Discovery Reports Q3 2021 Financial Results and Update
Discovery Reports Q3 2021 Financial Results and Update
November 25, 2021, Toronto, Ontario – Discovery Silver Corp. (TSX-V: DSV, OTCQX: DSVS F)
(“Discovery” or the “Company”) is pleased to announce its financial results for the three months ended
September 30, 2021 (“Q3 2021”), and to provide a summary of key events for the quarter and
subsequent to quarter -end. All amounts are presented in Canadian dollars (“ C$”) unless otherwise
stated.
Discovery’s flagship project is our 100% -owned Cordero silver project (“Cordero” or the “Project”)
located in Chihuahua S tate, Mexico. We are aggressively advancing the Project through drilling
(+120,000 meters in past two years), and metallurgical testing and engineering studies, with a focus on
delineating a high-margin project with size and scaleability.
HIGHLIGHTS:
• The Company’s cash position as of the date of this release is approximately $73.1 million
• Subsequent to quarter end we released our first -ever Environmental, Social and Governance
(“ESG”) report and launched a brand -new Sustainability section on our website. These materials
set out the Company’s current practices and priorities going forward, including in the Company’s
Vision, Mission and Values that form the foundation on which we advance our flagship Cordero
Project.
• We completed detailed and comprehensive metallurgical testing program for Cordero which
delivered several significantly positive outcomes related to processing and process design.
• We released an updated Mineral Resource Estimate (“Resource”) for Cordero which not only
confirmed Cordero’s status as one of the world’s largest silver deposits and but also showed how
advanced the Project has become with 87% of the Resource in the Measured and Indicated
category. The release also outlined various subsets of the resource at higher cut -offs, clearly
illustrating the high-margin potential of the Project.
• The Cordero Preliminary Economic Assessment (“PEA”) remains on schedule for later this quarter.
• Our Phase 2 drilling is on-going with four drill rigs on site, focusing on reserve definition, resource
expansion and high-grade vein delineation.
SUMMARY OF Q3 2021 & SUBSEQUENT EVENTS:
Financial & Corporate:
Balance Sheet
As at September 30, 2021, we had a cash and cash equivalents and short term investment balance of
$72.6 million (approximately $73.1 million as of the date of this release).
NEWS RELEASE
Inaugural ESG Report / Sustainability website launch
Subsequent to quarter end we released our first Environmental, Social and Governance (“ESG”) report
and launched a brand-new Sustainability section of our website. Report highlights include:
• Over $1.7 million in goods and services purchased from local Mexican businesses;
• Over $1.3 million in salaries and benefits paid to local employees;
• Total workforce of 124 includes 58 employees (89% Mexican) and 66 contractors (98% Mexican);
• Total GHG emissions of 167 tonnes of CO2 equivalent;
• Total water withdrawal of 36,017 m3 and total water discharged of 36,007 m3; and
• Zero fatalities and only 5 first-aid incidents
The full ESG Report is available for download at: www.discoverysilver.com/sustainability
Projects:
Metallurgical Test Work
Our metallurgical test program tested s amples of all of the four major rock types at Cordero. The
samples were sourced from locations spatially throughout the entire deposit , including the Pozo de
Plata and NE Extension zones in the North Corridor and from along the central and southwest parts of
the South Corridor. Tests were completed at the Blue Coast Research Ltd. (“Blue Coast”) laboratory
located in Parksville, BC, Canada. Highlights from the test work include:
Sulphide flotation test work
• Silver recoveries of 80-89%, lead recoveries of 83-91% and zinc recoveries of 81-90% from locked
cycle tests.
• Higher recoveries were achieved at coarser grind sizes (~200 microns).
• Saleable concentrate grades co nfirmed and levels of penalty elements for concentrates were
immaterial.
Oxide & transition cyanidation test work
• Silver recoveries of 54-80% & gold recoveries of 61-75% at coarse crush / grind sizes from coarse
bottle roll testing.
• Results indicate that a heap leach on the oxide & transition material at Cordero may be economic
and follow-up column leach test work is currently underway.
Further details on our metallurgical test results can be found i n our news release dated September 7,
2021.
Resource (Phase 1) drilling
On August 25, 2021, the Company announced results from the final drill holes that were used to support
the new resource estimate. The final drill holes were from multiple zones in both the North and South
Corridors. Drilling in the South Corridor along the Josefina vein trend intercepted high-grade veins within
broader zones of disseminated mineralization. Infill drilling within the central part of the South Corridor
was also succes sful in confirming continuity of mineralization within the higher -grade bulk -tonnage
domain.
