Discovery Metals Announces Mobilization FOR 35,000m Drill Program at Its Cordero Project
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DISCOVERY METALS ANNOUNCES MOBILIZATION FOR 35,000m
DRILL PROGRAM AT ITS CORDERO PROJECT
September 10, 2019, Toronto, Ontario - Discovery Metals Corp. (TSX-V: DSV) (“Discovery”
or the “Company”) is pleased to announce mobilization for a Phase 1 diamond drilling program
on its newly acquired and 100% -owned Cordero project (“Cordero” or “the Project”) located in
Chihuahua State, Mexico. Drill permits are in place and Discovery will begin its drill p rogram in
the coming days, approximately five weeks ahead of the anticipated commencement date.
Discovery’s plan is to drill approximately 30,000- 35,000m over the next 12 months with the
focus of: (1) delineating and discovering the highest -grade phases and domains of the
mineralized system; and (2) testing new high priority areas.
Taj Singh, President and CEO, states: “In just a few short weeks we have made great strides at
Cordero. We have integrated our teams, progressed well through our review of historic drilling,
planned our first holes, and accelerated the start -up of our drill campaign. We are very excited
to be aggressively exploring one of the world’s largest silver projects against a backdrop of
rising silver prices and we are confident that our high- grade and high-margin approach at
Cordero will add significant value.”
Background of the Cordero Project
Cordero is located on the eastern edge of the Sierra Madre Occidental mountains within the
northern extent of the Central Mexican Silver Belt. The Project is also located in one of Mexico’s
premier porphyry and carbonate replacement deposit districts , and is similar to well- known
nearby bulk -tonnage precious metal operating mines (e.g. Newmont Goldcorp Cor poration’s
Peñasquito Mine) and projects (e.g. Orla Mining Ltd’s Camino Rojo project).
The bulk-tonnage potential of the Cordero deposit was first recognized in 2009 by Levon
Resources Ltd (“Levon”) and the resource area was tested with 132,000m of drilling in 292
holes. The resource estimate for the Project, as currently stated, captures a massive inventory
of silver-zinc-lead-gold, making it one of the largest undeveloped silver deposits in the world and
thus providing exceptional leverage in a rising silver market. Within this extraordinary in -situ
resource, Discovery has identified a compelling opportunity to delineate and expand areas of
higher-grade silver that occur through the deposit.
Below in Table 1 is a sensitivity analysis showing the mineral r esource, with additional
information on grade and tonnage for higher cut -off grades. This table shows that a significant
portion of the resource remains even at significantly higher cut-off grades.
NEWS RELEASE
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Table 1: 2018 Cordero resource summary – Cutoff grade sensitivity1
AgEq1 (g/t)
Cutoff
Tonnage & Grade within Mineral Resources Pit Shell Total
Contained
Ag Mozs
Total
Contained
AgEq1 Moz Class Tonnes
x1000 AgEq1g/t Ag g/t Zn % Pb % Au g/t
15
(used in PEA)
Indicated 990,054 32 13 0.4 0.2 0.04 407.8 1022.0
Inferred 282,217 56 21 0.8 0.3 0.04 187.5 513.5
25
Indicated 467,298 46 19 0.5 0.3 0.06 278.4 685.9
Inferred 182,649 77 28 1.0 0.4 0.05 163.3 450.7
50
Indicated 99,217 95 40 1.0 0.6 0.11 128.4 302.8
Inferred 100,003 112 41 1.5 0.7 0.06 131.1 360.3
Within the Cordero drill database, there are 285 individual intervals with AgEq 2 values above
500 g/t and 1,416 individual intervals with AgEq2 values above 200 g/t. A selection of examples
of high- grade intervals and the longest natural intervals with grades over 200 g/t AgEq 2 at
Cordero are shown in the Table 2 and T able 3 respectively. These two tables illustrate both the
high-grade selective (underground) and high- grade bulk -tonnage (open- pit) potential of the
Project.
