Discovery Silver Corp.

Discovery Silver Corp. is a mid-tier gold and silver producer headquartered in Toronto, Canada, operating primarily in Canada and Mexico. The company's portfolio consists of 2 projects, comprising 1 operating mine and 1 development project. Key assets include Porcupine and Cordero. The organization is engaged in the acquisition, exploration, and development of mineral properties, transitioning towards becoming an operator through a significant acquisition. Its operational model focuses on advancing assets capable of supporting profitable, long-life operations by targeting higher-grade zones within larger mineralized systems. A phased development strategy is employed, involving staged expansions of processing capacity to manage capital deployment efficiently. Processing capabilities include conventional differential flotation for polymetallic deposits, with the flexibility to process blended ore types, including both oxide and sulphide material. The process design accommodates hard to very hard ore through robust comminution circuits. The business model integrates a development-stage asset with established producing operations, aiming to create a diversified production profile. A transition services agreement supports the integration of newly acquired assets, ensuring operational continuity during the initial ownership period.

The enterprise's strategy centers on transitioning from a development-focused entity to a diversified producer through a combination of organic growth and transformational acquisitions. A key objective is the integration of newly acquired operating assets to establish a stable production base, which will be followed by initiatives to enhance efficiency and expand output. The long-term growth plan involves advancing numerous exploration opportunities within its land packages to systematically expand the resource base. This includes a disciplined focus on defining high-margin projects with significant scale by targeting under-explored, higher-grade zones within larger mineralized systems. Capital allocation is managed through a multi-faceted approach, utilizing equity financing, such as bought-deal public offerings and base shelf prospectuses, alongside structured financing packages that include deferred payments and royalty agreements to fund major transactions and development. The strategic roadmap includes phased project development to manage capital expenditure and de-risk execution, with a clear path to scaling up processing throughput over the mine life.

Executive leadership is headed by a CEO with over 35 years of industry experience, including a notable tenure as President and CEO of a major intermediate producer where he led a significant corporate transformation. The board of directors is composed of 7 members, with key figures including a chairman with a background as a mining engineer and investment fund manager, and directors with executive experience at other major mining corporations. At least 4 of the 7 directors are independent. Governance is structured through 5 standing committees: Audit, Compensation, Nominating and Corporate Governance, Technical, and Sustainability. The Audit Committee, comprising 4 independent members, provides direct oversight of financial reporting, internal controls, and external auditors, meeting at least quarterly. The board maintains overall stewardship, supervising the business and affairs of the corporation and its subsidiaries, with direct approval authority over material transactions, investments, and strategic plans. A confidential, externally operated whistleblower hotline supports the organization's code of conduct and ethical standards.

The organization's sustainability framework is guided by a board-level Sustainability Committee that meets quarterly and a formal Sustainability Charter. Environmental stewardship is demonstrated through ongoing monitoring programs, compliance with evolving regulations, and the implementation of emergency plans for risks such as fuel spills. The company has received a 'Clean Industry Certification' from a federal government agency. Social responsibility initiatives focus on building positive relationships with local communities through transparency, local hiring and procurement programs, and sponsoring community events, earning a 'Socially Responsible Enterprise' distinction. Workplace health and safety is a key priority, managed through mandatory orientation for all site personnel, regular safety meetings during operational programs, and a commitment to providing a secure working environment, which resulted in zero lost-time incidents during the most recent fiscal year. The company publicly reports on its performance, with its latest ESG report detailing metrics on local procurement, workforce diversity, greenhouse gas emissions, and water consumption.

The corporate structure is undergoing a significant transformation following a definitive agreement dated January 27, 2025, to acquire a complex of operating assets from Goldcorp Canada Ltd., a subsidiary of Newmont Corporation. Upon closing, the acquired assets will be held in a newly created, wholly-owned subsidiary named Dome Mine Ltd. The company's primary development asset is held through another wholly-owned indirect subsidiary, Minera Titán, S.A. de C.V. A key structural component of the acquisition financing is an implementation agreement with Franco-Nevada Corporation, which includes the sale of a net smelter return royalty package on the acquired assets. As of the reporting date, a single shareholder, 2176423 Ontario Ltd., holds over 22% of the issued and outstanding common shares. Following the completion of the acquisition, it is anticipated that this shareholder and an affiliate of the seller will each hold approximately 15% of the company's shares, creating a concentrated ownership structure with two major stakeholders.