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 June 30, 2020, and
to provide a summary of key events subsequent to quarter end. All
amounts are presented in Canadian dollars (“C$”) unless otherwise
stated.
Discovery is focused on advancing our 100%-owned
flagship Cordero project (“Cordero” or the “Project”) in Chihuahua
State, Mexico. The 35,000-hectare Cordero property covers a
sizeable district that hosts a very large known silver resource as
well as numerous exploration targets for bulk tonnage
diatreme-hosted, porphyry style deposits and also carbonate
replacement deposits.
CORPORATE HIGHLIGHTS:
Our Company closed a $25 million private
placement in two tranches (May 29, 2020 – Tranche 1 and June 8,
2020 – Tranche 2) that included a $10 million investment from Mr.
Eric Sprott. The placement consisted of 45.5 million units at a
price of $0.55 per unit. Each unit was comprised of one common
share of Discovery and one-half of one common share purchase
warrant, with each full share purchase warrant exercisable at $0.77
until May 29, 2022 (Tranche 1) or until June 8, 2022 (Tranche 2)
(refer to the press release dated June 9, 2020, for further
details).
Subsequent to quarter end, on August 7, 2020, we
closed a $35 million private placement that included an additional
$15 million investment from Mr. Sprott. The placement consisted of
25.9 million units at a price of $1.35 per unit. Each unit was
comprised of one common share of Discovery and one-half of one
common share purchase warrant, with each full warrant exercisable
at $1.75 until August 7, 2022 (refer to the press release dated
August 11, 2020, for further details).
With the completion of this second financing now
closed we have over $80 million of cash to drive value through
aggressive exploration, resource growth and future development.
EXPLORATION HIGHLIGHTS:
In June 2020 we initiated the restart of
drilling activity at Cordero following the temporary shutdown of
operations in March 2020 due to increased health and safety risks
relating to COVID-19. We have put in place strict health and safety
protocols, including mandatory testing of all onsite workers, to
minimise health risks to our employees, consultants, contractors
and communities. In mid-August, after expanding our camp
facilities, we increased our drilling activities and we are now
operating at pre-COVID 19 levels with four diamond drill rigs.
Shortly following the restart of drilling, and
based on the excellent exploration results we have achieved to
date, we made the decision to expand our Phase 1 drill program by
20,000 metres (“m”) to 50,000 to 55,000 m. To date we have
completed 63 holes totaling approximately 23,500 m. We anticipate
completing the expanded Phase 1 drill program by the end of Q1
2021.
At our bulk-tonnage targets we have thus far
demonstrated excellent near-surface higher-grade potential at the
Project over a strike length of approximately 1,250m. We also
continued to advance high-grade sulphide veins as a separate
exploration target - identifying and isolating multiple sulphide
vein or sulphide related intercepts that returned kilogram per
tonne silver equivalent intercepts. Drill highlights at Cordero
during Q2 2020 and subsequent to quarter end from both these
targets include:
Bulk-tonnage targets
- 62.8 m averaging 217 grams per tonne (“g/t”)
silver-equivalent (“AgEq”)1 in hole C20-316 from
222.3 m (79 g/t silver (“Ag”), 0.58 g/t gold (“Au”), 1.2% lead
(“Pb” and 1.2% zinc (“Zn”))
- 168.8 m averaging 207 g/t
AgEq1 in hole C20-319 from 140.0 m (70 g/t Ag,
0.10 g/t Au, 1.5% Pb and 1.9% Zn)
- 51.9 m averaging 197 g/t AgEq1 in hole C20-328
from 79.2 m (69 g/t Ag, 0.13 g/t Au, 1.1% Pb and 1.0% Zn)
- 120.4 m averaging 114 g/t
AgEq1 in hole C20-333 from 206.8 m (30 g/t Ag,
0.11 g/t Au, 0.4% lead Pb and 1.5% Zn)
High-grade vein targets
- Todos Santos Vein
- 1.4 m averaging 1,907 g/t
AgEq1 in hole C20-342 from 147.0 m (700 g/t Ag,
0.74 g/t Au, 16.1% Pb and 14.0% Zn)
- 1.9 m averaging 2,007 g/t
AgEq1 in hole C20-344 from 171.1 m (1,035 g/t Ag,
0.06 g/t Au, 20.0% Pb and 6.4% Zn)
- 0.5 m averaging 1,293 g/t AgEq1 in hole
C20-347 from 125.7 m (629 g/t Ag, 0.33 g/t Au, 13.0% Pb and 4.4%
Zn)
- Parcionera Vein
- 1.3 m averaging 2,777 g/t
AgEq1 in hole C20-328 from 105.9 m (1,060 g/t Ag,
0.50 g/t Au, 15.9% Pb and 26.9% Zn)
- 1.5 m averaging 1,119 g/t AgEq1 in hole
C20-338 from 149.8 m (489 g/t Ag, 0.82 g/t Au, 2.9% Pb and 11.1%
Zn)
- 1.3 m averaging 1,073 g/t AgEq1 in hole
C20-340 from 69.6 m (587 g/t Ag, 0.67 g/t Au, 9.4% Pb and 2.4%
Zn)
- South Corridor/Josefina Vein
- 1.3 m averaging 1,007 g/t
AgEq1 in hole C19-307 from 202.7 m (516 g/t Ag,
0.05 g/t Au, 5.7% Pb and 6.9% Zn)
- 1.2 m averaging 1,436 g/t
AgEq1 in hole C20-310 from 51.1 m (904 g/t Ag,
0.08 g/t Au, 5.4% Pb and 8.1% Zn)
- 2.0 m averaging 966 g/t AgEq1 in hole C20-345
from 66.0 m (846 g/t Ag, 0.33 g/t Au, 2.6% Pb and 0.1% Zn)
Refer to press releases dated April 7, May 7,
June 18, July 20, and August 19, 2020 for further details.
