Discovery Metals Corp. (TSX-V: DSV) (“Discovery”
or the “Company”) is pleased to announce mobilization for a Phase 1
diamond drilling program on its newly acquired and 100%-owned
Cordero project (“Cordero” or “the Project”) located in Chihuahua
State, Mexico. Drill permits are in place and Discovery will begin
its drill program in the coming days, approximately five weeks
ahead of the anticipated commencement date. Discovery’s plan is to
drill approximately 30,000-35,000m over the next 12 months with the
focus of: (1) delineating and discovering the highest-grade phases
and domains of the mineralized system; and (2) testing new high
priority areas.
Taj Singh, President and CEO, states: “In just a
few short weeks we have made great strides at Cordero. We have
integrated our teams, progressed well through our review of
historic drilling, planned our first holes, and accelerated the
start-up of our drill campaign. We are very excited to be
aggressively exploring one of the world’s largest silver projects
against a backdrop of rising silver prices and we are confident
that our high-grade and high-margin approach at Cordero will add
significant value.”
Background of the Cordero
ProjectCordero is located on the eastern edge of the
Sierra Madre Occidental mountains within the northern extent of the
Central Mexican Silver Belt. The Project is also located in one of
Mexico’s premier porphyry and carbonate replacement deposit
districts, and is similar to well-known nearby bulk-tonnage
precious metal operating mines (e.g. Newmont Goldcorp Corporation’s
Peñasquito Mine) and projects (e.g. Orla Mining Ltd’s Camino Rojo
project).
The bulk-tonnage potential of the Cordero
deposit was first recognized in 2009 by Levon Resources Ltd
(“Levon”) and the resource area was tested with 132,000m of
drilling in 292 holes. The resource estimate for the Project, as
currently stated, captures a massive inventory of
silver-zinc-lead-gold, making it one of the largest undeveloped
silver deposits in the world and thus providing exceptional
leverage in a rising silver market. Within this extraordinary
in-situ resource, Discovery has identified a compelling opportunity
to delineate and expand areas of higher-grade silver that occur
through the deposit.
Below in Table 1 is a sensitivity analysis
showing the mineral resource, with additional information on grade
and tonnage for higher cut-off grades. This table shows that a
significant portion of the resource remains even at significantly
higher cut-off grades.
Table 1: 2018 Cordero resource summary – Cutoff grade
sensitivity1
AgEq1 (g/t)Cutoff |
Tonnage & Grade within Mineral Resources Pit
Shell |
TotalContainedAg Mozs |
TotalContainedAgEq1 Moz |
Class |
Tonnesx1000 |
AgEq1g/t |
Ag g/t |
Zn % |
Pb % |
Au g/t |
15 (used in PEA) |
Indicated |
990,054 |
32 |
13 |
0.4 |
0.2 |
0.04 |
407.8 |
1022.0 |
Inferred |
282,217 |
56 |
21 |
0.8 |
0.3 |
0.04 |
187.5 |
513.5 |
25 |
Indicated |
467,298 |
46 |
19 |
0.5 |
0.3 |
0.06 |
278.4 |
685.9 |
Inferred |
182,649 |
77 |
28 |
1.0 |
0.4 |
0.05 |
163.3 |
450.7 |
50 |
Indicated |
99,217 |
95 |
40 |
1.0 |
0.6 |
0.11 |
128.4 |
302.8 |
Inferred |
100,003 |
112 |
41 |
1.5 |
0.7 |
0.06 |
131.1 |
360.3 |
Within the Cordero drill database, there are 285
individual intervals with AgEq2 values above 500 g/t and 1,416
individual intervals with AgEq2 values above 200 g/t. A selection
of examples of high-grade intervals and the longest natural
intervals with grades over 200 g/t AgEq2 at Cordero are shown in
the Table 2 and Table 3 respectively. These two tables illustrate
both the high-grade selective (underground) and high-grade
bulk-tonnage (open-pit) potential of the Project.
