Discovery Mining Seeks Room to Expand Dome With US$55M Timmins Deal

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1. As of the date of this article, officers, contractors, shareholders, and/or employees of Streetwise Reports LLC (including members of their household) own securities of Discovery Mining Ltd. and Franco-Nevada Corp.
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1. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

Key Investor Takeaways

• Discovery Mining is buying McEwen Inc.'s Fuller property, its 60% interest in the Paymaster joint venture, and a surface-rights parcel next to the Dome Mine in Timmins, Ontario, for US$55 million.
• Discovery will pay US$5 million in cash and US$50 million in shares, and Franco-Nevada will pay Discovery US$8 million on closing to extend its royalty to the new properties.
• The CEO said the land could host a new processing plant and tailings facilities to run Dome, which has an 11-million-ounce inferred resource, at a much higher production rate.
• Discovery plans to restart Dome within five years using the existing mill, as part of a plan to more than double annual gold output to over 500,000 ounces.
• The company's Cordero silver project in Mexico recently received its key federal environmental permits, which one newsletter editor called "major derisking."
• Silver is headed for a sixth straight annual deficit, and industrial users account for more than half of demand.

A Land Deal That Clears the Way for a Bigger Dome

Discovery Mining Ltd. (DSV:TSX; DSVSF:OTCQX) agreed to buy mineral properties next to its Dome Mine in Timmins, Ontario, from McEwen Inc. (MUX:TSX; MUX:NYSE) for US$55 million, according to an October 9 release. Discovery will pay US$5 million in cash and US$50 million in its own shares.

Through its subsidiary Dome Mine Ltd., Discovery will acquire the Fuller property, about 210 hectares; McEwen's 60% interest in the Paymaster joint venture, about 179 hectares; and a surface-rights parcel, McEwen said. Discovery already holds the other 40% of Paymaster and will own all of it after closing.

"The transaction announced today is an important step forward as we continue to establish the land position needed to achieve our extensive growth plans in the Timmins Camp," President and Chief Executive Officer Tony Makuch said.

Separately, Franco-Nevada Corp. (FNV:TSX; FNV:NYSE) agreed to pay Discovery US$8 million on closing to extend its existing royalty on Discovery's Porcupine Operations to the purchased properties.

An 11-Million-Ounce Resource in Search of a New Mill

Makuch said the main benefit of the land is space for new processing and tailings facilities. "Dome has an 11 million ounce inferred resource, and we are working on plans to resume operations over the next five years using the existing Dome Mill for processing," he said. "Longer-term, we will look to operate the mine at a significantly higher level of production using a new processing facility to be located at the adjacent Purchased Assets."

The number of Discovery shares will be set by the five-day volume-weighted average price on the TSX ending two business days before closing. The shares carry a hold period of four months and a day.

Discovery expects the deal to close in October. Closing depends on the transfer of the properties and claims, the extinguishment of an existing net profits interest royalty on Fuller, and regulatory approvals, including TSX approval of the share issuance.

Half a Million Ounces a Year Is the Target; McEwen Takes the Cash

Discovery plans to more than double annual gold production to over 500,000 ounces through its Porcupine assets in and near Timmins. In June, it bought the Kidd Operations, which added land, infrastructure, and critical minerals production in the camp. The company also owns the Cordero silver project in Chihuahua, Mexico, which it calls one of the world's largest undeveloped silver deposits.

McEwen called the properties non-core and said it will put the proceeds into its operations and development projects.

It is targeting 250,000 to 300,000 gold equivalent ounces a year by 2030 with "minimal to no share dilution." Its Fox Complex near Timmins will stay focused on the Froome, Stock, and Grey Fox deposits. The Stock mine is expected to begin production in the fourth quarter and reach commercial production in the first quarter of 2027.

McEwen also assigned its US$13.5 million loan receivable from McEwen Copper to new third-party lenders for cash consideration. The transaction also resulted in the cancellation of incentive share purchase warrants previously issued to McEwen by McEwen Copper. Together, the two transactions are expected to provide McEwen with approximately US$68.5 million in additional liquidity, including the proceeds from the Discovery sale and the cash consideration for the McEwen Copper loan receivable.

Cordero Clears Its Biggest Regulatory Hurdle, Newsletter Editor Says 

Peter Krauth, editor of The Silver Stock Investor, focused on Discovery's other big asset, its Cordero silver project in Mexico, in an October 7 issue. Two days earlier, Discovery announced that Mexico's environmental agency, SEMARNAT, had approved Cordero's environmental impact assessment and change of land use permit, completing the project's federal environmental permitting.

