2. Operating cash costs and AISC include results from the Hoyle Pond and Borden operating mines, as well as corporate expenditures where applicable.
1. Example of Non-GAAP measure. See the section in this press release entitled, “NON-GAAP
MEASURES” for more information.
2. Operating cash costs and AISC include results from the Hoyle Pond and Borden operating mines, as well as corporate expenditures where applicable.
They do not include operating costs, capital expenditures, or gold ounces sold from Pamour, which is a capital project that continues to ramp up towards
commercial levels of production.
3. Site-level AISC excludes corporate G&A expense, share-based compensation costs and corporate-level sustaining capital expenditures.
DISCOVERY REPORTS 50,552 OUNCES OF
GOLD PRODUCTION, $27.3 MILLION OF
FREE CASH FLOW1 IN Q2 2025
August 12 , 2025 , Toronto, Ontario - Discovery Silver Corp. (TSX: DSV,
OTCQX: DSVSF) (“ Discovery” or the “ Company”) today announced the
Company’s financial and operating results for the second quarter ( “Q2
2025”) and first six months (“YTD 2025”) of 2025. Q2 2025 represents the
first quarter Discovery has reported the results of gold production and
sales following the Company’s acquisition (“Acquisition” or “ Porcupine
Acquisition”) of the Porcupine Complex (“Porcupine” or the “Porcupine
Operations”) in and near Timmins, Ontario on April 15, 2025. The
Company’s full financial statements and management discussion &
analysis are available on SEDAR+ at www.sedarplus.ca and on the
Company’s website at www.discoverysilver.com. All dollar amounts are in
US dollars, unless otherwise noted.
Tony Makuch, Discovery’s CEO, commented: “ Q2 2025 was Discovery’s
first quarter as a Canadian gold produce r. During the quarter, we
integrated systems, strengthened management structures and began
implementing investment programs at Porcupine aimed at improving
existing operations and pursuing growth opportunities. It was a
significant challenge, and I want to thank our team for delivering a
quarter of excellent progress. W e also turned in a solid quarter of
operating and financial performance, producing 50,552 ounces in the 76
days that we owned the assets. Gold sales of 42,550 ounces were below
gold produced with the gold inventory at quarter end to be sold during
Q3 2025. Net cash from operations totaled 67.1 million, while free cash
flow was $27.3 m illion. Adjusted net earnings 1 totaled $28.4 million or
$0.04 per share.
“Key investment programs initiated during Q2 205 included investments
at Dome Mill, mainly in the crushing, grinding and carbon handling
circuits, advancing work at the Dome tailings management area (“TMA”),
continuing to ramp up Pamour, with pre-stripping and production levels
meeting target levels, and commencing investment s at Hoyle Pond and
Borden to optimize and grow the operations . We also began deploying
drills as part of an extensive exploration program targeting numerous
near-mine and district targets at Hoyle Pond, Borden and Pamour, and
supporting the evaluation of high-potential new sources of production,
including the TVZ zone and the resumption of mining at Dome Mine.
“Looking ahead, we are targeting production levels to increase in the final
two quarters of the year. We also plan to ramp up our capital investment
and exploration programs as we move forward with our growth and value
creation plans for Porcupine.”
