Cordero project in Chihuahua State of Mexico is one of the largest undeveloped silver deposits in the world.

The property is fully owned by Canada-based company Discovery Silver. The company acquired the silver project in August 2019.

Besides silver (Ag), Cordero contains gold (Au), lead (Pb), and zinc (Zn).

Discovery Silver released a Preliminary Economic Assessment (PEA) in November 2021 by integrating 92,000m of additional drilling, metallurgical test work, and engineering studies.

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A Pre-Feasibility Study (PFS) of Cordero Silver Project was released in January 2023.

The project is expected to have a mine life of 18 years with average annual production of 33 million ounces (Moz) silver equivalent (AgEq).

Cordero Project location and site details

The Cordero project is located in the south of Chihuahua State approximately 600km from the US border.

It consists of 26 titled mining concessions encompassing a land of 34,909 contiguous hectares. The property is owned by Minera Titán S.V. de C.V. Mexico (Titán), a wholly owned Mexican subsidiary of Discovery Silver. The project is accessible by vehicles.

Mining and ownership history

There is a history of mining activity in the region around Cordero property since early 17th century, as per records and anecdotal information. Small scale unorganised mining was carried out in the late 19th century.

The American Smelting and Refining Company (Asarco) operated small mines on Cordero including La luz, La Ceniza, and Josefina by the beginning of the 20th century.

In 2000, a review of the region for copper, gold, and molybdenum was completed by Industrias Peñoles. Valley High Ventures (Valley High) owned the mineral concessions via its subsidiary Coro Minera from 2006-2009.

By 2009, Valley High shed half of its claim holdings and signed a joint venture agreement with Levon Resources. Levon re-staked concessions dropped by Valley High and acquired adjoining mineral concessions. The company purchased Aida claim in 2013 and it merged with Discovery Metals in 2019.

Discovery Metals Corp. changed its name to Discovery Silver Corp. in April 2021.

Geology and Mineralisation

Cordero is located in an area where sedimentary rocks of the Eastern Basin and Range geological province meet the Sierra Madre Occidental province’s volcanic rocks.

Three major southwest to northeast magmatic-hydrothermal belts crosscut the property subparallel to major transcurrent faults in the area. Other faults such as reverse, extensional, and normal are also present.

The fault corridor is exploited by a unique sheeted dyke complex that stretches for 3km from Pozo de Plata in the southwest to La Boquilla in the northeast.

The mineralisation style of the property also changes from La Ceniza in the northeast with prominent replacement skarn mineralisation to a breccia complex at the Pozo de Plata breccia complex in southwest.

The precious and base metal mineralisation is associated spatially with sulphide minerals like pyrite, galena, chalcopyrite, and sphalerite.

A near-surface oxide layer was created by weathering, consisting of primarily hematite and jarosite with up to 40m thickness locally. Sulphide minerals are absent here, and silver and gold are elevated in grade.

Some parts of the property resemble intrusion-related carbonate-hosted lead-zinc (Ag-Cu-Au) deposits further north in Chihuahua.

In northeast, the property is dominated by replacement-style Zn-Cu (sphalerite-chalcopyrite) ± Pb-Ag mineralisation veinlets with contact metamorphic aureole at the La Ceniza intrusive complex in fossiliferous limestone and calcareous sandstone.

Mineral reserves

The mineral resource of the property is divided into sulphide and oxide portions.

Sulphide mineralisation encompasses all mineralisation located beneath the oxide/transition boundary stretching depths of more than 800m below surface. Oxide/transition mineralisation is situated above the oxide/transition boundary with weathered (oxide) or partially weathered (transition) material.

Measured and Indicated (M&I) Sulphide Mineral Resources for the Cordero Project totals 653Mt at a grade of 20g/t Ag, 0.05g/t Au, 0.29%Pb and 0.56% Zn for contained metal of 413Moz silver, 1,128Koz gold, 4,211Mlb lead and 8,079Mlb zinc.

M&I Oxide Mineral Resources for the Cordero Project totals 63Mt at a grade of 26g/t Ag, 0.07g/t Au, 0.24%Pb and 0.29% Zn for contained metal of 54Moz silver, 136Koz gold, 333Mlb lead and 405Mlb zinc.

The mineral sources have an effective date of 23 January 2023.

The mineral reserves for the project are based on the conversion of the M&I mineral resources in the study mine plan.

