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Discovery Silver: Investment Case Improves Following Revamped PEA

Dec. 01, 2021 12:35 PM ETDiscovery Silver Corp. (DSVSF), DSV:CA15 Comments
Taylor Dart profile picture
Taylor Dart


  • Discovery Silver released an updated Preliminary Economic Assessment on its Cordero Project this week, showcasing very attractive economics.
  • The updated study carries a 35% lower upfront capex bill than the 2018 PEA by Levon and boasts an After-Tax NPV (5%) to Initial Capex ratio of 3.15.
  • Based on Discovery Silver trading at a fully diluted market cap of ~$570 million, the stock currently trades at a very reasonable valuation of less than 0.50x NPV (5%).
  • Given the significant improvement in the economics, I would view any pullbacks below US$1.20 for Discovery Silver as low-risk buying opportunities.

Bolivian Miner, Potosi, Bolivia

SL_Photography/iStock Editorial via Getty Images

It's been a rough year thus far for the Silver Juniors ETF (SILJ), with the index down 21% year-to-date. However, one name that has continued to perform well on a relative basis is Discovery Silver (OTCQX:DSVSF), which

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Taylor Dart profile picture
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Comments (15)

goldbug58 profile picture
Article needs an update, here we are at $0.78 US well under the $1.20 support.
BeaBaggage profile picture
@Microcap Mining personally I can't get excited about silver anymore, not that I ever was big on the miners for a long time. I was trading $SILV and dumped what I had in the runup to 7.20 a few weeks ago- here it is at 5.17. These developers have merit of course to trade but I am staying out. Good luck! Silver is fighting the FED and 5% cash rates hard as well as the dollar run back up and sentiment. As is gold, lets face it. Bea
goldbug58 profile picture
@BeaBaggage Feb. been a rough month. Most miners getting hit on costs, yes DXY strength a factor as well as potential recession weighing on the co-product base metals (zinc, lead etc); still, I try to buy when knocked down. Discovery seems oversold but could always get worse. Keeping some dry powder too.
BeaBaggage profile picture
@Microcap Mining yes me too, the MX situation to me is the big question mark the way AMLO is going after industry; but governments change!
BeaBaggage profile picture
well $DSVSF is at US$1.02, well under your buy of 1.20 range based on previous release here in late 2021 and silver is hanging out around $24 for a couple of months, is this worth a strong buy here? when is production set to start- 2025?? Thanx Bea
Mountain Marmot profile picture
Taylor, do you like prospects here at ~$1.13?
Taylor, does the pricing on (and amt of) the options given to Makuch bother you? Bothers me.
Yes they do pay him a lot in options. But he is also very good/experienced.
I did own LSG an KL before. Makuch managed to build those companies very well. And both campanies where acquired by another company at the end.
By giving him options now they keep the cash they need for construction. And they will only pay him when the project is a succes.
Yes makuch will get more. But only if the project is a succes.
Brian Cellars profile picture
Thanks for the update. Too bad I wasn't checking closer back in September. It's held up better than many on the recent drop in silver price. I've dabbled in too many already but will watch it closer now. Any quick thoughts on Vizsla? I've done well trading it but have heard it's not a great project.
Downtown10 profile picture
I’ve been a holder of Discovery for years, but I would not commit new money to them or any other Mexico miner at this time. The current Mexican government is just too anti-foreign miners at this point.
TopDoggie profile picture
@Downtown10 I like this company and it's potential. I am with you on the fear of putting any new money into Mexican miners.
@Downtown10 I am a long time investor as well and gladly add more. Perhaps my risk tolerance for Mexico and other South American countries is high. I am fine investing in them thus far. My point is most countries will want more participation of the commodities bull cycle. Considering the high debts around the world sooner or later everyone would want a better share. Just look at dems proposal for miners going forward. As usual great article, Taylor
TopDoggie profile picture
@Downtown10 From @Darp Research comments on his blog it looks like the Mexican president might be rethinking his position on mining.
Taylor, you are really busy. Thanks for this nice article.

I have Discovery Silver on my watchlist for a longer time but never bought it because I considered other stocks more attractive. I think of Gatos Silver with an already producing mine and Southern Silver with a massive resource and an extremely low valuation. But you are absolutely right: Discovery Silver is one of the best choices in Mexico.
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