NEWS RELEASE
TRANSFORMATIONAL QUARTER
Acquired Porcupine Complex on April 1 5th,
establishes Discovery as growing Canadian gold
producer
Finalized $ 575.0 million financing package,
including $475.0M of royalty & equity financing ,
$100.0M senior debt facility
Q2 2025 NET EARNINGS AND EPS
Net earnings of $5.5M ($0.01/share) versus net loss
of $ 5.1M ($0.0 1/share) in Q2 2024; Adjusted net
earnings1 totaled $28.4 million or $0.04 per share
INITIAL GOLD PRODUCTION IN Q2 2025
50,552 produced from April 16 – June 30;
Production included 16,112 oz from Hoyle Pond,
27,286 oz from Borden and 7,154 oz from Pamour
OPERATING CASH COSTS IN LINE WITH
EXPECTATIONS
Operating cash costs1,2 of $48.8M or $1,334/oz sold
ATTRACTIVE MARGINS DRIVE PROFITABILITY AND
CASH FLOW
All-in sustaining costs (“AISC”) 1,2 averaged
$2,123/oz sold versus average realized gold price 1
of $3,337/oz; Site -level AISC 3 averaged $1,872/oz
sold
STRONG CASH FLOW FROM GOLD SALES
Net cash from operati ng activities of $ 67.1M; Free
cash flow1 of $27.3M
SOLID CASH POSITION TO SUPPORT OPERATIONS
AND GROWTH PLANS
Cash at June 30, 2025 , totaled $2 52.5M; with
working capital of $2 25.9 million; Additional
$100.0M of liquidity at June 30, 2025, through
undrawn credit facility
2
SUMMARY OF Q2 2025 PERFORMANCE
Three months ended Six months ended
June 30, June 30, March 31 June 30 June 30,
2025 2024 2025 2025 2025
Revenue $ 142,010 $ - $ - $ 142,010 $ -
Production costs $ 54,919 - - 54,919 -
Earnings before income taxes $ 24,510 (5,138) (6,452) $ 18,058 $ (5,643)
Net earnings $ 5,534 $ (5,138) $ (6,452) $ (918) $ (5,643)
Basic earnings per share $ 0.01 $ (0.01) $ (0.02) $ (0.00) $ (0.01)
Diluted earnings per share $ 0.01 $ (0.01) $ (0.02) $ (0.00) $ (0.01)
Cash flow from operating activities $ 67,081 $ (8,543) $ (6,075) $ 61,005 $ (11,014)
Cash investment on mine development and PPE $ (39,766) $ (2,141) $ (3,767) $ (43,533) $ (5,448)
Three months ended Six months ended
June 30, June 30, March 31 June 30 June 30,
2025 2024 2025 2025 2025
Tonnes milled 508,791 - - 508,791 -
Average Grade (g/t Au) 3.39 - - 3.39 -
Recovery (%) 91.3% - - 91.3% -
Gold produced (oz) 50,552 - - 50,552 -
Gold sold (oz) 42,550 - - 42,550 -
Average realized price ($/oz sold) $ 3,337 $ - $ - $ 3,337 $ -
Operating cash costs per ounce sold ($/oz)(1)(2) $ 1,334 $ - $ - $ 1,334 $ -
AISC per ounce sold ($/oz)(1)(2)(3) $ 2,123 $ - $ - $ 2,123 $ -
Adjusted net earnings(1) $ 28,434 $ (2,107) $ (3,046) $ 25,338 $ (4,078)
Adjusted net earnings per share(1) $ 0.04 $ (0.01) $ (0.01) $ 0.04 $ (0.01)
Free cash flow(1) $ 27,314 $ (10,684) $ (9,842) $ 17,472 $ (16,462)
(1) Example of Non-GAAP measure. See the section in this press release entitled, “NON-GAAP MEASURES” for more information.
(2) Consolidated operating cash costs per ounce sold and AISC per ounce sold include results from the Hoyle Pond and Borden operating mines,
as well as corporate expenditures where applicable. They do not include operating costs, capital expenditures, or gold ounces sold from
Pamour, which is a capital project that continues to ramp up towards commercial levels of production.
(3) YTD 2025 results exclude G&A expense, share -based compensation costs and sustaining capital expenditures and lease expense incurred
prior to the April 15, 2025, the completion date of the Porcupine Acquisition.
Q2 2025
• Revenue in Q2 2025 totaled $142.0 million that resulted from gold sales of 42,550 ounces at an average
realized gold price1 of $3,337 per ounce.
• EBITDA1,2 of $55.2 million compared to a loss before interest, taxes and depreciation and amortization
of $5.1 million and $6.3 million in Q2 2024 and Q1 2025, respectively. The significant improvement in
EBITDA performance resulted from revenue and earnings generated from gold sales following
completion of the Porcupine Acquisition on April 15, 2025.
• Net earnings totaled $5.5 million ($0.01 per basic share) versus a loss of $5.1 million ($0.01 per basic
share) in Q2 2024 and net loss of $6.5 million ($0.02 per basic share) in Q1 2025.
