Discovery Mining Ltd. - Operations

About Kidd

Overview

Discovery's Kidd Operations are located in Timmins, Ontario and include the Kidd Met Site and the Kidd Creek Mine. The Kidd Operations opened in 1966 and over the last 60 years have produced over 772 million pounds of copper, 2.1 billion pounds of zinc and 400 million ounces of silver.

Location map 3D Presentation

The Kidd Met Site is a large, fully permitted processing facility that provides key infrastructure, including four independent processing circuits, significant tailings capacity, 90 MW of available power, a large metallurgical lab, fresh water supply and treatment capabilities and rail access. The Met Site includes a crushing plant and concentrator with four independent circuits (A, B, C and D Divisions) consisting of rod mill, ball mill and flotation infrastructure. There are also five thickeners and gas fired concentrate dryers. Currently, two circuits (B and C) are operating to process Kidd Creek Mine copper and zinc ores, with an operating capacity of approximately 6,000 tonnes per day. The remaining two circuits (A and D) are presently idled and were previously used for processing other ores, including nickel ores from the Montcalm Mine in Timmins, as well as ores related to custom milling. The four-circuit configuration of the Met Site provides both significant scale and flexibility. The Kidd Met Site infrastructure will greatly assist Discovery as it advances plans to grow its gold production, providing multiple options for increasing milling capacity.

The Kidd Creek Mine is the world's deepest base metal mine, with mining operations currently at the 9,800-foot level and the shaft extending to the 9,889-foot level. All mining at the Kidd Creek Mine is performed using the sublevel longhole mining method. Ore is hoisted up the shaft and transported by rail 27 kilometres to the Kidd Met Site. Discovery plans to continue operating the Kidd Creek Mine and will assess the potential for a longer-term future beyond the end of this year through the completion of technical studies and a drilling program.

Exploration potential

STRONG GROWTH OPPORTUNITIES

Across Hoyle Pond, Borden, Pamour, Hollinger, and Dome, all with large Mineral Resource bases and multiple known targets.

EXTENSIVE LAND POSITION TOTALLING 140,000 HA

~40,000 ha along the Porcupine-Destor Fault Zone (PDFZ) in Timmins

100,000 ha near Borden, with minimal historic drilling beyond current zones Borden West and B Roswell East/West

Key site exploration highlights

Hoyle Pond

Open at XMS, S-vein, and NMV2 (near 1350 level)
TVZ zone (adjacent) offers potential new source of production

Pamour

Remains open at depth and along strike
Potential north of current resource and between pit and Pamour West
Pamour West zone remains open at depth

Dome

Large base of Inferred Resources suited for open-pit mining
Potential for new underground resources

Borden

Open at depth and along strike to both east and west

Regional Opportunities

Multiple targets near former producing sites:

Hollinger–McIntyre trend, Broulan, Coniaurum, Owl Creek Deep, Paymaster
Prospective zones around Borden: Borden West and B Roswell East/West

Kidd Met Site

Overview

An integral part of Kidd Operations, Kidd Metallurgical Site (the “Kidd Met Site”) is a permitted processing facility with four circuits, a large tailings facility, 90 MW of available power, large metallurgical lab capacity, fresh water supply, water treatment capabilities and rail access.

The Kidd Met Site is an integrated mineral processing facility that includes the Kidd tailings management area (the “Kidd TMA”), an accompanying 1,200 hectare tailings facility. The Kidd Met Site includes a crushing plant and concentrator with four independent divisions (A, B, C and D) consisting of rod mill, ball mill and flotation infrastructure. There are also five thickeners and gas-fired concentrate dryers. Currently, circuits B and C operate to process Kidd Creek Mine copper and zinc at a capacity of approximately 6,000 tonnes per day. At full capacity, the four-circuit configuration at Kidd Met Site provides both significant scale and flexibility. In the future, Discovery plans to adjust the plant flowsheet to include at least one gold circuit and allow for the processing of different types of ores, including potentially refractory material that may exist in the TVZ zone.

The Kidd Met Site infrastructure will greatly assist Discovery as it advances plans to grow its gold production, providing multiple options for increasing milling capacity. Among these options are the opportunity to construct a new conventional gold circuit at the currently idle A division, converting D division to a gold flotation circuit, capable of processing refractory material, and the potential utilization of the met site's floatation circuits to process material from the Borden mine. The Company is targeting the addition of processing capacity sufficient for future planned tonnage from the Pamour, Borden and Hoyle Pond properties, as well as for processing mineralization from TVZ.

Kidd Creek Mine

Overview

The world’s deepest base metal mine, with total production of over 772 million pounds of copper, 2.1 billion pounds of zinc and 400 million ounces of silver since Kidd Creek opened in 1966.