Q2 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 June 30, 2020. A
copy of the Financial Statements and MD&A is available on our
website at www.dsvmetals.com or on SEDAR at www.sedar.com.
Net loss |
Q2 2020 |
Q2 2019 |
(a) Total(A) |
$ |
(1,747,677) |
$ |
(807,897) |
(b) basic and diluted per share |
$ |
(0.01) |
$ |
(0.01) |
Net loss & total comprehensive loss |
$ |
(1,936,075) |
$ |
(914,483) |
Total weighted average shares outstanding |
|
226,123,223 |
|
65,043,998 |
A. |
Net loss for Q2 2020 includes non-cash share-based compensation
expense of $599,478 (Q2 2019: and $48,495) and a 100% provision for
IVA receivable additions of $236,934 (Q2 2019: $nil). |
|
June 30, 2020 |
December 31, 2019 |
Cash, cash equivalents & short-term investments |
$ |
41,913,163 |
$ |
23,950,737 |
Total assets |
$ |
70,357,450 |
$ |
53,518,599 |
Total current liabilities |
$ |
520,234 |
$ |
716,596 |
Total liabilities |
$ |
584,944 |
$ |
804,466 |
Total Shareholders’ equity |
$ |
69,772,506 |
$ |
52,714,133 |
LOOKING AHEAD:
With the two financings completed we are now
well funded with over $80 million in cash. Support for these
financings reflects the exceptional exposure Cordero offers to
increasing silver prices and the progress we have made over the
past 12-months in exploring the Project following the acquisition
of Levon Resources Ltd. Moving forward we are focused on the
diligent deployment of this capital in the following areas:
- Expansion of the higher-grade bulk-tonnage domain at
Cordero
- Systematic assessment of the extensive vein trends flanking the
Cordero deposit
- Follow up metallurgical test work based on our improved
understanding the Cordero project to optimize the proposed flow
sheet
- Completion of the socio-economic and sustainability assessments
required to advance Cordero beyond the preliminary economic
assessment stage
This work will culminate in a brand-new resource
estimate and preliminary economic assessment for Cordero in the
second-half of 2021. Separately, we will be advancing our
property-wide exploration targets including initial drill testing
of other large interpreted intrusive centres on our sizeable land
package. We look forward to providing further details on all these
fronts through the remainder of the year and into 2021.
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”), a wholly owned subsidiary of Discovery)
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, $1,262/oz Au.
AgEq3 (g/t)Cutoff |
Tonnage & Grade within Mineral Resources Pit
Shell |
TotalContainedAg (Mozs) |
TotalContainedAgEq3 (Moz) |
Class |
Tonnes(M) |
AgEq3(g/t) |
Ag (g/t) |
Au (g/t) |
Pb (%) |
Zn (%) |
15 |
Indicated |
990 |
32 |
13 |
0.04 |
0.2 |
0.4 |
408 |
1,022 |
Inferred |
282 |
56 |
21 |
0.04 |
0.3 |
0.8 |
188 |
513 |
25 |
Indicated |
467 |
46 |
19 |
0.06 |
0.3 |
0.5 |
278 |
686 |
Inferred |
183 |
77 |
28 |
0.05 |
0.4 |
1.0 |
163 |
451 |
50 |
Indicated |
99 |
95 |
40 |
0.11 |
0.6 |
1.0 |
128 |
303 |
Inferred |
100 |
112 |
41 |
0.06 |
0.7 |
1.5 |
131 |
360 |
3 A PEA was completed for Levon in 2018 by M3
Engineering and Technology Corp., and includes the most recent
resource estimate, completed by Independent Mining Consultants
(available on Discovery’s website and on SEDAR under Levon’s
profile). Discovery acquired Cordero through the acquisition of
Levon in August 2019. Resource commodity prices used in the PEA are
($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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