Discovery Silver Corp. (TSX: DSV, OTCQX: DSVSF) has secured a new US$250 million revolving credit facility that is set to provide the company with additional financial flexibility as it pushes forward with its growth plans in Canada and Mexico. The agreement involves a syndicate of major financial institutions led by Bank of Montreal (BMO), with Canadian Imperial Bank of Commerce (CIBC) and National Bank of Canada (NBC) also playing key roles.
This new credit facility carries a maturity date of September 15, 2028, giving Discovery Silver a three-year horizon of accessible capital for its corporate operations and working capital needs, including investments that align with its ongoing expansion strategy. An important feature of the facility is an “accordion” option that could increase the available credit by an extra US$100 million, subject to lender commitments and other conditions.
The funds available under this facility will replace an earlier undrawn senior debt facility of US$100 million from Franco-Nevada GLW Holdings Corp. that Discovery had arranged in April 2025. This transition represents a significant boost in liquidity for the company, increasing its borrowing capacity by 150% at the outset.
Interest on borrowings will be tied to the Secured Overnight Financing Rate (SOFR) with a credit spread adjustment and a margin that varies between 2.50% and 3.50%, depending on Discovery Silver’s leverage ratio at the end of each fiscal quarter. Alternatively, loans can also be made at BMO’s US dollar base rate plus a margin that ranges from 1.50% to 2.50%. Undrawn amounts of the facility will incur a standby fee between 0.563% and 0.788%. Like many such arrangements, the facility is secured by all assets of the company and its material subsidiaries.
Discovery Silver’s CEO, Tony Makuch, expressed appreciation for the support from the banking partners and highlighted the benefit of increased financial capacity and flexibility that the facility offers. Given the company’s focus on advancing valuable projects in two distinct North American mining regions, this improved access to capital will help sustain and accelerate their work on the Cordero silver project in Chihuahua, Mexico, as well as the Porcupine Complex gold operations near Timmins, Ontario.
The Cordero project remains one of the largest undeveloped silver deposits in the world. Its location in a prolific mining belt with existing infrastructure makes it a significant asset in Discovery Silver’s portfolio. Earlier this year, the company also completed the acquisition of the Porcupine Complex, marking its evolution into a diversified precious metals producer. This acquisition brought multiple gold-producing operations and a strong resource base within one of Canada’s most renowned gold camps under Discovery’s control.
The new credit facility will be an important tool for Discovery Silver to manage its capital needs and fund further growth opportunities. Having a syndicate that includes respected Canadian banks like BMO, CIBC, and NBC on board provides not just financial resources but an added layer of credibility in the capital markets.
This US$250 million revolving credit arrangement stands as a key financial milestone for Discovery Silver as it elevates its operational scale and resource development in two important mining regions. The additional potential borrowing capacity allows for continued strategic investment while keeping liquidity readily available for ongoing working capital requirements.Â
