Discovery Reports Measured & Indicated Resource of 910 Moz AgEq and Inferred Resource of 140Moz AgEq for Cordero
Discovery Reports Measured & Indicated Resource of 910 Moz AgEq and
Inferred Resource of 140Moz AgEq for Cordero
October 20, 2021 , Toronto, Ontario - Discovery Silver Corp. (TSX-V: DSV, OTCQX: DSVSF)
(“Discovery” or the “Company”) is pleased to announce an updated Mineral Resource Estimate
(“Resource”) on its flagship Cordero silver project (“Cordero” or “the Project”) located in Chihuahua State,
Mexico. The Resource is pit-constrained with an estimated waste-to-ore ratio of 1.1 and is supported by
224,000 m of drilling in 517 drill holes and reinterpreted structural and geological models of the deposit.
87% of the contained metal is in the Measured and Indicated category . The Resource will be used to
support an updated PEA scheduled for completion later this quarter. The size of the Resource positions
Cordero as one of the largest development-stage silver projects globally. Highlights include:
SULPHIDE RESOURCE (assumed to be processed via mill/flotation)
• Measured & Indicated Resource of 837 Moz AgEq1 at an average grade of 48 g/t AgEq1 (541 Mt
grading 20 g/t Ag, 0.06 g/t Au, 0.29% Pb and 0.51% Zn)
• Inferred Resource of 119 Moz AgEq1 at an average grade of 34 g/t AgEq1 (108 Mt grading 14 g/t
Ag, 0.03 g/t Au, 0.19% Pb and 0.38% Zn)
• High-grade subset – at a $25/t NSR cut-off a Measured & Indicated Resource of 509 Moz AgEq1 at
an average grade of 101 g/t AgEq1 (42 g/t Ag, 0.11 g/t Au, 0.64% Pb and 1.04% Zn)
OXIDE/TRANSITION RESOURCE (assumed to be processed by heap leaching)
• Measured & Indicated resource of 74 Moz AgEq 1 at an average grade of 23 g/t AgEq 1 (98 Mt
grading 19 g/t Ag and 0.05 g/t Au)
• Inferred Resource of 22 Moz AgEq1 at an average grade of 20 g/t AgEq1 (35Mt grading 16 g/t Ag
and 0.04 g/t Au)
• High-grade subset – at a $15/t NSR cut-off, a Measured & Indicated Resource of 26 Moz AgEq1 at
an average grade of 60 g/t AgEq1 (52 g/t Ag and 0.09 g/t Au)
Taj Singh, President and CEO, states: “This resource estimate represents a huge step forward in
advancing Cordero for two key reasons . First, close to 90% of the contained metal is in the Measured
and Indicated category. This achievement is reflective of the tight drill spacing supporting the resource
along with the continuity of mineralization within each estimation domain. Second, the resource
demonstrates the large volume of higher-grade mineralization within the deposit. This, along with the low
strip ratio, excellent metallurgy and adjacent infrastructure, provide a strong platform as we pursue our
target of outlining an average production rate of at least 15 Moz of AgEq per year for a minimum of 15
years with cash costs in the lowest half of the industry cost curve in our PEA later this quarter. Finally,
we would also like to acknowledge the excellent work of our Mexican team in managing our sizeable drill
program to deliver this very large and technically-robust resource.”
NEWS RELEASE
SULPHIDE RESOURCE:
Sulphide mineralization is categorized as all mineralization that sits beneath the oxide/transition boundary
and is assumed to be processed via standard flotation processing. Sulphide mineralization extends to
depths of more than 800 m below surface. The estimates in the below table sit within a pit shell that
extends to a maximum depth of approximately 600 m.
The Sulphide Resource as outlined in the table below assumed a $7.25/t Net Smelter Return (“NSR”)
cut-off (see Resource Estimate Summary section below).
NSR $/t
cut-off Class
Tonnes
Grade Contained Metal
Ag Au Pb Zn AgEq Ag Au Pb Zn AgEq
(Mt) (g/t) (g/t) (%) (%) (g/t) (Moz) (koz) (Mlb) (Mlb) (Moz)
$7.25/t
Measured 128 22 0.08 0.31 0.52 52 89 328 881 1,470 212
Indicated 413 19 0.05 0.28 0.51 47 255 707 2,543 4,663 625
M&I 541 20 0.06 0.29 0.51 48 344 1,035 3,424 6,132 837
Inferred 108 14 0.03 0.19 0.38 34 49 99 451 909 119
1. Please refer to the Supporting Technical Disclosure section for cautionary statements and underlying assumptions for the Resource.
