Discovery Silver Corp. - Operations - Cordero Project (Minera Titán)

About Cordero

Overview

One of the world's largest undeveloped silver reserves.

The Cordero project is one of the world's largest undeveloped silver reserve. Based on the feasibility study results issued on February 20, 2024, Cordero will be one of the largest silver producers globally, with low unit costs that will generate substantial cash flows and attractive returns. The project will deliver valuable benefits to Mexico in terms of job creation, skills training, investment, local procurement purchasing and generating tax revenue.

Cordero has all the attributes of a high-quality project: grade, scale, significant organic growth opportunities and the ideal location in mining-friendly Chihuahua state along a prolific silver belt. It is being developed according to the highest environmental standards and, in 2023, was honoured with PROFEPA’s (Mexico’s Attorney’s Office for Environmental Protection) Quality Environmental Certification, which recognizes companies achieving full compliance with Mexico’s environmental regulations.

Geology and Metallurgy

Geology

Since acquiring Cordero in August 2019, Discovery’s focus has been on understanding the nature of the higher grade zones within the larger mineralized system.

Cordero is situated on the eastern edge of the Sierra Madre Occidental mountains in the northern part of the Central Mexican Silver Belt, Mexico’s premier porphyry and carbonate replacement deposit district. Mineralization here is similar to the well-known nearby bulk tonnage precious metals mines and projects. In addition to bulk tonnage mineralization, there’s also multiple high-grade silver-zinc-lead-gold sulphide vein trends as evidenced by more than 40 historical shallow, vertical shafts and associated underground workings. Property-wide, Cordero hosts at least eight large-scale targets on two distinct porphyry belts and a third mineralized volcanic centre.

Cordero Geology Overview Download PDF

Metallurgy

Discovery has completed three detailed metallurgical test work programs that demonstrate excellent recoveries via conventional flotation of all major rock types to generate clean, highly saleable concentrates.

Test work highlights include:

Silver recoveries on average of 85-90%, lead recoveries of 85-90% and zinc recoveries of 83-87% from locked cycle tests
Test work completed on all major rock types, varying grade profiles and from different areas across the deposit
Higher recoveries were achieved at a coarse grind size of approximately 200 microns, and
Oxide-sulphide blend testwork established economic recoveries allowing for co-processing of oxide and sulphide mineralization via flotation.

Further details can be found in our press releases on September 7, 2021, August 29, 2022 and October 26, 2023.

Reserves and Resources

NI 43-101 RESOURCE*

Cordero hosts one of the largest mineral inventories of silver globally, along with significant volumes of gold, lead and zinc.

The Mineral Resource Estimate for Cordero was most recently updated in February 2024. This update incorporated an additional 33,400 m of drilling for a total of 310,900 m of drilling in 793 drill holes.

The Measured & Indicated Resource grew by 70 Moz AgEq to 1,202 Moz AgEq with the Inferred Resource decreased by 12 Moz AgEq to 155 Moz AgEq as summarized below. The overall expansion of the resource was largely driven by exploration success at depth and in the northeast part of the deposit.

Mineral Resource - Cordero Project
MATERIAL	CLASS	TONNES (Mt)	GRADE					CONTAINED METAL
MATERIAL	CLASS	TONNES (Mt)	Ag (g/t)	Au (g/t)	Pb (%)	Zn (%)	AgEq (g/t)	Ag (Moz)	Au (koz)	Pb (Mlb)	Zn (Mlb)	AgEq (Moz)
OXIDE	Measured	29	29	0.07	0.23	0.27	49	27	67	148	171	45
	Indicated	37	24	0.06	0.25	0.29	44	28	74	207	241	53
	M&I	66	26	0.07	0.24	0.28	46	55	142	355	412	99
	Inferred	32	19	0.03	0.26	0.33	42	20	35	188	234	43
SULPHIDE	Measured	324	24	0.07	0.34	0.63	57	247	745	2,413	4,473	598
	Indicated	329	18	0.04	0.28	0.58	48	190	416	2,045	4,215	506
	M&I	653	21	0.06	0.31	0.60	53	437	1,161	4,458	8,687	1,104
	Inferred	116	12	0.02	0.16	0.35	30	45	86	418	906	111
TOTAL	Measured	353	24	0.07	0.33	0.60	57	274	812	2,561	4,644	643
	Indicated	366	19	0.04	0.28	0.55	47	218	490	2,252	4,456	559
	M&I	719	21	0.06	0.30	0.57	52	493	1,303	4,813	9,099	1,202
	Inferred	149	14	0.03	0.18	0.35	32	65	121	606	1,140	155

*Further details including all supporting technical disclosure can be found in our February 20, 2024, press release.

NI 43-101 RESERVE*

Cordero hosts the world's largest undeveloped silver reserve

The Mineral Reserve Estimate for Cordero was most recently updated in February 2024. The Mineral Reserve for silver grew $36 Moz or 14% to 302Moz. On an AgEq basis, the Mineral Reserve increased 68 Moz or 10% to 779 Moz, with the increase related to successful resource expansion drilling as well as the impact of positive metallurgical test results in 2023 that supported oxide-sulphide blending up to 15% oxides versus only 10% oxides previously. Mineral Reserves are stated within the final pit designs based on a US$20.00/oz silver price, US$1,600/oz gold price, US$0.95/lb lead price and US$1.20/lb zinc price.