Table 2: Cordero project – Selection of historic high-grade intervals
Hole From (m) To (m) Length (m) Ag g/t Zn% Pb% Au g/t AgEq2 (g/t)
C10-66 256 258 2 3,230 11.4 2.3 0.08 3,878
C11-141 472 478 6 993 27.3 14.6 0.29 2,887
C12-251 230 232 2 1,150 7.7 20.4 0.52 2,779
C14-271 470 472 2 1,179 7.3 12.4 0.20 2,311
C10-29 122 126 4 925 4.1 19.9 0.21 2,002
C17-284 466 468 2 134 2.6 2.1 17.95 1,865
C10-39 72 74 2 732 14.0 7.5 0.53 1,738
C10-32 280 286 6 547 11.5 13.9 0.30 1,732
C11-139 72 76 4 846 1.5 16.7 0.71 1,639
C12-236 54 56 2 830 1.6 17.2 0.30 1,581
Table 3: Cordero project – Selection of longest natural intervals > 200 g/t AgEq2
Hole From (m) To (m) Length (m) Ag g/t Zn% Pb% Au g/t AgEq2 g/t
C14-267 216 272 56 68 3.6 1.0 0.14 292
C09-5 132 180 48 193 3.2 3.0 1.31 562
C10-26 224 264 40 167 2.3 2.2 0.47 398
C11-113 320 360 40 61 3.4 1.1 0.06 272
C11-165 428 466 38 56 2.7 2.2 0.11 277
C10-31 176 212 36 317 2.4 5.5 0.85 700
C10-39 44 78 34 92 1.4 1.3 1.50 322
C11-190 588 620 32 41 3.8 0.1 0.02 234
C14-275 112 140 28 180 2.4 1.3 0.09 353
C10-60 246 274 28 37 3.3 0.7 0.02 227
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A summary of the most recent economics of the Project can be found in Section 1.14 of the
2018 Preliminary Economic Analysis (“ PEA”)1. The PEA contemplates a 29- year conventional
open-pit truck-and-shovel operation with a life- of-mine strip ratio of 0.94, with essentially a ll of
the ore being sulphides. Testwork indicates the ore responds well to a standard crushing /
milling / sequential lead and zinc flotation concentration process. Discovery’s goal is to
undertake intensive drilling in advance of updating the resource and PEA. Discovery believes
that a focus on drilling and defining higher -grade areas of the Cordero deposit and subsequent
improved geological modelling and improvements in mine planning, mining methods, process
engineering and logistics, may vastly improve the economics of the P roject by lowering capital
and operating costs.
Table 4 below outlines the economics of the 2018 PEA and , although Discovery intends t o
significantly rescope the Project, it is mainly shown to illustrate the excellent leverage the
Project has to higher silver prices (all metal prices other than silver are kept constant ; the same
as used in the PEA1).
Table 4: 2018 Cordero PEA – Post-tax economic sensitivities to silver prices1
Ag Price (US$/oz) NPV5% (US$M) NPV7.5% (US$M) IRR (%) Cash Costs (US$/oz AgEq1)
$20 $700 $426 16.5 $9.70
$25 $1,118 $754 22.6 $10.65
$30 $1,536 $1,081 28.3 $11.39
$35 $1,953 $1,408 33.8 $11.99
Project update and plans
In the five weeks since acquiring the Project through its acquisition of Levon, Discovery has:
• successfully completed the integration of the technical teams, under the overall supervision
of Gernot Wober, Discovery’s Vice- President of Exploration. Discove ry’s Roman Solis
continues to serve as Country Mana ger, and Dave Greenan, who has been on the Cordero
project since the discovery in 2009, will continue to act as the Cordero Project Exploration
Manager.
• initiated a relogging and review of historical drill core in order to develop a better
understanding of the distribution and controls on mineralization, such that high- grade
mineralization within the relatively sparsely drilled portions of the deposit can be targeted. To
date, the geological team has relogged approximately 30% of the previous Cordero holes.
