Discovery Silver Corp. has officially completed its acquisition of Newmont Corporation’s Porcupine Operations, a significant move that positions the company as a new Canadian gold producer. The acquisition, valued at $200 million in cash and approximately 119.7 million Discovery common shares, grants Newmont a 15% stake in the company, marking a pivotal moment for Discovery as it expands its operations in one of the world’s most prolific mining regions.
On April 16, 2025, the Toronto-based company announced the closure of the deal, which also includes a deferred cash payment of $150 million to be paid in four annual installments of $37.5 million starting December 31, 2027. This strategic acquisition not only enhances Discovery’s asset portfolio but also significantly boosts its production capabilities.
“With the closing of the Porcupine acquisition, Discovery moves forward as a diversified North American precious metals company,” said Tony Makuch, Discovery’s CEO. He emphasized the combination of growing gold production in Northern Ontario’s prolific gold camp with their Cordero project, recognized as one of the world’s largest silver development projects based on reserves and expected production.
The Porcupine Complex itself has a rich history, having produced approximately 70 million ounces of gold since its inception in 1910. The complex includes several key assets, each with unique production capabilities:
- Hoyle Pond: Known as one of North America’s highest-grade gold mines, it has produced over four million ounces since 1987 and boasts an excellent track record for replacing reserves.
- Borden: This relatively new mine is situated at the center of a 1,000 km² land position, where there is potential to extend existing mining zones. Notably, there has been minimal exploration outside the current mining area.
- Pamour: An open-pit project that is currently beginning production, Pamour has the potential to expand significantly through drilling in various directions.
- Dome Mine: A historic cornerstone of Canada’s gold mining history, Dome Mine still has a large mineral resource and substantial exploration upside.
- Dome Mill: This large-scale, central processing facility is currently operating below capacity but has significant growth potential to accommodate increased production.
Discovery’s recent technical report estimates an average annual production of over 285,000 ounces of gold for the next decade, with total production extending to 2046. This projection highlights the company’s commitment to improving operational efficiencies and expanding production capabilities across its newly acquired assets.
To support this ambitious expansion, Discovery has secured a financing package totaling $575 million, which will fund the acquisition and cover capital expenditures and working capital requirements at Porcupine. The financing includes a public offering completed on February 3, 2025, where the company raised approximately C$247.5 million (around $175 million) through the sale of 275 million subscription receipts.
As a result of the acquisition and financing, Discovery’s capital structure now includes 797.5 million common shares outstanding. Existing shareholders prior to the transaction own approximately 50.5% of the pro forma shares, excluding any new shares acquired via the offering. Following the receipt of all cash from the financing package, Discovery’s cash position has increased by approximately C$240 million ($170 million). Additionally, the company has a $100 million senior debt facility with Franco-Nevada that remains undrawn.
In conjunction with the acquisition, Discovery unveiled a new logo that reflects its growth as a North American precious metals company. The logo features the name “DISCOVERY” in blue, with the letter “V” incorporating both gold and silver, symbolizing the company’s dual focus on these precious metals.
Looking ahead, Discovery aims to re-establish the Porcupine Complex as a Tier 1 asset in the global gold industry, one that meets the highest operating standards and excels in all aspects of responsible mining. The management team, with extensive experience in the Timmins Camp, is optimistic about the opportunities that lie ahead.
“Our efforts will be supported by a strong balance sheet, and we are looking forward to getting started,” Makuch stated, emphasizing the company’s strategic vision and commitment to enhancing its operations.
As part of the ongoing efforts to optimize production and explore new opportunities, Discovery is focused on addressing operational inefficiencies, particularly at the Dome Mill, which is currently operating below capacity. The company recognizes the importance of maximizing its resources to ensure sustainable growth and profitability.
With the completion of this acquisition, Discovery Silver Corp. is poised to make a significant impact in the precious metals market, leveraging its strong asset portfolio and financial resources to drive future success. The company’s strategic initiatives and commitment to responsible mining practices will likely enhance its reputation and position in the industry.
As Discovery embarks on this new chapter, the mining community and investors alike will be watching closely to see how the company navigates its growth trajectory in the competitive landscape of gold production.
In conclusion, the acquisition of Newmont’s Porcupine Operations marks a transformative moment for Discovery Silver Corp., setting the stage for a promising future in the North American precious metals sector.