Sulphide Resource Estimate – NSR Cut-off Sensitivity
A significant portion of the Sulphide Resource persists at higher NSR cut-offs as highlighted in the graph
below. At an NSR cut-off $25/oz, the Measured & Indicated Resource is 509 Moz AgEq 1 at an average
grade of 101 g/t AgEq1 representing over 60% of the total Measured and Indicated Sulphide Resource.
Note – NSR cut-off of $7.25/t is the reporting cut-off for Sulphide mineralization
0
20
40
60
80
100
120
0
200
400
600
800
1,000
1,200
$7.25 $10 $15 $20 $25 $30 $35
AgEq (g/t)
AgEq (Moz)
NSR cut-off ($/t)
M&I Inferred AgEq grade
OXIDE/TRANSITION RESOURCE:
Oxide/transition mineralization is categorised as all mineralization that is at or close to surface that is
weathered (oxide) or partially weathered (transition). O xide/transition mineralization is assumed to be
processed via heap leaching. Lead and zinc are not incorporated in the Oxide/Transition Resource given
these metals are not recoverable through heap leaching. The depth of the oxide/transition zone varies
across the deposit from approximately 20 m in the Pozo de Plata zone to depths of up to 100 m in certain
areas in the South Corridor and in the far north-east of the deposit.
The Oxide/Transition Resource as outlined in the table below assumed a $4.78/t NSR cut-off (see
Resource Estimate Summary section below).
NSR $/t cut-
off Class
Tonnes
Grade Contained Metal
% Oxide / %
Trans Ag Au AgEq Ag Au AgEq
(Mt) (g/t) (g/t) (g/t) (Moz) (koz) (Moz)
$4.78/t
Measured 23 20 0.06 25 15 43 19 92% / 8%
Indicated 75 19 0.05 23 45 125 56 87% / 13%
M&I 98 19 0.05 23 60 168 74 88% / 12%
Inferred 35 16 0.04 20 18 44 22 63% / 37%
1. Please refer to the Supporting Technical Disclosure section for cautionary statements and underlying assumptions for the Resource
Oxide/Transition Resource Estimate – NSR Cut-off Sensitivity
A graph showing sensitivities to the NSR cut-off is also provided below. At a $15 NSR cut-off the
Oxide/Transition Measured & Indicated Resource is 26 Moz AgEq1 averaging 60 g/t AgEq1 highlighting
the excellent potential to generate meaningful cash flow via heap leaching in the early years of the mine
life.
Note – NSR cut-off of $4.84/t is the reporting cut-off for Oxide/Transition mineralization
0
20
40
60
80
100
0
20
40
60
80
100
$4.84 $5 $10 $15 $20
AgEq (g/t)
AgEq (Moz)
NSR cut-off ($/t)
M&I Inferred AgEq grade
RESOURCE SUMMARY:
Resource estimation:
• The Resource was compiled by Rock Ridge Consulting Resource Geologists. Mo Srivastava of Red
Dot 3D was retained to complete an independent third-party review of the Resource estimation
methodology.
• Supporting drill dataset consists of 224,000 m of drilling (517 drill holes); of this drilling 92,000 m of
drilling (225 drill holes) was completed by the Company.
• The Resource incorporates geological and structural constraints and is an in-pit resource containing
a total of 782 Mt of Mineral Resource and 893 Mt of waste.
Net Smelter Return (NSR) cut-off:
• NSR is defined as the net revenue from metal sales (taking in to account metallurgical recoveries and
payabilities) less treatment costs and refining charges.
• Sulphide mineral resources are reported at a $7.25/t NSR cut-off based on the estimated processing
and G&A cost for sulphide mineralization.
• Oxide/transition mineral resources are reported at a $4.78/t NSR cut -off based on the estimated
processing and G&A cost for oxide/transition mineralization.
Pit constraint & NSR calculation assumptions:
• Key assumptions are outlined directly below (the full list of assumptions can be found in the
Appendix):
o Commodity prices: Ag - $24.00/oz, Au - $1,800/oz, Pb - $1.10/lb, Zn - $1.20/lb.
o Metallurgical recoveries: sourced from the Company’s 2021 test program - sulphides were
based on locked cycle test work and oxides/transition was based on coarse bottle roll test work.
o Operating costs:
Base mining costs of $1.54/t for ore and $1.64/t for waste (with incremental costs of $0.024/t
per 10 m bench below the 1550 elevation) were developed by AGP Mining Consultants Inc.
