Discovery Reports Record Revenue, Strong Year-over-Year Earnings Growth IN Q2 2026
DISCOVERY REPORTS RECORD REVENUE,
STRONG YEAR-OVER-YEAR EARNINGS
GROWTH IN Q2 2026
August 13, 2026, Toronto, Ontario — Discovery Mining Ltd. (TSX: DSV,
OTCQX: DSVSF) (“Discovery” or the “Company”) today announced
financial and operating results for the second quarter (“Q2 2026”) and first
half (“YTD 2026”) of 2026. Results for Q2 2026 include one month of
production from the Company’s Kidd Operations, which were acquired on
June 1, 2026. All dollar amounts are in US dollars, unless otherwise noted.
Tony Makuch, Discovery’s CEO, commented: “Q2 2026 was a pivotal
quarter as we work to substantially grow gold production in Timmins.
Firstly, we accelerated our investment programs aimed at optimizing our
operations and driving our growth. Capital expenditures totaled $86.4
million and focused on tailings expansion and improvement, increasing
production and lowering costs at Hoyle Pond and Borden, and, very
importantly, advancing Pamour towards commercial levels of production.
“Second, we continued to achieve outstanding exploration success at all
operations, at near-mine targets and at our key growth projects, Dome,
TVZ and Owl Creek. Post quarter end, we released very important drill
results at our Pamour operation, clearly establishing it as a large-scale
deposit extending over a 4 km strike length, with the deposit remaining
open in several directions and to depth. We have also announced an
extension of the Main Zone at Borden of over half a kilometre and continue
to confirm and expand the known mineralization at Dome, TVZ and Owl
Creek.
“Finally, we completed the acquisition of the Kidd Operations in Timmins
on June 1, 2026. These operations include the Kidd Metallurgical Site and
the Kidd Creek Mine. Completing the Kidd acquisition is critical for our
future growth plans. Adding the Kidd Met Site provides an opportunity,
with investment, to increase our processing capacity to ensure Pamour can
reach its full potential, to support future growth at Hoyle Pond and Borden
and to process feed from TVZ and Owl Creek, while also freeing Dome Mill
to process material from Dome Mine following a resumption of operations.
“Turning to our Q2 2026 results, we achieved record gold production and
revenue, and increased gold sales 11% from last quarter. Adjusted earnings
more than tripled from Q2 2025 and were 12% higher than in Q1 2026. Our
cash position reflected timing factors that will largely reverse in the third
quarter. For example, while we funded costs and working capital for our
Kidd Operations in June, cash payments related to $29.7 million of revenue
from concentrate sales were received early in Q3 2026. We also had $35
million of accelerated payments made in advance of implementing a new
enterprise resource planning system, effectively pulling cash outflows
from later in the year into our Q2 2026 results. We ended Q2 2026 with
total liquidity of over $600 million and no debt, and have since increased
our undrawn RCF by $150 million and extended the maturity date. Looking
ahead, we are poised for a strong second half of the year and remain well
positioned to achieve all of our 2026 guidance.”
(1) Non-GAAP measure. For more information, see the section entitled, “NON-GAAP MEASURES.”
(2) Q2 2025 production refers to 50,552 ounces produced from April 15, 2025 to June 30, 2025.
(3) Gold sold includes ounces delivered in-kind under the Franco Nevada royalty arrangement.
(4) | Gold AISC refers to all-in sustaining costs, and excludes share-based compensation costs.
NEWS RELEASE
Creates opportunity to significantly increase
processing capacity, adds valuable land and
infrastructure, provides exposure to critical
minerals and adds exploration upside
Excellent drill results at all operations, at near-mine
targets and at key growth projects; Recent results
confirmed Pamour to be large-scale deposit with
substantial growth potential
Total capital expenditures” of $86.4M versus
$44.2M in Q2 2025 and $69.9M in Q1 2026
Produced 67,309 oz of gold, 33% increase from Q2
2025) and 12% higher than Q1 2026; Gold sold!)