• Adjusted net earnings1 totaled $28.4 million ($0.04 per basic share) versus adjusted net loss of $3.0
million ($0.01 per basic share) in Q2 2024 and adjusted net loss of $3.0 million ($0.01 per basic share)
the previous quarter; The difference between net earnings and adjusted net earnings reflected the
after-tax impact of $16.6 million of acquisition-related costs, mainly for legal, consulting and advisory
services, and other expenses, $ 6.8 million of foreign exchange losses and $2.4 million of transition -
related costs involving the Porcupine Operations.
• Solid operating performance in initial quarter of production at Porcupine (April 1 6, 2025, to June 30,
2025):
3
o Production of 50,552 ounces, comprised of 16,112 ounces at Hoyle Pond, 27,286 ounces
at Borden and 7,154 ounces at Pamour
o Gold poured totaling 46,608 ounces, with gold sales of 42,550 ounces
o Production costs of $54.9 million
o Operating cash costs1 averaging $1,334 per ounce sold
o All-in sustaining costs1 (“AISC”) averaging 2,123 per ounce sold; Site-level AISC averaging
$1,872 per ounce sold (see the Operating Cash Costs and AISC tables in Non -GAAP
Measures section near the end of this press release for more information).
• Cash flows included net cash provided by operating activities of $67.1 million, which compared to net
used by operations activities of $8.5 million and $6.1 million in Q2 2024 and Q1 2025, respectively.
• Free cash flow 1 totaled $27.3 million versus free cash flow of ($10.7) million in Q2 2024 and ($9.8)
million in Q1 2025.
• Capital expenditures1 totaled $44.2 million, with sustaining capital expenditures1 accounting for $16.1
million and growth capital expenditures1 totaling $28.1 million; Sustaining capital expenditures largely
focused on capital development at Hoyle Pond and Borden and construction work to raise and buttress
the No. 6 tailings impoundment area (“TMA”), while the $28.1 million of growth capital expenditures
related to pre-stripping at Pamour, with the remainder largely related to longer -term investments at
the TMA.
CAPITAL EXPENDITURES
$ thousands unless
otherwise states Hoyle Pond Borden Pamour Porcupine1 Cordero Corporate Total
Sustaining $5,743 $9,032 $- $14,775 $- $1,347 $16,122
Growth 1,854 2,665 22,338 26,857 1,196 - 28,053
Total $7,597 $11,697 $22,338 $41,632 $1,196 $1,347 $44,175
1. Capital expenditures incurred at Dome Mill and the TMA are allocated to Porcupine’s mining operations based on their proporti on of mill fee
provided to Dome Mill.
• Cash at June 30, 2025 totaled $252.5 million reflecting approximately $475.0 million of gross proceeds
($468.7 million of net proceeds after share issue costs) from a financing package (the “ Financing
Package”) arranged in conjunction with the Porcupine Acquisition, as well as $67.1 million of net cash
from operating activities generated during Q2 2025 , partially offset by $200 .6 million of cash
consideration paid for the Porcupine Operations at closing, the $44.2 million of capital expenditures
during Q2 2025, as well as the impact of $51.6 million of restricted cash related to letters of credit and
cash collateral for government required financial assurances in relation to closure plans involving the
Porcupine assets.
4
1. The difference between the $39.8 million of Acquisitions of mineral interests, property and equipment
and total capital expenditures of $44.2 million relates to the timing of cash expenditures relative to the
accrual of capital expenditures for accounting purposes.
• Working capital 1 at June 30, 2025, totaled $225.9 million as compared to working capital of $17.0
million at December 31, 202 4. The working capital balance at June 30, 2025, reflected the significant
increase in cash during Q2 2025 as well as higher levels of short-term trade and other receivables and
inventories, offset by higher current liabilities, mainly accounts payable and ac crued liabilities,
reclamation liabilities, deferred revenue, current income tax and employee-related benefits.
YTD 2025
Discovery did not generate revenue or earnings from mine operations in Q1 2025 or YTD 2024.
