Discovery Mining Secures Key Permits for Cordero Silver Project

Discovery Mining has secured two critical environmental and land-use permits from Mexico’s government, bringing its Cordero silver project closer to the construction phase. The Toronto-based company announced that SEMARNAT, Mexico’s environmental agency, approved the project’s environmental impact assessment and Change of Land Use permit, marking the completion of federal environmental approvals. However, before construction can begin, Discovery must finalize development planning and secure financing. The company is currently updating its 2024 feasibility study to reflect current capital and operating costs and is evaluating whether natural gas or grid electricity should serve as the primary power source.

Analysts view the permits as a significant milestone. Rabi Nizami of National Bank Financial described the approvals as a key step that makes the project more financeable and strategically important for Discovery. SCP Resource Finance noted that the approval demonstrates the feasibility of large greenfield open-pit projects under the current administration, lifting its price target for Discovery by $1.20 to C$13.80. BMO Capital Markets analyst Kevin O'Halloran characterized the permits as Cordero’s last major obstacle, projecting first output in the second half of 2029 and valuing the project at $2.73 billion based on a long-term silver price of $47 per ounce. Scotiabank values Cordero at approximately C$3.4 billion, representing 32% of its asset value estimate.

The Cordero project, acquired by Discovery in 2019, has seen over $100 million invested in exploration and technical work. The 2024 feasibility study outlined a 19-year mine expected to produce an average of 37 million ounces of silver equivalent annually over its first 12 years, with average all-in sustaining costs under $12.50 per silver-equivalent ounce during the initial eight years. Located in Chihuahua state, Cordero holds 327 million proven and probable tonnes of silver, gold, lead, and zinc, making it one of the world’s largest undeveloped silver reserves. Despite the positive developments, Discovery’s shares dropped 2.3% to C$11.92 on Tuesday morning in Toronto, though the stock has nearly tripled over the past year.