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, 2020.
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 the strong investment
interest in our Company and the exposure 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 metre (“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)
- 105.9 m of 188 g/t AgEq1 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 firepower to
aggressively advance Cordero and to accelerate our exploration
efforts on the surrounding regional property package.
On March 31, 2020, we announced the 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 on 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 DiscoveryDiscovery 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
100%-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, CFAVP Corporate
Development & Investor
Relationsforbes.gemmell@dsvmetals.com
TECHNICAL NOTES & REFERENCES:
1 All 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. 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 indicated 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, $1,262/oz Au.
AgEq3 (g/t) Cutoff |
Tonnage & Grade within Mineral Resources Pit
Shell |
Total Contained Ag (Mozs) |
Total Contained AgEq3 (Moz) |
Class |
Tonnes (M) |
AgEq3 (g/t) |
Ag (g/t) |
Au (g/t) |
Pb (%) |
Zn (%) |
15 |
Indicated |
990 |
32 |
13 |
0.04 |
0.2 |
0.4 |
408 |
1,022 |
Inferred |
282 |
56 |
21 |
0.04 |
0.3 |
0.8 |
188 |
513 |
25 |
Indicated |
467 |
46 |
19 |
0.06 |
0.3 |
0.5 |
278 |
686 |
Inferred |
183 |
77 |
28 |
0.05 |
0.4 |
1.0 |
163 |
451 |
50 |
Indicated |
99 |
95 |
40 |
0.11 |
0.6 |
1.0 |
128 |
303 |
Inferred |
100 |
112 |
41 |
0.06 |
0.7 |
1.5 |
131 |
360 |
3 A PEA was completed for Levon in 2018 by M3
Engineering and Technology Corp., and includes the most recent
resource estimate, completed by Independent Mining Consultants
(available on Discovery’s website and on SEDAR under Levon’s
profile). Discovery acquired Cordero through the acquisition of
Levon in August 2019. Resource commodity prices used in the PEA are
($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,
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 samples 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 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. 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 obligation to update any forward-looking statements
except as required under applicable laws.
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