Dikoloti Nickel Metallurgical Test Results

AIM RELEASE 31 August 2007 Bio-Ox metallurgical test enters final phase for Dikoloti Nickel Project in Botswana Metallurgical tests based on oxidation heap leaching of samples of nickel-copper sulphide mineralisation from Discovery Metals Limited (AIM:DME) Dikoloti Nickel Project, in northeast Botswana, are progressing to their final phase of testing following positive initial tests. Bio oxidation (Bio-Ox) processing has shown the most promising results to date of a range of processing techniques being trialled as part of an ongoing scoping study of Dikoloti. The project work aims to define a cost effective method for processing Dikoloti's nickel mineralisation. Metallurgical Test Work Highlights * Initial tests on the Dikoloti nickel sulphide mineralisation indicated that high nickel extractions could potentially be achieved using a bacterial leaching process; * A column test, simulating the heap-leach bacterial process, has achieved 50% nickel extraction to date with the nickel extraction now accelerating rapidly, suggesting that a final high nickel extraction value could be obtained at the conclusion of the test. Discovery Metals' Managing Director, Mr Jeremy Read, said that due to its fine grained nature, the Dikoloti nickel mineralisation presented some challenges for conventional processing and as a consequence, alternative methods of processing the nickel mineralisation are being investigated. "The first bacterial process test we undertook on the Dikoloti nickel mineralisation was a stirred reactor test which showed that it should be possible to achieve high nickel extractions using a bio-oxidation process, as the reactor test achieved 97% nickel extraction," Mr Read said. "Following the successful reactor test, we moved to a 2m column test which simulates the actual processes in a heap leach environment," he said. "The column test has highlighted several issues relating to the release of iron into solution which has been slowing the nickel extraction. In recent days, however, progress has been made on controlling the iron and the rate of nickel extraction is now increasing rapidly. We are optimistic of a successful final outcome to the column test." Dikoloti Bio-Oxidation Metallurgical Test Previous testing by Discovery Metals on the Dikoloti nickel mineralisation, indicated that a fine grind would be required in order to liberate the nickel at acceptable recoveries using traditional flotation processing techniques. Consequently, Discovery Metals has been evaluating alternative methods for processing the nickel mineralisation which would allow Dikoloti to be developed as a standalone operation. The alternative processing technique which has shown most promise to date is an oxidation heap leach approach using bacteria to break down the sulphide mineralisation and release the nickel into solution (Bio-Ox Processing). Preliminary stirred reactor testing demonstrated that the Dikoloti ore is readily oxidised by bacterially regenerated ferric sulphate chemistry, and that high nickel extractions (97%) can be achieved. Following this successful initial test, a 2m column test was initiated in order to simulate the processes which would occur in a heap leach environment. The early column testing indicated that due to large amounts of pyrrhotite in the Dikoloti mineralisation, acid consumption was high and breakdown of the pyrrhotite released a significant amount of iron into solution. The release of the iron affected the ability of the bacteria to break down the sulphides and release the nickel. As a result of iron high concentrations in the column, nickel extraction in the first 40 days of the test was low. During the next 49 days of the test, a range of techniques was trialled in order to control the iron release into the column such that the bacteria would not be seriously affected. As a result of these techniques nickel extraction has improved markedly from day 99. Nickel extraction now stands at approximately 50% and is increasing steadily (Figure One). The Bio-Ox test has now entered its final phase with this testing expected to take another two months. Once the results of this final test phase are available a decision on how to further progress the Dikoloti Nickel Project will be made. The information in this report that relates to Exploration Results is based on information compiled by Mr. Jeremy Read who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Read is a full-time employee of the Company. Mr. Read 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. Read consents to the inclusion in the report of the matters based on information provided by him and in the form and context in which it appears. NOTE: For further information contact Jeremy Read Managing Director Tel: +617 3218 0202 Mobile: 0409 484322 Email: jeremy@discoverymetals.com.au Jamie Wright RFC Corporate Finance Ltd (Nomad) Tel: +618 9480 2508 Email: Jamie.Wright@rfc.com.au Richard Hail Fox-Davies Capital Ltd (AIM Broker) Telephone: +44(0) 20 7936 5200 Email: Richard.Hail@fdcap.com Further information on the Company is available on its website: www.discoverymetals.com.au ---END OF MESSAGE---