Discovery Reports Strong Earnings Growth and Cash Generation in Q4 2025

2026-02-19

TSX - Toronto Stock Exchange · Silver · Gold · Zinc · Lead · Canada

Cash of $410.7 million at December 31, 2025

75% INCREASE IN ADJUSTED EPS Net earnings $65.3M or $0.08/share, with adjusted net earnings1of $113.5M or $0.14/share versus $61.1M or $0.08/share in Q3 2025

6% GROWTH IN GOLD PRODUCTION 66,718 oz produced versus 63,154 oz in Q3 2025

12% IMPROVEMENT IN OPERATING CASH COSTS Operating cash costs1of $1,185/oz sold compared to $1,339/oz in Q3 2025

AISC REFLECTS HIGHER SUSTAINING CAPITAL1 AISC/oz1,2averaged $2,034; Site-level AISC/oz3averaged $1,824

INVESTING TO IMPROVE AND GROW PORCUPINE Sustaining capital expenditures1of $33.8M, with growth capital expenditures1of $66.1M versus $20.8M and $44.4M, respectively, in Q3 2025

STRONG CASH FLOW FROM GOLD SALES Net cash from operating activities of $163.2M; Free cash flow1of $67.9M

20% GROWTH IN CASH POSITION Cash at December 31, 2025, of $410.7M, with $250M of liquidity from an undrawn revolving credit facility and $100M accordion feature

EXPLORATION SUCCESS AT ALL TARGETS Excellent drill results from resource conversion and expansion drilling at Hoyle Pond, Borden and Pamour, continued success at Owl Creek, and encourage initial results from Dome, TVZ and Broulan Pit

2026 GUIDANCE INCLUDES SOLID PRODUCTION GROWTH, INVESTMENTS FOR THE FUTURE 2026 guidance includes back half weighted production of 260 – 300 koz; operating cash costs/oz of $1,250 – $1,400, AISC/oz of $1,950 – $2,250; front half weighted sustaining capital expenditures of $120M – $165M and growth capital expenditures of $195M – $235M

1. Example of Non-GAAP measure. See the section in this press release entitled, “NON-GAAP MEASURES” for more information. 2. Refers to all-in sustaining costs per ounce sold. 3. Site-level AISC includes corporate G&A allocation and excludes remaining corporate G&A, share-based compensation costs and corporate-level sustaining capital expenditures.

TORONTO, Feb. 19, 2026 (GLOBE NEWSWIRE) -- Discovery Silver Corp.(TSX: DSV, OTCQX: DSVSF) (“Discovery” or the “Company”) today announced the Company’s financial and operating results for the fourth quarter (“Q4 2025”) and full year of 2025 (“FY 2025”). Discovery began reporting the results of gold production and sales following the Company’s acquisition (“Acquisition” or “Porcupine Acquisition”) of the Porcupine Complex (“Porcupine”) in and near Timmins, Ontario on April 15, 2025. The Company’s full financial statements and management discussion & analysis are available on SEDAR+ at www.sedarplus.caand on the Company’s website at www.discoverysilver.com. All dollar amounts are in US dollars, unless otherwise noted.

Tony Makuch, Discovery’s CEO, commented: “We have built considerable momentum since acquiring Porcupine last April, with production in Q4 2025 totaling 66,718 ounces and operating cash costs improving to $1,185/oz. AISC has remained relatively unchanged as we have increased sustaining capital expenditures to provide needed investment for the Porcupine operations to achieve their full value potential. Our solid operating performance, in combination with higher gold prices, has resulted in improved profitability and substantial cash flow generation. We ended 2025 with a very strong financial position, with cash totaling $410.7 million and no debt.

“Another key area of accomplishment has been exploration. Last week, we reported excellent drilling results across our key Porcupine targets, including additional high-grade intersections from resource conversion and extension drilling at Hoyle Pond, Borden and Pamour; district drilling success at Owl Creek, as well as at the new Broulan target near Pamour; and very encouraging initial drilling results from our two key near-term growth projects, Dome and TVZ.

“Looking ahead, we issued our 2026 guidance today with our Q4 2025 results. The guidance includes significant production growth, reflecting higher output at Hoyle Pond and Borden, as well as increased production from open pit sources, including both Pamour and Hollinger, where we are currently resuming operations. Unit costs will be near the top of the target ranges in the first half of the year and improve significantly over the final six months as production levels increase, sustaining capital declines and we benefit from our investments in equipment, development and infrastructure at our operations. We will also be investing $55 – $75 million in exploration, which is a direct result of the success we are achieving and the tremendous upside we see at all our Porcupine operations and projects.”

