Discovery Reports 50,552 Ounces of Gold Production, $27.3 Million of Free Cash Flow Superscript 1 in Q2 2025

Executive Summary

• Discovery Silver Corp. reported its first quarter of gold production after acquiring the Porcupine Complex, posting net earnings of $5.5 M ($0.01/share) versus a loss in Q2 2024 and generating adjusted net earnings of $28.4 M ($0.04/share).
• The company completed a $575 M financing package (including $475 M royalty & equity financing and a $100 M senior debt facility), leaving cash at $252.5 M and strong liquidity to fund growth.
• Q2 2025 gold output was 50,552 oz from Hoyle Pond, Borden and Pamour, with operating cash costs of $1,334/oz sold, AISC of $2,123/oz sold, and free cash flow of $27.3 M.

Key Details

• Acquisition & Transformation
• Completed acquisition of the Porcupine Complex on April 15 2025; now a diversified gold‑silver producer.
• Financing Package
• Total gross proceeds: $575.0 M
  • $475.0 M royalty & equity financing (net $468.7 M after issuance costs)
  • $100.0 M senior debt facility
• Used to fund acquisition cash consideration of $200.6 M, capital expenditures, and working‑capital needs.
• Q2 2025 Financial Highlights
• Revenue: $142.0 M (gold sales of 42,550 oz at $3,337/oz).
• Net earnings: $5.5 M ($0.01/share) vs. net loss of $5.1 M in Q2 2024.
• Adjusted net earnings: $28.4 M ($0.04/share).
• EBITDA: $55.2 M, up from a loss in prior periods.
• Operating cash flow: $67.1 M; free cash flow: $27.3 M.
• Working capital (June 30 2025): $225.9 M (up from $17.0 M at year‑end 2024).
• Gold Production – Q2 2025
• Total gold produced: 50,552 oz (April 16–June 30)
  • Hoyle Pond: 16,112 oz (97,817 t milled, 5.50 g/t Au, 93.1% recovery)
  • Borden: 27,286 oz (166,609 t milled, 5.62 g/t Au, 90.6% recovery)
  • Pamour (open‑pit ramp‑up): 7,154 oz (244,366 t milled, 1.02 g/t Au, 89.7% recovery)
• Gold sold: 42,550 oz; inventory carried to Q3 2025.
• Cost Metrics
• Operating cash costs: $1,334/oz sold (consolidated).
• All‑in sustaining cost (AISC): $2,123/oz sold (site‑level AISC $1,872/oz).
• Capital Expenditures – Q2 2025
• Total capex: $44.2 M
  • Sustaining capex: $16.1 M (primarily Dome Mill/TMA work)
  • Growth capex: $28.1 M (Pamour pre‑stripping, TMA upgrades, equipment).
• Cash Position
• Cash at June 30 2025: $252.5 M (including undrawn credit facility of $100 M).
• Outlook & Guidance
• Targeting increased production in H2 2025 and a full‑year drilling program of 140,000 m, aiming to convert resources at Hoyle Pond, Borden, Pamour and the Dome Mine.
• Continued de‑risking of Cordero silver project; awaiting Mexican environmental impact assessment approval.

Notable Quotes

• Tony Makuch, President & CEO: “Q2 2025 was Discovery’s first quarter as a Canadian gold producer… we delivered a quarter of excellent progress… net cash from operations totaled $67.1 M while free cash flow was $27.3 M.”