Discovery Metals has formed a JV exploration program with the Japan Oil Gas and Metals National Corporation for the Dikoloti Nickel Project in north east Botswana, Africa.

The Dikoloti nickel project comprises four prospecting licenses covering an area of 600 square kilometres surrounding the three nickel deposits of BCL Limited in the Selebi-Phikwe region of north east Botswana.

The agreement provides for funding by JOGMEC of USD 3 million for exploration on the Dikoloti prospecting areas.

The deal will provide DML investors with another exploration project with upside, which has not seen much exploration, as well as funding from a major corporation, which are not factored into current market valuation.

Discovery Metals will remain operator of the joint venture during the farm-in exploration period and for any future projects or operating phases. The joint venture will be controlled by a joint operating committee, with representation of both JOGMEC and Discovery Metals.

A number of highly prospective exploration targets have been identified adjacent to the existing Inferred Mineral Resource. JOGMEC has the right to earn-in a joint venture interest of up to 60%. Should the exploration program prove successful, it would be expected that JOGMEC would assign its interest to another Japanese entity for the development and operating phases.

Mr Brad Sampson MD of Discovery Metals said “The agreement with JOGMEC underscores the potential value of the Dikoloti nickel project. Dikoloti was the company’s first project in Botswana and, whilst our main focus has changed to the Boseto Copper Project, Dikoloti remains a very interesting nickel sulphide resource with significant upside potential. We are delighted to work with such a highly credentialed joint venture partner in JOGMEC.”

Discovery Metals has earned an 85% interest in Dikoloti from Xstrata. An Inferred Mineral Resource of 4.1 million tonnes @ 0.7% Ni, 0.5% Cu and 1.2 g/t PGE’s at a cut off of 0.5% Ni for 28,700 tonnes of contained nickel has been reported at Dikoloti.

On completion of the contemplated exploration program for the Dikoloti tenements, the remaining Xstrata interest will convert to a royalty on future production.

The four Dikoloti prospecting licenses were renewed in August 2009 and are subject to the next renewal in mid 2011.

(Sourced from proactiveinvestors.com.au)