SUMMARY OF Q4 AND FY 2025 PERFORMANCE

| | Three months ended | | Year ended | | | | | | | | | (in $ thousands except per share amounts) | December 31, 2025 | | December 31, 2024 | | September 30, 2025 | | December 31, 2025 | | December 31, 2024 | | | Revenue | 274,242 | | — | | 236,961 | | 653,213 | | — | | | Production costs | 73,814 | | — | | 106,807 | | 235,540 | | — | | | Earnings (loss) before income taxes | 60,349 | | (5,663 | ) | 71,114 | | 149,521 | | (15,167 | ) | | Net earnings (loss) | 65,289 | | (5,663 | ) | 42,439 | | 106,810 | | (15,167 | ) | | Basic earnings (loss) per share | 0.08 | | (0.01 | ) | 0.05 | | 0.16 | | (0.04 | ) | | Diluted earnings (loss) per share | 0.08 | | (0.01 | ) | 0.05 | | 0.15 | | (0.04 | ) | | Cash flow from (used in) operating activities | 163,231 | | (2,937 | ) | 153,488 | | 377,723 | | (15,141 | ) | | Cash investment on mine development and PPE | (95,324 | ) | 479 | | (66,675 | ) | (205,532 | ) | (7,245 | ) |

| | Three months ended | | Year ended | | | | | | | | | | | | | | | December 31, 2025 | | December 31, 2024 | | September 30, 2025 | | December 31, 2025 | | December 31, 2024 | | | | | | | | Tonnes milled | | 892,818 | | | — | | | 808,688 | | | 2,210,297 | | | — | | | Average Grade (g/t Au) | | 2.58 | | | — | | | 2.69 | | | 2.80 | | | — | | | Recovery (%) | | 90.2% | | | — | | | 90.3% | | | 90.5% | | | — | | | Gold produced (oz) | | 66,718 | | | — | | | 63,154 | | | 180,424 | | | — | | | Gold sold (oz)(1) | | 64,479 | | | — | | | 66,200 | | | 173,229 | | | — | | | Average realized price ($/oz sold)(2) | $ | 4,157 | | $ | — | | $ | 3,489 | | $ | 3,701 | | $ | — | | | Operating cash costs per ounce sold ($/oz sold)(2) | $ | 1,185 | | $ | — | | $ | 1,339 | | $ | 1,267 | | $ | — | | | AISC per ounce sold ($/oz sold)(2)(3) | $ | 2,034 | | $ | — | | $ | 1,734 | | $ | 1,925 | | $ | — | | | Adjusted net earnings(2) | $ | 113,495 | | $ | (4,320 | ) | $ | 61,090 | | $ | 199,974 | | $ | (10,736 | ) | | Adjusted net earnings per share(2) | $ | 0.14 | | $ | (0.01 | ) | $ | 0.08 | | $ | 0.29 | | $ | (0.03 | ) | | Free cash flow(2) | $ | 67,907 | | $ | (2,458 | ) | $ | 86,813 | | $ | 172,191 | | $ | (22,386 | ) |

(1) The difference between ounces produced and ounces sold largely reflects the delivery of in-kind ounces under the Franco-Nevada royalty arrangement. (2) Example of Non-GAAP measure. See the section in this press release entitled, “NON-GAAP MEASURES” for more information. (3) 2025 results exclude G&A expense, share-based compensation costs and sustaining capital expenditures and lease expense incurred prior to April 15, 2025, the completion date of the Porcupine Acquisition.