"This is huge," Krauth wrote. "Although the press release is short, the implications are massive."

BMO Capital's Kevin O'Halloran raised his target from CA$12 to CA$15.

He called the approvals "key permits and major derisking." The environmental permit confirms the project meets Mexico's environmental protection rules, and the land use permit allows the land to be converted for mining. "These remove the primary regulatory hurdle to move forward," he wrote.

Krauth noted that Cordero is one of the world's largest undeveloped primary silver deposits and is expected to produce about 30 million ounces of silver equivalent a year. The next steps are a final construction decision and project financing, he wrote.

"I think the market's reaction was muted only because there was a lot of buying in the last 2 months in anticipation," Krauth wrote. "Shares are near all-time highs. Attractive on weakness."

Four analysts rate Discovery a Buy with CA$15 price targets, according to TipRanks. On September 17, BMO Capital's Kevin O'Halloran raised his target from CA$12, and CIBC's Cosmos Chiu reiterated his. ATB Cormark Capital Markets' Nicolas Dion reiterated his rating on April 24, and Scotiabank's Ovais Habib initiated coverage on April 1.

From Solar Panels to AI, Silver Demand Outruns Supply

Silver traded at about US$60.30 per ounce on October 12, up about 15% from a year earlier, according to Trading Economics. Prices have eased from January's record of about US$121.64 as a strong U.S. dollar and expectations of a Federal Reserve rate hike weighed on precious metals.

The market's fundamentals have held up better than the price. Silver is headed for a sixth straight annual deficit, expected to widen to 46.3 million ounces in 2026 from 40.3 million ounces in 2025, Mexico Business News reported, citing the World Silver Survey 2026, produced by Metals Focus for the Silver Institute. That would bring the total drawn from above-ground stocks since 2021 to 762 million ounces. Mine production is expected to stay flat this year, and coin and bar demand is forecast to rise 18%.

Industrial silver use accounted for about 657 million ounces in 2025, or more than half of total demand. Silver conducts electricity better than any other metal, which makes it hard to replace in solar panels, electronics, electric vehicles, and the data centers behind artificial intelligence. Data centers alone are expected to use more than 10% of the silver that goes into electrical and electronics products by 2027, according to the survey, as cited by Kitco.

Washington has also taken notice. The U.S. Interior Department added silver to its final list of critical minerals in November 2025.

Ownership and Share Structure¹

About 2.34% of the company is held by insiders and management, about 33.03% by strategic investors, and about 36.39% by institutions. The rest is retail.

Its market cap is CA$9.53 billion with about 813.9 million shares outstanding. It trades in a 52-week range of CA$4.58 and CA$13.43.

Common Questions from Investors

What is Discovery buying from McEwen? The Fuller property, about 210 hectares; McEwen's 60% interest in the Paymaster joint venture, about 179 hectares; and a surface-rights parcel, all next to the Dome Mine in Timmins. Discovery already owns the other 40% of Paymaster.

How is Discovery paying? US$5 million in cash and US$50 million in Discovery shares. The share count will be set by the five-day volume-weighted average price on the TSX ending two business days before closing. Separately, Franco-Nevada will pay Discovery US$8 million on closing to extend its royalty to the purchased properties.

Why does Discovery want the land? CEO Tony Makuch said it is an ideal location for new processing and tailings facilities. Discovery plans to restart Dome within five years using the existing Dome Mill, then eventually run the mine at a much higher rate with a new plant on the acquired land.

When is the deal expected to close? Discovery expects it to close in October. Closing depends on the transfer of the properties, the extinguishment of a net profits interest royalty on Fuller, and regulatory approvals, including TSX approval of the share issuance.

What does McEwen get out of it? McEwen called the properties non-core and will put the proceeds into its own projects, targeting 250,000 to 300,000 gold equivalent ounces a year by 2030. Together with the sale of a US$13.5 million loan receivable, it expects about US$68.5 million in additional capital.

What is happening at Cordero? On October 5, Discovery said Mexico's environmental agency had approved Cordero's environmental impact assessment and change of land use permit, completing federal environmental permitting. Newsletter editor Peter Krauth said the permits "remove the primary regulatory hurdle to move forward." He said the next steps are a construction decision and financing.

How is the silver market doing? Silver traded at about US$60.30 per ounce on October 12, up about 15% from a year earlier. The market is headed for a sixth straight annual deficit, and industrial uses, including solar panels, electronics, and data centers, account for more than half of demand.