Discovery Reports Q1 2020 Operating & Financial Results
Discovery Reports Q1 2020 Operating & Financial Results
May 28, 2020, Toronto, Ontario - Discovery Metals Corp. (TSX-V: DSV, OTCQX: DSVMF)
(“Discovery” or the “Company”) is pleased to announce its operating and financial results for the three
months ended March 31 , 20 20. All amounts are presented in Canadian dollars (“CAD”) unless
otherwise stated.
Our Company is focused on advancing a portfolio of silver projects in historic mining districts in
northern Mexico, including our flagship Cordero project in Chihuahua State (“Cordero” or the
“Project”), as well as the Puerto Rico, Minerva and Monclova projects in Coahuila State.
In February 2020 we were named to the TSX Venture Exchange’s 2020 Venture 50™ in recognition of
our share price appreciation, market capitalization growth, and trading volume growth over the past
year.
In March 2020 we temporarily suspended all exploration activities at our Mexican operations due to
the increased health and safety risks associated with the growing number of COVID -19 cases in the
country. We have put in place business continuity plans so that exploration activity can quickly ramp
up once it is deemed safe to do so.
In April 2020 we announced the divestiture of our non -core Congress property located in British
Columbia, to Talisker Resources Ltd . (“Talisker”). Under the terms of the purchase agreement,
Talisker issued 1,000,000 common shares to our Company in return for 100% ownership of Congress.
On May 18, 2020, we announced a $25 million private placement that included a $10 million
investment from Mr. Eric Sprott. This financing is expected to close in early June. Support for this
placement is indicative of t he strong investment interest in our Company and the ex posure and
leverage that our Cordero project provides to a rising silver price. Upon completion , we will have over
$40 million of cash on our balance sheet - this positions us as one of the best financed silver
exploration companies in the industry.
EXPLORATION HIGHLIGHTS:
At Cordero, our 100% owned project in Chihuahua State, Mexico, we:
• Rapidly progressed our 30,000 to 35,000 m etre (“m”) Phase 1 drill program – to date we have
completed forty-eight holes totaling approximately 17,500 m
• Demonstrated excellent near -surface higher-grade potential at the Project over a strike length of
approximately 1,250 m. Drill highlights to date include:
- 68.1 m of 361 g/t AgEq1 in hole C19-295 from 157.8 m ( comprised of 117 g/t Ag, 1.96 g/t Au,
1.7% Pb and 1.1% Zn)
NEWS RELEASE
- 105.9 m of 188 g/t AgEq 1 in hole C19-304 from 76.8 m ( comprised of 74 g/t Ag, 0.38 g/t Au,
1.1% Pb and 1.1% Zn)
- 62.8 m of 217 g/t AgEq1 in hole C20-316 from 222.3 m (comprised of 79 g/t Ag, 0.58 g/t Au,
1.2% Pb and 1.2% Zn)
- 168.8 m of 207 g/t AgEq1 in hole C20-319 from 140.0 m (comprised of 70 g/t Ag, 0.10 g/ t Au,
1.5% Pb and 1.9% Zn)
• Intercepted multiple sulphide veins that returned kilogram per tonne silver equivalent intercepts.
Drill highlights to date from these veins include:
- 1.0 m of 2,153 g/t AgEq1 in hole C20-316 from 166.4 m (comprised of 1,255 g/t Ag, 1.10 g/t
Au, 20.0% Pb and 2.5% Zn)
- 3.3 m of 1,141 g/t AgEq1 in hole C20-320 from 214.2 m (comprised of 588 g/t Ag, 0.58 g/t Au,
12.4% Pb and 1.7% Zn)
Q1 2020 FINANCIAL HIGHLIGHTS:
The following selected financial data is summarized from our Company’s unaudited interim condensed
consolidated financial statements and related notes thereto (the “Financial Statements”) for the three
months ended March 31, 2020. A copy of the Financial Statements is available on our website at
www.dsvmetals.com or on SEDAR at www.sedar.com.
Net loss Q1 2020 Q1 2019
(a) Total(A) $ (4,826,135) $ (793,684)
(b) basic and diluted per share $ (0.02) $ (0.01)
Net loss & total comprehensive loss $ (5,827,330) $ (704,463)
Total weighted average shares
outstanding 211,423,805 65,043,998
A. Net loss for Q1 2020 includes non-cash share-based compensation expense of $ 157,576 (Q1 2019: and $ 55,393) and a non -cash
impairment charge of $586,328 (Q1 2019: $nil) on IVA receivable.
March 31, 2020 December 31, 2019
Cash and cash equivalents $ 20,018,474 $ 23,950,737
Total assets $ 47,966,857 $ 53,518,599
Total current liabilities $ 767,213 $ 716,596
Total liabilities $ 843,560 $ 804,466
Total Shareholders’ equity $ 47,123,297 $ 52,714,133
LOOKING AHEAD:
Discovery has transformed itself over the last 12 months and we believe we are now in the best
position since the Company’s formation to benefit from a rising silver price. Through the acquisition of
our Cordero project in August 2019 we now have 100% ownership of a very large silver endowment.
Post-acquisition we have been actively adding value through drilling with highly encouraging results
reported from our Phase 1 drill program. Upon completion of the recently announced financing, we will
have a cash balance of over $40 million. Our balance sheet has never been stronger and moving
forward we have the firepow er to aggressively advance Cordero and to accelerate our exploration
efforts on the surrounding regional property package.
On March 31, 2020, we announced th e temporary suspension of exploration activity in response to
COVID-19. We are using this period to evaluate the substantial amount of data collected to -date to
refine our drill targets. We still have assays pending from 16 holes completed prior to the shutdown
and we look forward to releasing these holes in the coming weeks. We have also been busy putting in
place business continuity plans so that we can ramp up our drilling activities in an efficient and
systematic fashion once it is deemed safe to do so.