Q4 2025

Revenue in Q4 2025 increased 16% from the previous quarter to $274.2 million, reflecting gold sales of 64,479 ounces and an average realized gold price1of $4,157 per ounce. Net earnings totaled $65.3 million, or $0.08 per basic share compared to net loss of $5.7 million, or $0.01 per basic share, in Q4 2024 and net earnings of $42.4 million, or $0.05 per basic share, in Q3 2025. Adjusted net earnings1totaled $113.5 million, $0.14 per basic share, which compared to net loss of $4.3 million, or $0.01 per basic share, in Q4 2024, and adjusted net earnings of $61.1 million, or $0.08 per basic share, the previous quarter; Adjusted net earningsin Q4 2025 differed from net earnings due mainly to the exclusion from adjusted net earnings of a one-time $45.0 million reclamation expense for non-operating mine sites, a $10.9 million expense related to shares issued for the Taykwa Tagamou Nation (“TTN”) Resource Development Agreement (see Discovery press release dated October 21, 2025 for more information), $4.0 million of foreign exchange losses, $3.0 million related to a transaction services agreement (“TSA”) with Newmont Corporation, and $2.2 million of purchase price allocation adjustments. EBITDA1,2of $126.0 million compared to a loss before interest, taxes and depreciation and amortization of $5.6 million in Q4 2024 and EBITDA of $122.5 million in Q3 2025; EBITDA increased from the previous quarter as the favourable impact of higher revenue and lower production costs more than offset the reduction from a one-time $45.0 million reclamation expense related to non-operating mine sites due to a one-time accounting remeasurement. Solid operating performancein Q4 2025: Production of 66,718 ounces increased 6% from the previous quarter. Gold sales of 64,479 ounces versus 66,200 ounces in Q3 2025. Production costs of $73.8 million compared to $106.8 million the previous quarter, with the reduction largely due to reduced PPA adjustments and lower costs related to inventory changes compared to the previous quarter. Operating cash costs1improved 12% to $1,185 per ounce sold compared to $1,339 per ounce sold in Q3 2025, largely reflecting changes in inventories. AISC1averaged $2,034 per ounce sold compared to $1,734 per ounce sold the previous quarter, with the increase largely resulting from higher sustaining capital expenditures, as the Company invested in new mobile equipment, capital development and improving infrastructure at Hoyle Pond and Borden, and in buttressing the No. 6 tailings management area (“TMA6”), as well as increased Corporate G&A expense; Site-level AISC in Q4 2025 averaged $1,824 per ounce sold versus $1,699 per ounce sold in Q3 2025.

Cash flows included net cash from operating activities of $163.2 million, which compared to net cash used in operating activities of $2.9 million in Q4 2024 and net cash from operating activities of $153.5 million the previous quarter. Free cash flow1totaled $67.9 million versus free cash flow of ($2.5) million in Q4 2024 and $86.8 million in Q2 2025, with the change from Q3 2025 mainly reflecting progress in ramping up the Company’s investment programs. Capital expenditures1in Q4 2025 totaled $99.9 million, with an additional $5.9 million of leases. Of the $99.1 million, $33.8 million related to sustaining capital expenditures1, while $66.1 million were growth capital expenditures1. Growth capital expenditures primarily related to pre-stripping at Pamour and longer-term investments at the TMA6. Cashat December 31, 2025, totaled $410.7 million compared to $341.5 million at September 30, 2025, with the increase in cash mainly resulting from the $67.9 million of free cash flow generated during Q4 2025. Working capital1at December 31, 2025 totaled $242.2 million as compared to working capital of $17.0 million at December 31, 2024 and $224.2 million at September 30, 2025. The Growth in working capital in Q4 2025 resulted from the increase in cash, partially offset by higher current taxes payable and increases in accounts payable and accrued liabilities compared to September 30, 2025. The Company’s current taxes payable at December 31, 2025, totaled $85.1 million, which will be paid in Q1 2026.

(1) Represents cash capital expenditures incurred during Q4 2025

FY 2025

Discovery did not generate revenue or earnings from mine operations in FY 2024 or Q1 2025.

