Discovery Mining Secures Final Approval for Cordero Silver Project
Discovery Mining has obtained key federal approvals for its Cordero open-pit silver project in Chihuahua, Mexico, clearing the final major hurdle for development. The project, which received SEMARNAT approval for both the environmental impact assessment and Change of Land Use permits, is planned to operate for 19 years, producing 37 million ounces of silver equivalent annually in its first 12 years at an all-in sustaining cost (AISC) of under $12.50 per ounce for the first eight years.
The February 2024 feasibility study outlined 327 million tonnes of proven and probable reserves, grading 29 grams per tonne silver, 0.08 grams per tonne gold, 0.41% lead, and 0.72% zinc. Initial capital expenditure (capex) is estimated at $606 million, with an after-tax net present value (NPV) of $1.2 billion at a silver price of $22 per ounce. Discovery is currently updating the feasibility study to reflect current capital and operating cost assumptions before proceeding with financing.
Analysts highlight improved financeability and optionality on power supply, with a review ongoing between dedicated natural gas versus connection to the Mexican grid. The company is also coordinating with local water-treatment plant operators to upgrade facilities to support the project's water quality and volume needs. BMO Capital Markets models first production in the second half of 2029 and assigns the project a value of $2.73 billion at a silver price of $47 per ounce, while Scotiabank values Cordero at about C$3.4 billion, representing roughly 32% of its total asset value estimate.
Since acquiring Cordero in 2019, Discovery has invested over $100 million in exploration and technical work. The project's approval is seen as evidence that large greenfield open pits with existing concessions can advance under Mexico’s current administration. Additionally, about 240 million tonnes of measured and indicated resources outside the current pit shell suggest potential for mine-life expansion.