Discovery Silver Corp. (TSX-V: DSV, OTCQX: DSVSF)
(“Discovery” or the “Company”) is pleased to announce its financial
results for the three months ended March 31, 2021 (“Q1 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 project (“Cordero” or the “Project”) located in Chihuahua
State, Mexico. We are aggressively advancing the Project through a
66,000 metre (“m”) drill program in 2021 focused on delineating a
high-margin silver project with size and scaleability.
HIGHLIGHTS FROM Q1 2021 & SUBSEQUENT
EVENTS:
Financial & Corporate:
- As at March 31,
2021, we had a cash and cash equivalents and short term investment
balance of $94.7 million. The Company’s cash position as of the
date of this release is approximately $91.0 million.
- In February we
announced that an aggregate of 31,140,000 common share purchase
warrants with an exercise price of $1.00 were exercised prior to
their expiry on February 17, 2021. The exercises resulted in gross
proceeds of approximately $31 million, of which approximately $17.6
million was received in 2021.
- On March 12, 2021, we announced the
appointment of Jennifer Wagner to the Company’s Board of Directors.
Ms. Wagner is a corporate securities lawyer and has extensive
experience advising companies on a variety of corporate commercial
transactions, governance, and compliance matters. She currently
serves as Executive Vice-President, Corporate Affairs and
Sustainability at Kirkland Lake Gold Ltd.
- In late March,
we were added to the VanEck Vectors Junior Gold Miners ETF (NYSE:
GDXJ) (with the underlying designation as a silver pure-play
company) and the ETFMG Prime Junior Silver Miners ETF (NYSE:
SILJ).
Exploration:
At Cordero, we completed our 75,000 m (178
holes) Phase 1 drill program at the end of April. Data from Phase 1
drilling will be used to support the bulk-tonnage resource update
and preliminary economic assessment (“PEA”) scheduled for the
second half of the year.
The four drill rigs on site continued
uninterrupted with Phase 2 drilling. Phase 2 drilling will be
focused on reserve definition, resource expansion and high-grade
vein delineation.
PEA update
We announced earlier this month the PEA will be
led by Ausenco, an industry leader in cost-effective process design
and construction, with input from specialists across all key mining
disciplines. 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.
Support work for the study is progressing well.
A comprehensive metallurgical testwork program with samples based
on both rock type and mining phases is ongoing with results
expected in Q3 2021. Preliminary mine scheduling work has been
completed by AGP Mining Consultants Inc. to evaluate the impact on
project economics of different mining rates, mill throughput rates
and cut-off grade and stockpiling strategies. Knight Piésold and
Co. (USA) also completed a site visit to Cordero in March 2021. The
site visit included a review of drill core to assess pit wall
stability, an evaluation of potential tailings and waste storage
locations and a preliminary review of the hydrogeological regime at
Cordero.
Bulk-tonnage drilling
Our recent drilling has expanded the
higher-grade bulk-tonnage domain by more than 250 m northeast,
along strike in the South Corridor. This domain has now been
defined over a strike length of approximately 1.4 km and is open to
the northeast and has been drilled to a depth of 500 m and remains
open below this. Higher-grade zones of mineralization are typically
flanked by medium and lower-grade mineralization pointing to the
scaleability of the mineralized system at Cordero.
Select drill highlights during Q1 2021 and
subsequent to quarter-end from our bulk-tonnage targets
include:
- 128.2 m
averaging 165 g/t AgEq from 312.4 m (65
g/t Ag, 0.05 g/t Au, 1.2% Pb and 1.3% Zn) including 26.1 m
averaging 263 g/t AgEq1 (109 g/t Ag, 0.06
g/t Au, 2.0% Pb, 1.9% Zn) in hole C20-405
- 131.6 m
averaging 118 g/t AgEq from 49.2 m (48
g/t Ag, 0.09 g/t Au, 0.5% Pb and 1.1% Zn) including 37.1 m
averaging 223 g/t AgEq (119 g/t Ag, 0.22 g/t Au, 1.0% Pb,
1.2% Zn) in hole C20-375
- 110.0 m
averaging 110 g/t AgEq from 137.1 m (37 g/t Ag, 0.04 g/t
Au, 0.8% Pb and 1.0% Zn) and 51.8 m averaging 184 g/t
AgEq from 357.1 m (65 g/t Ag, 0.05 g/t Au, 1.6% Pb, 1.4%
Zn) in hole C21-414
- 85.6 m
averaging 175 g/t AgEq from 406.2 m (53 g/t Ag, 0.05 g/t
Au, 1.4% Pb and 1.7% Zn) including 39.9 m averaging 308 g/t
AgEq (93 g/t Ag, 0.08 g/t Au, 2.4% Pb, 3.0% Zn) in hole
C20-378
High-grade vein drilling
We continue to demonstrate the excellent
potential of the high-grade vein systems that transect the deposit.
At Josefina we have consistently intercepted bonanza grades along
1.5 km of strike extent. At the 1.5 km Todos Santos vein trend we
continue to expand the drill-confirmed strike extent with recent
step out holes 250 m to the southwest and 250 m to the northeast
from our previous drilling intercepting high-grade vein
mineralization. Similarly, recent step out holes at the Parcionera
vein trend have also doubled the drill-confirmed strike extent to
at least 1 km with clear potential for further expansion to the
northeast.
