Discovery Reports Record Revenue, Strong Year-Over-Year Earnings Growth in Q2 2026

Discovery Silver Corp. (DSV) reported second-quarter 2026 revenue of $319.1 million, more than doubling the $148.5 million recorded in the same period last year and rising 12% from the $285.0 million posted in the first quarter. Net earnings for the quarter were $52.1 million, or $0.06 per share, a decline from the $81.7 million, or $0.10 per share, achieved in Q1. Adjusted net earnings came in at $92.3 million, or $0.11 per share, up from $82.7 million in the prior quarter.

The company generated $170.0 million in EBITDA, down from $177.9 million in Q1 2026. Free cash flow was negative at -$11.4 million, an improvement from the -$24.1 million reported in Q1, bringing year-to-date free cash flow to -$35.5 million. Gold production reached 67,309 ounces, representing a 12% increase quarter-over-quarter and a 33% year-over-year gain, with 66,068 ounces sold. The realized gold price decreased to $4,474 per ounce from $4,908 per ounce in the first quarter.

Gold operating cash costs were $1,387 per ounce sold, while all-in sustaining costs (AISC) rose to $2,154 per ounce sold, up from $2,041 per ounce in Q1. The Kidd Operations were included for one month, contributing $29.7 million in revenue and $0.47 million in earnings from mining operations.

As of June 30, the company held $364.3 million in cash and total liquidity of $607.8 million. The revolving credit facility (RCF) was later increased to $400 million and extended to 2030. Discovery Silver maintained its 2026 guidance, projecting gold production between 260,000 and 300,000 ounces, cash costs of $1,250 to $1,400 per ounce, and AISC of $1,950 to $2,250 per ounce. Sustaining capital expenditure is expected to range from $120 million to $165 million, with growth capital expenditure between $195 million and $235 million.

While the company reported record revenue, this figure was influenced by a partial Q2 2025 comparison period that covered only April 15 through June 30, 2025, rather than a full quarter, alongside volume increases.

The quarter presented some negative margin pressures. Gross margin compressed from approximately 59.7% in Q1 to about 51.5% in Q2. Additionally, the all-in sustaining costs (AISC) rose, the ore grade fell to 2.57 g/t from 2.96 g/t, and free cash flow turned negative.

Management attributed the cash flow dynamics to timing differences, noting that $29.7 million of Kidd revenue cash was received in early Q3. Furthermore, $35.8 million in payments were accelerated to support an ERP implementation. Consequently, working capital is expected to partially reverse in Q3.

The stock had previously rallied from $7.50 in mid-July to $10.83 ahead of the release, suggesting the market had already priced in much of the positive narrative surrounding Kidd, exploration, and the back-half of the year.

Discovery Silver Corp. (DSV) is a Canadian gold producer that changed its name to Discovery Mining Ltd. effective July 3, 2026. The company’s Porcupine Complex, located in Timmins, Ontario, encompasses the Hoyle Pond, Borden, Pamour, and Hollinger operations. Growth initiatives within the Porcupine region include the Dome, TVZ, and Owl Creek projects.

The company also acquired the Kidd Operations from Glencore, which were closed on June 1, 2026. This acquisition includes the Kidd Creek Mine, the Kidd Met Site, and related tailings and land packages. Additionally, Discovery Silver holds the Cordero silver project in Mexico, a development-stage asset that completed a feasibility study in 2024.

Regarding production metrics, H1 2026 gold output reached 127,578 oz. For the fiscal year 2025, Porcupine gold production from April 15 through December 31 totaled 180,424 oz, or 234,702 oz when including pre-acquisition output.