23 December 2013

ASX ANNOUNCEMENT

Zeta Pit

ASX/BSE: DML

MARKET CAPITALISATION Shares on Issue 560m

Share Price A$0.039

Market Cap US$21.84m

Cash in bank (9/12) ~US$14m

Debt US$153.9m

ABN 29 104 924 423

CONTACTS Bob Fulker

Chief Executive Officer

Phone: +61 (7) 3218 0222

Paul Frederiks

Chief Financial Officer

Phone: +61 (7) 3218 0222

WEBSITE

discoverymetals.com

BOARD OF DIRECTORS

Chairman

Jeremy Read

Non-Executive Directors

Ribson Gabonowe

Russell Luxford

Company Secretary

Paul Frederiks

REGISTERED OFFICE Level 23, 333 Ann Street Brisbane QLD 4000, Australia Phone: +61 (7) 3218 0222

Fax: +61 (7) 3218 0233 [email protected]

BOTSWANA COUNTRY OFFICE Plot 21314 Sebele Station Road Phakalane, Gaborone, Botswana

Phone: +267 318 0751

Fax: +267 318 0752

Discovery Metals Limited

Update on potential change of control process

On 19 December 2013, the board of Discovery Metals Limited (Discovery Metals or the Company) (ASX: DML) announced the lapsing of the term sheet that was executed between the Company and Singapore Stock Exchange (SGX) listed investor, Blumont Group Limited (SGX: A33) (Blumont), in relation to a strategic recapitalisation proposal (the Term Sheet Announcement).

Since that time, and with the support of the Company's lenders, Discovery Metals has recommenced discussions with various parties that have approached the Company in relation to a proposed transaction. Those parties have been provided with access to the Company's data room so that they may commence, and in some cases recommence, due diligence.

In addition, and as noted in the Term Sheet Announcement, the Company remains in discussions with Blumont as to a replacement term sheet to that which lapsed on

19 December 2013, for an amended recapitalisation proposal. Blumont has made comment on the status of the transaction in its announcement released to the Singapore Stock Exchange (SGX: A33) on 20 December 2013 (attached).

The Board will update the market of material developments in due course. There can be no assurance that a transaction will occur.

Dump truck transporting a load of ore

Workers at the Boseto Copper Project

Forward looking statements

This release includes 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 Discovery Metals expects, are forward-looking statements. Although Discovery Metals 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. 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 such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in forward-looking statements.

Discovery Metals Background

Discovery Metals is an ASX/BSE listed copper exploration and production company focused on the emerging Kalahari Copperbelt in north-west Botswana. The Company is a copper producer at its 100% owned Boseto Copper Project.
The Kalahari Copperbelt sediment-hosted mineralisation of the Boseto Copper Project is similar in style to the well-known and large deposits of the Central African Copperbelt of Zambia and the Democratic Republic of the Congo.
Discovery Metals has prospecting licences covering approximately 26,150 km2 in Botswana.

Further information on the Company including Mineral Resources and Ore Reserves is available on our website: www.discoverymetals.com

For further information on this release and Discovery Metals Limited, please contact:

Bob Fulker Interim CEO Ph: +61 7 3218 0222 [email protected]

Concentrate shed

Paul Frederiks CFO and Company Secretary Ph: +61 7 3218 0222

[email protected]

Bagged concentrate

BLUMONT GROUP LTD.

(Company Registration No.: 199302554G) (Incorporated in the Republic of Singapore)

UPDATE ON INVESTMENT IN DISCOVERY METALS LIMITED

Blumont Group Ltd. (博诺有限公司) (the "Company") refers to its announcement dated 19 September
2013 on its proposed subscription for US$100 million in convertible bonds to be issued by Discovery Metals Limited ("DML"). Terms defined therein shall bear the same meaning in this announcement unless otherwise defined here.
The Company notes that DML has announced on 19 December 2013 that the Conditions Precedent have not been satisfied and the Term Sheet has lapsed. DML has also issued a letter to the Company dated 20
December 2013 to terminate the Term Sheet.
The Company will continue to engage in ongoing discussions with DML for a mutually beneficial outcome on the investment in DML.
Further updates on the matter will be provided as and when appropriate. In the meantime, shareholders of the Company are advised to refrain from taking any action in relation to their shares of the Company which may be prejudicial to their interests, and to exercise caution when dealing in the shares of the Company.

BY ORDER OF THE BOARD BLUMONT GROUP LTD.

James Hong Gee Ho
Director
20 December 2013

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