Discovery Silver Corp T.DSV

Management Response

[cbew]

Ok I just got a reply back from management concerning this latest financing:  Here is my email and the response I got back:

Dear Sirs,
 
I am a large shareholder of Discovery Silver, having bought a large portion of my shares last year because of the merits of Cordero and the potential for a Major discovery.  I have been following the developments of the company closely and have even told many of my friends and family about it.  Many got in due to the fact that this was a fully funded venture that would take it to the full feasibility study by the end of 2023 or so we were told by management last year.  Now we have learned that you just did a major financing when to us it didn’t seem like raising funds were necessary at this time.  So I and many shareholders are very surprised and disappointed by the unnecessary dilution of the stock particulary at a time when the sp is undervalued compared to its peer group.  So my question to you is why did management find the need to do this financing at this time?  What plans do you have to utilize this money to increase shareholder value?  Many of us would like to know the answers to these questions to restore our confidence in the direction of this company and management.   I await your answer with eagerness. 
 
Sincerely,
xxx



Forebes Reply:

Hi,

Thanks for reaching out and I can appreciate your line of questioning.
 
For some context, this financing allows us to accelerate key de-risking items that are beyond the feasibility study (mostly focused on land and water) and that were originally scheduled for next year. Hence, the financing puts us in a strong position to now advance the project to a construction decision rather than just the delivery of a feasibility study.
 
In addition, since Tony Makuch signed on as CEO and post the release of our Pre-Feasibility Study, we had several large institutions wanting to get positioned in the stock however given our liquidity it was proving to be a challenge for them to establish meaningful positions by buying in the open market. This financing, which is common shares only, and at a relatively modest discount compared to where we have been trading at recently, allows these institutions, which are long-only funds with a long-term view, to get positioned in the stock.  With respect to timing, if we had the crystal ball for the silver price we could of course be more patient and look to finance at a higher price. The long term set up for silver is obviously very positive but silver as we both know can be very volatile … its YTD fluctuations are a clear indication of this (as well as our share price which traded as low as $1.00 only a month ago).
 
I hope this helps. If you have any further questions please let me know … note that I am getting my hip replaced tomorrow so my response time may be delayed.
 
Warm regards
Forbes


I am now somewhat satisfies with his response although I still feel that they could of waited a bit.  There were many signs that the Fed's tightening cycle was ending and although PM prices are volatile as he mentioned one can put two and two together with developements happening in the financial sector to know that an end to tightening would lead to PM prices surging as we have recently seen.  Anyways, that's looking in hindsight now. 

The good thing is we have good institutional support for this now.  It will take large intitutional buying in the future to drive the sp much higher and that's what we need.  Since these funds now have a stake in DSV, imho further derisking of Cordero will by the catalyst for this future inflow of buying from these funds.  My 2 cents for what its worth.

[spitfire191]

Yea this is exactly the same email I got back

[Dutchdoctor]

Good action, Cbew! This gives some welcome inside information. The reaction of Forbes sounds understandable and positive. For me the clouds around DSV are gone and the sun is shining again... Like always: we have to be patient in order to get a golden future from this exceptional silver project...

[Heywood_Silvers]

Folks, we shouldn't have to worry about dark clouds and such with DSV.  They have the world's largest silver development project in a safe jurisdiction with a solid shareholder base headlined by Sprott.  We will not be sold out for a lowball offer, we'lll ride this puppy to the end of the line which will be at least $10 USD a share!!  We have a rare asset indeed here

[MoneyK]

$10 US per share seems excessive unless silver jumps significantly. At current prices, this mine is not a cash cow.  $5B valuation would be 50x the cash flows? Not going to happen. IMO. MoneyK

[cbew]

LOL saids the guy who keeps pumping CUU for the last 10 years.  What happened with your buyout predictions MK?  The self appointed mining expert who kept telling people to buy CUU from over $2/sh to what .26 cents / sh now LMAO?  I would take your predictions with a huge grain of salt.  With the state of the financial system silver prices are getting ready to take off. 

[MoneyK]

Learn to read please.  I said that $10 US is not possible unless silver takes off to much higher levels. Who would pay $5B for a mine that will generate half of that in total profit at the current levels. Lets be somewhat serious. MoneyK