• Net loss for YTD 2025 totaled $ 0.9 million, or $0.0 0 per basic share , compared to net loss of $5.6
million, or $0.01 per basic share, in YTD 2024.
• Adjusted net earnings1 and adjusted net earnings per basic share1 were $ 25.4 million and $0.0 4,
respectively, which compared to adjusted net loss and adjusted net loss per basic share of $4.5 million
and $0.01, respectively, in YTD 2024. The difference between net earnings and adjusted net earnings
in YTD 2025 mainly reflected the exclusion from adjusted net earnings of the after-tax impact of $20.2
million of business development expenses related to the Porcupine Acquisition, $6.7 million of foreign
exchange losses, as well as $2.4 of one-time transition-related costs.
• EBITDA1,2 for YTD 2025 totaled $48.9 million versus a loss before interest, taxes and depreciation and
amortization of $5.6 million in YTD 2024 . The difference between net earnings and EBITDA mainly
reflected the exclusion from EBITDA of $ 16.4 million of depletion and depreciation expense , $14.4
million of net finance costs, largely due to accretion expense from reclamation and deferred
consideration and interest expense related to royalty agreements entered into with Franco -Nevada
Corp. concurrent with the completion of the Porcupine Acquisition, and $19.0 million of income tax
expense.
• Net cash provided by operating activities in YTD 2025 totaled $6 1.0 million, while free cash flow 1
totaled $17.5 million.
• Total capital expenditures 1 for YTD 2025 totaled $48.1 million, including $ 16.2 million of sustaining
capital expenditures1, $31.1 million of growth capital expenditures1 and $0.8 million related to financial
10.5
67.1
(200.6)
(51.6) (39.8)1 (1.8)
252.5
468.7
0
100
200
300
400
500
600
Change in Cash (March 31, 2025 - June 30, 2025)
$ Millions
5
leases. Sustaining capital expenditures were incurred during Q2 2025 following the completion of the
Porcupine Acquisition. Of growth capital expenditures in YTD 2025, $26.9 million related to Porcupine,
with $4.2 million related to Cordero, largely for land acquisition during Q1 2025.
(1) Example of Non-GAAP measure. See the section of this press release entitled, “NON-GAAP MEASURES” for more information.
(2) Refers to earnings before interest, taxes and depreciation and amortization.
INCOME STATEMENT SUMMARY
$ thousands unless otherwise states Three months ended Six months ended
June 30, June 30, March 31 June 30 June 30,
2025 2024 2025 2025 2025
Revenue $ 142,010 $ - $ - $ 142,010 $ -
Production costs 54,919 - - 54,919 -
Depletion and amortization 16,384 - - 16,384 -
Royalties 1,916 - - 1,916 -
Earnings from mining operations 68,791 - - 68,791 -
Expenses
General and administration 22,877 1,827 5,474 28,351 3,641
Exploration 830 103 25 855 217
Share-based compensation 1,953 692 1,167 3,120 1,346
Earnings (loss) from operations 43,131 (2,622) (6,666) 36,465 (5,204)
Other
Other income (loss) (6,879) (3,012) 189 (6,690) (1,451)
Finance items
Finance income (cost), net (11,742) 496 25 (11,717) 1,012
Earnings (loss) before taxes 24,510 (5,138) (6,452) 18,058 (5,643)
Income taxes expense (recovery) 18,976 - - 18,976 -
Net earnings (loss) $ 5,534 $ (5,138) $ (6,452) $ (918) $ (5,643)
Basic earnings per share $ 0.01 $ (0.01) $ (0.02) $ (0.00) $ (0.01)
Diluted earnings per share $ 0.01 $ (0.01) $ (0.02) $ (0.00) $ (0.01)
Weighted average number of common
shares outstanding (in 000’s)
Basic 735,616 397,570 401,122 569,293 396,771
Diluted 762,923 397,570 411,049 596,600 396,771
PORCUPINE OPERATIONS REVIEW
Discovery’s Porcupine Operations cover approximately 1,400 km2 in and near Timmins, Ontario. Porcupine
consists of the Hoyle Pond, Pamour and Hollinger mine properties, the Dome mine property and milling
facility, and numerous near-mine and regional exploration targets. The Complex also includes the Borden
mine property and large land position near Chapleau, Ontario. Current operations include the Hoyle Pond
and Borden underground mines, with the Pamour open -pit project currently ramping up towards
commercial levels of production. All mineralization from the operating mines, and Pamour, is processed
at Dome, including mineralization from Borden, which is trucked 190 km to the Dome Mill.
