Honey Badger Silver Inc press release
Discovery Reports 50,552 Ounces of Gold Production, $27.3 Million of Free Cash Flow¹ in Q2 2025
TSXV - TSX Venture Exchange · Silver · Gold · Zinc · Lead · Copper · Antimony · Tellurium · Arsenic · Bismuth · Iron · Gallium · Germanium · Canada
TRANSFORMATIONAL QUARTER Acquired Porcupine Complex on April 15 th , establishes Discovery as growing Canadian gold producer Finalized $575.0 million financing package, including $475.0M of royalty & equity financing, $100.0M senior debt facility
Q2 2025 NET EARNINGS AND EPS Net earnings of $5.5M ($0.01/share) versus net loss of $5.1M ($0.01/share) in Q2 2024; Adjusted net earnings 1 totaled $28.4 million or $0.04 per share
INITIAL GOLD PRODUCTION IN Q2 2025 50,552 produced from April 16 – June 30; Production included 16,112 oz from Hoyle Pond, 27,286 oz from Borden and 7,154 oz from Pamour
OPERATING CASH COSTS IN LINE WITH EXPECTATIONS Operating cash costs 1,2 of $48.8M or $1,334/oz sold
ATTRACTIVE MARGINS DRIVE PROFITABILITY AND CASH FLOW All-in sustaining costs (“AISC”) 1,2 averaged $2,123/oz sold versus average realized gold price 1 of $3,337/oz; Site-level AISC 3 averaged $1,872/oz sold
STRONG CASH FLOW FROM GOLD SALES Net cash from operating activities of $67.1M; Free cash flow 1 of $27.3M
SOLID CASH POSITION TO SUPPORT OPERATIONS AND GROWTH PLANS Cash at June 30, 2025, totaled $252.5M; with working capital of $225.9 million; Additional $100.0M of liquidity at June 30, 2025, through undrawn credit facility
1. Example of Non-GAAP measure. See the section in this press release entitled, “NON-GAAP MEASURES” for more information. 2. Operating cash costs and AISC include results from the Hoyle Pond and Borden operating mines, as well as corporate expenditures where applicable. They do not include operating costs, capital expenditures, or gold ounces sold from Pamour, which is a capital project that continues to ramp up towards commercial levels of production. 3. Site-level AISC excludes corporate G&A expense, share-based compensation costs and corporate-level sustaining capital expenditures.
TORONTO, Aug. 12, 2025 (GLOBE NEWSWIRE) -- Discovery Silver Corp. (TSX: DSV, OTCQX: DSVSF) (“ Discovery ” or the “ Company ”) today announced the Company’s financial and operating results for the second quarter (“Q2 2025”) and first six months (“YTD 2025”) of 2025. Q2 2025 represents the first quarter Discovery has reported the results of gold production and sales following the Company’s acquisition (“ Acquisition ” or “ Porcupine Acquisition ”) of the Porcupine Complex (“ Porcupine ” or the “ Porcupine Operations ”) 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.ca and 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: “Q2 2025 was Discovery’s first quarter as a Canadian gold producer. During the quarter, we integrated systems, strengthened management structures and began implementing investment programs at Porcupine aimed at improving existing operations and pursuing growth opportunities. It was a significant challenge, and I want to thank our team for delivering a quarter of excellent progress. We also turned in a solid quarter of operating and financial performance, producing 50,552 ounces in the 76 days that we owned the assets. Gold sales of 42,550 ounces were below gold produced with the gold inventory at quarter end to be sold during Q3 2025. Net cash from operations totaled 67.1 million, while free cash flow was $27.3 million. Adjusted net earnings totaled $28.4 million or $0.04 per share.
“Key investment programs initiated during Q2 205 included investments at Dome Mill, mainly in the crushing, grinding and carbon handling circuits, advancing work at the Dome tailings management area (“TMA”), continuing to ramp up Pamour, with pre-stripping and production levels meeting target levels, and commencing investments at Hoyle Pond and Borden to optimize and grow the operations. We also began deploying drills as part of an extensive exploration program targeting numerous near-mine and district targets at Hoyle Pond, Borden and Pamour, and supporting the evaluation of high-potential new sources of production, including the TVZ zone and the resumption of mining at Dome Mine.
