Discovery Silver Provides Cordero Project Update
Discovery Silver Provides Cordero Project Update
June 22, 2023, Toronto, Ontario - Discovery Silver Corp. (TSX: DSV, OTCQX: DSVSF)
(“Discovery” or the “Company”) is pleased to provide a project update on its flagship Cordero
project (“Cordero” or “the Project”) located in Chihuahua State, Mexico.
Tony Makuch, President & CEO, states: “We have made excellent progress so far this year on
the critical de -risking items for Cordero - surface rights, water, power, permitting and the
Feasibility Study - as we systematically advance Cordero towards a construction decision. We
recently secured surface rights covering the proposed open pit and key infrastructure locations
at the Project . We have also identified the potential sources of water for the Project and
recently acquired a significant volume of water rights. We received two power studies earlier
this year confirming there is sufficient capacity in the existing grid to supply the Project for mine
operations and establishing the work required to access the grid.
“We are putting the final touches on our Environmental Impact Statement, a significant step in
the permitting process for Cordero and the culmination of detailed social and environmental
assessment work completed by the Company. Our Feasibility Study work is well advanced and
remains on schedule for completion in 1H 2024. Recent drill results highlight the potential to
further grow reserves within and on t he margins of the open pit. We also remain focused on
optimization opportunities within the study including potentially reduc ing reagent costs ,
achieving higher recoveries and lowering mining costs through adopting larger benches and
bigger mining equipment.”
KEY DE-RISKING ITEMS
The Company is set to initiate the permitting process in the next three to four weeks with the
submission of its Environmental Impact Statement (“Manifesto de Impacto Ambiental” or “MIA”)
to the Mexican Federal Environmental Department (“SEMARNAT”). The MIA is one of the
principal permits required for the development of Cordero and encapsulates extensive social
and environmental work programs completed by the Company’s team in Mexico since 2020 in
parallel with multiple reviews by third-party consultants.
The Company has reviewed the expected changes to be made with the new mining law
recently introduced in Mexico and does not expect the new law will have a material impact on
the Project timeline. It is the Company’s intention to be in full compliance with all Mexican
regulatory requirements alongside its overarching commitment to meet the highest industry
standards for environmental protection, social responsibility and health and safety. The
Company’s MIA submission incorporates the expected changes to the new mining law, in
NEWS RELEASE
particular the inclusion of supplementary details of the Project’s closure and reclamation plans.
Cordero benefits from being located on private land in an area of Mexico (Chihuahua State)
where mining has a long history and is a key economic contributor.
The Company recently secured the surface rights that correspond with the planned open pi t
and key infrastructure locations at Cordero as well as a significant volume of water rights. For
hydrogeology, t he Company is continuing its work with Mexican specialist consultant
Investigacion y Desarrollo de Acuiferos y Ambiente (“IDEAS”) to build on previous
hydrogeology drilling to develop a more detailed groundwater flow model within and near the
open pit and geophysical surveys further away from the pit to guide future water exploration
drilling campaigns. Discovery also recently engaged M3 Engineering & Technology Corp to
complete a technical review of the scope and cost to source water from existing water
treatment plants in the region.
An impact assessment study and power installation study by Mexican electrical infrastructure
authority CENACE were delivered earlier this year, with confirmation that there is sufficient
capacity in the existing power grid to supply the Project with power for operations at peak
throughput levels. Standard upgrades of the Camargo II substation will be required as well as
the installation of a 74- kilometre powerline along the existing power corridor. This scenario
confirms prior assumptions about power supply to Cordero and is an important milestone in
de-risking the Project. The work to be undertaken in the Feasibility Study for power supply will
entail a detailed cost estimate for the construction of the powerline and preparation of tender
documentation to allow qualified contractors to bid on the defined scope. The option to use
renewable energy sources at site to supplement grid power will also be evaluated.
FEASIBILITY STUDY UPDATE
Study Approach: The Company will look to accelerate front-end engineering design work as
part of the Feasibility Study (“FS” or “the Study”) scope to increase the confidence level of the
initial capital cost estimate and to shorten the timeline between the Study completion and the
Project build. As part of Discovery’s overall approach to ensuring successful project execution
the Company plans to expand its owner’s team through the course of the year with a skillset
focus on processing, mining and engineering, procurement and construction management.
Reserves/Resource update: the FS will be supported by an updated reserves and resource
estimate to be released concurrently with the results of the Study. The updated estimates will
be based on a total of approximately 310,000 m in 793 drill holes. This includes an additional
35,000 m in 103 drill holes, completed since the update in January 2023, focused on resource
upgrade and reserve expansion opportunities.
