Discovery Silver (TSX:DSV) released first-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below.

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Access the full call at https://events.q4inc.com/attendee/749292221

Summary

Discovery Silver is on track to more than double gold production at Porcupine to over 500,000 ounces per year and develop the Caro project in Mexico with a target of producing 14 million ounces of silver annually.

The company announced a significant acquisition of Glencore Kidd operations, which will enhance milling capacity and provide exposure to critical minerals like copper, zinc, and silver.

Q1 2026 saw revenues of $285 million, a 4% increase, with EBITDA growing 41% quarter-over-quarter to $178 million, driven by higher gold prices.

Discovery Silver’s cash balance at the end of Q1 was $384.9 million, with free cash flow generation strengthening its balance sheet.

The company is advancing exploration and drilling projects, with notable progress at Hoyle Pond and TVZ zones, aiming for a resource estimate by year-end.

Management remains confident in achieving 2026 guidance, emphasizing increased production in the latter half of the year and ongoing improvements at the Dome Mill.

Full Transcript

Sarah (Conference Operator)

Mark Utting (Senior Vice President, Investor Relations)

Tony Makuta

Allison White (Chief Financial Officer)

Pierre Rock (Chief Operating Officer)

Eric Calio (Senior Vice President, Exploration)

Jose Javalera

Thank you Eric.

Tony Makuta

Operator

Larry Lu (Equity Analyst at CIBC)

Hi Tony Allison Pierre, Eric Martin. I guess I’ll start off my first question by asking about Kidd Creek. Would you mind reminding us, you know what are some of the opportunities you see here? Does the acquisition of Kidd Creek change the way we should look at the near term mine plan as well as you know. Can you also remind us what are some of the steps between now to closing our transaction in Q1 2026?

Tony Makuta

Larry Lu (Equity Analyst at CIBC)

Yeah, for sure. Thanks to Lee for that answer. I guess, you know, kind of a follow up here on Kidd Creek. Not diving too deep as well. How you know, are you comfortable adding copper, zinc and silver to your portfolio and should, you know, would this be a good experience for having some processing base metal capacity from Cordero potentially in the future?

Tony Makuta

Larry Lu (Equity Analyst at CIBC)

Perfect. Sounds good. And sorry if I can, Allison, I do apologize in advance. This is going to be a tax question. So if I look at this quarter’s free cash flow before being adjusted, a large item would be the taxes paid for last year from Porcupine taxes. So going forward, should we expect more of a monthly installment or how should we look at taxes? Cash taxes being paid going forward.

Allison White (Chief Financial Officer)

Yeah, Larry, so you’re exactly right. First of all, thanks for the question. Taxes are never anybody’s favorite topic to talk about, so you’re great to ask it. But nevertheless, yes, you’re right and we will be. And we are paying monthly installments in 2026. The one time event for 2025 payment was largely just because last year was our first partial year of operations.

Larry Lu (Equity Analyst at CIBC)

Amazing. Sounds good. All right, thanks so much, Tony and team for the response and I’ll return to the queue. Thank you.

Operator

Your next question comes from John Tomazos with very independent research. Your line is open.

John Tomazos (Equity Analyst at Very Independent Research)

Tony Makuta

John Tomazos (Equity Analyst at Very Independent Research)

is the 131 million tons that Glencore reported for Kidd good enough to meet your standards?

Tony Makuta

John Tomazos (Equity Analyst at Very Independent Research)

Just want to make sure I heard you right, Tony. Did you say that there’ll be a resource for Hollinger or Owl Creek or not? Right now we don’t have plans to do it, but depending on how the drilling goes, we could do one. If you’re taking material from Hollinger, do you have resources without drilling them based on earlier data since you’re putting ore through the mill?

Tony Makuta

John Tomazos (Equity Analyst at Very Independent Research)

If I could ask one more, when do you expect to have the single stage crusher at the Dome Mill and where will you put it? Will it be away from the existing mill site in case a decade from now you move the mill site?

Tony Makuta

John Tomazos (Equity Analyst at Very Independent Research)

Thank you and congratulations on all the progress.

Operator

Once again, if you have a question, it is Star One. Your next question comes from Ken Ilodibe with SCP Results Finance. Your line is open.

Ken Ilodibe (Equity Analyst at SCP Results Finance)

Tony Makuta

Ken Ilodibe (Equity Analyst at SCP Results Finance)

Okay, so is it, is it fair to say that I guess in the long term you’re working on a single stage crusher replacement, but then in the short, shorter term you are confident in the reliability of what you have right now.

Tony Makuta

Ken Ilodibe (Equity Analyst at SCP Results Finance)

Okay. That’s. Yeah, that’s all from me. Thanks, Tony and the team for taking my questions. Best of luck in Q2 and I’ll pass the mic to next person on the queue.

Tony Makuta

Operator

This concludes the question and answer session. I’ll turn the call to Mark Utting for closing remarks.

Mark Utting (Senior Vice President, Investor Relations)

Thanks very much and again just want to thank everyone for taking part in the call. As you’ve heard. To say the least, we have a lot going on. We’re making a lot of progress and there’s a lot more to come. And that’s good for a bunch of reasons, one of which is we will definitely have a lot more to talk about when we have our next quarterly call. So we look forward to speaking with you then. Enjoy the rest of your day.

Operator

This concludes today’s conference call. Thank you for joining. You may now disconnect.