“Looking ahead, we are targeting production levels to increase in the final two quarters of the year. We also plan to ramp up our capital investment and exploration programs as we move forward with our growth and value creation plans for Porcupine.”
SUMMARY OF Q2 2025 PERFORMANCE
| | Three months ended | | Six months ended | | | | | | | | | | | June 30, | June 30, | March 31 | June 30 | | June 30, | | | | | | | | | 2025 | | 2024 | | 2025 | | 2025 | | 2025 | | | Revenue | $ | 142,010 | $ | - | $ | - | $ | 142,010 | $ | - | | | Production costs | $ | 54,919 | | - | | - | | 54,919 | | - | | | Earnings before income taxes | $ | 24,510 | | (5,138) | | (6,452) | $ | 18,058 | $ | (5,643) | | | Net earnings | $ | 5,534 | $ | (5,138) | $ | (6,452) | $ | (918) | $ | (5,643) | | | Basic earnings per share | $ | 0.01 | $ | (0.01) | $ | (0.02) | $ | (0.00) | $ | (0.01) | | | Diluted earnings per share | $ | 0.01 | $ | (0.01) | $ | (0.02) | $ | (0.00) | $ | (0.01) | | | Cash flow from operating activities | $ | 67,081 | $ | (8,543) | $ | (6,075) | $ | 61,005 | $ | (11,014) | | | Cash investment on mine development and PPE | $ | (39,766) | $ | (2,141) | $ | (3,767) | $ | (43,533) | $ | (5,448) | | | | | | | | | | | | | | |
| | Three months ended | | Six months ended | | | | | | | | | | | June 30, | June 30, | March 31 | June 30 | | June 30, | | | | | | | | | 2025 | | 2024 | | 2025 | | 2025 | | 2025 | | | Tonnes milled | | 508,791 | | - | | - | | 508,791 | | - | | | Average Grade (g/t Au) | | 3.39 | | - | | - | | 3.39 | | - | | | Recovery (%) | | 91.3% | | - | | - | | 91.3% | | - | | | Gold produced (oz) | | 50,552 | | - | | - | | 50,552 | | - | | | Gold sold (oz) | | 42,550 | | - | | - | | 42,550 | | - | | | Average realized price ($/oz sold) | $ | 3,337 | $ | - | $ | - | $ | 3,337 | $ | - | | | Operating cash costs per ounce sold ($/oz) (1)(2) | $ | 1,334 | $ | - | $ | - | $ | 1,334 | $ | - | | | AISC per ounce sold ($/oz) (1)(2)(3) | $ | 2,123 | $ | - | $ | - | $ | 2,123 | $ | - | | | Adjusted net earnings (1) | $ | 28,434 | $ | (2,107) | $ | (3,046) | $ | 25,338 | $ | (4,078) | | | Adjusted net earnings per share (1) | $ | 0.04 | $ | (0.01) | $ | (0.01) | $ | 0.04 | $ | (0.01) | | | Free cash flow (1) | $ | 27,314 | $ | (10,684) | $ | (9,842) | $ | 17,472 | $ | (16,462) | | | | | | | | | | | | | | | | (1) Example of Non-GAAP measure. See the section in this press release entitled, “NON-GAAP MEASURES” for more information. | | | | | | | | | | | | | (2) Consolidated operating cash costs per ounce sold and AISC per ounce sold include results from the Hoyle Pond and Borden operating mines, as well as corporate expenditures where applicable. They do not include operating costs, capital expenditures, or gold ounces sold from Pamour, which is a capital project that continues to ramp up towards commercial levels of production. | | | | | | | | | | | | | (3) YTD 2025 results exclude G&A expense, share-based compensation costs and sustaining capital expenditures and lease expense incurred prior to the April 15, 2025, the completion date of the Porcupine Acquisition. | | | | | | | | | | | | | | | | | | | | | | | | |
Q2 2025
Revenue in Q2 2025 totaled $142.0 million that resulted from gold sales of 42,550 ounces at an average realized gold price¹ of $3,337 per ounce. EBITDA 1,2 of $ 55.2 million compared to a loss before interest, taxes and depreciation and amortization of $5.1 million and $6.3 million in Q2 2024 and Q1 2025, respectively. The significant improvement in EBITDA performance resulted from revenue and earnings generated from gold sales following completion of the Porcupine Acquisition on April 15, 2025. Net earnings totaled $5.5 million ($0.01 per basic share) versus a loss of $5.1 