Metallurgical testwork: Testwork will be focused on the potential reduction of reagent costs
through minimizing reagent dosages and testing of lower cost substitut e reagents. Variability
testwork focused on blend optimization over the life- of-mine will also be completed. This wil l
consist of testing of rock type blends and of higher oxide-sulphide blends (up to 20% oxides).
Additional comminution testwork, including sensitivity of regrind sizes on recoveries and testing
alternative regrind mills will also be completed. The testwork is being conducted by Blue Coast
Research Ltd. (“Blue Coast”) with oversight from Libertas Metallurgy Ltd. (“Libertas”) and
Ausenco Engineering Canada Inc. (“Ausenco”).
Process Design: The process design will continue to incorporate staged expansions that are
roughly in-line with the Preliminary Feasibility Study (“PFS”) with Phase 1 expected throughput
of approximately 25,000 tonnes per day (“tpd”) and Phase 2 throughput of approximately
50,000 tpd. The Study will focus on optimizing the selection of equipment based on these
throughput rates and will also evaluate the opportunity to vary throughput levels over the life-
of-mine based on changes in ore hardness of the different rock type blends.
Mining: mine planning work for the FS will be completed by AGP Mining Consultants Inc.
(“AGP Mining”). A trade -off study assessing potential cost reductions by moving to bigger
benches and larger mine equipment will be completed as part of this scope. Options to reduce
the Project’s carbon footprint, including the use of automation, electric vehicles and trolley
assist technology will also be assessed. The mine plan for the FS will include a more detailed
mine schedule for the early years of the mine life (including monthly and quarterly resolution).
Like the PFS, the mine plan will be focused on mining rates and cut-off grade and stockpiling
strategies that optimize the capital efficiency and Net Present Value of the Project.
Geotechnical: WSP Global Inc. (“ WSP”) has been selected for the role of Geotechnical
Engineer for the Study and will perform the geotechnical work for the open pit (pit slope
analysis) and for the infrastructure locations of the project (input to foundation design) . The
first part of the geotechnical investigation is ongoing through a condemnation drilling campaign
with additional geotechnical drilling expected to commence in 3Q 2023.
Tailings: WSP has been selected as the TSF Engineer for the Study and will also be
responsible for surface water management and the overall site water balance. Additional
settling tests to further improve the water efficiency of the Project will be completed . It is
expected that the TSF location in the PFS will be maintained, with additional engineering to be
completed to further define, cost and de-risk this key facility. WSP will also support Discovery’s
permitting process in the areas of tailings and water.
FEASIBILITY STUDY PROJECT TEAM
The Feasibility Study team consists of Ausenco , WSP and AGP Mining with support from
multiple independent third parties as outlined in the table below.
Area of Responsibility FS Qualified Person Third Party Input/Review
Principal Author Ausenco -
Metallurgy Ausenco Libertas / Blue Coast
Processing Ausenco -
Mining AGP Mining Hard Rock Consulting
Pit Geotech WSP -
Tailings Management WSP -
Environment Ausenco CIMA
Social Ausenco Vinfidem
QP CONSULTANT / THIRD PARTY WEBSITES
Ausenco – www.ausenco.com
AGP Mining – www.agpmining.com
Blue Coast – www.bluecoastresearch.ca
CIMA – www.cimasc.com.mx
IDEAS – www.ideasenagua.com
WSP – www.wsp.com/en-ca
Libertas - LinkedIn profile
Hard Rock Consulting - www.hardrock-consulting.com
Vinfidem – www.vinfidem.com.mx
About Discovery
Discovery’s flagship project is its 100%-owned Cordero project, one of the world’s largest silver
deposits. The PFS completed in January 2023 demonstrates that Cordero has the potential to
be developed into a highly capital efficient mine that offers the combination of margin, size and
scalability. Cordero is located close to infrastructure in a prolific mining belt in Chihuahua State,
Mexico.
On Behalf of the Board of Directors,
Tony Makuch, P.Eng
CEO & Director
For further information contact:
Forbes Gemmell, CFA
VP Corporate Development
Phone: 416-613-9410
Email: [email protected]
Website: www.discoverysilver.com
Qualified Person
Tony Esplin, FAusIMM, Chief Operating Officer , Discovery Silver Corp., is the Company's
designated Qualified Person for this news release within the meaning of National Instrument
43-101 Standards of Dis closure for Mineral Projects (“NI 43- 101”) and has reviewed and
validated that the information contained in this news release is accurate.
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