Table 2: Cordero project –
Selection of historic high-grade intervals
Hole |
From (m) |
To (m) |
Length (m) |
Ag g/t |
Zn% |
Pb% |
Au g/t |
AgEq2 (g/t) |
C10-66 |
256 |
258 |
2 |
3,230 |
11.4 |
2.3 |
0.08 |
3,878 |
C11-141 |
472 |
478 |
6 |
993 |
27.3 |
14.6 |
0.29 |
2,887 |
C12-251 |
230 |
232 |
2 |
1,150 |
7.7 |
20.4 |
0.52 |
2,779 |
C14-271 |
470 |
472 |
2 |
1,179 |
7.3 |
12.4 |
0.20 |
2,311 |
C10-29 |
122 |
126 |
4 |
925 |
4.1 |
19.9 |
0.21 |
2,002 |
C17-284 |
466 |
468 |
2 |
134 |
2.6 |
2.1 |
17.95 |
1,865 |
C10-39 |
72 |
74 |
2 |
732 |
14.0 |
7.5 |
0.53 |
1,738 |
C10-32 |
280 |
286 |
6 |
547 |
11.5 |
13.9 |
0.30 |
1,732 |
C11-139 |
72 |
76 |
4 |
846 |
1.5 |
16.7 |
0.71 |
1,639 |
C12-236 |
54 |
56 |
2 |
830 |
1.6 |
17.2 |
0.30 |
1,581 |
|
|
|
|
|
|
|
|
|
Table 3: Cordero project – Selection of
longest natural intervals > 200 g/t AgEq2
Hole |
From (m) |
To (m) |
Length (m) |
Ag g/t |
Zn% |
Pb% |
Au g/t |
AgEq2 g/t |
C14-267 |
216 |
272 |
56 |
68 |
3.6 |
1.0 |
0.14 |
292 |
C09-5 |
132 |
180 |
48 |
193 |
3.2 |
3.0 |
1.31 |
562 |
C10-26 |
224 |
264 |
40 |
167 |
2.3 |
2.2 |
0.47 |
398 |
C11-113 |
320 |
360 |
40 |
61 |
3.4 |
1.1 |
0.06 |
272 |
C11-165 |
428 |
466 |
38 |
56 |
2.7 |
2.2 |
0.11 |
277 |
C10-31 |
176 |
212 |
36 |
317 |
2.4 |
5.5 |
0.85 |
700 |
C10-39 |
44 |
78 |
34 |
92 |
1.4 |
1.3 |
1.50 |
322 |
C11-190 |
588 |
620 |
32 |
41 |
3.8 |
0.1 |
0.02 |
234 |
C14-275 |
112 |
140 |
28 |
180 |
2.4 |
1.3 |
0.09 |
353 |
C10-60 |
246 |
274 |
28 |
37 |
3.3 |
0.7 |
0.02 |
227 |
A summary of the most recent economics of the
Project can be found in Section 1.14 of the 2018 Preliminary
Economic Analysis (“PEA”)1. The PEA contemplates a 29-year
conventional open-pit truck-and-shovel operation with a
life-of-mine strip ratio of 0.94, with essentially all of the ore
being sulphides. Testwork indicates the ore responds well to a
standard crushing / milling / sequential lead and zinc flotation
concentration process. Discovery’s goal is to undertake intensive
drilling in advance of updating the resource and PEA. Discovery
believes that a focus on drilling and defining higher-grade areas
of the Cordero deposit and subsequent improved geological modelling
and improvements in mine planning, mining methods, process
engineering and logistics, may vastly improve the economics of the
Project by lowering capital and operating costs.
Table 4 below outlines the economics of the 2018
PEA and, although Discovery intends to significantly rescope the
Project, it is mainly shown to illustrate the excellent leverage
the Project has to higher silver prices (all metal prices other
than silver are kept constant; the same as used in the PEA1).
Table 4: 2018 Cordero PEA – Post-tax economic
sensitivities to silver prices1
Ag Price (US$/oz) |
NPV5% (US$M) |
NPV7.5% (US$M) |
IRR (%) |
Cash Costs (US$/oz AgEq1) |
$20 |
$700 |
$426 |
16.5 |
$9.70 |
$25 |
$1,118 |
$754 |
22.6 |
$10.65 |
$30 |
$1,536 |
$1,081 |
28.3 |
$11.39 |
$35 |
$1,953 |
$1,408 |
33.8 |
$11.99 |
Project update and plans
In the five weeks since acquiring the Project
through its acquisition of Levon, Discovery has:
- successfully completed the
integration of the technical teams, under the overall supervision
of Gernot Wober, Discovery’s Vice-President of Exploration.