Gold production from April 16, 2025 to December 31, 2025 totaled 180,424 ounces, while gold sales totaled 173,229 ounces. Revenue of $653.2 million resulted from gold sales and an average realized price of $3,701 per ounce. Production costs totaled $238.5 million. Operating cash costs averaged $1,267 per ounce sold, while AISC per ounce sold averaged $1,925. The difference between ounces produced and ounces sold largely reflects the delivery of in-kind ounces related to the Franco-Nevada royalty arrangement. EBITDA was $297.0 million versus a loss before interest, taxes and depreciation and amortization of $15.1 million in FY 2024, with earnings generated following the Porcupine Acquisition in FY 2025 mainly accounting for the significant improvement in EBITDA performance. Net earningstotaled $106.8 million, or $0.16 per basic share, versus net loss of $15.2 million, or $0.04 per basic share, in FY 2024, with the prior year net loss largely resulting from corporate G&A costs, share-based compensation expense and foreign exchange losses during FY 2024. Weighted average basic shares outstandingwere 687.8 million shares versus 398.4 million shares for the same period a year earlier, with the increase mainly due to the impact of the 401.8 million shares issued during Q2 2025 in relation to the Porcupine Acquisition and related financing package. Adjusted net earningswere $200.0 million, or $0.29 per basic share compared to adjusted net loss of $10.7 million, or $0.03 per basic share, in FY 2024. The difference between net earnings and adjusted net earnings in FY 2025 mainly reflected the exclusion of the one-time $45.0 million reclamation expense for non-operating sites, $22.1 million of transaction-specific business development expenses, primarily related to the Porcupine Acquisition, $20.7 million of PPA adjustments, a $10.9 million expense related to shares issued in relation to the TTN Resource Development Agreement, and $8.8 million of TSA costs. Net cash from operating activitiesin FY 2025 totaled $377.7 million, while free cash flowtotaled $172.2 million. Capital expendituresfor FY 2025 totaled $212.3 million, with an additional $8.1 million of leases, which included $70.8 million of sustaining capital expenditures and $141.5 million of growth capital expenditures; Of growth capital expenditures in FY 2025, $134.4 million related to Porcupine, primarily due to pre-stripping at Pamour and longer-term investments at the TMA6, and $7.1 million related to Cordero, largely for land acquisition.

(1) Example of Non-GAAP measure. See the section of this press release entitled, “NON-GAAP MEASURES” for more information. (2) Refers to earnings before interest, taxes and depreciation and amortization.

Income Statement Summary

| | Three months ended | | Year ended | | | | | | | | | | | | | | (in thousands except per share amounts) | December 31, 2025 | | December 31, 2024 | | September 30, 2025 | | December 31 2025 | | December 31, 2024 | | | | | | | | Revenue | $ | 274,242 | | $ | - | | $ | 236,961 | | $ | 653,213 | | $ | - | | | | | | | | | | | | | | | | | | | | Production costs | | 73,814 | | | - | | | 106,807 | | | 235,540 | | | - | | | Depreciation and amortization | | 49,381 | | | - | | | 35,826 | | | 101,591 | | | - | | | Royalties | | 7,859 | | | - | | | 3,619 | | | 13,394 | | | - | | | Earnings from mining operations | | 143,188 | | | - | | | 90,709 | | | 302,688 | | | - | | | | | | | | | | | | | | | | | | | | Expenses | | | | | | | | | | | | | | | | | General and administration | | 16,695 | | | 4,834 | | | 6,661 | | | 51,707 | | | 10,492 | | | Exploration | | 340 | | | (2 | ) | | 5,972 | | | 7,167 | | | 373 | | | Impairment | | — | | | — | | | 2,140 | | | 2,140 | | | — | | | Share-based compensation | | 461 | | | 1,212 | | | 1,398 | | | 4,979 | | | 3,235 | | | Other operating costs | | 47,512 | | | — | | | — | | | 47,512 | | | — | | | Earnings from operations | | 78,180 | | | (6,044 | ) | | 74,538 | | | 189,183 | | | (14,100 | ) | | | | | | | | | | | | | | | | | | | Other | | | | | | | | | | | | | | | | | Other income (loss) | | (3,623 | ) | | 186 | | | 9,301 | | | (1,012 | ) | | (2,592 | ) | | Finance Items | | | | | | | | | | | | | | | | | Finance expense (income), net | | (14,208 | ) | | 195 | | | (12,725 | ) | | (38,650 | ) | | 1,525 | | | Earnings before taxes | | 60,349 | | | (5,663 | ) | | 71,114 | | | 149,521 | | | (15,167 | ) | | | | | | | | | | | | | | | | | | | Current income tax expense (recovery) | | 26,255 | | | - | | | 32,462 | | | 85,088 | | | - | | | Deferred income tax expense (recovery) | | (31,195 | ) | | - | | | (3,787 | ) | | (42,377 | ) | | - | | | Net (loss) earnings | $ | 65,289 | | $ | (5,663 | ) | $ | 42,439 | | $ | 106,810 | | $ | (15,167 | ) | | | | | | | | | | | | | | | | | | | Basic earnings per share | $ | 0.08 | | $ | (0.01 | ) | $ | 0.05 | | $ | 0.16 | | $ | (0.04 | ) | | Diluted earnings per share | $ | 0.08 | | $ | (0.01 | ) | $ | 0.05 | | $ | 0.15 | | $ | (0.04 | ) | | | | | | | | | | | | | | | | | | | Weighted average number of common shares outstanding (in 000’s) | | | | | | | | | | | | | | | | | Basic | | 805,988 | | | 400,415 | | | 802,837 | | | 687,819 | | | 398,386 | | | Diluted | | 828,211 | | | 400,415 | | | 825,798 | | | 710,042 | | | 398,386 | | | | | | | | | | | | | | | | | | |

