(Kitco News) - Discovery Silver is making a significant move into the gold sector with its acquisition of the Porcupine mine in Ontario, Canada, from Newmont. The deal, discussed by CEO Tony Makuch in an interview at the 2025 BMO Global Metals Mining and Critical Minerals Conference, marks a shift for the company, which has been primarily known as a silver developer in Mexico.
"This is buying a camp," Makuch stated, emphasizing the multiple mine potential of the Porcupine acquisition. He noted that "good geology and a good region with a long history of mining" were key factors in the decision.
Makuch believes that Discovery Silver can "make a difference in Porcupine." The company aims to grow production, reduce costs, and ultimately transform the asset into a Tier 1 operation. "The other part of value creation here is you take assets that are not Tier 1 assets at this point in time, and you convert them to Tier 1 assets," he explained.
Discovery Silver has a team with experience operating in the Timmins region, which Makuch believes will be an advantage.
The market has responded positively to the announcement, with Discovery Silver's stock price jumping to a 52-week high. Makuch said the market reaction reflects the transaction's value and the strong support from shareholders, Franco Nevada, and Newmont.
He also highlighted the company's strong balance sheet, which will allow it to invest in the assets and create value.
Cordero Project in Mexico
While expanding into gold, Discovery Silver remains committed to its Cordero project in Mexico. The company submitted permit applications in August 2023 and provided final submissions in March 2024. Makuch anticipates receiving the necessary permits in the second quarter of 2025.
"We've had good feedback from the regulators in Mexico in terms of what the project can deliver," Makuch stated. He said the company has de-risked the project by securing surface rights, community support, water access, and power.
M&A activity and investor interest
Makuch noted that M&A activity is sparking renewed interest in the mining space. He said Discovery Silver is seeing increased investor interest due to the Porcupine acquisition's entry-level valuation and the company's solid production base in Canada.
Looking ahead, Makuch believes the appreciation of gold prices is creating opportunities in the gold space. He said Discovery Silver aims to be a low-cost producer positioned to generate free cash flow and profitability regardless of price fluctuations.
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