Discovery Announces 2024 Work Program for Cordero - Seite 2

The Company plans to progress all financing options for the Project through the course of 2024. These options include equity, debt, offtake, joint ventures, partnerships, lease financing on major equipment, streams, royalties and other strategic alternatives.

PERMITTING

The two principal environmental permits required for the construction, operation and closure of Cordero are:

1. Environmental Impact Assessment (“Manifestacion de Impacto Ambiental” or “MIA”)
2. Change of Land Use (“Cambio de Uso de Suelo” or “CUS”)

Both permits are subject to review and approval by the Secretaría de Medio Ambiente y Recursos Naturales (“SEMARNAT”), Mexico’s federal agency for natural resources and the environment.

The Company formally submitted for evaluation its MIA in August 2023. The MIA incorporates extensive social and environmental work programs completed by the Company’s team in Mexico since 2020 in conjunction with multiple reviews by third-party consultants. The review process of the MIA submission by SEMARNAT is ongoing.

The CUS submission is supported by a Change of Land Use Study known as an Estudio Tecnico Justificativo (“ETJ”). Compilation of the ETJ by the Company and third-party consultants will be finalized in the coming months with formal submission of the CUS expected to be made by 3Q 2024.

KEY DE-RISKING ITEMS

Power: impact assessment and power installation studies were completed in 2023 confirming that there is sufficient capacity in the existing power grid to supply the Project with power for operations at peak throughput levels. The FS will include detailed capital cost estimates for the standard upgrades required at the Camargo II substation and for the installation of a 74-kilometre powerline from the substation to Cordero. The Company has identified three potential routes for the powerline. Work in 2024 for the powerline will consist of finalizing the powerline route, surface rights access negotiations, permitting and engineering for both the Camargo II substation upgrade and the new powerline to site. The option to use renewable energy sources at site to supplement grid power will also be evaluated.

Surface Rights: in 2023 the Company secured the surface rights that correspond with the planned open pit and key infrastructure locations at Cordero. In 2024, the Company will focus on acquiring ancillary surface rights where appropriate as well as securing long-term access and lease agreements for nearby land as required.