Sprott discloses holdings in Discovery Silver Corp.

An Ontario numbered company associated with Bay Street mining financier Eric Sprott has acquired 31.9 million shares Discovery Silver Corp. [DSV-TSXV, DSVSF-OTCQX] pursuant to the automatic conversion of the same number of subscription receipts of Discovery Silver that Sprott acquired on February 3, 2025, through a public offering at 90 cents per subscription receipt that generated $28.7 million.

Prior to the conversion of the subscription receipts, Sprott beneficially owned 89.9 million shares, or approximately 22.3% of the company’s outstanding shares. As a result of the conversion of the subscription receipts, he now owns 121.8 million shares, or 15.3% of the shares outstanding. The acquisition, combined with prior treasury issuances of shares resulted in a decrease in holdings, on a partially diluted basis, of approximately 7.4% since the last filing of an early warning report.

Discovery shares rose 2.15% or $0.06 Thursday to $2.84. The shares currently trade in a 52-week range of $2.86 and 52 cents.

Discovery Silver was in the news recently when it announced details of a definitive deal with Newmont Corp. [NGT-TSX, NEM-NYSE, ASX, PNGX] to acquire the U.S. company’s 100% interest in its Porcupine operations based in and near Timmins, Ont., for a total consideration of US$425 million.

The amount to be paid consisted of US$200 million in cash and US$75 million payable in common shares of Discovery. Both amounts are payable on closing of the transaction, which also includes a deferred payment that will be paid in four annual cash payments of US$37.5 million starting on December 31, 2027.

Discovery Silver has set out to become the mining sector’s next major silver producer by developing its 100%-owned Cordero project in Chihuahua State, Mexico.

The company is led by CEO Tony Makuch, a highly experienced mining executive who previously led the transformation of Kirkland Lake Gold Ltd., a company that was acquired in $13.5 billion deal by Agnico-Eagle Mines Ltd. (AEM-TSX, AEM-NYSE) deal in February, 2022.

To fund the Newmont transaction and provide liquidity in support of operating and growing the Porcupine Complex, Discovery has entered into a binding commitment for approximately US$555 million of financing, including US$400 million related to royalty and debt agreements with Franco Nevada Mining Corp. [FNV-TSX, NYSE] and approximately US$155 million from a bought deal offering of subscription receipts.

The deal establishes Discovery as a new Canadian gold producer with multiple operations in one of the world’s most prolific gold camps, accounting for approximately 70 million ounces of total historic production, with a large base of mineral resources remaining and substantial exploration upside.