RockeTeller updated the narrative for DSV

🪙 Discovery Silver – Updated Stock Price Estimate & Analysis

🔍 Latest Info

• Shares Outstanding: ~801 million basic shares; ~816 million fully diluted (options + warrants). Discovery Silver Corp.
• Market Cap: CAD ~$3.65-3.87B as of mid- to late-2025. StockAnalysis
• AISC / cost info: In Q2 2025, operating cash costs and AISC for some of their operations were in the range of USD ~$2,000-$2,200/oz for certain high-grade or startup zones. Discovery Silver Corp.
• Production Guidance: The company’s feasibility study (Cordero FS filed Feb 2024) offers data: in that FS, they expect average annual production of 37 million silver equivalent ounces (AgEq) over the first 12 years. Discovery Silver Corp.

💰 Redone FCF at High Metals Prices

Assumptions for new valuations:

• Use 37 million oz AgEq/year as production (based on Cordero FS).
• Use “industry average” AISC (or effective cost) of around US$20/oz AgEq (silver cost basis), or equivalent cost for gold/other metals embedded in AgEq.
• Shares outstanding: ~801 million basic.

Valuation multipliers: 10×, 15×, 20× FCF.

We’ll run scenarios for:

1. Silver = $100/oz
2. Silver = $150/oz
3. Gold = $4,500/oz (converted through AgEq assumption where relevant)
4. Gold = $5,000/oz

We’ll assume AgEq is priced by silver basis, but note actual revenue depends on the metal mix (silver, gold, lead, zinc etc.) so this is approximate/ideal.

Scenario A: Silver = $100/oz

• FCF per ounce = $100 − $20 = $80/oz
• Annual FCF = 37,000,000 oz × $80 = $2,960,000,000

Valuations:

• 10× FCF → $29.60B → per share ≈ $36.93 ( $29.60B ÷ 801M )
• 15× FCF → $44.40B → per share ≈ $55.40
• 20× FCF → $59.20B → per share ≈ $73.86

Scenario B: Silver = $150/oz

• FCF per ounce = $150 − $20 = $130/oz
• Annual FCF = 37,000,000 oz × $130 = $4,810,000,000

Valuations:

• 10× → $48.10B → per share ≈ $60.05
• 15× → $72.15B → per share ≈ $90.08
• 20× → $96.20B → per share ≈ $120.10

⚠️ Risks

• Share count dilution: Company has issued shares and options; fully diluted number matters. The ~801M basic may increase over time. Discovery Silver Corp.
• Cost risk: Recent AISC metrics in certain zones are very high (~US$2,000+/oz) for some operations — ramping up or transitioning to full production could see costs rise. Discovery Silver Corp.
• Production assumption risk: 37M oz AgEq is a guided average early-stage; actual results may lag due to delays in permitting, capital, construction, or metallurgical recoveries.
• Silver (and metal) price risk: These valuations assume very high silver or gold prices. If markets weaken, downside is large.
• Financing risk: Capex and working capital needs are large; raising capital may come with unfavorable terms or dilution.
• Operational risk: metallurgy, environmental permits, infrastructure, and logistics (especially remote or harsh environment) may introduce cost or time overruns.
• Jurisdiction / regulatory risk: Mexico (for Cordero), other jurisdictions in portfolio may have political, environmental, social, permitting risk.

⚡ Catalysts

• Feasibility study (if following the FS) updates or optimization (e.g. cost reductions, higher recoveries) for Cordero.
• Further drilling / exploration results to increase AgEq resource above the FS baseline, or better define high grade zones.
• Permitting progress (environmental, social, infrastructure) to reduce timeline risk.
• Strong silver/gold price environment (if silver moves up to $100+, gold higher) — greatly improves FCF.
• Strategic partnerships or JV / off-take / financing deals to underwrite capex.
• Cost optimization: power, processing, logistics, reducing AISC below assumed $20/oz.
• Market sentiment / macro tailwinds for precious metals.

🎯 Updated Conclusion

Using the updated shares outstanding (~801M basic), and using production guidance of 37M oz AgEq from the Cordero Feasibility Study:

• At silver = $100/oz, per-share value might be in the $35-75 range (depending on multiple).
• At silver = $150/oz, per-share value might be in the $60-120 range.
• The gold-priced scenarios (at $4,500 or $5,000) produce very large theoretical values, but are very sensitive to AgEq mix, cost structure, and realistic recoveries; they are more “bull case / what could happen if everything goes right”.