19 December 2013

ASX ANNOUNCEMENT

Zeta Pit

ASX/BSE: DML

MARKET CAPITALISATION Shares on Issue 560m

Share Price A$0.053

Market Cap US$29.7m

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

Blumont recapitalisation update

On 19 September 2013, the board of Discovery Metals Limited (Discovery Metals or Company) (ASX: DML) announced a strategic recapitalisation proposal (Original Announcement). As part of that recapitalisation proposal, Singapore Stock Exchange (SGX) listed investor, Blumont Group Limited (SGX: A33) (Blumont), conditionally agreed to subscribe for 100,000 five year convertible bonds with a face value of USD1,000 per bond, to be convertible into fully paid ordinary shares in the capital of Discovery Metals at a price of AUD0.15 per share (Convertible Bonds). The terms of the Convertible Bonds were agreed in a binding term sheet that was executed between Blumont and Discovery Metals (Term Sheet).

The Convertible Bonds were expected to raise USD100 million.

As noted in the Original Announcement, the Term Sheet was conditional on a number of conditions being satisfied by 19 December 2013 (Sunset Date). The conditions precedent have not been satisfied by the Sunset Date, and as a result of this, the Term Sheet has lapsed. The Company has reserved all of its rights against Blumont.

Discovery Metals remains in discussions with Blumont as to an amended recapitalisation proposal and the Company will update the market as soon as further information is available.

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