TORONTO, Aug. 27, 2020 (GLOBE NEWSWIRE) -- 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.
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.
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:
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)
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.
(b) basic and diluted per share
Net loss & total comprehensive loss
Total weighted average shares outstanding
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
Total current liabilities
Total Shareholders’ equity
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
Discovery 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, CFA
VP Corporate Development & Investor Relations
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, $1,262/oz Au.
Tonnage & Grade within Mineral Resources Pit Shell
3 A PEA was completed for Levon in 2018 by M3 Engineering and Technology Corp., and includes the most recent resource estimate, completed by Independent Mining Consultants (available on Discovery’s website and on SEDAR under Levon’s profile). Discovery acquired Cordero through the acquisition of Levon in August 2019. Resource commodity prices used in the PEA are ($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.