Discovery Metals Limited (Discovery Metals or Company) says it has received from Cathay Fortune Investment Limited (the Bidder) a Bidder Statement in respect of their previously announced off-market bid to acquire all the ordinary shares (not currently held by CFC) in Discovery Metals for A$1.70 per share (Offer).

The new bidder is a joint venture between Cathay Fortune Corporation (CFC) and China-Africa Development Fund (CAD Fund).

Discovery Metals expects the Bidder Statement to be released to the market by the Bidder later on Thursday.

Discovery Metals is currently preparing its Target Statement. The Target Statement will set out the view of the Director’s in relation to the Offer and full details and reasons for the Board’s recommendation to reject the Bidder’s Offer.

As previously announced, the Offer is unsolicited and follows an indicative, non-binding, conditional proposal received by Discovery Metals from CFC and CAD Fund on 21 September 2012.

On 11 October 2012, the Directors advised representatives of CFC and CAD Fund that the proposal was inadequate and did not reflect, in the context of a change of control:  the value of the Company’s operations and expansion plans; the potential to increase the resources on the Company’s tenements through further exploration; the strategic value of the Company with an operating project and management team in Botswana; and the scarcity value of the Company.

The board chairman says accordingly, the Board of Directors recommend that shareholders reject the Offer and take no action in relation to the Offer.

Discovery Metals’ Target Statement is expected to be released around 22 November 2012. UBS Investment Bank is acting as financial advisor and GRT Lawyers is acting as legal advisor to Discovery Metals.