Discovery Silver Corp · TSX:DSV
Discovery Silver — Merger or Acquisition (January 2025)
35 slides from Discovery Silver's merger presentation, Jan 27, 2025
Slide 1: Acquisition of Newmont's Porcupine Complex
TSX:DSV OTCQX: DSVSF DISCOVERYSILVER.COM January 27, 2025 ACQUISITION OF NEWMONT’S PORCUPINE COMPLEX Creating a New Canadian Gold Producer with Upside A final base shelf prospectus containing important information relating to the securities described in this document has been filed with the securiti
Slide 2: Forward Looking Statement
DSV Forward Looking Statement This presentation contains "forward-looking information" within the meaning of applicable Canadian securities legislation. All information, other than statements of historical facts, included in this presentation that address activities, events or developments that Disc
Slide 3: Additional Cautionary Language
DSV Additional Cautionary Language Third Party Information: This presentation includes market and industry data which was obtained from various publicly available sources and other sources believed by the Company to be true. Although the Company believes it to be reliable, the Company has not indepe
Slide 4: Cautionary Note for US Investors
DSV Cautionary Note for US Investors The securities of the Company have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered and sold within the United States (as defined in Regu
Slide 5: Transformational Acquisition & Value Creation Opportunity
Transformational Acquisition & Value Creation DSV Opportunity Combines quality gold Complex in historic Timmins Camp with management team highly- experienced operating in the area Right Creates a new Canadian growing gold producer, ~285 koz/yr (average Years Assets 1-10), Base Case NPV of $1.2B1,2 o
Slide 6: Porcupine – Quality Complex in a Tier 1 Gold Camp
DSV Porcupine – Quality Complex in a Tier 1 Gold Camp Technical Report Highlights ~285 koz 22 Years 3.9 Moz 12.5 Moz Avg. Annual production Current mine life M&I Resources1 Inferred Resources1,2 (Years 1-10) $1.2B $2.3B $1,504/oz After-tax NPV5%2,3 After-tax NPV5%2,3,4 Average AISC Base Case LT Pric
Slide 7: Porcupine – Quality Complex in a Tier 1 Gold Camp
DSV Porcupine – Quality Complex in a Tier 1 Gold Camp Close to 70 Moz produced1 with large resource base and substantial exploration upside A Hoyle Pond: One of Canada’s highest-grade gold mines Porcupine Complex Locations • 4 Moz @ ~11 g/t since 1987 – Excellent track record of replacing reserves •
Slide 8: Long-Life Production Profile with Substantial Upside
DSV Long-Life Production Profile with Substantial Upside Targeting growth in production and mine life through optimization, investment & exploration success Annual Gold Production (koz Au)1 Pamour Hoyle Borden Opportunities: • Grow production at Hoyle Pond, Borden, Pamour • Resume mining operations
Slide 9: PEA Results (@ Consensus Pricing)
DSV PEA Results (@ Consensus Pricing1) Significant free cash flow following funding of Pamour project Capital Expenditures ($M) Free Cash Flow ($M) Sustaining Capital Exploration Capital Development Capital After-Tax Free Cash Flow Pre-Tax Free Cash Flow $213 After-Tax FCF: $500M $182 $218 $86 $24 $
Slide 10: Transaction Overview
DSV Transaction Overview ▪ Discovery to acquire from a wholly owned subsidiary of Newmont all the issued and outstanding common shares in a newly created Transaction entity (the “Reorganization”) formed to hold Newmont’s 100% interest in the Porcupine Complex (the “Transaction”) ▪ Total consideratio
Slide 11: Transaction Sources & Uses
DSV Transaction Sources & Uses Significant excess liquidity to fund future exploration, development capital, and other funding initiatives to support and grow the Porcupine Complex Cash Sources Cash Uses Franco-Nevada 2.25% Royalty $200 Upfront Proceeds to Newmont $200 Franco-Nevada Repayable Royalt
Slide 12: A Team Uniquely Qualified to Operate in Timmins
DSV A Team Uniquely Qualified to Operate in Timmins Extensive experience working in the Timmins Camp Tony Makuch | Born and raised in Timmins, Ontario • CEO of Kirkland Lake Gold (2016-2022) – Market cap growth of 15x prior to merger with Agnico Eagle • CEO of Lake Shore Gold (2008-2016) – Transform
Slide 13: Substantial Upside – Near-Mine Exploration
DSV Substantial Upside – Near-Mine Exploration Multiple targets with little or no drilling in recent years Hoyle • S Zone Deep, S Zone Upper, XMS Zone, TVZ Zone, PST Pond Zone, Owl Creek Zone • Depth extensions and open along strike to east and west Borden • Large number of prospects with little or
Slide 14: Substantial Upside – Near-Mine Exploration
DSV Substantial Upside – Near-Mine Exploration Multiple targets with little or no drilling in recent years • Remains open at depth and along strike of the old underground workings • Potential to extend mineralization to the north of Pamour the current Mineral Resource model • Pamour West open at dep
Slide 15: Substantial Upside – Regional Exploration
DSV Substantial Upside – Regional Exploration Exploration key to growth in production, Mineral Resources and mine life extensions Key Regional Exploration Targets ▪ Multiple targets in Timmins along Destor-Porcupine fault zone ▪ Legacy sites provide numerous opportunities at depth and along strike o
Slide 16: Substantial Upside – Optimization and Growth
DSV Substantial Upside – Optimization and Growth Opportunities to grow production and reduce costs • Grow production and lower costs at Borden and Hoyle Pond Grow Production • Investments to improve ventilation, haulage, equipment, mining and back fill processes, ground support and material handling