Highlight intercepts include:
• 217.3 m averaging 194 g/t AgEq from 39.3 m (75 g/t Ag, 0.45 g/t Au, 1.1% Pb and 1.0% Zn)
in hole C21-481 including:
• 25.5 m averaging 404 g/t AgEq from 147.2 m (236 g/t Ag, 0.55 g/t Au, 1.2% Pb and 1.9% Zn)
in hole C21-482 including:
• 56.8 m averaging 139 g/t AgEq from 358.7 m (40 g/t Ag, 0.05 g/t Au, 0.7% Pb and 1.7% Zn)
in hole C21-442
• 52.5 m averaging 128 g/t AgEq from 214.8 m (42 g/t Ag, 0.08 g/t Au, 0.7% Pb and 1.3% Zn)
and 54.9 m averaging 133 g/t AgEq from 392.8 m (39 g/t Ag, 0.06 g/t Au, 0.9% Pb and 1.3%
Zn) in hole C21-493
Updated Mineral Resource Estimate
Subsequent to quarter end we announced our updated Resource. 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 in Q4 2021. The size of the Resource positions Cordero as one of the largest silver
projects globally. Highlights include:
Sulphide Resource (assumed to be processed via mill/flotation)
• Measured & Indicated Resource of 837 Moz AgEq 1 at an average grade of 48 g/t AgEq 1 (541 Mt
grading 20 g/t Ag, 0.06 g/t Au, 0.29% Pb and 0.51% Zn)
• Inferred Resource of 119 Moz AgEq 1 at an average grade of 34 g/t AgEq 1 (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 AgEq1 at an average grade of 23 g/t AgEq1 (98 Mt grading
19 g/t Ag and 0.05 g/t Au)
• Inferred Resource of 22 Moz AgEq 1 at an average grade of 20 g/t AgEq 1 (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)
Further details on our Resource can be found in our news release dated October 20, 2021. Supporting
Technical Disclosure and underlying assumptions for the Resource can be found at the end o f this
release.
Phase 2 drilling
At the end of the quarter, we announced results from the first 13 holes from our Phase 2 drill program.
The holes were predominantly focused on the South Corridor and in the Northeast Extension of the
North Corridor and were targeting improved definition of high- grade zones within the bulk -tonnage
domain and will be included in a prefeasibility study on the Project planned for 2022.
Highlight intercepts include:
• 73.1 m averaging 241 g/t AgEq1 from 75.0 m (104 g/t Ag, 0.06 g/t Au, 0.8% Pb and 2.5% Zn) in
hole C21-510
• 133.8 m averaging 103 g/t AgEq1 from 69.0 m (39 g/t Ag, 0.07 g/t Au, 0.8% Pb and 0.7% Zn) in
hole C21-523
• 28.6 m averaging 300 g/t AgEq1 from 265.5 m (101 g/t Ag, 0.12 g/t Au, 1.6% Pb and 3.2 % Zn)
including 9.4 m averaging 759 g/t AgEq 1 (257 g/t Ag, 0.26 g/t Au, 4.1% Pb & 8.1% Zn) in hole
C21-519
• 38.0 m averaging 229 g/t AgEq1 from 687.0 m (54 g/t Ag, 0.07 g/t Au, 1.3% Pb and 2.9% Zn) in
hole C21-517
Phase 2 drilling will continue through the remainder of the year and will be focused on three key areas:
(1) upgrading inferred resources for inclusion in a prefeasibility study planned for 2022; (2) resource
expansion of bulk -tonnage mineralization; and (3) testing of the widt h, grade and continuity of the
extensive high-grade vein systems that transect the deposit. There are currently four drill rigs operating
on site.
For further details on the drill results noted above refer to our news releases dated August 25 and
September 30, 2021.
LOOKING AHEAD:
We are looking forward to releasing our PEA, a landmark milestone for the Company, later this quarter.
The overarching objective is to deliver a technically robust study that outlines one of the largest
producing primary silver operations in the industry with manageable upfront development capex and
operating costs in the bottom half of the industry cost curve. The study will incorporate staged
expansions to reduce initial capex and an elevated cut-off grade strategy and effective use of stockpiling
to accelerate the payback period. The study will be vetted by industry leading consultants and supported
by our recently released Mineral Resource Estimate and three rounds of metallurgical testwork.