Processing costs of $6.39/t for mill/flotation and $3.92/t for heap leaching and G&A costs of
$0.86/t were developed by Ausenco Engineering Canada Inc.
o Pit slopes: pit slope assumptions were based on a pit slope assessment completed by Knight
Piésold and Co. (USA).
• Commodity price assumptions were guided by the NI 43-101 requirement for the Resource to have
‘reasonable prospects’ of economic extraction. The Company plans to use a more conservative price
deck for the PEA.
Growth Opportunities:
• Bulk-tonnage targets: follow up drilling of historic holes that returned encouraging intercepts in the far
north-east of the deposit within Domain 6 (see Estimation Domains below).
• High-grade vein targets: future drilling to test extensions along strike and at depth at Todos Santos
and along strike to the north-east of the Josefina vein trend.
SUPPORTING TECHNICAL DISCLOSURE:
• Mineral resources that are not mineral reserves do not have demonstrated economic viability.
• AgEq for the Sulphide Resource is calculated as Ag + (Au x 16.07) + (Pb x 32.55) + (Zn x 35.10);
these factors are based on commodity prices of Ag - $24.00/oz, Au - $1,800/oz, Pb - $1.10/lb, Zn -
$1.20/lb and assumed recoveries of Ag – 84%, Au – 18%, Pb – 87% and Zn – 88%.
• AgEq for the O xide/Transition Resource is calculated as Ag + (Au x 87.5); this factor is based on
commodity prices of Ag - $24.00/oz and Au - $1,800/oz and assumed recoveries of Ag – 60% and
Au – 70%.
• The Resource is constrained by a pit optimisation; supporting parameters for this pit constraint are
provided in the Pit Constraint Parameters section in the Appendix below.
• Individual metals are reported at 100% of in-situ grade.
• Sensitivity cut-offs reported are a subset of the in-pit Resource.
• The effective date of the Resource is October 20, 2021, and is based on drilling through July 2021.
• All figures are in US dollars unless otherwise noted.
• There are no known legal, political, environmental or other risks that could materially affect the
potential development of the Resource.
• A full technical report will be prepared in accordance with NI 43-101 and will be filed on SEDAR
within 45 days of this press release.
APPENDIX:
An appendix with the following supporting information can be found at the end of the release.
• Resource Estimation Methodology
• Estimation Domains
• Variability & Capping
• Pit Constraint Parameters
• Long Sections / Cross Sections
• Resource NSR Cut-off Tables
About Discovery
Discovery’s flagship project is its 100% -owned Cordero project, one of the few silver projects globally
that offers margin, size and scaleability. Cordero is located close to infrastructure in a prolific mining belt
in Chihuahua State, Mexico, and is supported by an industry leading balance sheet with over C$75 million
available for aggressive exploration, resource expansion and future development. Discovery was a
recipient of the 2020 TSX Venture 50 award and the 2021 OTCQX Best 50 award.
On Behalf of the Board of Directors,
Taj Singh, M.Eng, P.Eng, CPA,
President, Chief Executive Officer and Director
For further information contact:
Forbes Gemmell, CFA
VP Corporate Development & Investor Relations
Phone: 416-613-9410
Email: [email protected]
Website: www.discoverysilver.com
Qualified Person
The scientific and technical content of this press release was reviewed and approved by R. Mohan
Srivastava who is a "Qualified Person" as defined by National Instrument 43- 101 - Standards of
Disclosure for Mineral Projects ("NI 43-101"). Mr. Srivastava is a consultant to Red Dot 3D, a geological
consulting company specializing in mineral resource estimation, and is considered to be “independent”
of Discovery for purposes of section 1.5 of NI 43-101.
FORWARD-LOOKING STATEMENTS:
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.
This news release is not for distribution to United States newswire services or for dissemination in the United States.
This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful, including any of the securities in the United States of America. The securities
have not been and will not be registered under the United States Securities Act of 1933, as amended (the “1933 Act”) or any s tate securities
laws and may not be offered or sold within the United States or to, or for account or benefit of, U.S. Persons (as defined in Regulation S under
the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is
available.
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 Discovery 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, and general economic, market or business conditions. There can be no assurances that s uch statements
will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties. Discovery does not assume any
obligation to update any forward-looking statements except as required under applicable laws.
APPENDIX
RESOURCE ESTIMATION METHODOLOGY:
Resource database: T he resource database consists of a total of 224,148 m of sampling in 517 drill
holes. Of the total holes in the database 221,839m of sampling from 478 holes are included in the
Resource. A total of 91,713 m (225 drill holes) was completed by the Company with the remainder drilled
historically between 2009 and 2017. Lithologic types logged in 195,553 m of drill core were used to
support an updated geological model of the deposit.