We look forward to providing further details on the progress we have made to our shareholders at our
upcoming Annual General Meeting ( “AGM”). The AGM will be held via conference call o n June 26,
2020. Further details can be found on our website at www.dsvmetals.com/investors/annual-meeting/.
On Behalf of the Board of Directors,
Taj Singh, M.Eng, P.Eng, CPA,
President, Chief Executive Officer, and Director
About Discovery
Discovery Metals Corp. (TSX -V: DSV, OTCQX: DSVMF) is a Canadian exploration and development
company headquartered in Toronto, Canada, and focused on historic mining districts in Mexico.
Discovery’s flagship is its 10 0%-owned Cordero silver project in Chihuahua State, Mexico. The
35,000-hectare property covers a large district that hosts the announced resource as well as
numerous exploration targets for bulk tonnage diatreme -hosted, porphyry -style, and carbonate
replacement deposits.
For further information contact:
Forbes Gemmell, CFA
VP Corporate Development & Investor Relations
TECHNICAL NOTES & REFERENCES:
1 All results in this news release are rounded . A ssays are uncut and undiluted. Widths are drilled
widths, not true widths, as a full interpretation of the actual orientation of mineralization is not
complete. Composites for this release were chosen at a 25 g/t AgEq cutoff, whereby no more than 5m
of below -cutoff material is included in any composite interval. AgEq calculations for reported drill
results are based on USD $16.50/oz Ag, $1,350/oz Au, $0.85/lb Pb, $1.00/lb Zn. The calculations
assume 100% metallurgical recovery and are indicative of gross in -situ metal value at the indica ted
metal prices . Refer to note three below for metallurgical recoveries assumed in the 2018 PEA
completed on Cordero.
2 The most recent resource estimate for Cordero as shown in the table below was released in 2018
(technical report available on Discovery’s website and the SEDAR profile of Levon Resources Ltd.
(“Levon”)) and was based on a base case cutoff grade of 15 g/t AgEq (highlighted below). The table
includes a sensitivity analysis that also shows tonnage and grade estimates at higher AgEq cutoff
grades within the resource shell. Resource commodity prices used for the resource estimate were
(USD): $17.14/oz Ag, $1.11/lb Zn, $0.96/lb Pb, $1,262/oz Au.
AgEq3 (g/t)
Cutoff
Tonnage & Grade within Mineral Resources Pit Shell Total
Contained
Ag (Mozs)
Total
Contained
AgEq3 (Moz) Class Tonnes
(M)
AgEq3
(g/t) Ag (g/t) Au (g/t) Pb (%) Zn (%)
15
Indicated 990 32 13 0.04 0.2 0.4 408 1,022
Inferred 282 56 21 0.04 0.3 0.8 188 513
25 Indicated 467 46 19 0.06 0.3 0.5 278 686
Inferred 183 77 28 0.05 0.4 1.0 163 451
50 Indicated 99 95 40 0.11 0.6 1.0 128 303
Inferred 100 112 41 0.06 0.7 1.5 131 360
3 A PEA was completed for Levon in 2018 by M3 Engineering and Technology Corp., and includes the
most recent resource estimate, completed by I ndependent Mining Consultants (a vailable on
Discovery’s website and on SEDAR under Levon ’s profile). Discovery acquired Cordero through the
acquisition of Levon in August 2019. Resource commodity prices used in the PEA are ($US):
$17.14/oz Ag, $1.11/lb Zn, $0.96/lb Pb, $1,262/oz Au; the mine plan in the PEA uses a subset of
Indicated and Inferred Resources at 15 g/t AgEq cutoff. The PEA assumes metallurgical recoveries of
89% Ag, 84% Pb, 72% Zn, 40% Au.
Sample analysis and QA/QC Program: True widths of reported drill intercepts have not been
determined. Assays are uncut except where indicated. All core assays are from HQ drill core unless
stated otherwise. Drill core is logged and sampled in a secure core storage facility located at the
project site 40km north of the city of Parral. Core samples from the program are cut in half, using a
diamond cutting saw, and are sent to ALS Geochemistry -Mexico for preparation in Chihuahua City,
Mexico, and subsequently pulps are sent to ALS Vancouver, Ca nada, which is an accredited mineral
analysis laboratory, for analysis. All samples are prepared using a method whereby the entire sample
is crushed to 70% passing -2mm, a split of 250g is taken and pulverized to better than 85% passing
75 microns. Samples are analyzed for gold using standard Fire Assay -AAS techniques (Au -AA24)
from a 50g pulp. Over limits are analyzed by fire assay and gravimetric finish. Samples are also
analyzed using thirty three -element inductively coupled plasma method (“ME -ICP61”). Over limit
sample values are re-assayed for: (1) values of zinc > 1%; (2) values of lead > 1%; and (3) values of
silver > 100 g/t. Samples are re -assayed using the ME -OG62 (high -grade material ICP -AES)
analytical package. For values of silver greater than 1,500 g/t, samples are re-assayed using the Ag-
CON01 analytical method, a standard 30 g fire assay with gravimetric finish. Certified standards and
blanks are routinely inserted into all sample shipments to ensure integrity of the assay process.
Selected s amples are chosen for duplicate assay from the coarse reject and pulps of the original
sample. No QAQC issues were noted with the results reported herein.
Qualified Person: Gernot Wober, P.Geo, VP 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.
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 an y 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 state
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 exem ption 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 expect ations
expressed in such forward -looking statements are based on reasonable assumptions, such statements are not guarantees of futu re
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 such statements will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties.
There can be no assurance that the Private Placement will close on the announced terms. Discovery does not assume any obligat ion to
update any forward-looking statements except as required under applicable laws.