million ($0.01 per basic share) in Q2 2024 and net loss of $6.5 million ($0.02 per basic share) in Q1 2025. Adjusted net earnings 1 totaled $28.4 million ($0.04 per basic share) versus adjusted net loss of $3.0 million ($0.01 per basic share) in Q2 2024 and adjusted net loss of $3.0 million ($0.01 per basic share) the previous quarter; The difference between net earnings and adjusted net earnings reflected the after-tax impact of $16.6 million of acquisition-related costs, mainly for legal, consulting and advisory services, and other expenses, $6.8 million of foreign exchange losses and $2.4 million of transition-related costs involving the Porcupine Operations. Solid operating performance in initial quarter of production at Porcupine (April 16, 2025, to June 30, 2025): Production of 50,552 ounces, comprised of 16,112 ounces at Hoyle Pond, 27,286 ounces at Borden and 7,154 ounces at Pamour Gold poured totaling 46,608 ounces, with gold sales of 42,550 ounces Production costs of $54.9 million Operating cash costs 1 averaging $1,334 per ounce sold All-in sustaining costs 1 (“ AISC ”) averaging 2,123 per ounce sold; Site-level AISC averaging $1,872 per ounce sold (see the Operating Cash Costs and AISC tables in Non-GAAP Measures section near the end of this press release for more information).
Cash flows included net cash provided by operating activities of $67.1 million, which compared to net used by operations activities of $8.5 million and $6.1 million in Q2 2024 and Q1 2025, respectively. Free cash flow 1 totaled $27.3 million versus free cash flow of ($10.7) million in Q2 2024 and ($9.8) million in Q1 2025.
Capital expenditures 1 totaled $44.2 million, with sustaining capital expenditures 1 accounting for $16.1 million and growth capital expenditures 1 totaling $28.1 million; Sustaining capital expenditures largely focused on capital development at Hoyle Pond and Borden and construction work to raise and buttress the No. 6 tailings impoundment area (“ TMA ”), while the $28.1 million of growth capital expenditures related to pre-stripping at Pamour, with the remainder largely related to longer-term investments at the TMA.
| CAPITAL EXPENDITURES | | | | | | | | | | $ thousands unless otherwise states | Hoyle Pond | Borden | Pamour | Porcupine 1 | Cordero | Corporate | Total | | | Sustaining | $5,743 | $9,032 | $- | $14,775 | $- | $1,347 | $16,122 | | | Growth | 1,854 | 2,665 | 22,338 | 26,857 | 1,196 | - | 28,053 | | | Total | $7,597 | $11,697 | $22,338 | $41,632 | $1,196 | $1,347 | $44,175 | | | 1. Capital expenditures incurred at Dome Mill and the TMA are allocated to Porcupine’s mining operations based on their proportion of mill fee provided to Dome Mill. | | | | | | | | | | | | | | | | | | |
Cash at June 30, 2025 totaled $252.5 million reflecting approximately $475.0 million of gross proceeds ($468.7 million of net proceeds after share issue costs) from a financing package (the “ Financing Package ”) arranged in conjunction with the Porcupine Acquisition, as well as $67.1 million of net cash from operating activities generated during Q2 2025, partially offset by $200.6 million of cash consideration paid for the Porcupine Operations at closing, the $44.2 million of capital expenditures during Q2 2025, as well as the impact of $51.6 million of restricted cash related to letters of credit and cash collateral for government required financial assurances in relation to closure plans involving the Porcupine assets.
1. The difference between the $39.8 million of Acquisitions of mineral interests, property and equipment and total capital expenditures of $44.2 million relates to the timing of cash expenditures relative to the accrual of capital expenditures for accounting purposes.