Mineral Reserve - Cordero Project
MATERIAL	CLASS	TONNES (Mt)	GRADE					CONTAINED METAL
MATERIAL	CLASS	TONNES (Mt)	Ag (g/t)	Au (g/t)	Pb (%)	Zn (%)	Ag (Moz)	Au (Moz)	Pb (Blb)	Zn (Blb)
OXIDE	Proven	10	46	0.08	0.35	0.38	15	0.03	0.08	0.09
	Probable	10	40	0.09	0.40	0.42	13	0.03	0.09	0.09
	Total P&P	20	43	0.08	0.37	0.40	28	0.05	0.17	0.18
SULPHIDE	Proven	212	29	0.09	0.42	0.74	199	0.61	1.96	3.48
	Probable	95	24	0.06	0.40	0.73	74	0.18	0.83	1.53
	Total P&P	307	28	0.08	0.41	0.74	274	0.78	2.79	5.00
TOTAL	Proven	223	30	0.09	0.42	0.73	214	0.64	2.04	3.57
	Probable	104	26	0.06	0.40	0.70	87	0.20	0.91	1.62
	Total P&P	327	29	0.08	0.41	0.72	302	0.84	2.96	5.1

*Further details including all supporting technical disclosure can be found in our February 20, 2024, press release.

Feasibility Study and Technical Report

Feasibility study highlights

Cordero’s Feasibility Study released in February 2024 positions Cordero as one of the largest silver development projects globally and comes at a time when silver demand is expected to grow significantly.

Highlights from the FS (February 16, 2024), include:

LARGE-SCALE, LONG-LIFE PRODUCTION: 19-year mine life with average annual payable production of ~14 Moz silver in Year 1 to Year 10 (over 12 Moz silver LOM).
LOW COSTS, HIGH MARGINS & LOW CAPITAL INTENSITY: average AISC of less than $12.50 over the first eight years of the mine life placing Cordero in the bottom half of the cost curve.
LOW CAPITAL INTENSITY: initial development capex of $606 million resulting in an attractive after-tax NPV-to-capex ratio of 2.0.
ATTRACTIVE PROJECT ECONOMICS: Base Case after-tax NPV5% (“NPV”) of $1.2 billion and IRR of 22% with NPV expanding to $2.2 billion in Year 4.
TIER 1 RESERVE BASE: Reserves of Ag - 302 Moz, Au - 840 koz, Pb – 3.0 Blb and Zn – 5.2 Blb, positioning Cordero as one of the largest undeveloped silver deposits globally.
CLEAR UPSIDE POTENTIAL:240Mt of Measured & Indicated Resource sit outside the FS pit highlighting the potential to materially extend the mine life at modestly higher silver prices.
SUBSTANTIAL SOCIO-ECONOMIC CONTRIBUTION: an initial investment of over $600 million, 2,500 jobs created during construction, $4 billion of goods and services purchased and estimated tax contributions of over $1.4 billion within Mexico (assumes $22/oz silver price – $4.4 Bn at $60/oz silver price).
INDUSTRY-LEADING ENVIRONMENTAL STANDARDS: third-party reviews of proposed environmental practices to ensure adherence to both Mexican regulatory standards and Equator Principles 4. The Study also incorporates investment in infrastructure and technology to recycle wastewater from local communities with discharged water representing the primary source of water for mine operations.

Cordero 2024 feasibility study Download PDF Feasibility study Press Release Download PDF

Exploration Targets

PROPERTY-WIDE TARGETS

Exploration on property-wide targets has been ongoing at Cordero since March 2021.

Work completed to date includes geological mapping, surface rock and soil sampling, geophysics and diamond drilling. The five main target areas identified to-date are La Perla (10 km south of Cordero), Dos Mil Diez (immediately southwest of Cordero), Porfido Norte (10 km north of Cordero), Molino de Viento (8 km southwest of Cordero) and Sanson (immediately northeast of Cordero). In 2024, the Company plans to complete mapping, sampling, as well as 2,500 m of drilling with a focus on three of the target areas: La Perla, Dos Mil Diez and Porfido Norte.

LA PERLA – In 2024, planned work was focused on a zone of anomalous silver from rock sampling within a very large alteration footprint and high chargeability/low resistivity anomalies defined by the geophysics program completed in 2022. Historical mine workings are also present within a northeast trending structural corridor (parallel to the orientation of the main mineralized trends at Cordero).
DOS MIL DIEZ – further mapping and sampling was planned in 2024 to support the evaluation of chargeability anomalies identified during an IP survey completed in 2022. Dos Mill Diez is located in an area of mapped intrusives, veining and alteration, directly to the southwest of Cordero.
PORFIDO NORTE – additional mapping and sampling was planned in 2024 to define targets within a northeast trending structural corridor in this area. Porfido Norte includes prominent silver-in-soil anomaly and surface alteration coincident with a possible intrusion based on high chargeability from the IP survey and surface morphology interpreted from satellite imagery consisting of annular features.
MOLINA DE VIENTO – high-grade silver from rock sampling within a very large alteration footprint and a high chargeability/low resistivity anomaly.
SANSON – large, strong magnetic high located on the Cordero belt directly northeast of the Cordero resource area. Breccias and igneous rocks mapped at surface are coincident with intense silica alteration, quartz-molybdenite and jasperoid veining and anomalous silver from rock sampling.

Property-wide targets overview Download PDF

Cordero Silver Development