Compositing: The Cordero drill core was predominantly sampled at an interval of 2m or less . Assay
records were assigned a domain code and then composited to approximately 2m interval s. The
composite interval was varied where required to avoid excessively short composites from forming at
domain boundaries or at the ends of holes.
Estimation domains: Six estimation domains were created, bounded by major faults. Within each of
these six domains , there are two sub-domains; a high-grade sub-domain and a medium to low -grade
stockwork domain. An additional sub-domain representing a mostly barren, glomerophyric dyke was also
modeled. Hard boundaries for the block model were then applied to these thirteen estimation sub-
domains. A graphic representation of the estimation domains is provided in the plan map below.
Capping: The presence of high-grade outlier values was investigated, as these low probability values
could adversely influence the estimate. In all estimation domains and for all elements, the locations of
the high-grade outliers were not concentrated in a given area, but rather disseminated throughout each
domain. Appropriate capping limits were selected by studying coefficient of variation plots, probability
plots and decile plots. The capping applied to the composite dataset resulted in a reduction in total silver
content of 1.6% and a reduction in total metal content (A g-Au-Pb-Zn) of 1.8%. Additional geostatistics
summarizing variability and capping for each sub-domain is provided in the table below.
Variography & interpolation: Experimental pairwise relative semi -variograms were calculated and
modeled for each metal in each mineralized domain. Spherical two structure models were fitted to all
experimental semi-variograms. All the domains had sufficient samples to create acceptable experimental
semi-variograms for each metal. Strong anisotropy was observed for the most part and thus directional
variogram models were used. Nugget values (i.e., the sample variability at close distance) were
established from downhole variograms. Nugget values were on average approximately 33% of the total
sill value for all elements in all domains. Major axis ranges for the short first structure of all the variograms
were approximately 25 m and the ranges for the second structure were 115 m on average. Anisotropic
search radii with variable orientations along mineralization trends were used to select data informing
block estimates. Search radii were based on the variogram ranges. Ordinary kriging was used to estimate
all blocks into the model in three estimation passes.
Block model: The block model w as constructed to fill the domain volumes with 20 m x 5 m x 10 m in
the X, Y and Z directions rotated to an azimuth of 55⁰ to best represent: the data density; the narrower,
steeply dipping deposit shape; and to minimize blocks unsupported by data. Accurate representation of
the domain volume was achieved by allowing sub-blocks to be created at domain boundaries. Each
parent cell could be split in the X, Y and Z directions. For both sets of parent cell sizes described above,
blocks in the X and Y directions were split, with a minimum possible size of 2.5 m, while the height of the
block was truncated precisely against the wireframe boundary. Eac h sub-block was assigned the
estimate derived for the parent block.
Classification: The b lock model w as classified into Measured, Indicated and Inferred resource
categories. Blocks were assigned a preliminary classification based on the variography, drillhole spacing
and number of samples in each pass as well as by domain. Search distances for the first pass were half
the variogram range; this was used as the initial classification for assigning blocks to the Measured
resource category. Blocks estimated in the second pass employed a search distance of the full variogram
range and were allocated to the Indicated resource category. Blocks estimated in the third pass that
allowed a relaxed search up to three times the range were assigned to the Inferred resource category.
The preliminary classification boundaries were then adjusted to create continuity of blocks within the
corresponding resource category classification.
Overburden/Weathering profile: Drill logs differentiating the weathered near-surface material from the
un-weathered underlying rock , as well as a transition zone, were used to model surfaces for oxide,
transitional and fresh material. These surfaces were included in the model to estimate density values as
well as code blocks into each category. An overburden volume was also modeled from the drill logs. The
bottom of the overburden surface was used to truncate grade estimates.
Bulk density: Density values were available from metallurgical test work for rhyodacite, siltstone and
two breccia samples. No measurements were taken for the dyke and hornfels lithotypes. A total of 1501
bulk density measurements were collected from pulps for the oxide zone, 355 measurements for the
transition zone and 5244 pulp measurements for fresh rock, so a large dataset of pulp density exists.
Densities were calculated by factoring the differences between the pulp density measurement into the
metallurgical sample values for rhyodacite and siltstone. The resulting values were assigned to dyke and
hornfels lithotypes respectively. An average density value was assigned to each of the six modeled
lithotypes. Density values for the oxide and transitional portions of each lithotype was factored down by
an additional 4% and applied to the oxide blocks.