DOME MILL
The current Dome Mill was commissioned in 1988, with expansion projects being completed in 1995 and
2004. The mill consists of three -stage crushing, two parallel rod mill and ball mill circuits, a single leach
6
and Carbon-in-Pulp circuit, followed by a carbon strip and electrowinning circuit. The Mill’s nameplate
operating capacity is approximately 12,000 tonnes per day (approximately 4.3 million tonnes per annum).
In recent years, the mill has operated at rates well below capacity levels, largely reflecting increased
maintenance requirements which contributed to reduced availability and utilization rates, as well as
production shortfalls from mining operations. Through investment programs launched following the
closing of the Porcupine Acquisition, the Company is targeting a return to full capacity operations by 2028
or sooner.
Three months ended
Dome Mill June 30, 2025
Total material milled (t) 508,791
Average Grade (g/t Au) 3.39
Recovery (%) 91.3%
Gold produced (oz) 50,552
Gold poured (oz) 46,608
Gold sold (oz) 42,550
Milling operating costs ($ Millions) $ 12,861
Operating costs per tonne processed ($/tonne) $ 25.4
For the period April 16, 2025, to June 30, 2025, a total of 508,791 tonnes were processed at Dome Mill at
an average grade of 3.39 g/t, with recovery rates averaging 91.3%. A total of 50,552 ounces of gold were
produced over this period, with total gold poured of 46,608 ounces. Availability rates at the Dome Mill
during Q2 2025 were impacted by a two-week maintenance shutdown, previously scheduled by the prior
owner, for the purpose of replacing equipment in the thickening tank. The Company used the occasion of
the shutdown to advance multiple other projects, primarily in the crushing, grinding and carbon handling
circuits. Based on operating days during Q2 2025, mill throughput averaged approximately 8,500 tonnes
per day. Mill operating costs during Q2 2025 totaled $12.9 million for an average of $25.4 per tonne
processed. These costs are allocated to the mine operations based on a proportion of total tonnes
processed basis.
For the purpose of segment reporting, capital expenditures1 for Dome Mill and the TMA are allocated to
Hoyle Pond, Borden and Pamour based on a proportion of total tonnes processed basis. Capital
expenditures allocated during Q2 2025 totaled $16.5 million. The majority of these capital expenditures
related to the TMA, with work during the quarter largely focused on raising and buttressing the existing
dam walls and constructing seepage collection systems.
HOYLE POND
Hoyle Pond Mine is an underground gold mining operation located within the Archean Abitibi Greenstone
Belt approximately 20 km northeast of downtown Timmins, Ontario. Underground infrastructure includes
two decline ramps, an 815-metre four-compartment shaft (“#1 Shaft”) and a 1,350 metre winze (the “#2
Winze”) with the deepest station being on the 1600 -metre level. Underground production is trucked to
the #2 Winze and is then hoisted to the 720 level, where it is sent by tram to the loading pocket of the #1
Shaft. Mineralization is then trucked approximately 17 km to Dome Mill. The mine began operations in
1985 and, since that time, has produced over 4.0 million ounces of gold.
7
Three months ended
Hoyle Pond June 30, 2025
Total material milled (t) 97,817
Average Grade (g/t Au) 5.50
Gold Contained (oz) 17,297
Recovery (%) 93.1%
Gold produced (oz) 16,112
Gold sold (oz) 14,804
Development metres – operating 526
Development metres – capital 180
Production costs $ 20,870
Operating cash costs per ounce sold1 $ 1,566
AISC per ounce sold1 $ 2,036
Total capital expenditures1 (in thousands) $ 7,597
(1) Example of Non-GAAP measure. See the section in this press release entitled, “NON-GAAP MEASURES” for more information.