Discovery’s Kidd Operations are located in Timmins, Ontario and include the Kidd Creek Mine (the “Kidd Mine”), the Kidd Metallurgical Site (“Kidd Met Site”) and the Kidd tailings management area (“Kidd TMA”). The Kidd operations opened in 1966 and in 2024 produced 40 million pounds of copper, 82 million pounds of zinc and 1.5 million ounces of silver. Upon closing the transaction, Discovery will continue with the current operating plan for both the Kidd Mine and the Kidd Met Site. It plans to undertake an extensive drilling program with the goal of identifying new mineral resources to support future operations of the Kidd Creek mine.

The Kidd Creek Mine is the world’s deepest base metal mine, with mining operations currently at the 9,800-foot level and the shaft extending to the 9,899-foot level. All mining at the Kidd Mine is performed using the sublevel longhole mining method. Ore is hoisted up the shaft and transported by rail 27 km to the Kidd Met Site.

Mineral Resources

The Mineral Resource estimates provided below are taken from the technical report entitled, “Porcupine Complex, Ontario, Canada, Technical Report on Preliminary Economic Assessment”, with an effective date of January 13, 2025. The technical report is available on this website and at www.sedarplus.ca. The Mineral Resources listed below are not Mineral Reserves and, as such, do not have demonstrated economic viability.

Mineral Resources
Mineral Resources¹	Tonnes (kt)	Gold Grade (g/t Au)	Contained Ounces (Koz Au)
Hoyle Pond	-	-	-
Borden	1,471	6.17	292
Pamour	-	-	-
Dome	-	-	-
Total Measured Resources	1,471	6.17	292.0
Hoyle Pond	1,167	12.90	484
Borden	2,274	6.15	449
Pamour	64,755	1.30	2,704
Dome	-	-	-
Total Indicated Resources	68,196	1.66	3,640.0
Hoyle Pond	1,167	12.90	484
Borden	3,745	6.16	741
Pamour	64,755	1.30	2,704
Dome	-	-	-
Total Measured & Indicated Resources	69,667	1.76	3,931.9
Hoyle Pond	578	15.24	283
Borden	1,372	5.22	230
Pamour	23,264	1.34	1,002
Dome	229,284	1.49	10,978
Total Inferred Resources	254,499	1.53	12,493.5

Notes:

Mineral Resources are reported in situ, using the 2014 CIM Definition Standards. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
Mineral Resources have an effective date of 3 December, 2024. The Qualified Person for the Borden, Hoyle Pond and Pamour estimates is Mr. Eric Kallio, P.Geo., an independent Qualified Person. The Qualified Person for the Dome estimate is Dr. Ryan Barnett, P.Geo., an employee of Resource Modelling Solutions.
Mineral Resources that are considered amenable to underground mining methods at Borden are constrained within conceptual mineable shapes that use the following input parameters: gold price of US$2,000/oz Au, mining costs of US$120.08/t mined, process costs of US$18.30/t processed, general and administrative costs of US$31.58/t processed, variable metallurgical recoveries by mining zone ranging from 81.08–93.64%, refining costs of US$0.98/oz Au, dilution percentages that vary by mining zone, ranging from 18–25%, and a 4.6% royalty. Mineral Resources are reported at varying cut-off grades by mining zone, ranging from 3.3–4.2 g/t Au.
Mineral Resources that are considered amenable to open pit mining methods at Dome are constrained within a pit shell that uses the following input parameters: gold price of US$2,000/oz Au, mining costs of US$3.85/t mined, process costs of US$18.75/t processed, general and administrative costs of US$3.86/t processed, average 91% metallurgical recovery, refining costs of US$0.94/oz Au, and pit slope angles of 45º. Mineral Resources are reported above a 0.40 g/t Au cut-off.
Mineral Resources that are considered amenable to underground mining methods at Hoyle Pond are constrained within conceptual stope designs that use the following input parameters: gold price of US$2,000/oz Au, mining costs of US$371.55/t mined assuming longitudinal long-hole retreat methods and US$277.33/t mined assuming underhand cut-and-fill methods, process costs of US$45.01/t processed, general and administrative costs of US$47.05/t processed, average 94.3% metallurgical recovery, refining costs of US$0.98/oz Au, dilution percentages that vary by zone and mining method, ranging from 12–194%, and a royalty of 8.0%. The Mineral Resource estimate is reported at a cut-off grade of 12.3 g/t Au in the stopes assumed to be mined using longitudinal long-hole retreat methods and 6.05 g/t Au in the stopes assumed to be mined using underhand cut-and-fill.
Mineral Resources that are considered amenable to open pit mining methods at Pamour are constrained within a pit shell that uses the following input parameters: gold price of US$2,000/oz Au, mining costs of US$5.50/t mined, process costs of US$23.70/t processed, general and administrative costs of US$10.47/t processed, average 91% metallurgical recovery, refining costs of US$0.94/oz Au, and pit slope angles of 25º in overburden and 45º in rock. Mineral Resources are reported above a 0.53 g/t Au cut-off.
Estimates have been rounded. Grades and contained metal content are presented as weighted averages.
The preliminary assessment is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the preliminary economic assessment will be realized.

