PERTH (miningweekly.com) – While a re-evaluation of ASX-listed Discovery Metals’ (DML’s) Zeta underground copper project, in Botswana, has increased the project’s cash cost, the miner has maintained that the project remained economically robust.

A 2012 definitive feasibility study (DFS) found that the project would require a capital investment of $26.8-million to first ore production, and would operate at a C1 cash cost of $1.82/lb.

Under that study, the project was estimated to have a net present value (NPV) of $131-million, and an internal rate of return (IRR) of 42%.

However, a review of the DFS had estimated that the project would have a NPV of $97-million and an IRR of 45%, while cash costs were estimated at $2.12/lb.

Despite the higher cash costs, the total capital expenditure to first stope ore production had decreased to only $5.9-million.

The 2012 DFS was based on a 1.5-million-tonne-a-year operation, with the Zeta mine expected to deliver 18 000 t/y of copper and 800 000 oz/y of silver, over an 11-year mine life.

The revised DFS has slightly downgraded production to about 16 600 t/y of copper and 720 000 oz/y silver, over an 11-year mine life.

“The Zeta underground DFS establishes the technical and economic viability of the Zeta underground mine. Subsequent revisions to the design and the cost estimates reaffirm the development plan concept,” said DML CEO Bob Fulker.

He noted that DML intended for the Zeta underground mine to be a model for more extensive underground mining developments at the Boseto copper project, creating value from the significant mineral resource at the Boseto project.

“The Zeta underground mine has been a key strategic component of the Boseto development plan since inception in August 2010. This was reaffirmed during our life-of-mine planning that was completed in early 2014,” Fulker said.

“The future of the Boseto operation lies in the development of underground mining. We envisage having a minimum of three distinct mines with potentially five declines within the Boseto mineral district over the next decade, of which the Zeta underground will be the first.”

Fulker said that the mines would have the potential to bring copper production to a sustainable 30 000 t/y for a 15-year mine life, or more.

The revision of the original DFS included changes to the sequence of the mine development, deepening of the Zeta openpit mine, developing portals for underground access from within the established openpit mine, and accessing upper production levels directly from the openpit area.