Discovery’s Roman Solis continues to serve as Country Manager, and
Dave Greenan, who has been on the Cordero project since the
discovery in 2009, will continue to act as the Cordero Project
Exploration Manager.
- initiated a relogging and review of
historical drill core in order to develop a better understanding of
the distribution and controls on mineralization, such that
high-grade mineralization within the relatively sparsely drilled
portions of the deposit can be targeted. To date, the geological
team has relogged approximately 30% of the previous Cordero
holes.
Discovery’s focus over 2019 and 2020 can be
split into two key areas: Cordero deposit and Property-wide. The
current plan calls for approximately 20,000-25,000m drilling at the
Cordero deposit and 10,000m Property-wide for a total estimated
budget of C$7-8M.
On the Property-wide exploration, Discovery
intends to follow up on numerous exploration targets that have been
defined outside of the resource area, and to carry out
reconnaissance programs to define new targets on the remainder of
the property. Prior to Levon’s exploration program for bulk tonnage
silver-zinc-lead-gold deposits, exploration focused on:
- Narrow, high-grade underground vein and intrusive contact
deposits;
- Bulk tonnage porphyry copper and molybdenum potential;
- Gold skarn and porphyry gold deposits.
Currently there are six regional targets outside
of the Cordero deposit that require follow-up work and drill
testing. A conceptual plan view map of the Cordero property and
various target areas is shown in Figure 1.2 of the 2018 PEA1.
Historical mine workings and prospects at
Cordero date back to the 17th century. There are about 40 shallow,
vertical shafts with associated open stopes at Cordero, generally
developing outcropping, narrow (1-2 m), high-grade silver, zinc,
lead and gold veins as well as high-grade skarn mineralization.
Local artisanal miners report most of the past and recent
production was direct shipping ore, which was hand-sorted, shipped,
and processed in the nearby town of Parral. The La Luz mine was the
largest mine and was active in the 1940's. Remnants of a small
six-cell floatation mill built by ASARCO remain at La Luz mine.
ABOUT DISCOVERY METALSDiscovery
is exploring one of the world’s largest silver resources at its
100%-owned Cordero Project in Chihuahua State, Mexico. The
37,000-hectare property covers an entire porphyry district that
hosts the announced resource and numerous exploration targets for
bulk tonnage diatreme-hosted, porphyry-style, and carbonate
replacement deposits. In addition, Discovery is focused on
discovering and advancing high-grade silver-zinc-lead deposits in a
land package of approximately 150,000 hectares covering a historic
mining district in Coahuila State, Mexico. The portfolio of three
large-scale, drill-ready projects and several earlier-stage
prospects, all with shallow, high-grade mineralization, is situated
in a world-class carbonate replacement deposit belt that stretches
from southeast Arizona to central Mexico. The land holdings contain
numerous historical direct-ship ore workings with several
kilometers of underground development, but there was no modern
exploration or drill testing on the properties prior to the work
carried out by Discovery.
REFERENCES1 PEA by M3
Engineering, Resource by IMC, Mar. 1, 2018, Resource commodity
prices ($US): $17.14/oz Ag, $1.11/lb Zn, $0.96/lb Pb, $1,262/oz Au;
Mine plan uses a subset of Indicated and Inferred Resources at 15
g/t AgEq cutoff. AgEq grades do not consider metallurgical or
smelting recoveries.
2 AgEq calculated using (USD): $16/oz Ag,
$1.15/lb Zn, $0.85/lb Pb, $1,250/oz Au. AgEq grades do not consider
metallurgical or smelting recoveries.
TECHNICAL
NOTESQualified Person:
Gernot Wober, P.Geo, V.P. 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.
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 the Company 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, delays in receipt of required permits,
timing of commencement of drilling, 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. We do not
assume any obligation to update any forward-looking statements
except as required under applicable laws.
For Further Information:
Discovery Metals Corp.Taj Singh, President and Chief Executive
Officer,on behalf of the board of directors(416)
613-9410info@dsvmetals.com
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