Discovery’s focus over 2019 and 2020 can be split into two key ar eas: Cordero d eposit and
Property-wide. The current plan calls for approximately 20,000 -25,000m drilling at the Cordero
deposit and 10,000m Property-wide for a total estimated budget of C$7-8M.
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On the Property -wide exploration, Discovery intends to follow up on numerous exploration
targets that have been defined outside of the resource area, and to carry out reconnaissance
programs to define new targets on the remainder of the property. Prior to Levon’s exploration
program for bulk tonnage silver-zinc-lead-gold deposits, exploration focused on:
• Narrow, high-grade underground vein and intrusive contact deposits;
• Bulk tonnage porphyry copper and molybdenum potential;
• Gold skarn and porphyry gold deposits.
Currently there are six regional targets outside of the Cordero deposit that require follow -up
work and drill testing. A conceptual plan view map of the Cordero property and various target
areas is shown in Figure 1.2 of the 2018 PEA1.
Historical mine workings and prospects at Cordero date back to the 17th century. There are
about 40 shallow, vertical shafts with associated open stopes at Cordero, generally developing
outcropping, narrow (1-2 m), high-grade silver, zinc, lead and gold veins as well as high- grade
skarn mineralization. Local artisanal miners report most of the past and recent production was
direct shipping ore, which was hand- sorted, shipped, and processed in the nearby town of
Parral. The La Luz mine was the largest mine and was active in the 1940's. Remnants of a
small six-cell floatation mill built by ASARCO remain at La Luz mine.
ABOUT DISCOVERY METALS
Discovery is exploring one of the world’s largest silver resources at its 100% -owned Cordero
Project in Chihuahua State, Mexico. The 37,000- hectare property covers an entire porphyry
district that hosts the announced resource and numerous exploration targets for bulk tonnage
diatreme-hosted, porphyry-style, and carbonate replacement deposits. In addition, Discovery is
focused on discovering and advancing high- grade silver-zinc-lead deposits in a land package
of approximately 150,000 hectares covering a historic mining district in Coahuila State, Mexico.
The portfolio of three large- scale, drill-ready projects and several earlier -stage prospects, all
with shallow, high-grade mineralization, is situated in a world- class carbonate replacement
deposit belt that stretches from southeast Arizona to central Mexico. The land holdings contain
numerous historical direct -ship ore workings with several kilometers of underground
development, but there was no modern exploration or drill testing on the properties prior to the
work carried out by Discovery.
REFERENCES
1 PEA by M3 Engineering, Resource by IMC, Mar. 1, 2018, Resource commodity prices ($US):
$17.14/oz Ag, $1.11/lb Zn, $0.96/lb Pb, $1,262/oz Au; Mine plan uses a subset of Indicated and
Inferred Resources at 15 g/t AgEq cutoff. AgEq grades do not consider metallurgical or smelting
recoveries.
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2 AgEq calculated using (USD): $16/oz Ag, $1.15/lb Zn, $0.85/lb Pb, $1,250/oz Au. AgEq grades
do not consider metallurgical or smelting recoveries.
TECHNICAL NOTES
Qualified Person: Gernot Wober, P.Geo, V.P . Exploration, Discovery Metals Corp., is the
Company's designated Qualified Person for this news release within the meaning of National
Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and has reviewed
and validated that the information contained in this news release is accurate.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
This news release may include forward-looking statements that are subject to inherent risks and uncertainties. All statements within
this news release, other than statements of historical fact, are to be considered forward looking. Although the Company 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 described in forward- looking
statements. Factors that could cause actual results to differ materially from those described in forward- looking statements include
fluctuations in market prices, including metal prices, continued availability of capital and financing, delays in receipt of required
permits, timing of commencement of drilling, and general economic, market or business conditions. There can be no assurances
that such statements will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties.
We do not assume any obligation to update any forward-looking statements except as required under applicable laws.