Discovery Silver Corp. (TSX-V: DSV, OTCQX: DSVSF)
(“Discovery” or the “Company”) is pleased to provide a project
update and to announce the project study team for its Preliminary
Economic Study (“PEA” or “the Study”) on the Company’s flagship
Cordero project (“Cordero” or “the Project”) located in Chihuahua
State, Mexico. The PEA will be led by Ausenco Engineering Canada
Inc. (“Ausenco”) and is scheduled for completion in 4Q 2021 and
will be based on an updated resource estimate scheduled for
completion in 3Q 2021.
Taj Singh, President & CEO, states: “The
objective of our PEA is to establish Cordero as one of the largest
producing and longest mine life primary silver mines in the world
with costs in the bottom half of the industry cost curve. The Study
will be supported by a comprehensive drilling and metallurgical
dataset and will be undertaken by an industry-leading project team
led by Ausenco with input from specialists across all key mining
disciplines. While the Study work progresses we will continue to
remain focused on adding value through drilling with our recently
commenced Phase 2 drill program.”
PROJECT UPDATE
Phase 1 drilling: The Company’s
Phase 1 drill program concluded at the end of April. The data from
the 75,000 m of drilling completed in this program will be used to
support the resource update which the PEA will be based on.
Phase 2 drilling: The four
drill rigs currently operating on site will continue uninterrupted
with Phase 2 drilling which will be focused on three key areas: (1)
upgrading inferred resources to indicated for inclusion in a
prefeasibility study; (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.
Resource update: An updated
resource estimate is scheduled for completion in 3Q 2021. The
resource estimate will be based on an updated geological model of
the deposit that includes the relogging of 110,000 m of historic
drilling plus 75,000 m of drilling from the Phase 1 drill program.
The resource model will use estimation domains based on structure
and lithology. Previous resource estimates did not incorporate
these constraints.
Metallurgical testwork: A
comprehensive metallurgical testwork program with samples based on
both lithology and mining phases is ongoing with results expected
in 3Q 2021. The testwork is being conducted by Blue Coast Research
Ltd. (“Blue Coast”) with oversight from Libertas Metallurgy Ltd.
(“Libertas”) and Ausenco. The current program will expand on
previous metallurgical testwork programs conducted by ALS Ltd. in
2013 and METCON Research Inc. in 2011.
Mining: The Company has already
been working with AGP Mining Consultants Inc. (“AGP Mining”) to
complete preliminary pit optimization work to assist with drill
targeting. Preliminary mine scheduling work has also been completed
to evaluate the impact on project economics of different mining
rates, mill throughput rates and cut-off grade and stockpiling
strategies. The objective of this work is to optimize the Net
Present Value (“NPV”) and capital efficiency (ratio of initial
capital expenditure to NPV).
Geotechnical / Hydrology /
Hydrogeology: Knight Piésold and Co. (USA)
(“Knight Piésold”) 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. Dedicated geotechnical drilling for the open pit is
expected to commence this month and will be used to generate pit
slope assumptions for the PEA.
ESG: An environmental baseline
study managed by CIMA Consultores (“CIMA”) commenced in 1Q 2021 and
will be ongoing throughout the year. A desktop social baseline
assessment has already been completed by Vinfidem Consultoria
(“Vinfidem”) with follow up field work expected to commence later
this quarter. Key findings from both sets of work will be included
in the PEA. The ESG work will be complemented by the Company’s
inaugural ESG report scheduled for publication in 3Q 2021. The
report will outline the Company’s ESG approach as it relates to
strategy, planning and risk management and will be developed in
conjunction with Stratos Inc. (“Stratos”).
PEA PROJECT TEAM
The PEA project team will be led by Ausenco, an
industry leader in cost-effective process design and construction.
Ausenco is a global company providing innovative, value-add
consulting studies, project delivery, asset operations and
maintenance solutions in the minerals and metals industry with
recent and relevant study, project construction (“EPC”) and
construction management (“EPCM”) experience on projects within the
Americas. Ausenco has significant experience in Mexico including
recently leading the Feasibility Study (& future EPC) for
SilverCrest Metals Inc.’s Las Chispas project. Ausenco also has
recent experience with process plants of similar size and/or
recovery flowsheet to what is expected at Cordero including Trilogy
Metals Inc.’s Arctic project in Alaska (Feasibility Study), Hudbay
Minerals Inc.’s Constancia mine in Peru (EPCM), Minsur S.A.’s Mina
Justa mine in Peru (Feasibility Study & EPCM), Mantos Copper
S.A.’s Mantoverde project in Chile (EPC), Artemis Gold Inc.’s
Blackwater project (EPC) in Canada and Argonaut Gold Inc.’s Magino
project (EPC) in Canada.
Area of Responsibility |
PEA Qualified Person |
Third Party Input/Review |
Principal Author |
Ausenco |
- |
Resource Estimate |
Red Dot 3D |
RockRidge Consulting |
Metallurgy |
Ausenco |
Libertas / Blue Coast |
Processing |
Ausenco |
- |
Mining |
AGP Mining |
- |
Geotech/Hydrology |
Knight Piésold |
- |
Environment |
Ausenco |
CIMA |
Social |
Ausenco |
Vinfidem |
PEA OUTLINE
Study objective: The
overarching objective is to deliver a technically robust study
supported by a comprehensive dataset and vetted by top-tier
independent consultants with third party peer review. The Company’s
target for the Study is to outline 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.
Process plant: The Study will
incorporate staged expansions of the processing facility to reduce
the upfront capex and payback period. Production trade-off studies
are ongoing however based on preliminary results the initial mill
throughput rate is expected to be in the 10,000 – 20,000 tonnes per
day (“tpd”) range and the expanded mill throughput is expected to
be in the 20,000 – 40,000 tpd range.
Mine plan: The mine schedule
will incorporate an elevated cut-off grade early in the mine life
and the effective use of stockpiling to accelerate the payback
period and maximize the NPV at the set mill throughput rates. A
trade-off study comparing the use of contractor mining versus
owner-operated mining is ongoing.
QP CONSULTANT / THIRD PARTY
LIST Ausenco – www.ausenco.com AGP
Mining – www.agpmining.com Blue Coast – www.bluecoastresearch.ca
CIMA – www.cimasc.com.mx Knight Piésold – www.knightpiesold.com
Libertas - LinkedIn profile Red Dot 3D – LinkedIn profileRockRidge
Consulting – www.rockridgeconsult.com Vinfidem –
www.vinfidem.com.mx
About Discovery
SilverDiscovery’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
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.
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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