Slide 1: Cordero: A World-Leading Silver Development Project
Cordero: A World-Leading Silver Development Project Corporate Presentation June 2024 TSX: DSV | OTCQX: DSVSF | DISCOVERYSILVER.COM DSV
Slide 2: Forward Looking Statement & NI 43-101 Disclosure
DSV Forward Looking Statement & NI 43-101 Disclosure This presentation may include forward-looking statements that are subject to inherent risks and uncertainties. All statements within uncertainties. Discovery does not assume any obligation to update any forward-looking statements except as require
Slide 3: Discovery Silver Corp. (DSV-TSX, DSVSF-OTCQX)
DSV Discovery Silver Corp. (DSV-TSX, DSVSF-OTCQX) A development-stage company advancing the world- class Cordero Silver Project, a large-scale, long-life project that will generate attractive returns, deliver substantial benefits to Mexico and achieve best practice in responsible mining Cordero Silv
Slide 4: A World-Leading Silver Development Project
A World-Leading Silver Development Project DSV Cordero – a large-scale, low-cost, capital-efficient project that generates excellent returns Large-scale Excellent Exceptional production profitability economics 37Moz AgEq produced annually Average AISC <$12.50/oz After-tax NPV(5%) of $1.2 billion (Ye
Slide 5: Generational Socio-Economic Benefits for Mexico
Generational Socio-Economic Benefits for Mexico DSV Cordero will deliver substantial job creation, investment, purchasing and tax revenue Job creation Total investment >2,500 in construction US$1.4Bn >1,000 during operations US$600M initial investment 4 to 5 times minimum wage Local purchasing Tax r
Slide 6: Responsible Environmental Management
Responsible Environmental Management DSV Environmental Leadership ▪ 3rd party reviews being used to ensure leading practices ▪ Evaluating use of solar farms, electric vehicles, wireless, AI ▪ Investing US$130M on site restoration ▪ Awards: Quality Environmental Award by PROFEPA1 Socially Responsible
Slide 7: Responsible Water Management
Responsible Water Management DSV Water Management ▪ Bringing technology and infrastructure to support improved water treatment in the community ▪ Treated wastewater to be primary source of water for Cordero operation ▪ Will use <1% of water in Chihuahua State ▪ >85% of water used will be recycled 7
Slide 8: Silver Price Momentum
Silver Price Momentum DSV Favourable market fundamentals driving significant increase in silver price Spot Silver Price (US$/Oz) • 1 Year increase: 22% • YTD 2024 increase: 24% +24% $29.70 (June 10) 8
Slide 9: Silver Demand Outstripping Supply
Silver Demand Outstripping Supply DSV On track for a fourth consecutive year of market deficits in 2024 Silver Market Balance (Moz) 50 • Current year deficit expected to 0 be second highest in over 20 -50 years -100 • Demand has increased 14% -150 over last decade while mine production of silver has
Slide 10: Demand Growth Driven by Green Energy
Demand Growth Driven by Green Energy DSV Silver’s high conductivity and reflectivity contributing to strong demand growth Photovoltaics Demand for Silver (Moz) 250 • Photovoltaic demand has 200 quadrupled over the last decade 150 • Solar and other forms of green energy are primary drivers of 100 gro
Slide 11: Established Infrastructure
Established Infrastructure DSV Cordero is ideally located in a prolific mining region with established infrastructure Chihuahua (population 1,100,000) • International airport • Major industrial hub for mining and manufacturing Parral (population 120,000) • Mining town dating back to 1600s • Major mi
Slide 12: Silver Reserves
Silver Reserves DSV Cordero ranks as the world’s largest undeveloped silver deposit by reserves 350 300 250 Silver Reserves (Moz) 200 150 100 50 0 Cordero (Mexico) Corani (Peru) Bowdens (Australia) Santa Ana (Peru) Fuwan (China) 12 Source: S&P Capital IQ
Slide 13: Silver Reserves vs. Producer Peers
Silver Reserves vs. Producer Peers DSV Second highest reserve base among North American listed silver producers 500 400 Ag Reserves (Moz) 300 200 100 0 Pan American Discovery Coeur Hecla Aya First Majestic Endeavour MAG Silver Silvercrest Fortuna Market Cap (C$B) $10.9 $0.4 $2.3 $3.7 $1.9 $2.8 $1.3
Slide 14: Large Scale & Low Cost
Large Scale & Low Cost DSV Cordero is uniquely positioned in the silver space based on its volume of production, low costs and resource size AgEq Production & AISC & Ag Resource (M&I)1 40 Bubble size = M&I silver resource, inclusive of reserves 35 La Colorada La Encantada Huaron 2024 AISC (US$/oz Ag
Slide 15: After-tax NPV Accretion & Silver Price Leverage
After-tax NPV Accretion & Silver Price Leverage DSV Rolling After-tax NPV(5%) of Cordero expands to $2.2 billion at US$22/oz Ag Phase2 Development $2.2B $2.0B At current spot metal 2.0 Phase 1 prices1: Development • NPV(5%) of US$2.0Bn NPV(5%) - US$ billion 1.5 $1.2B • NPV(5%) grows to US$3.1Bn in Y