Gold production at Hoyle Pond from April 16, 2025, to June 30, 2025, totaled 16,112 ounces, which
resulted from 97,817 tonnes being processed at an average grade of 5.50 g/t and average recoveries of
93.1%. Production during the quarter was primarily from the Lower S Zone on the 1965 and 1985 levels.
A total of 45,160 tonnes were mined from April 16, 2025, to the end of Q2 2025, for an average mining
rate of 594 tonnes per day. During Q2 2025, 52,657 tonnes of stockpiled material from Hoyle Pond were
milled, which resulted in higher than planned tonnes milled for the quarter and a lower than expected
average grade. The Company does not anticipate processing significant amounts of low -grade stockpiles
from Hoyle Pond during the second half of 2025.
Operating development metres during Q2 2025 were mainly focused on the main production areas in the
Lower S Zone, as well as in areas of the Upper Mine, where production from narrow, high-grade veins is
expected to commence during the second half of 2025. Capital development activities during the quarter
mainly involved continuing to extend the main ramp to depth in the Lower S Zone.
Production costs, including mining and processing costs, in Q2 2025 totaled $20.9 million, with operating
cash costs averaging $1,566 per ounce sold1. AISC1 for the quarter averaged $2,036 per ounce sold, which
included $5.7 million of sustaining capital expenditures1, mainly related to capital development activities
as well as Hoyle Pond’s allocation of capital expenditures1 related to the TMA.
BORDEN
Borden Mine is a ramp access underground mine located on a 1,000 km 2 land position approximately 20
km east of Chapleau, Ontario. The deposit mine is located within the lower limb of an antiform in the
Borden Lake Greenstone Belt. Production at Borden commenced in 2019 and, to date, approximately
600,000 ounces have been produced. Mining is carried out at Borden using the longhole stoping method
with unconsolidated as well as cemented rock fill. Material is trucked from underground to surface and
then from the mine site approximately 190 km to the Dome Mill.
8
Three months ended
Borden June 30, 2025
Total material milled (t) 166,609
Average Grade (g/t Au) 5.62
Gold Contained (oz) 30,118
Recovery (%) 90.6%
Gold produced (oz) 27,286
Gold sold (oz) 21,792
Development metres – operating 449
Development metres – capital 204
Production costs $ 22,038
Operating cash costs per ounce sold1 $ 1,175
AISC per ounce sold1 $ 1,621
Total capital expenditures1 (in thousands) $ 11,697
(1) Example of Non-GAAP measure. See the section in this press release entitled, “NON-GAAP MEASURES” for more information.
Gold production at Borden from April 16, 2025, to June 30, 2025, totaled 27,286 ounces, which resulted
from 166,609 tonnes being processed at an average grade of 5.62 g/t and average recoveries of 90.6%.
Production during Q2 2025 was mainly in the West and Central zones. A total of 123,743 tonnes of
mineralization were mined from April 16, 2025, to the end of Q2 2025, for an average mining rate of 1,628
tonnes per day. Mining rates are expected to increase in the second half of 2025 as investments in new
trucks and other equipment results in improved availability and utilization rates.
Operating development during the quarter was mainly focused on the West, Central and Upper East Zones,
with capital development metres primarily related to the continued advancement of the main ramp and
the exploration drift on the 575 level.
Production costs in Q2 2025 totaled $22.0 million, with operating cash costs per ounce1 averaging $1,175
per ounce sold. AISC 1 averaged $1,621 per ounce sold for the quarter. Sustaining capital expenditures 1
totaled $9.0 million, with capital development accounting for $5.7 million and the remainder related to
allocated TMA expenditures, as well as investments in infrastructure, including an upgrade of the slurry
plant, and new equipment to optimize the mining fleet.
PAMOUR
Pamour mine, located approximately 20 km from downtown Timmins, first commenced underground
mining in 1911 and was operated until 1996. Open -pit mining operations were initiated in 2006 and
ceased in 2011. The project to re -develop and expand the Pamour open pit, and resume operations,
commenced in 2023, with initial production achieved early in 2025 and project contin uing to ramp up
towards commercial production levels.