Technical Report On Preliminary Economic Assessment

The Porcupine Complex includes operating mines at Borden, Hoyle Pond, and Pamour. The Hollinger open pit is suspended, and is considered to be mined out for the purposes of this Report. All mineralization from the operating mines is treated at the Dome process plant, including mineralization from Borden, which is trucked 190 km to the Dome plant.

Highlights from the PEA (January 13, 2025) include:

Mineral resource estimate: Measured and Indicated Mineral Resources totalling 69.7 Mt grading 1.76 g/t Au (approximately 3,932 koz); Inferred Mineral Resources totalling 254 Mt grading 1.53 g/t Au (approximately 12,500 koz; estimated for Borden, Dome, Hoyle Pond and Pamour);

The 2024 PEA mine plan: based on a sub-set of the Mineral Resources estimates for Borden, Hoyle Pond, and Pamour, and assumes a 22-year mine life, with 10 years of production (2025–2035) from Hoyle Pond, eight years of production (2025–2033) from Borden, and 21 years of production (2025–2046) from open pit operations at Pamour; stockpiled material generated during mining of Pamour will be reclaimed for an additional year of milling at the Dome process plant (2047);

Capital cost estimate: mining costs over the proposed life-of-mine (LOM) total US$868 M, comprising US$147 M for Borden, US$175 M for Hoyle Pond, and US$546 M for Pamour. Process capital costs total US$642 M and site general sustaining capital are US$61 M over the LOM. The exploration capital costs are US$93 M. Closure costs are estimated at US$722 M. The LOM capital costs, inclusive of closure and reclamation, total US$2,385 M;

Operating cost estimate: mine operating cost estimates include an average of US$126/t processed at Borden, US$291/t processed for Hoyle Pond and US$18.90/t processed for Pamour. Process costs include an allocation of US$8.93/t processed across all operations (fixed costs) in addition to a variable process cost of US$7.33/t processed for Borden, US$7.33/t processed for Hoyle Pond, and US$6.79/t processed for Pamour. All operating costs related to infrastructure are allocated to either the process plant or each mining operation. Total general and administrative costs are estimated at US$770 M. The G&A unit cost averages approximately US$8.09/t processed. Overall, LOM mining costs total US$2,915 M, LOM process costs total US$1,507 M, and LOM general and administrative costs US$771 M, for a total LOM estimate of US$5,192 M;

Economic analysis: reported on a 100% project ownership basis. Project acquisition costs are considered to be corporate Discovery Silver costs and are not included in the financial evaluation. A royalty anticipated as part of financing of acquisition is included in the Project economics. The Project valuation date basis was January 1, 2025. A discount rate of 5% was used. A reverting price curve was used for the gold price, based on Canadian Imperial Bank of Commerce (CIBC) consensus forecasts, resulting in a long-term gold price assumption for 2028 and beyond of US$2,150/oz Au. The economic analysis includes provision for the Canadian corporate income tax (Federal and Ontario Income Tax), which consists of a combined 25% income tax, and the Ontario Mining Tax, applied at 10% on production earnings before interest, taxes, and corporate overhead costs. Forecast tax payments over the 2024 PEA LOM are estimated at US$947 M. The after-tax Project NPV is US$1,239 M. The economic analysis does not entail initial capital investment prior to the start of production and of cashflow and so there is no internal rate of return or project payback period relevant to the economic analysis presented;

The sensitivity of the Project NPV to changes in head grades, gold price, metallurgical recoveries, capital costs and operating cost assumptions was tested using a range of up to 23% above and below the base case values. The Project is most sensitive to changes in metal price, closely followed by head grade. Changes in metal prices approximately mirror changes in the gold grade and metallurgical recovery. The Project is less sensitive to variations in operating costs, and least sensitive to capital cost changes;

The 2024 PEA is preliminary in nature and includes Inferred Mineral Resources that are too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the preliminary economic assessment will be realized.

Technical Report on Preliminary Economic Assessment Download PDF

Kidd Operations

About Kidd

Overview

Exploration potential

Key site exploration highlights

Hoyle Pond

Pamour

Dome

Borden

Regional Opportunities

Aerial Tour