totaled 66,068 oz vs. 42,550 oz in Q2 2025 and
59,445 oz the previous quarter
Gold operating cash costs of $1,387/0z sold, gold
AISC™(4) of $2,154/o0z sold
Revenue of $319.1M, more than double the Q2
2025 level and 12% higher than Q1 2026
Net earnings of $52.1M, or $0.06/share, vs $5.5M,
or $0.01/share, in Q2 2025 and $81.7M, $0.10/share
in Q1 2026; Adjusted net earnings) of $92.3M, or
$0.11/share, compared to $28.4M, or $0.04/share,
in Q2 2025 and $82.7M, or $0.10/share in Q1 2026
Total liquidity of $607.8M at June 30" (including
$364.3M of cash); Revolving credit facility (“RCF”)
increased to $400 million and maturity extended to
July 30, 2030 subsequent to quarter end
2026 guidance includes back-half weighted
production of 260 — 300 koz; operating cash
costs/oz of $1,250 — $1,400 and AISC/oz of $1,950
— $2,250; sustaining capital") of $120M — $165M
and growth capital" of $195M — $235M
Discovery began reporting the results of gold production and sales following the Company’s acquisition (“Porcupine
Acquisition”) of the Porcupine Complex (“Porcupine”) in and near Timmins, Ontario on April 15, 2025.
The Company’s full financial statements and management discussion & analysis are available on SEDAR+ at
www.sedarplus.ca, and on the Company’s website at www.discoverysilver.com.
Effective July 3, 2026, the Company’s common shares commenced trading on the TSX under the name Discovery Mining Ltd.
Financial Results (in S thousands except per
share amounts)
June 30, 2026
Three months ended
June 30, 2025 March 31, 2026
Six months ended
June 30, 2026
June 30, 2025
Revenue
Production costs
Earnings before income taxes
Net earnings
Basic earnings per share
Diluted earnings per share
Adjusted net earnings")
Adjusted net earnings per share")
Cash flow from operating activities
Cash investment on mine development
and PPE
Free cash flow”
319,094
108,609
112,752
52,149
0.06
0.06
92,306
0.11
73,977
(85,414)
(11,437)
142,010
54,919
24,510
5,534
0.01
0.01
28,434
0.04
67,081
(39,766)
27,315
285,035
76,184
131,371
81,679
0.10
0.10
82,722
0.10
42,968
(67,057)
(24,089)
604,129
184,793
244,123
133,828
0.17
0.16
175,029
0.22
116,945
(152,471)
(35,526)
142,010
54,919
18,058
(918)
0.00
0.00
25,388
0.04
61,005
(43,533)
17,472
Three months ended
Six months ended
Operating Results
Porcupine Complex
Gold
Ore processed (t)
Average Grade (g/t Au)
Recovery (%)
Gold produced (oz)
Gold sold (0z))
Average realized gold price ($/oz sold)')®)
Gold operating cash costs per ounce sold
($/oz sold))
Gold AISC per ounce sold ($/oz sold)
$
$
$
June 30, 2026
904,244
2.57
90.2%
67,309
66,068
4,474
1,387
2,154
June 30, 2025
508,791
3.39
91.3%
50,552
42,550
3,337
1,341
2,074
March 31, 2026
$
$
698,984
2.96
90.6%
60,269
59,445
4,908 $
1,417 $
2,041 $
June 30, 2026
1,603,228
2.74
90.4%
127,578
125,513
4,680
1,401
2,101
June 30, 2025
508,791
3.39
91.3%
50,552
42,550
3,337
1,341
2,074
Kidd Operations
Ore processed (t)
Copper
Copper produced (t)
Copper sold (t)
Zinc
Zinc produced (t)
Zinc sold (t)
102,839
1,286
1,230
3,361
2,967
(1) Example of Non-GAAP measure. See the section in this press release entitled, “NON-GAAP MEASURES” for more information.
(2) Gold sold Includes ounces delivered in-kind under the Franco-Nevada royalty arrangement of 2,813 ounces in Q2 2026, nil in Q2 2025, 2,518 ounces in Q2 2026,
5,331 ounces in YTD 2026 and nil in YTD 2025.
(3) Ounces delivered in-kind under the Franco Nevada royalty arrangement are excluded for the purposes of operating cash costs per ounce sold, gold AISC per
ounce sold, and average realized gold price per ounce sold.
