Discovery Metals Corp. (TSX-V: DSV, OTCQX: DSVMF)
(“Discovery” or the “Company”) is pleased to outline its 2021 work
program and budget for its flagship Cordero project (“Cordero” or
“the Project”) located in Chihuahua State, Mexico. All amounts are
presented in Canadian dollars unless otherwise stated.
Taj Singh, President and CEO, states: “We
anticipate 2021 will be a transformative year where we firmly
establish Cordero as one of the few silver projects globally that
offers margin, size and scaleability. Our focus is to both de-risk
the Project by delivering a technically robust PEA, and to deliver
resource growth, by expanding known zones and making new
discoveries. We plan to complete 66,000 m of drilling outlined as
follows:
|
2021 Drill Program - 66,000 m |
|
Phase 1 drilling - 20,000 m |
Phase 2 drilling - 46,000 m |
|
1Q 2021 - 2Q 2021 |
2Q 2021 - 4Q 2021 |
Bulk-tonnage mineralization |
Resource definition - deliver new resource
estimate followed by revamped PEA |
Reserve definition - upgrade resource for
inclusion in PFS |
Resource expansion - target 'blue sky'
potential |
High-grade veins |
Resource development - initial testing of grades
& continuity |
Resource definition - initial infill drilling |
Property-wide targets |
|
Discovery - initiate scout drilling on
property-wide targets |
“Other key project development milestones for
2021 include completion of social baseline assessment and progress
on environmental baseline studies. Our planned work for metallurgy,
processing, geotech and hydrology will go above and beyond what is
typically included in a PEA study and will identify areas where we
can accelerate pre-feasibility work.
“Our current cash balance of approximately $82
million places us in a very strong position to fund our planned
expenditures at Cordero this year of approximately $26 million.
Recent investment in on-site infrastructure will allow us to
maintain strict COVID-19 protocols and should ensure we can
complete our proposed work program in a safe and efficient manner.
We will continue to closely monitor the health and safety situation
at site and if practicable, we will look to expand our drill
program if it is deemed safe to do so.”
2021 DRILL PLANS
We plan on completing 66,000 m of drilling in
2021 based on four drill rigs operating throughout the year. This
program and the number of drill rigs may be expanded when the
Company is confident that the health and safety risks related to
COVID-19 can be managed effectively.
Further details on the allocation of 2021 drill
metres are provided in the table below. Based on the excellent
results from drilling in the South Corridor, our Phase 1 drill
program has been expanded by 10,000 m to 65,000 m. Our Phase 1
drill program will be completed in 2Q 2021 and will be immediately
followed by our Phase 2 drill program. The total amount and
allocation of drill metres in our Phase 2 drill program is still to
be determined and will be based on a detailed review this quarter
of all drill results to date.
|
2019 |
2020 |
2021 |
Total |
Details |
Phase 1 Drilling(metres) |
6,000 |
39,000 |
20,000 |
65,000 |
Bulk-tonnage mineralization – resource definition
(for 2021 resource update & PEA) |
High-grade veins – initial testing of grades &
continuity |
Phase 2 Drilling (metres) |
- |
- |
46,000 |
To be determined |
Bulk-tonnage mineralization – upgrade resource
(for PFS) & resource expansion |
High-grade veins – resource definition |
Property-wide targets – initial scout
drilling |
Total |
6,000 |
39,000 |
66,000 |
|
|
BALANCE SHEET
We ended 2020 with a cash balance of
approximately $82 million and no debt. Our planned work program at
Cordero in 2021 is budgeted at $26 million. Expenditures for the
year reflect an accelerated approach to de-risking the Project
while still allocating growth capital to resource expansion and
property-wide exploration. We have a significant cash balance
beyond our proposed 2021 budget spend that will allow us to expand
our work program, if feasible within COVID-19 constraints, as well
as to rapidly advance the Project to a construction decision beyond
2021.
RESOURCE ESTIMATE & PRELIMINARY
ECONOMIC ASSESSMENT
Our objective is to deliver a technically robust
PEA that demonstrates Cordero is a high-margin silver project with
size and scaleability. The PEA will be focused on the bulk-tonnage
domain and will be supported by more than 350 drill holes and
180,000 m of drilling and two programs of detailed metallurgical
testwork. Key milestones include:
- Phase 1 drill
program – based on our results to date we have expanded
our Phase 1 program to 65,000 m (an increase of 10,000 m). We
expect to complete the remaining 20,000 m of this expanded Phase 1
program in 2Q 2021.