Working capital 1 at June 30, 2025, totaled $225.9 million as compared to working capital of $17.0 million at December 31, 2024. The working capital balance at June 30, 2025, reflected the significant increase in cash during Q2 2025 as well as higher levels of short-term trade and other receivables and inventories, offset by higher current liabilities, mainly accounts payable and accrued liabilities, reclamation liabilities, deferred revenue, current income tax and employee-related benefits.
YTD 2025
Discovery did not generate revenue or earnings from mine operations in Q1 2025 or YTD 2024.
Net loss for YTD 2025 totaled $0.9 million, or $0.00 per basic share, compared to net loss of $5.6 million, or $0.01 per basic share, in YTD 2024. Adjusted net earnings¹ and adjusted net earnings per basic share¹ were $25.4 million and $0.04, respectively, which compared to adjusted net loss and adjusted net loss per basic share of $4.5 million and $0.01, respectively, in YTD 2024. The difference between net earnings and adjusted net earnings¹ in YTD 2025 mainly reflected the exclusion from adjusted net earnings of the after-tax impact of $20.2 million of business development expenses related to the Porcupine Acquisition, $6.7 million of foreign exchange losses, as well as $2.4 of one-time transition-related costs. EBITDA¹ , ² for YTD 2025 totaled $48.9 million versus a loss before interest, taxes and depreciation and amortization of $5.6 million in YTD 2024. The difference between net earnings and EBITDA mainly reflected the exclusion from EBITDA of $16.4 million of depletion and depreciation expense, $14.4 million of net finance costs, largely due to accretion expense from reclamation and deferred consideration and interest expense related to royalty agreements entered into with Franco-Nevada Corp. concurrent with the completion of the Porcupine Acquisition, and $19.0 million of income tax expense. Net cash provided by operating activities in YTD 2025 totaled $61.0 million, while free cash flow¹ totaled $17.5 million. Total capital expenditures¹ for YTD 2025 totaled $48.1 million, including $16.2 million of sustaining capital expenditures¹, $31.1 million of growth capital expenditures¹ and $0.8 million related to financial leases. Sustaining capital expenditures were incurred during Q2 2025 following the completion of the Porcupine Acquisition. Of growth capital expenditures in YTD 2025, $26.9 million related to Porcupine, with $4.2 million related to Cordero, largely for land acquisition during Q1 2025.
(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 | | | | | | | | | | | | | $ thousands unless otherwise states | Three months ended | | Six months ended | | | | | | | | | | | June 30, | June 30, | March 31 | June 30 | | | | | | | | | | | 2025 | | 2024 | | 2025 | | 2025 | | June 30, 2025 | | | Revenue | $ | 142,010 | $ | - | $ | - | $ | 142,010 | $ | - | | | | | | | | | | | | | | | | Production costs | | 54,919 | | - | | - | | 54,919 | | - | | | Depletion and amortization | | 16,384 | | - | | - | | 16,384 | | - | | | Royalties | | 1,916 | | - | | - | | 1,916 | | - | | | Earnings from mining operations | | 68,791 | | - | | - | | 68,791 | | - | | | | | | | | | | | | | | | | Expenses | | | | | | | | | | | | | General and administration | | 22,877 | | 1,827 | | 5,474 | | 28,351 | | 3,641 | | | Exploration | | 830 | | 103 | | 25 | | 855 | | 217 | | | Share-based compensation | | 1,953 | | 692 | | 1,167 | | 3,120 | | 1,346 | | | Earnings (loss) from operations | | 43,131 | | (2,622) | | (6,666) | | 36,465 | | (5,204) | | | | | | | | | | | | | | | | Other | | | | | | | | | | | | | Other income (loss) | | (6,879) | | (3,012) | | 189 | | (6,690) | | (1,451) | | | Finance items | | | | | | | | | | | | | Finance income (cost), net | | (11,742) | | 496 | | 25 | | (11,717) | | 1,012 | | | Earnings (loss) before taxes | | 24,510 | | (5,138) | | (6,452) | | 18,058 | | (5,643) | | | Income taxes expense (recovery) | | 18,976 | | - | | - | | 18,976 | | - | | | Net earnings (loss) | $ | 5,534 | $ | (5,138) | $ | (6,452) | $ | (918) | $ | (5,643) | | | | | | | | | | | | | | | | Basic earnings per share | $ | 0.01 | $ | (0.01) | $ | (0.02) | $ | (0.00) | $ | (0.01) | | | Diluted earnings per share | $ | 0.01 | $ | (0.01) | $ | (0.02) | $ | (0.00) | $ | (0.01) | | | | | | | | | | | | | | | | Weighted average number of common shares outstanding (in 000’s) | | | | | | | | | | | | | Basic | | 735,616 | | 397,570 | | 401,122 | | 569,293 | | 396,771 | | | Diluted | | 762,923 | | 397,570 | | 411,049 | | 596,600 | | 396,771 | | | | | | | | | | | | | | |
PORCUPINE OPERATIONS REVIEW
Discovery’s Porcupine Operations cover approximately 1,400 km 2 in and near Timmins, Ontario. Porcupine consists 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 currently ramping up towards commercial levels of production. All mineralization from the operating mines, and Pamour, is processed at Dome, including mineralization from Borden, which is trucked 190 km to the Dome Mill.
