Discovery Silver expands Cordero project output as costs limit returns 

Discovery Silver’s (TSX-V:DSV; OTC:DSVSF) preliminary feasibility study on its Cordero project in northern Mexico expands output by 40% while increasing construction costs by nearly a quarter compared with an earlier report.  

The project, located about 550 km south of the border city of El Paso, TX, is forecast to produce 33 million tonnes of silver-equivalent over an 18-year mine life for a net present value of US$1.15 billion at a 5% discount rate, Discovery said in a news release on Tuesday. Construction is estimated to cost US$455 million.  

That compares with estimates of 26 million tonnes of silver-equivalent produced over a 16-year mine life for a net present value of US$1.16 billion at a 5% discount rate, according to a preliminary economic assessment from 2021, Discovery said. That study forecast construction at $US368 million.  

“Despite significant industry-wide cost escalation over the last year, cost savings from a streamlined process design and improved metallurgical performance have resulted in a highly capital efficient project with excellent margins,” Discovery chief executive officer Tony Makuch said in the release. Makuch was appointed CEO of the company on Monday.  

The Toronto-based company attributed the 24% higher construction estimates on increasing the plant’s initial size by a quarter, cost inflation and a switch to owner-operated mining from contractor mining because the open pit is now projected to be nearly a third larger. It said a full feasibility study should be completed before April 2024.