Select drill highlights from these veins during
Q1 2021 and subsequent to quarter end include:
Josefina Vein Trend
- 1.3 m
averaging 2,166 g/t AgEq from 95.6 m (1,581 g/t Ag, 0.15
g/t Au, 9.9% Pb and 5.4% Zn) in hole C20-381
- 1.3 m averaging 2,290
g/t AgEq from 136.7 m (1,607 g/t Ag, 2.06
g/t Au, 5.2% Pb and 8.0% Zn) in hole C20-396
- 4.1 m averaging 1,043 g/t
AgEq1 from 304.5 m (520 g/t Ag, 0.11 g/t Au, 3.0% Pb and
9.8% Zn) in hole C21-421
Todos Santos Vein Trend
- 1.4 m
averaging 1,107 g/t AgEq from 135.4 m (552 g/t Ag, 0.33
g/t Au, 11.0% Pb and 3.4% Zn) within a 4.0 m interval averaging 763
g/t AgEq (377 g/t Ag, 0.28 g/t Au, 7.1% Pb, 2.7% Zn) in hole
C20-385
-
1.2 m averaging 875 g/t AgEq1 from 186.5 m (241
g/t Ag, 0.52 g/t Au, 4.6% Pb and 10.4% Zn) in hole C20-387
-
2.8 m averaging 670 g/t AgEq1 from 166.3 m (207
g/t Ag, 0.15 g/t Au, 3.7% Pb and 7.7% Zn) in hole C20-397
Parcionera Vein Trend
- 4.4 m averaging 524
g/t AgEq from 53.9 m (246 g/t Ag, 0.39
g/t Au, 6.5% Pb and 0.4% Zn) within a 37.1 m interval averaging 113
g/t AgEq (47 g/t Ag, 0.09 g/t Au, 1.1% Pb, 0.4% Zn) in hole
C20-362
- 0.5 m
averaging 1,765 g/t AgEq from 100.9 m (665 g/t Ag, 0.58
g/t Au, 13.8% Pb and 13.7% Zn) in hole C20-360
For drill results noted above, refer to news
releases dated January 6, February 2, March 15, April 20 and May
26, 2021, for further details.
COVID-19:
The Company continues to be proactive in
mitigating health and safety risks regarding COVID-19 and
continually monitors employees and contractors. The Company remains
committed to being engaged with our local stakeholders during this
uncertain time and will continue to closely monitor the directives
of all levels of government in both Mexico and Canada as well as
the relevant health authorities. The current schedule for our
exploration activities and the delivery of the resource update in
Q3 2021 and PEA in 4Q 2021 assumes no significant impact from
COVID-19 on operations. The Company’s business, however, including
its operations and the market for its securities, could be
adversely impacted by the spread of new COVID-19 variants.
LOOKING AHEAD:
Our Phase 1 drill program began in September
2019 and concluded at the end of April 2021. In this campaign we
drilled 75,000 m delivering results that have exceeded our
expectations and that have confirmed the excellent high-grade
potential that exists within the giant mineralized footprint at
Cordero. Over the coming months we will be busy compiling this
drill data alongside our updated geological and structural models
to produce a brand-new resource estimate in Q3 2021. This resource
model, along with the results from our detailed metallurgical
testwork program that is ongoing, will form the basis for a
revamped PEA to be completed in Q4 2021. Our objective with the PEA
is to deliver a technically robust study supported by a
comprehensive dataset and vetted by top-tier independent
consultants that demonstrates Cordero is one of the few deposits in
the silver space that offers the combination of margin, size and
scaleability.
While we are working on these major de-risking
milestones we will remain focused on continuing to add value
through our Phase 2 drill program. This program will be focused on
three key areas: (1) upgrading inferred resources to indicated for
inclusion in a prefeasibility study on Cordero; (2) resource
expansion of bulk-tonnage mineralization; and (3) testing of the
width, grade and continuity of extensive high-grade vein systems
that transect the deposit. Additionally, socio-economic and
environmental baseline studies are currently underway and will
continue through the year.
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 March 31, 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 |
|
|
Q1 2021 |
|
Q1 2020 |
|
(a) Total |
|
|
|
|
$ |
(10,965,302 |
) |
$ |
(4,826,135 |
) |
(b) basic and diluted per share |
|
|
|
|
$ |
(0.03 |
) |
$ |
(0.02 |
) |
Net loss & total comprehensive loss |
|
|
|
|
$ |
(11,058,575 |
) |
$ |
(5,827,330 |
) |
Total weighted average shares outstanding |
|
|
|
|
|
317,429,574 |
|
|
211,423,805 |
|
|
March 31, 2021 |
December 31, 2020 |
Cash, cash equivalents & short-term investments |
$ |
94,742,626 |
$ |
82,547,897 |
Total assets |
$ |
123,667,380 |
$ |
111,564,881 |
Total current liabilities |
$ |
1,604,846 |
$ |
982,260 |
Total liabilities |
$ |
1,633,949 |
$ |
1,023,349 |
Working capital |
$ |
94,000,415 |
$ |
82,435,046 |
Total Shareholders’ equity |
$ |
122,033,432 |
$ |
110,541,532 |
About Discovery
Discovery’s flagship project is its 100%-owned
Cordero project, one of the few silver projects globally that
offers margin, size and scaleability. 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
over C$90 million available for aggressive exploration, resource
expansion and future 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:
1All 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.
The most recent technical report for the Cordero
Project is the 2018 Preliminary Economic Assessment (PEA) authored
by M3 Engineering and Technology Corp and includes the most recent
resource estimate, completed by Independent Mining Consultants,
Inc. It is available on Discovery’s website and on SEDAR under
Levon Resources Ltd, a wholly owned subsidiary of Discovery. The
PEA assumes metallurgical recoveries of 89% for Ag, 84% for Pb, 72%
for Zn and 40% for 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 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.
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
Assessmen 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.
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