According to the technical report, the total mineral reserves (Proven and Probable) are 302.4Mt containing 266.47Moz Ag at a grading of 27.41g/t, 0.79Moz Au at a grading of 0.08g/t, 2.94Blb Pb at a grading of 0.44% Pb, and 4.65Blb Zn at a grading of 0.70%.

Cordero Project mining and ore processing

At Cordero, open pit mining methods will be employed to recover ore using truck and shovel equipment. The major production unit operations will consist of drilling, loading, hauling, and dumping.

The mining plan is based on proven and probable mineral reserves. No underground mining methods are planned currently.

The processing plant will be expanded in stages to increase throughput and enable accommodating higher feed grades over the life of mine.

The flowsheet includes a single stage crushing circuit with crushed product reporting to the crushed ore stockpile.

The ore will be transferred to SAB grinding circuit, consisting of a SAG and ball mill and operating with a cyclone cluster in a closed circuit.

The cyclone overflow material undergoes rougher flotation with sequential stages. Here, Pb and Zn concentrates will be separated from the gangue material, and rougher concentrates of Pb and Zn are transferred to regrinding mills for further size reduction before cleaner flotation.

The cleaning circuits upgrade concentrate grades to produce concentrates of requisite quality. Subsequently, the concentrates will pass to dewatering circuits with high-rate thickeners and vertical plate-and-frame filter presses.

A front-end loader will handle the resulting filter cakes for stockpiling and loadout activities. Tailings will get thickened in a high-rate thickener and transported overland to the tailings management facility.

In the first phase, the process plant is expected to have a throughput of 25.5kt/d from one to three years. It will process material with a throughput of 51kt/d from four to six years in Phase 2, and in Phase 3 the Zn cleaning and concentrate dewatering circuits will be expanded to process higher zinc grades.

Infrastructure

The infrastructure will consist of on-site roads, a water management system, site civil work facilities/buildings, and site electrical power.

The site facilities include truck shop, mine administration offices, explosives storage, fuel storage and distribution, ore stockpiles and waste stockpiles among others.

The process facilities include the process plant and workshop, crushing facilities, assay laboratory, pipelines, and freshwater facilities.

The general facilities include a gatehouse, administrative building, communications, switchyard, and weighing scale.

The other infrastructure will include tailings storage facility, catchment ponds and related water management infrastructure.

The tailings storage facility will have handling capacity of 25,500t/d in years 1 through 4 and 51,000 t/d following expansion.

Power infrastructure

Currently, the site does not have power access. Comisión Federal de Electricidad (CFE) conducted a study and determined that the power demand at the project can be met with the construction of a 75km long, 230kV transmission line from Camargo 2 power plant to the site.

Based on power demand, the outdoor substation is phased into two stages.

In Phase I, two 40/53.3MVA and 230kV/13.8kV oil filled transformers will be installed. These will be connected to a 13.8kV switchgear with an open bus tie.

In Phase II, two 37.5/50MVA transformers will be connected to another 13.8kV switchgear in a similar arrangement.

The substation will have four 4MVAR-rated banks of power factor correction equipment.

Contractors involved

Ausenco Engineering Canada (Ausenco) prepared the technical report and the Pre-feasibility Study (PFS) of the Cordero Silver Project, effective January 2023.

Several other companies were also associated in the preparation of this report. Ausenco Sustainability conducted a review of the environmental studies and site-wide water management, while AGP Mining Consultants designed the open pit mine, mine production schedule and determined mine capital and operating costs.

Knight Piésold and Co. (USA) carried out geotechnical studies and PFS-level design and cost estimate of the tailings storage facility.

World Metals was responsible for work related to property description, accessibility, local resources, geological setting, deposit type, exploration work and drilling among others.

RedDot3D developed the mineral resource estimate and Hard Rock Consulting reviewed the technical information.

The metallurgical test programme was conducted by Blue Coast Research.

In 2022, Investigacion y Desarrollo de Acuiferos y Ambiente (IDEAS) conducted a separate hydrogeological site investigation programme for the open pit.

CIMA Consultores (CIMA) completed environmental studies.

In 2019, Discovery Silver contracted Geotech for VTEM airborne electromagnetics (AEM) acquisition over the entire Cordero property.

Arrow Geosciences was commissioned in 2022 to reprocess all historical geophysical survey data collected by Levon. Zonge International won the contract to collect induced polarization (IP) survey data over select target areas.