With drill intercepts like the recent 2,007 grams per tonne silver-equivalent from its Cordero project in Chihuahua, Mexico, it is not hard to see why and with C$80 million in the bank, there could be many more such results released before a new mineral resource estimate is posted in the second quarter of 2021.
"This will be a brand-new resource with new modelling and tighter geological controls and structure unlike the old resource in the past," president and CEO Taj Singh, told Mining Journal.
Cordero has a high-grade core with Discovery working to advance an open pit project which can be economic at an US$17-18 per ounce silver price. The 55,000m drilling programme which commenced in September 2019 added a new element to the equation in the shape of high-grade veins which were never modelled before. "We have a tighter pit with veins that flank it which gives us the possibility of having an openpit with the high-grade veins mined separately underground to sweeten the mill grade. The veins give us price downside protection as they could make money at $14/oz," Singh said.
About this time next year, Discovery plans to follow its resource estimate with a preliminary economic assessment (PEA) with an advanced flow sheet. "The previous operator had a big bulk tonnage plan like Peñasquito and there wasn't a lot of time spent on the flow sheet development. Our goal is to treat the PEA like a pre-feasibility study and processing is a huge component of it," Singh said.
Going into 2021, Singh expects the company will start showing the broader regional potential at Cordero, which if it is like other major silver deposits in Mexico, could be significant.
"Our resource area is about 1,000 hectares and around it we have 35,000 hectares that have never really been explored. We plan to drill regional targets in 2021. There are over 40 shafts around Cordero so in the same property we have a development stage project and an exploration pipeline," he said.
Shares in Discovery Metals are trading at $2.24, valuing the company at $640 million.