(4) 2025 results exclude G&A expense, share-based compensation costs, sustaining capital expenditures and lease expense incurred prior to April 15, 2025, the
completion date of the Porcupine Acquisition.
Q2 2026
e
Revenue of $319.1 million more than doubled from Q2 2025, reflecting increases of 55% and 34% in gold sold and the
average realized gold price”, respectively; Revenue increased 11% from Q1 2026 as higher gold sales more than offset
a reduction in the average realized gold price.
EBITDA™2) totaled $170.0 million, a significant increase from $55.2 million in Q2 2025 and similar to $177.9 million
the previous quarter.
Net earnings totaled $52.1 million ($0.06 per basic share) compared to net earnings of $5.5 million ($0.01 per basic
share) in Q2 2025 and net earnings of $81.7 million ($0.10 per basic share) the previous quarter.
Adjusted net earnings totaled $92.3 million ($0.11 per basic share), more than triple adjusted net earnings of $28.4
million ($0.04 per basic share) in Q2 2025 and 11% higher than $82.7 million ($0.10 per basic share) in Q1 2026. The
$42.2 million difference between net earnings and adjusted net earnings in Q2 2026 mainly reflected the exclusion of
a one-time deferred tax expense of $19.7 million, purchase price allocation adjustments (“PPA”) related to the Kidd
Acquisition, Transition Services Agreement (“TSA”) costs involving the Porcupine Acquisition, and payments to First
Nations in connection with the closing of the Kidd Transaction.
Key operating results:
o Gold production of 67,309 ounces compared to 50,552 ounces in Q2 2025 and 60,269 ounces the previous
quarter, with the increase from the previous quarter mainly resulting from a 29% increase in tonnes
processed, which more than offset the impact of a planned reduction in the average grade.
o Gold sold") of 66,068 ounces compared to 42,550 ounces in Q2 2025 and 59,445 ounces the previous quarter.
0 Total gold production costs of $89.7 million versus $68.8 million in Q2 2025 and 76.2 million in Q1 2026, with
the increase from the previous quarter mainly related to higher volumes.
o Operating cash costs of $1,387 per ounce sold compared to $1,341 per ounce sold in Q2 2025 and $1,417
per ounce sold in Q1 2026.
0 Site-level AISC™(5) of $2,028 per ounce sold versus $1,849 per ounce sold in Q2 2025 and $1,875 per ounce
sold the previous quarter, with the increase from Q1 2026 reflecting increased sustaining capital expenditures.
0 AISC)) of $2,154 per ounce sold compared to AISC of $2,074 per ounce sold in Q2 2025 and $2,041 per ounce
sold the previous quarter.
Capital expenditures totaled $86.4 million. Sustaining capital expenditures totaled $36.5 million and largely related
to capital development and infrastructure improvements at Hoyle Pond and Borden, new mobile equipment,
investments at Dome Mill and work to buttress the No. 6 tailings management area (“TMA6”). Growth capital
expenditures totaled $49.9 million (including $6.8 million of capitalized exploration), mainly reflecting investments to
increase capacity and implement a new deposition strategy at the TMA6 and for continued pre-stripping at Pamour.
Net cash generated from operating activities in Q2 2026 totaled $74.0 million compared to net cash from operating
activities of $67.1 million in Q2 2025 and net cash from operating activities of $43.0 million in the previous quarter.
Net cash generated from operating activities before changes in working capital totaled $130.0 million versus $39.7
million in Q2 2025 and $128.4 million in Q1 2026.
Cash at June 30, 2026, totaled $364.3 million compared to $384.9 million at March 31, 2026. The change in cash during
Q2 2026 mainly reflected the following: the timing for cash flows from the Kidd Operations, with $16.0 million of
working capital funding during the quarter and cash payments related to $29.7 million of revenue from concentrate
sales being received early in Q3 2026; a $35.8 million impact from the acceleration of payments on the accounts
payable liability prior to quarter end as part of the implementation of a new enterprise resource planning system; the
impact of capital expenditures in Q2 2026, and the use of $10 million of cash for an investment in Abitibi Metals Corp.
These factors more than offset the favourable impact of operating cash flow generated during the quarter before
changes in working capital.
Working capital at June 30, 2026, totaled $270.7 million compared to working capital of $225.9 million at June 30,
2026 and $288.2 million at March 31, 2026.
