Discovery Reports Q1 2023 Financial Results and Update

HIGHLIGHTS FROM Q1 2023 & SUBSEQUENT EVENTS:

• Completion of our PFS on Cordero that outlined an 18-year mine life with average annual production of 33 Moz AgEq at an average AISC of $12.80/oz AgEq in Years 1 to 12. The after-tax NPV5% was US$1.2 B and the IRR was 28% at base case metal prices of Ag – US$22.00/oz, Au – US$1,600/oz, Pb – US$1.00/lb and Zn – US$1.20/lb.
• The appointment of Tony Makuch as the Chief Executive Officer; Mr. Makuch has more than 35 years of development, operational and leadership experience. Most recently he was CEO of Kirkland Lake Gold Ltd. where, under his five-year tenure, annual gold production grew from 315,000 oz to over 1,400,000 oz and Kirkland Lake’s share price increased over 500%.
• Completion of a “marketed” public offering for aggregate gross proceeds of approximately C$51.75 million putting the Company in a strong position to deliver on key de-risking milestones as well as the Feasibility Study on Cordero.
• The graduation to the main board of the Toronto Stock Exchange reflecting the Company’s maturity and growth with Cordero now having advanced to the feasibility study stage.
• As of March 31, 2023, we had a cash and cash equivalents balance of $37 million.

LOOKING AHEAD:

The Company is currently focused on advancing its Feasibility Study (“FS” or “the Study”) with the objective of delivering the Study in the first half of 2024. Feasibility Study drilling, consisting of engineering drilling, resource upgrade drilling, and reserve expansion drilling, is progressing well with initial drill results highlighting the potential to further grow reserves within and on the margins of the open pit. The sample selection for the metallurgical testwork program is now finalized. This program will target the potential reduction of reagent costs and improved metallurgical performance through further variability testwork. Work on optimizing bench heights and mine equipment sizing with the objective of reducing mining costs will also get underway shortly.  We also remain committed to the growth potential of Cordero with 9,000 m of drilling planned this year on property-wide targets. This drilling follows on from significant target generation work the Company has completed in recent years including extensive mapping and sampling work and multiple geophysical surveys.

In parallel to the FS work, the Company plans to advance the construction permitting process for Cordero. The submission of the Environmental Impact Statement (“Manifesto de Impacto Ambiental” or “MIA”) to the Mexican Federal Environmental Department (“SEMARNAT”) is currently planned for later this quarter. Assuming a 12 to 24 month permitting timeline, this would position the Company to make a potential construction decision toward the end of 2024. Of note, on Saturday April 29, 2023, the Mexican government approved a bill amending several laws relating to mining and water concessions. The Company is awaiting further details on these amendments, including publication of the approved laws in the Official Gazette, to determine the impact, if any, on the Company’s operations.

The Company’s Environment, Social and Governance (“ESG”) program continues to be an important area of focus. The 2022 ESG report is scheduled for issuance in 2Q 2023, and key government and international accreditation certifications are planned for completion in the second half of 2023.

Our balance sheet remains exceptionally strong with a current cash balance of over $80 million and no debt. This puts the Company in a strong position to complete the FS as well as other key derisking milestones required to advance Cordero to a construction decision.

Further Information ias attached.