The Botswana government approved an application to amend the existing mining lease to incorporate the Zeta underground.

The company said the approval would allow it to quickly begin underground mining once a $US105 million ($A111.6 million) recapitalisation proposal from Monsant Partners was finalised.

Discovery CEO Bob Fulker said it was “exciting times” for the company.

“This approval will allow the development of our underground mining program to progress and is consistent with the new overall strategic direction of the company to develop our underground mineral resources,” he said.

The proposed Zeta underground, the first of three planned underground mines at the project, will produce 1.5 million tonnes per annum at 1.3% copper.

The company said the access to higher grade mineralisation would boost recoveries and increase production.

Once Discovery receives the Monsanto funds, it will use $65 million to repay debt and $40 million for working capital purposes, including the advancement of the Zeta underground.

The directors are recommending the proposal and will put it to a shareholder vote.

An independent expert will be appointed to prepare a report for shareholders before the vote.

Discovery shares remained at A3c but were heavily traded today.