Slide 16: Mine Plan Upside
DSV Mine Plan Upside Substantial mine life extension potential at modestly higher metal prices Reserves • Ag – 302 Moz • Pb – 3.0 Blb • Zn – 5.2 Blb Reserve prices • Ag - $22/oz, Pb - $1.00/lb, Zn - $1.20/lb Resource* • Ag – 493 Moz • Pb – 4.8 Blb • Zn – 9.1 Blb Resource prices • Ag - $24/oz, Pb - $
Slide 17: 2024 Work Program
DSV 2024 Work Program Work program focuses on permitting, project de-risking and project financing Permitting Project De-risking Project Financing • MIA submitted in August 2023; • Front-end Engineering Design to • Advance all financing options: additional information provided in enable ordering lon
Slide 18: Experienced Management Team
DSV Experienced Management Team Tony Makuch Dimitry Demianyuk Gord Leavoy President, CEO & Director VP Projects VP Mineral Processing +35 years in mining incl. President +20 years in project development +40 years of processing & tailings & CEO of Kirkland Lake Gold (2016 and management experience in
Slide 19: Experienced Board of Directors
DSV Experienced Board of Directors Murray John Jeff Parr Jennifer Wagner Chairman Director Director +35 years in capital markets & Current Vice-Chair of Agnico +15 years in legal and compliance executive management Eagle incl. Kirkland Lake Gold Tony Makuch Moira Smith Jon Gill President, CEO & Dire
Slide 20: Corporate Snapshot
Corporate Snapshot DSV Ticker: DSV-TSX, DSVSF-OTCQX Share us 29% YTD in 2024 Market 1.4 cap: $390M (Basic) 8500000 Cash balance: ~C$40 M 1.2 7500000 C$0.98 6500000 1 (June 7, 5500000 0.8 2024) 4500000 3500000 Share price - C$0.98 (June 7, 2024) 0.6 2500000 0.4 1500000 Shares outstanding – 397 M 0.2
Slide 21: A World-Leading Silver Development Project
DSV A World-Leading Silver Development Project Highly profitable production from one of world’s largest silver reserves Exceptional economics with an NPV(5%) that almost doubles by Year 4 Provides outstanding leverage to silver prices A major socio-economic contributor in Mexico that meets the highe
Slide 22: Appendix
Appendix TSX: DSV | OTCQX: DSVSF | DISCOVERYSILVER.COM DSV
Slide 23: Operating & Production Metrics
DSV Operating & Production Metrics Poised to become a top 3 global silver producer Unit FS Mine Life (years) 19 Ore Tonnes (Mt) 327 Strip Ratio (w:o) 2.0 Silver Produced – Life of Mine (Moz) 259 Lead Produced – Life of Mine (Blb) 2.6 Zinc Produced – Life of Mine (Blb) 4.4 Silver-equivalent Produced
Slide 24: Financial Metrics
DSV Financial Metrics Cordero is a large-scale, capital-efficient project with low costs that is expected to generate substantial free cash flow Unit FS Silver Price (US$/oz) $22.00 NPV(5%) – After-tax (US$M) $1,177 IRR – After-tax (%) 22.0% Payback – After-tax (years) 5.2 Initial Capex (US$M) $606
Slide 25: Mine Plan
DSV Mine Plan Simple open pit with a low strip ratio • Mine plan is based on a detailed mine design incorporating dilution, ore loss, safety berms & haul roads • Average strip ratio of 2.0:1 over life of mine • Stockpiling of low-grade material allows higher grade material to be fed to mill earlier
Slide 26: Process Design
DSV Process Design Low execution and operating risk from a simple conventional flowsheet Phase 1 • Initial throughput rate of ~26,000 tpd Phase 2 • Expanded throughput rate of ~51,000 tpd • Flexibility on timing of Phase 2 expansion; currently assumed to be built in Y3 and operational in Y4 • Coarse
Slide 27: Capex Summary
DSV Capex Summary Highly capital efficient project with an NPV to Capex ratio of 2x INITIAL EXPANSION SUSTAINING TOTAL LOM Capital efficiency driven by: CAPITAL EXPENDITURES (US$ M) • Staged expansion of process plant Mining $117 $2 $110 $229 • Simple and conventional process design On-site Infrastr
Slide 28: Commodity Price Leverage
DSV Commodity Price Leverage Unparalleled leverage to rising silver prices NPV/IRR/Payback sensitivity to Ag/Zn prices: (Fixed prices for Au = $1,600/oz & Pb = $1.00/lb) Ag ($/oz) NPV(5%) upside $20.00 $22.00 $25.00 $30.00 $35.00 estimates do NOT include the mine life NPV (5%) IRR Payback NPV (5%) I
Slide 29: Commodity Price Leverage
DSV Commodity Price Leverage Unparalleled leverage to rising silver prices 29
Slide 30: Resource Statement
DSV Resource Statement GRADE CONTAINED METAL TONNES MATERIAL CLASS Ag Au Pb Zn AgEq Ag Au Pb Zn AgEq (Mt) (g/t) (g/t) (%) (%) (g/t) (Moz) (koz) (Mlb) (Mlb) (Moz) 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 OXIDE M&I 66 26 0.07 0.24 0.28 46 55
Slide 31: Reserves Statement
DSV Reserves Statement GRADE CONTAINED METAL TONNES MATERIAL CLASS Ag Au Pb Zn Ag Au Pb Zn (Mt) (g/t) (g/t) (%) (%) (Moz) (koz) (Mlb) (Mlb) Proven 10 46 0.08 0.35 0.38 15 0.03 0.08 0.09 OXIDE 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 Proven 212