Discovery Silver Corp. (TSX-V: DSV, OTCQX: DSVSF)
(“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 State, 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).
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 samples 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 confirmed 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 in 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
successful 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 AgEq1 at an average
grade of 48 g/t AgEq1 (541 Mt grading 20 g/t Ag, 0.06 g/t Au, 0.29%
Pb and 0.51% Zn)
-
Inferred Resource of 119 Moz AgEq1 at an average grade of 34 g/t
AgEq1 (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 AgEq1 at an average grade of 20 g/t
AgEq1 (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 of 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 AgEq1 (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 width, 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 ESG
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 development. 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, CFAVP Corporate
Development & Investor RelationsPhone: 416-613-9410Email:
forbes.gemmell@discoverysilver.comWebsite:
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 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 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 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.
Mineral Resource Estimate:
Sulphide Resource (assumed to be processed via
mill/flotation)
NSR $/tcut-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 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. 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.
Discovery Silver (TSXV:DSV)
Historical Stock Chart
From Jun 2024 to Jul 2024
Discovery Silver (TSXV:DSV)
Historical Stock Chart
From Jul 2023 to Jul 2024