-
Metallurgical testwork – sampling for the
metallurgical testwork is based on both mining phase and lithology.
The program will consist of comminution testwork, flotation
optimisation, preconcentration testwork and high-level
environmental testwork. Results are expected to be received in 2Q
2021.
- Resource
estimate – the resource estimate will be focused on the
bulk-tonnage domain only and will incorporate all historical data
and data from Phase 1 drilling. The resource update is expected to
be completed in 3Q 2021.
-
PEA – the ‘base case’ mine plan in the PEA will be
based on a conservative silver price and will incorporate staged
expansions of the throughput rate at the planned processing
facility. Scheduling will prioritise higher grades early in the
mine life to expedite payback. The study will be based on the
updated resource model and all metallurgical testwork and is
expected to be completed in 4Q 2021. To demonstrate the
scaleability of Cordero we also anticipate including a ‘blue sky’
alternative as an addendum that looks at the impact of higher
silver prices on Project throughput and optimization.
HIGH-GRADE VEINS
Phase 1 drilling of the high-grade vein trends
that transect the deposit has focused on testing the limits and
continuity of the vein trends and has yielded highly encouraging
results. In Phase 2, the focus of vein drilling will transition to
resource definition with the objective of publishing an initial
resource estimate of the high-grade veins in 2022.
PRE-FEASIBILITY STUDY
- Phase 2
drill program – a key focus of our Phase 2 drill program
will be on upgrading any inferred mineral resources within the PEA
mine plan to allow the inclusion of these ounces in the PFS mine
plan. This infill drilling is expected to commence in 3Q 2021
following a review of all Phase 1 data.
- Gap
analysis – as part of our PEA we will be completing a gap
analysis for metallurgy, processing, geotech and hydrology to
identify the data gaps required to advance the project to a PFS
level. This analysis will allow us, where appropriate, to commence
PFS level work for these items in 2H 2021 in order to accelerate
the delivery of a PFS for Cordero.
CORPORATE RESPONSIBILITY
- Health &
safety – managing health and safety during the COVID-19
pandemic will remain a key priority during the year. Risk
mitigation measures include recent investment in on-site
infrastructure to accommodate social-distancing requirements,
enhanced testing and travel restrictions.
-
Environment – CIMA Consultores Ambientales, a
consulting firm based in Chihuahua, Mexico, was engaged in 3Q 2020
to complete an environmental baseline study at Cordero. Field work
associated with the study has been delayed due to COVID-19
restrictions. We anticipate commencing field work in 1H 2021 and
completing the study in 1H 2022.
- Community
relations – we engaged Vinfidem Consultoria, a consulting
firm based in Sonora, Mexico, in 3Q 2020 to complete a social
baseline study of the local municipalities associated with Cordero.
The objective of the study is to identify and evaluate the
potential social impact of the project. The study is expected to be
completed in 3Q 2021.
PROPERTY-WIDE EXPLORATION
- Target generation
– we have strengthened our exploration team in Mexico in order to
rapidly advance a detailed field mapping and sampling program on
our property-wide targets in 2021.
-
Reconnaissance drilling – initial drill testing of
property-wide targets is expected to commence in the 4Q 2021
following the completion of field work on our high priority
targets.
For further information contact:
Forbes Gemmell, CFAVP Corporate
Development & Investor RelationsPhone: 416-613-9410Email:
forbes.gemmell@dsvmetals.comWebsite: www.dsvmetals.com
About DiscoveryDiscovery’s
flagship project is its 100%-owned Cordero silver project in
Chihuahua State, Mexico. Our drill results to date show that
Cordero is developing all the attributes of a tier 1 project –
grade, scale, significant organic growth opportunities and well
located in one of Mexico’s premier mining belts. The project is
supported by an industry leading balance sheet with over $80
million of cash allocated for aggressive exploration, resource
expansion and future development.
On Behalf of the Board of Directors,
Taj Singh, M.Eng, P.Eng, CPA, President, Chief
Executive Officer and Director
Qualified
PersonGernot 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.
FORWARD-LOOKING STATEMENTS:
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 but are not limited to:
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.
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