursue alternative funding options and transactions,” it added.

Following the expiry of the Exclusivity Period with Cupric, the total of US$5 million in interim funding drawn from Cupric is repayable on or prior to 31 March 2015. DML directors are currently considering alternative funding sources in this regard for the repayment of this
amount.

Discovery Metals said it has already been approached by another interested group that is seeking to finalise a Terms Sheet Agreement with DML over the coming days.

“DML has started to re-engage with a number of parties with whom it was in discussions with prior to entering into the Exclusivity Period with Cupric,” the company revealed.

“This includes the provision of short term working capital funding being made available to DML. These parties remain committed to formalising an agreement with DML. DML understands that a number of these parties have continued to complete their own required due diligence procedures, at their own cost and risk, during the now expired Exclusivity Period.”

The company is bullish it will shortly receive a Terms Sheet offer from alternative sources, which will allow for the settlement of all existing debt facilities, and to provide the required capital to allow the company to expedite the progression of the Zeta underground development and to provide additional working capital.

Discovery also said it remains firmly committed to unlocking value from its extensive Mineral Resources through the commencement of the Zeta underground development. Accordingly, DML continues to consider and pursue options which allow for this project to be funded and progressed in the near term.

“The Company will continue to pursue its current plan of placing the current open-pit operations at Boseto into “care and maintenance” by 30 June 2015 and simultaneously will be actively pursuing the commencement of development of the Zeta underground development.”