PORCUPINE OPERATIONS REVIEW

Discovery’s Porcupine Operations consist of the Hoyle Pond, Pamour and Hollinger mine properties, the Dome mine property and milling facility, and numerous near-mine and regional exploration targets. The Complex also includes the Borden mine property and large land position near Chapleau, Ontario. Current operations include the Hoyle Pond and Borden underground mines, with the Pamour open-pit project ramping up towards commercial levels of production. All mineralization is processed at Dome, including mineralization from Borden, which is trucked 190 km to the Dome Mill. The Dome Mill is a 12,000 tonne-per-day processing facility that in recent years has operated at rates well below optimal levels. Through investment programs launched following the closing of the Porcupine Acquisition, the Company is targeting a return to full capacity operations by 2027 or sooner.

| | Three months ended | | Year ended | | | | | | | | Porcupine Complex | December 31, 2025 | | September 30, 2025 | | December 31, 2025 | | | | | | Tonnes processed (t) | | 892,818 | | | 808,688 | | | 2,210,297 | | | Average Grade (g/t Au) | | 2.58 | | | 2.69 | | | 2.80 | | | Recovery (%) | | 90.2% | | | 90.3% | | | 90.5% | | | Gold produced (oz)(1) | | 66,718 | | | 63,154 | | | 180,424 | | | Gold poured (oz)(1) | | 67,010 | | | 65,978 | | | 179,605 | | | Gold sold (oz)(1)(2) | | 64,479 | | | 66,200 | | | 173,229 | | | Milling costs (in thousands) | $ | 19,354 | | $ | 17,107 | | $ | 49,351 | | | Milling costs per tonne processed ($/tonne) | $ | 21.7 | | $ | 21.2 | | $ | 22.3 | | | Production costs | $ | 73,814 | | $ | 106,807 | | $ | 235,540 | | | Operating cash costs per ounce sold(3)(4) | $ | 1,185 | | $ | 1,339 | | $ | 1,267 | | | AISC per ounce sold(3)(4) | $ | 1,824 | | $ | 1,699 | | $ | 1,781 | | | Total capital expenditures(3)(4)(in thousands) | $ | 96,581 | | $ | 65,976 | | $ | 204,189 | |

(1) Includes gold production, poured and sold from Hoyle Pond, Borden and Pamour. (2) The difference between ounces produced and ounces sold largely reflects the delivery of in-kind ounces under the Franco-Nevada royalty arrangement. (3) Example of Non-GAAP measure. See the section in this press release entitled, “NON-GAAP MEASURES” for more information. (4) Operating cash costs per ounce sold, AISC per ounce sold and total capital expenditures are site level and exclude remaining corporate G&A, share-based compensation costs and corporate-level sustaining capital expenditures.

During Q4 2025, a total of 892,818 tonnes were processed at Porcupine Complex at an average grade of 2.58 g/t, with recovery rates averaging 90.2%, which compared to 808,688 tonnes at an average grade of 2.69 g/t and recovery rates averaging 90.3% in the previous quarter. A total of 66,718 ounces of gold were produced over this period, with total gold poured of 67,010 ounces, compared to 63,154 and 65,978 ounces produced and poured respectively, in the previous quarter. Higher production in Q4 2025 reflected the favourable impact of increased ore mining rates at Pamour and higher average grades at Hoyle Pond, Borden, and Pamour, partially offset by lower mining rates at Borden. The change in the combined average grade for the Porcupine Complex to 2.58 g/t in Q4 2025 from 2.69 g/t in the previous quarter, reflected a higher proportion of tonnes processed from Pamour.