Discovery Silver (TSE:DSV) executives highlighted rising production, higher adjusted earnings and a stepped-up investment program during the company’s fourth-quarter and full-year 2025 results call, while also outlining a production ramp and a materially larger exploration campaign planned for 2026.
Quarterly performance and cash generation
President and CEO Tony Makuch said the fourth quarter marked a “solid quarter,” pointing to adjusted earnings per share of $0.14, up 75% from the prior quarter, alongside ongoing cash generation despite higher capital spending. The company reported production of nearly 67,000 ounces in Q4, with revenue of $274 million on sales of 64,000 ounces at a net realized gold price of $4,157/oz.
Costs, capital spending and liquidity
Chief Financial Officer Alison White said Q4 was a period of reinvestment at the Porcupine operations. Capital expenditures in the quarter totaled $99.9 million, up from $65.2 million in Q3, including $34 million of sustaining capital and $66 million of growth capital. Sustaining spending was focused on mobile equipment procurement and capital development at Hoyle Pond and Borden, plus construction work to “buttress” the number 6 tailings management area at the Dome property. Growth capital was primarily tied to pre-stripping at Pamour and longer-term investments at the TMA Six tailings facility.
Cash costs per ounce sold improved to $1,185/oz from $1,339/oz, which White attributed largely to inventory movements between quarters. All-in sustaining costs averaged $2,034/oz, up from $1,734/oz, reflecting higher sustaining capital, higher corporate G&A, and higher accretion and amortization related to reclamation obligations (partly offset by the favorable inventory change).
Discovery ended 2025 with cash of $410.7 million, up 20% from the prior quarter. Total liquidity was described as just under $660 million, including a $250 million undrawn revolving credit facility finalized in Q4 with a $100 million accordion feature.
Operations: Porcupine production and mill performance
Chief Operating Officer Pierre Rocque reported Q4 recoveries of 66,718 ounces and 67,010 ounces poured, both higher than Q3. He said the increase reflected higher mining rates at Pamour and higher average grades at Hoyle Pond and Borden, though the overall grade was lower due to a higher proportion of Pamour tons.
At the Dome mill, Discovery processed over 892,000 tons at an average grade of 2.58 g/t and average recovery of 90.2%. Throughput averaged 10,145 tons/day, a 9% increase over Q3, while mill operating costs were $21.68/ton, roughly in line with Q3.
Rocque also discussed operational constraints and mitigation efforts. At Hoyle Pond, high summer temperatures had previously slowed higher-grade stopes; those areas were “back to normal,” and the company is assessing ventilation upgrades and cooling options for 2026. At Borden, winter storm-related highway closures led to ore stockpiling on site, with deliveries to the plant occurring early in 2026.
2026 outlook: H2-weighted production, ongoing reinvestment
Makuch said Discovery issued 2026 guidance calling for production of 260,000 to 300,000 ounces, with output weighted to the second half. Unit costs are expected to start at the high end of target ranges early in the year due to ramp-up and capital spending weighted to the first half, then improve into the lower end of the ranges in the second half as cost savings from capital investments begin to flow through.
Management also discussed the Hollinger open pit during Q&A. Rocque said Discovery plans to mine remaining benches left by the prior operator, suggesting investors model about 2,000 tons/day at an expected grade of about 1.4, with a “very low” strip ratio (he suggested about 1:1) and minimal upfront capex. He added that Hollinger ore is expected to partially displace Pamour feed due to the higher grade, with some Pamour material moving to stockpiles. The team said mining at Hollinger began in January and that permitting is in place to continue.
On mill performance, the company reiterated that processing capacity is the key constraint. Mill manager Gord (referenced on the call) said the operation is working toward a 12,000 ton/day average but is not there yet, citing maintenance work and recent issues including screen deck changes and a conveyor belt problem that were described as fixed. He said reaching 15,000 tons/day would require additional grinding horsepower and more leach retention time, including thickener upgrades. Makuch said the company is evaluating pathways to increase mill capacity, noting that larger expansions would require tailings, power, water and permitting considerations.
Exploration momentum and Cordero permitting
Senior Vice President of Exploration Eric Kallio described broad drilling success across the Timmins-area assets, including Hoyle Pond (Lower F and the TVZ zone), Owl Creek, Borden, Pamour and the Brule target, and initial drilling at Dome. He said the 2026 program would expand materially to about 280,000 meters of drilling, with multiple rigs planned across mine-site and regional targets.
In Mexico, VP of Sustainability and Corporate Affairs José Jabalera said the company is in the final stage of environmental impact assessment evaluation for the Cordero project in Chihuahua. He cited meetings with SEMARNAT and Mexico’s Minister of Economy and said the company believes it is “very close” to receiving approval “in the months to come.”
During Q&A, management said the 2026 $90 million to $100 million figure referenced for Cordero is largely tied to the land use fee. White said the fee represents roughly $70 million to $80 million of the total, depending on the final calculation, and is higher than initially anticipated due to updated government fee calculations. Makuch added that the company is evaluating a change from grid power to gas power, with a decision expected in the second quarter, while keeping plant size and mine plan broadly similar to the 2024 feasibility study. Management said any formal technical report update would likely come after permitting, potentially in the second half of the year.
About Discovery Silver (TSE:DSV)
Discovery Silver Corp is an exploration and development company building a large-scale, high-margin silver asset in Mexico. Its flagship project is the Cordero project, one of the few silver projects globally that offer margin, size, and scaleability. The project is located in a prolific mining belt in Chihuahua State, Mexico.
