Mr. Tony Makuch reports

DISCOVERY ANNOUNCES ACQUISITION OF GLENCORE'S KIDD OPERATIONS

Discovery Silver Corp. has entered into a definitive agreement to acquire, through a wholly owned subsidiary, Glencore Canada Corp.'s 100-per-cent interest in the Kidd operations in Timmins, Ont. The Kidd operations include the Kidd metallurgical site, the Kidd tailings management area (the Kidd TMA) and the Kidd Creek copper, zinc and silver mine. All amounts are in United States dollars unless otherwise specified.

• Supports Discovery's vision to more than double gold production in Timmins to over half a million ounces per year;
• Large land position contiguous with Hoyle Pond and Pamour supports future expansion of both operations and provides an opportunity for development of the TVZ zone;
• Adds exposure to copper, zinc, silver from the Kidd Creek mine, and provides significant exploration potential for critical minerals and precious metals;
• Delivers anticipated cost synergies and potential for reduced reclamation obligations at Porcupine;
• Provides a large, skilled work force with expertise and experience in all disciplines, including operations, trades, management, supervision and technical services;
• Consideration to Glencore at closing includes $10-million in Discovery common shares, offtake arrangements related to concentrates produced from the Kidd operations and a 1-per-cent NSR (net smelter return) royalty on minerals produced from a large exploration land package held by Kidd Creek Timber Ltd., that is located outside of the existing Kidd Creek operations.

Tony Makuch, Discovery's president and chief executive officer, commented: "Acquiring the Kidd operations provides an opportunity to substantially increase our processing and tailings capacity and supports a growth trajectory that could more than double gold production in Timmins to over half a million ounces per year. In addition, the acquisition also provides important synergies that will augment our current operations and delivers a large land package with tremendous exploration upside potential for copper, zinc and silver, the metals produced at Kidd Creek, as well as for other critical minerals and gold. Very importantly, the Kidd operations include valuable, well-maintained infrastructure, and come with a large, highly-skilled labour force with expertise and experience in all key disciplines of our business, which we plan to leverage to support our future success in the Timmins camp.

"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 rail access. This infrastructure will assist us as we advance plans to grow our gold production substantially, with the added milling capacity and the addition of at least one new gold circuit, expected to be sufficient for future planned tonnage from Pamour, Borden and Hoyle Pond, as well as for processing mineralization from TVZ. This configuration would then allow our Dome mill to process mineralization from the adjacent Dome mine following an anticipated resumption of mining operations.

"Among the many anticipated synergies resulting from the acquisition, haulage costs will be reduced significantly given that Hoyle Pond and Pamour are approximately one kilometre and three kilometres from the Kidd Met site, respectively. The Kidd surface rights will also allow for the optimal placement of potential new infrastructure for Hoyle Pond, including development related to the TVZ project, as well as improve options for waste rock deposition from the Pamour mine. In addition, we will have an opportunity to reduce reclamation costs at both Porcupine and Kidd by using Porcupine waste rock and gold tailings for Kidd tailings management.

"Turning to the Kidd Creek mine, like Dome, Hollinger and other mines in Timmins, Kidd Creek mine is a pillar of Canadian mining history. Production started in 1966 and in 2024 totalled 40 million pounds of copper, 82 million pounds of zinc and 1.5 million ounces of silver. Upon closing of the transaction, we plan to deploy drills at Kidd Creek mine and surrounding properties, where there is substantial exploration upside, and limited past drilling, with a goal of identifying new mineral resources that could support future mining operations at the site."

Stephen Lecce, Minister of Energy and Mines for the Province of Ontario, stated: "This acquisition reaffirms Ontario as a reliable partner building confidence to invest and expand mines in the province. After reducing permit timelines, Ontario is proud to support Discovery's significant investment in the region that could result in doubling production in Timmins while creating jobs for Canadians. This is a massive achievement as the Kidd Met site would have been closed this year and now, with renewed confidence, we are taking this fully permitted mill and community to the next level. We thank Discovery for their leadership in investing in protecting Ontario's highly skilled work force and working with us to advance responsible resource development across the North."

