Discovery Reports Record Gold Production & Sales, Solid Earnings, Strong Cash Generation in Q3 2026

Discovery Silver Corp. (DSV) reported third-quarter 2026 financial results on November 10, 2026, marking the first full quarter consolidating the Kidd Operations acquired on June 1, 2026. The company posted revenue of $371.4 million, an increase from $237.0 million in the third quarter of 2025 and $319.1 million in the second quarter of 2026. Net earnings reached $58.4 million, or $0.07 per share, compared to $42.4 million, or $0.05 per share, in the prior year period and $52.1 million, or $0.06 per share, in the second quarter of 2026. Adjusted net earnings were $83.0 million, or $0.10 per share, versus $61.1 million, or $0.08 per share, and $92.3 million, or $0.11 per share, respectively.

EBITDA rose 49% year-over-year to $181.4 million, with a 7% sequential increase, resulting in an EBITDA margin of 48.8%, down from 51.5% in the third quarter of 2025 and 53.3% in the second quarter of 2026. Operating cash flow totaled $203.3 million, while free cash flow was $86.9 million. Total capital expenditures amounted to $139.1 million, comprising $42.0 million in sustaining capital and $97.1 million in growth capital. The company’s cash position stood at $450.7 million, a 24% increase quarter-over-quarter, with total liquidity of $844.2 million against a $400 million revolving credit facility.

At the Porcupine operation, production reached a record 70,564 ounces from 943,761 tonnes at a grade of 2.61 g/t and an 89.0% recovery. Sales totaled 71,200 ounces. Cash costs at Porcupine were $1,470 per ounce, compared to $1,339 and $1,387 in the previous quarters, while all-in sustaining costs (AISC) were $2,293 per ounce, up from $1,734 and $2,154. Site-level AISC was reported at $2,123 per ounce.

The Kidd Operations processed 283,763 tonnes, yielding 3,644 tonnes of copper at a 1.34% grade with 96.2% recovery and 5,491 tonnes of zinc at a 2.25% grade with 85.9% recovery. Revenue from Kidd was $72.3 million, with production costs of $45.1 million and earnings from mining operations of $(0.9) million.

At Cordero, Discovery Silver received a Change of Land Use permit on September 28 and a Mine Impact Assessment (MIA) on October 5, completing federal environmental permitting. Consequently, 2026 Cordero fees and capital guidance were reduced to $20–30 million from the previous $90–100 million estimate, as the permit fee was $11.6 million.

For the full year 2026, guidance remains unchanged except for Cordero and corporate general and administrative expenses. The company expects to produce 260,000–300,000 ounces of gold, with cash costs of $1,250–1,400 per ounce and AISC of $1,950–2,250 per ounce. Sustaining capital expenditure is guided at $120–165 million, Porcupine growth capital at $195–235 million, and exploration spending at $55–75 million. Management now anticipates releasing an updated Porcupine technical report early in 2027, a shift from the prior late 2026 timeline.

Discovery Silver Corp. (DSV) reported third-quarter cash costs of $1,470 and all-in sustaining costs (AISC) of $2,293, exceeding the company’s guidance ceiling of $1,400 and $2,250, respectively. Management stated that costs were tracking to the top end of guidance, marking a miss on the metric most closely watched by the market.

Adjusted earnings fell 10.1% sequentially to $83.0 million from $92.3 million, with adjusted earnings per share declining to $0.10 from $0.11, despite record production levels. The decline was driven by a 4.3% quarter-over-quarter drop in the realized gold price to $4,283 per ounce and rising unit costs. The company’s release framed earnings performance only on a year-over-year basis.

The quarter provided the first full look at the Kidd operation, which generated $72.3 million in revenue at a 37.6% cash margin. However, the mine reported a $0.9 million loss after approximately $28 million in purchase-price-allocation depreciation. Copper cash costs more than doubled to $3.21 per pound from $1.29 per pound, while zinc grade halved to 2.25% from 3.63%. This performance was thinner than the June estimate had implied.

The company reported $450.7 million in cash and $844.2 million in total liquidity, including an essentially undrawn $400 million revolving credit facility maturing in 2030. Additionally, Discovery Silver announced a $60–70 million reduction in 2026 spending at the Cordero project, following permit announcements made on October 5.

Production volume guidance is now considered de facto stale. With 198,142 ounces produced year-to-date and a record 70,564 ounces in the third quarter, reaching the 280,000-ounce midpoint would require approximately 82,000 ounces in the fourth quarter, a 16% sequential increase. Reaching the 300,000-ounce top end would require approximately 102,000 ounces, a 44% sequential increase. The effective guidance is now estimated at 260,000–275,000 ounces.

The stock closed at C$11.66 on November 9, up 21% from the C$9.62 low of November 3 but 12.5% below the September 3 high of C$13.33.

Discovery Silver Corp. (DSV) has assembled a portfolio of assets centered on its Porcupine Complex in Timmins, Ontario, which it acquired on April 15, 2025. This complex, described as the company's production engine, includes the Hoyle Pond and Borden underground operations, the Pamour open pit which is currently ramping up, the Hollinger open pit, and the Dome Mill. During the third quarter, the complex produced 70,564 ounces of silver from 943,761 tonnes of material at an 89.0% recovery rate.

The company also acquired the Kidd Operations in Timmins from Glencore on June 1, 2026. The transaction involved $10 million in shares, the assumption of environmental obligations, a 1.0% net smelter return (NSR) on the Kidd Creek Timber land package, and up to $75 million in deferred payments. The Kidd Operations include the Kidd Creek Mine, a copper-zinc-silver operation recognized as one of the world's deepest base metal mines with a business plan extending to the end of 2026. The acquisition also encompasses the Kidd Met Site, which features four circuits processing approximately 6,000 tonnes per day on B and C lines, along with crushing, concentrator, and five thickener facilities, 90 MW of power, and rail infrastructure. Additionally, the deal includes a 1,200-hectare tailings management area and surface rights contiguous to the Hoyle Pond and Pamour operations. Strategically, this serves as a mill-and-tailings acquisition, with plans to establish a new gold circuit at the Met Site to feed a centralized processing hub.

Further expanding its footprint in Timmins, Discovery Silver acquired land and infrastructure for the Dome, Paymaster, and Fuller sites from McEwen Inc. in October 2026 for $55 million, consisting of $5 million in cash and $50 million in shares. This transaction included the extension of the Franco-Nevada royalty over the acquired ground for $8 million received. These assets provide the foundation for a potential large-scale Dome open pit and future processing and tailings siting.

Outside of Ontario, the company owns the Cordero project in Chihuahua, Mexico, on a 100% basis since 2019, having invested more than $100 million. Cordero is a large-scale silver-gold-lead-zinc development project with a feasibility study dated February 16, 2024, and has now completed federal environmental permitting.

Tony Makuch serves as President, CEO, and Chairman of Discovery Silver. The release does not disclose the broader management team, board composition, or key strategic shareholders.