Our drill planning for next year is currently being finalized. our ongoing Phase 2 drill program focused
on reserve definition for an expected pre-feasibility study on the project for 2022. Alongside this infill
drilling we will remain focused on potential resource expansion of bulk-tonnage mineralization as well
as ongoing testing of the grade and continuity of the high- grade veins that transect the deposit. Our
property wide mapping and sampling program also continues to progress well with targets expected to
be finalized through the remainder of the year ahead of initial drill testing early next year.
We are also eager to advance and expand our ES G efforts following the recent publication of our
inaugural ESG report. During 2021, we have added key positions to our management team in Mexico
in the areas of environment, community relations and human resources to help develop and implement
our ESG strategy across the organization. We anticipate publishing our 2021 ESG Report in Q2 2022
and look forward to sharing our progress.
SELECTED FINANCIAL DATA:
The following selected financial data is summarized from the Company’s condensed interim
consolidated financial statements and related notes thereto (the “Financial Statements”) for the three
months ended September 30, 2021.
A copy of the Financial Statements and MD&A is available at www.discoverysilver.com or on SEDAR
at www.sedar.com.
Net loss Q3 2021 Q3 2020
(a) Total $ (8,752,766) $ (5,127,665)
(b) basic and diluted per share $ (0.03) $ (0.02)
Net loss & total comprehensive loss $ (8,739,307) $ (4,914,927)
Total weighted average shares outstanding 325,155,725 282,624,020
September 30, 2021 December 31, 2020
Cash, cash equivalents & short-term
investments $ 72,637,485 $ 82,547,897
Total assets $ 109,227,233 $ 111,564,881
Total current liabilities $ 1,753,280 $ 982,260
Total liabilities $ 1,758,054 $ 1,023,349
Working capital $ 71,594,510 $ 82,435,046
Total Shareholders’ equity $ 107,469,179 $ 110,541,532
About Discovery
Discovery’s focus is on advancing its flagship 100%-owned Cordero project, one of the world’s largest
silver projects. 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 more than C$ 70 million available
for aggressive exploration, resource expansion , engineering and dev elopment. 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
TECHNICAL NOTES & REFERENCES:
Drill results [1]: all drill results in this news release are rounded. Assays are uncut and undiluted.
Widths are drilled widths, not true widths, as a full interpretation of the actual orientation of
mineralization is not complete. Intervals were chosen based on a 20 g/t AgEq cutoff with no more than
10 m of dilution. AgEq calculations are used as the basis for total metal content calculations given Ag
is the dominant metal constituent as a percentage of AgEq value in approximately 70% of the
Company’s mineralized intercepts. AgEq cal culations 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 indicated metal prices. Refer to notes
below for metallurgical recoveries assumed in the 2018 PEA completed on Cordero.
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, Canada, 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.
Mineral Resource Estimate:
Sulphide Resource (assumed to be processed via mill/flotation)
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
Oxide/Transition Resource (assumed to be processed by heap leaching)
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%
Supporting Technical Disclosure for Resource:
• 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 Oxide/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 based on the following commodity prices: Ag -
$24.00/oz, Au - $1,800/oz, Pb - $1.10/lb, Zn - $1.20/lb. Additional parameters for the pit constraint
are provided in the October 20, 2021, press release.
• Individual metals are reported at 100% of in-situ grade.
• The effective date of the Resource is October 20, 2021, and is based on drilling through July 2021.
• 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 the October 20, 2021, Resource press release.
Qualified Person: Gernot Wober, P.Geo, VP Exploration, Discovery Silver 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.
The scientific and technical content related to the updated Mineral Resource Estimate 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.
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 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 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. Such statements include but are not
limited to: the timeline for the execution and completion of the Phase 2 drill program including the impacts and benefits; the timeline and
anticipated results to be included in the Resource update including the impact and benefits; the timeline and anticipated results to be included
in the Preliminary Economic Assessment including the impact and benefits; Factors that could cause actual results to differ materially from
those described in forward- looking statements include fluctuati ons 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 prov e 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. For a detailed discussion on the risks faced by the Company, refer
to the documents incorporated by reference herein, the Company’s MD&A for the year ended December 31, 2020 and the Company’s 2019
Annual Information Form available on the Company’s website at www.discoverysilver.com or under Discovery’s profile on SEDAR at
www.sedar.com.