Transaction summary and timing

Consideration to be paid to Glencore upon closing of the transaction includes:

• $10-million to be paid through the issuance of Discovery common shares;
• The assumption of all financial assurances and environmental and rehabilitation obligations associated with the Kidd Met site and the Kidd Creek mine, subject to terms and conditions of the agreement;
• Offtake arrangements related to concentrates produced from the Kidd Creek mine;
• A 1.0-per-cent net smelter return royalty (NSR) that would apply to any future mineral production from a large exploration land package held by Kidd Creek Timber Ltd., that is located outside of the existing operations.

The agreement also includes a deferred payment of up to $75-million, payable either in Discovery common shares or in cash at the sole discretion of Discovery. The future payment shall be paid upon receipt of all material permits and regulatory approvals required to deposit gold tailings at the Kidd TMA and in accordance with the terms of the agreement. The agreement contains certain postclosing obligations on Glencore relating to financial assurances and indemnities for a specified period time, as further set out in the agreement.

Discovery anticipates closing of the transaction during the first half of 2026. The transaction is subject to certain conditions, including, among other things, the transfer of the Kidd Creek mine, Kidd Met site, Kidd TMA and all associated property, claims and assets, as well as all of the issued and outstanding shares of Kidd Creek Timber, to the company from Glencore. The transfer requires certain approvals, including the consent of Ontario's Ministry of Mines. The closing of the transaction is also subject to the receipt of all required regulatory approvals, including the approval of the Toronto Stock Exchange (TSX) and approval, or expiry of the applicable waiting period, under the Competition Act (Canada), and other customary closing conditions for a transaction of this nature.

Kidd overview

Glencore's Kidd operations are located in Timmins, Ont., and include the Kidd Creek mine and the Kidd Met site. 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. In 2025, Glencore announced plans to close both the Kidd Met site and Kidd Creek mine at the end of 2026. Upon closing of the transaction, Discovery will continue with the current operating plan for both the Kidd Met site and Kidd Creek mine. Moving forward, the company intends to look at constructing one, and possibly two, gold circuits at the Kidd Met site to support future growth in gold production at Porcupine. At the Kidd Creek mine, Discovery plans to undertake an extensive drilling program, given the significant exploration potential that exists at and near Kidd Creek mine, with a goal of identifying new mineral resources that could support future operations at the mine.

The Kidd Met site is an integrated mineral processing facility, with an accompanying 1,200 hectare tailings facility. The Kidd Met site includes a crushing plant and concentrator with four independent circuits (A, B, C and D circuits) 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, 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 minerals, including nickel from the Montcalm mine in Timmins, as well as minerals related to custom milling. The four-circuit configuration of the Kidd Met site provides both significant scale and flexibility. Discovery plans to adjust the plant flowsheet to include at least one gold circuit and to allow for the processing of different kinds of ores, including potentially refractory material which may exist in the TVZ zone.

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 long-hole mining method. Ore is hoisted up the shaft and transported by rail 27 kilometres to the Kidd Met site.

Advisers and counsel

SCP Resource Finance LP and John Tumazos are acting as financial advisers to Discovery. Cassels Brock & Blackwell LLP is acting as legal adviser to the company.

About Discovery Silver Corp.

Discovery is a growing precious metals company that is creating value for stakeholders through exposure to both gold and silver. The company's silver exposure comes from its first asset, the 100-per-cent-owned Cordero project, one of the world's largest undeveloped silver deposits, which is located close to infrastructure in a prolific mining belt in Chihuahua state, Mexico. On April 15, 2025, Discovery completed the acquisition of the Porcupine complex, transforming the company into a new Canadian gold producer with multiple operations in one of the world's most renowned gold camps in and near Timmins, Ont. Discovery owns a dominant land position within the camp, with a large base of mineral resources remaining and substantial growth and exploration upside.

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