YTD 2026
Gold production totaled 127,578 ounces compared to 50,552 ounces in YTD 2025. Revenue totaled $604.1 million
($574.5 million from Porcupine Operations), which compared to $142.0 million in YTD 2025 representing revenue
generated from the closing of the Porcupine Acquisition on April 15, 2025 to June 30, 2025. Production costs totaled
$184.8 million in YTD 2026 compared to $54.9 million in YTD 2025. Gold operating cash costs averaged $1,401 per
ounce sold, while gold AISC per ounce sold averaged $2,101, compared to $1,341 per ounce sold and $2,074 per ounce
sold, respectively, for YTD 2025.
EBITDA was $347.9 million versus $48.9 million in YTD 2025.
Net earnings totaled $133.8 million, or $0.17 per basic share. YTD 2026 net earnings compared to a net loss of $0.9
million, or $0.00 per basic share, in YTD 2025.
Adjusted net earnings were $175.0 million, or $0.22 per basic share, compared to $25.4 million, or $0.04 per basic
share, in YTD 2025. The difference between net earnings and adjusted net earnings in YTD 2026 mainly reflected the
$19.7 million deferred tax expense, PPA adjustments on short-term inventory, TSA costs and payment to the First
Nations in connection with the closing of the Kidd Transaction.
Net cash from operating activities in YTD 2026 totaled $116.9 million compared to net cash generated from operating
activities of $61.0 million in YTD 2025. The increase mainly reflected significantly higher earnings in 2026, partially
offset by a $86.8 million cash income tax payment related to the 2025 tax year made in Q1 2026 and changes in
working capital in Q2 2026.
Total capital expenditures for YTD 2026 totaled $156.4 million. Included in the $156.4 million were $57.2 million of
sustaining capital expenditures and $99.1 million of growth capital expenditures (including $13.9 million of capitalized
exploration).
(1) Example of Non-GAAP measure. For more information, see the section in this press release entitled, “NON-GAAP MEASURES”.
(2) Refers to earnings before interest, taxes and depreciation and amortization costs.
(3) The difference between ounces produced and ounces sold largely reflects the delivery of in-kind ounces under the Franco-Nevada royalty arrangement.
(4) Site-level AISC includes corporate G&A allocation and excludes remaining corporate G&A, share-based compensation and corporate-level sustaining capital
expenditures.
(5) AISC does not include share-based compensation costs.
Income Statement Summary
(in thousands except per share amounts)
Three months ended
June 30, June 30, March 31,
2026 2025 2026
Six months ended
June 30,
2026
June 30,
2025
Revenue 319,094 S 142,010 S 285,035 $ 604,129 S$ 142,010
Production costs 108,609 54,919 76,184 184,793 54,919
Depreciation and amortization 40,589 16,384 31,576 72,165 16,384
Royalties 5,625 1,916 7,058 12,683 1,916
Earnings from mining operations 164,271 68,791 170,217 334,488 68,791
Expenses
General and administration 14,355 22,877 11,475 25,830 28,351
Exploration 6,453 830 6,817 13,270 855
Share-based compensation 3,507 1,953 8,859 12,366 3,120
Other operating costs 10,121 _ 101 10,222 _—
Earnings from operations 129,835 43,131 142,965 272,800 36,465
Other
Other income (loss) (3,016) (6,879) 1,091 (1,925) (6,690)
Finance Items
Finance income (expense), net (14,067) (11,742) (12,685) (26,752) (11,717)
Earnings before taxes 112,752 24,510 131,371 244,123 18,058
Current income tax expense (recovery) 40,756 18,976 36,646 77,402 _—
Deferred income tax expense (recovery) 19,847 _ 13,046 32,893 18,976
Net earnings 52,149 S$ 5,534 S$ 81,679 $ 133,828 $ (918)
Basic earnings per share 0.06 S$ 0.01 $ 0.10 $ 0.17 S$ 0.00
Diluted earnings per share 0.06 S 0.01 S$ 0.10 $ 0.16 S$ 0.00
Weighted average number of common
Basic 811,222 735,616 810,063 810,659 569,293
Diluted 818,077 762,923 818,106 817,514 596,600