Slide 17: Substantial Upside – Optimization & Growth – Mining
DSV Substantial Upside – Optimization & Growth – Mining Opportunities to reduce costs and improve throughput Hoyle Pond Borden • Increase ventilation U/G • Optimize workflow • Improve backfill quality and procedures • Upgrade underground haulage trucks • Remove bottlenecks in material handling • Inv
Slide 18: Substantial Upside – Optimization & Growth – Mining
DSV Substantial Upside – Optimization & Growth – Mining Opportunities to reduce costs and improve throughput Pamour Dome • Reduce or eliminate waste rock re-handling • 11.0 Moz Inferred Mineral Resource estimated at Dome1 • Evaluate use of alternatives for truck • Evaluate potential for new producti
Slide 19: Substantial Upside – Optimization & Growth – Milling
DSV Substantial Upside – Optimization & Growth – Milling Opportunities to improve utilization rates, lower costs, increase recoveries and throughput levels Mill • Potential of 30% improvement on A Circuit and 15% on B circuit through improvements in maintenance program and program execution Throughp
Slide 20: Sustainability and Stewardship
DSV Sustainability and Stewardship Committed to building on Discovery’s strong track record for responsible mining ▪ Recognize and work constructively with First Nations partners ▪ Support and contribute to the success and welfare of local communities ▪ Recognize the value of people and suppliers an
Slide 21: Appendix 1 Financing
Appendix 1 Financing TSX: DSV | OTCQX: DSVSF | DISCOVERYSILVER.COM DSV
Slide 22: $400M Franco-Nevada Royalty and Debt Financing
DSV $400M Franco-Nevada Royalty and Debt Financing $200M • 2.25% life-of-mine net smelter return royalty (the “LOM Royalty”) • Applies to all mineral produced from the Porcupine Complex LOM Royalty • Establishes a long-term strategic partnership with Franco-Nevada • 2.00% net smelter return royalty
Slide 23: $155M Public Offering of Subscription Receipts
DSV $155M Public Offering of Subscription Receipts ▪ Public Offering of subscription receipts (“Subscription Receipts”) of Discovery for expected gross proceeds of approximately C$225M ($155M) ▪ Each Subscription Receipt entitles holder to receive one Discovery common share, without payment of addit
Slide 24: Appendix 2 Exploration
Appendix 2 Exploration TSX: DSV | OTCQX: DSVSF | DISCOVERYSILVER.COM DSV
Slide 25: Substantial Upside – Exploration – Hoyle Pond
DSV Substantial Upside – Exploration – Hoyle Pond Exploration key to growth in production, Mineral Resources and mine life extensions Key Targets • Multiple near-mine targets: S Zone Deep, S Zone Upper, XMS Zone, TVZ Zone, PST Zone, Owl Creek Zone 950 Zone Upper 2 km S Vein OPEN UM S Vein Complex XM
Slide 26: Substantial Upside – Exploration – Borden
DSV Substantial Upside – Exploration – Borden Exploration key to growth in production, Mineral Resources and mine life extensions • Depth extensions and open along strike to east and west Key Targets • Large number of prospects with little or no previous drilling 26
Slide 27: Substantial Upside – Exploration – Pamour
DSV Substantial Upside – Exploration – Pamour Exploration key to growth in production, Mineral Resources and mine life extensions • Remains open at depth and along strike of the old underground workings Key Targets • Potential to extend mineralization to the north of the current Mineral Resource mod
Slide 28: Substantial Upside – Exploration – Dome
DSV Substantial Upside – Exploration – Dome Exploration key to growth in production, Mineral Resources and mine life extensions • Upgrade existing Inferred Mineral Resource to higher confidence categories • Establish potential resource classifications within blocks in/around pit where existing drill
Slide 29: Appendix 3. Porcupine Complex – Overview
Appendix 3. Porcupine Complex – Overview TSX: DSV | OTCQX: DSVSF | DISCOVERYSILVER.COM DSV
Slide 30: Hoyle Pond
DSV Hoyle Pond1 High-grade underground mine with attractive exploration potential ▪ 4 Moz produced @ average grade of ~11 g/t since 1987 ▪ Planned mining rate ~500 tpd, hoisting capacity of 2,200 tpd ▪ Mined material trucked 17 km to Dome Mill ▪ Production to average ~65 koz per year with a remining
Slide 31: Borden
DSV Borden1 Underground mine in highly prospective area with camp potential ▪ Underground mine in township 20 km from Chapleau, Ontario ▪ Long hole mining method with current mining rate of 2,000 tpd ▪ Mined material is trucked to surface and then 190 km to Dome Mill ▪ Production to average ~105 koz
Slide 32: Pamour
DSV Pamour1 Open Pit project with substantial exploration potential ▪ Involves layback of existing open pit located 13 km from Dome Mill ▪ To provide feed to Dome Mill through to 2047 ▪ Expected annual production to average 150 koz over a 22-year production life (21 years of mining, additional year
Slide 33: Dome
DSV Dome1 Large mill built in early 1980s, century-old mine with large Inferred Resource ▪ Conventional gold plant, crushing, grinding, cyanide leaching, CIP, and 8 tonne carbon strip / EW circuit ▪ Technical report assumes capacity of 3.9 Mtpa with average recoveries of ~92% ▪ Dome mine produced cl
Slide 34: Appendix 4. Mineral Resources
Appendix 4. Mineral Resources TSX: DSV | OTCQX: DSVSF | DISCOVERYSILVER.COM DSV
Slide 35: Mineral Resources
DSV Mineral Resources Mineral Resources Tonnes Gold Grade Contained Ounces Notes: 1. Mineral Resources are reported insitu, using the 2014 CIM Definition Standards. Mineral Resources (kt) (g/t Au) (koz Au) that are not Mineral Reserves do not have demonstrated economic viability. 2. Mineral Resource
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