DOME MILL
The current Dome Mill was commissioned in 1988, with expansion projects being completed in 1995 and 2004. The mill consists of three-stage crushing, two parallel rod mill and ball mill circuits, a single leach and Carbon-in-Pulp circuit, followed by a carbon strip and electrowinning circuit. The Mill’s nameplate operating capacity is approximately 12,000 tonnes per day (approximately 4.3 million tonnes per annum). In recent years, the mill has operated at rates well below capacity levels, largely reflecting increased maintenance requirements which contributed to reduced availability and utilization rates, as well as production shortfalls from mining operations. Through investment programs launched following the closing of the Porcupine Acquisition, the Company is targeting a return to full capacity operations by 2028 or sooner.
| | | Three months ended | | | Dome Mill | | June 30, 2025 | | | Total material milled (t) | | 508,791 | | | Average Grade (g/t Au) | | 3.39 | | | Recovery (%) | | 91.3% | | | Gold produced (oz) | | 50,552 | | | Gold poured (oz) | | 46,608 | | | Gold sold (oz) | | 42,550 | | | Milling operating costs ($ Millions) | $ | 12,861 | | | Operating costs per tonne processed ($/tonne) | $ | 25.4 | | | | | | |
For the period April 16, 2025, to June 30, 2025, a total of 508,791 tonnes were processed at Dome Mill at an average grade of 3.39 g/t, with recovery rates averaging 91.3%. A total of 50,552 ounces of gold were produced over this period, with total gold poured of 46,608 ounces. Availability rates at the Dome Mill during Q2 2025 were impacted by a two-week maintenance shutdown, previously scheduled by the prior owner, for the purpose of replacing equipment in the thickening tank. The Company used the occasion of the shutdown to advance multiple other projects, primarily in the crushing, grinding and carbon handling circuits. Based on operating days during Q2 2025, mill throughput averaged approximately 8,500 tonnes per day. Mill operating costs during Q2 2025 totaled $12.9 million for an average of $25.4 per tonne processed. These costs are allocated to the mine operations based on a proportion of total tonnes processed basis.
For the purpose of segment reporting, capital expenditures¹ for Dome Mill and the TMA are allocated to Hoyle Pond, Borden and Pamour based on a proportion of total tonnes processed basis. Capital expenditures allocated during Q2 2025 totaled $16.5 million. The majority of these capital expenditures related to the TMA, with work during the quarter largely focused on raising and buttressing the existing dam walls and constructing seepage collection systems.
HOYLE POND
Hoyle Pond Mine is an underground gold mining operation located within the Archean Abitibi Greenstone Belt approximately 20 km northeast of downtown Timmins, Ontario. Underground infrastructure includes two decline ramps, an 815-metre four-compartment shaft (“#1 Shaft”) and a 1,350 metre winze (the “#2 Winze”) with the deepest station being on the 1600-metre level. Underground production is trucked to the #2 Winze and is then hoisted to the 720 level, where it is sent by tram to the loading pocket of the #1 Shaft. Mineralization is then trucked approximately 17 km to Dome Mill. The mine began operations in 1985 and, since that time, has produced over 4.0 million ounces of gold.