Discovery Silver takeover vote of Newmont's Porcupine Division set for March 27

Discovery Silver Corp. is asking shareholders to vote on the issuance of shares related to its acquisition of Newmont Corporation’s Porcupine Complex. The company has filed its notice of meeting and management information circular ahead of a special meeting scheduled for March 27 in Toronto.

“This is really a once-in-a-generation, a once-in-a-lifetime opportunity," said Discovery CEO Tony Makuch. “We've got the chance to create a whole new mining company.”

Makuch told investors earlier this month that there’s nothing wrong with the company’s silver or our silver project in Mexico, but this enhances their ability to finance and build a world-class project.

“We had a lot of good support in getting this over the line. We have a strong team here, with people who have worked together for a long time.”

Makuch says that team has a good chance to build on success, expand the team, and bring in new people.

The acquisition, announced on January 27, 2025, involves Discovery purchasing all issued and outstanding shares of Dome Mine Ltd., a newly created subsidiary of Goldcorp Canada Ltd. (a wholly owned subsidiary of Newmont). The transaction includes the Hollinger mine, Hoyle Pond mine, Borden mine, Pamour open pit, and the Dome mill, collectively known as the Porcupine Complex.

The total purchase price is US$425 million, consisting of:

• US$200 million in cash at closing.

• US$75 million in Discovery Silver shares, equating to 119,716,667 common shares.

• US$150 million in deferred payments, to be made in four equal installments of US$37.5 million starting on December 31, 2027.

The Toronto Stock Exchange (TSX) requires shareholder approval because the share issuance exceeds 25% of Discovery’s pre-acquisition outstanding shares. If shareholders approve the issuance of up to 123,616,667 common shares, it will represent approximately 30.9% of the company’s outstanding shares before the deal was announced.

If the proposal is rejected, the number of shares issued to Newmont will be reduced to 94,512,921 shares, and the first deferred cash payment on December 31, 2027, will increase from US$37.5 million to US$53,289,622. The total purchase price remains unchanged, but the mix of cash and shares would be adjusted.

Discovery Silver emphasized that the vote will not determine whether the transaction proceeds, but rather the final structure of the purchase price.

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