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# FS

Source: https://discoverysilver.com/site/assets/files/6684/2025-q4-dsv-fs.pdf
Published: 2026-02-18T00:00:00+00:00
Fetched: 2026-05-05T09:26:21.247+00:00
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## Content

# FS
ANNUAL AUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2025 and 2024
(expressed in thousands of United States dollars)
Independent auditor’s report
To the Shareholders of Discovery Silver Corp.
Our opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the financial position of Discovery Silver Corp. and its subsidiaries (together, the Company) as at
December 31, 2025 and 2024 and January 1, 2024, and its financial performance and its cash flows for the
years ended December 31, 2025 and 2024 in accordance with IFRS Accounting Standards (IFRS) as issued
by the International Accounting Standards Board (IASB).
What we have audited
The Company’s consolidated financial statements comprise:
• the consolidated statements of financial position as at December 31, 2025 and 2024 and January 1, 2024;
• the consolidated statements of income (loss) and total comprehensive income (loss) for the years ended
December 31, 2025 and 2024;
• the consolidated statements of cash flows for the years ended December 31, 2025 and 2024;
• the consolidated statements of changes in shareholders’ equity for the years ended December 31, 2025 and
2024; and
• the notes to the consolidated financial statements, comprising material accounting policy information and
other explanatory information.
PricewaterhouseCoopers LLP
PwC Tower, 18 York Street, Suite 2500
Toronto, Ontario, Canada M5J 0B2
T.: +1 416 863 1133, F.: +1 416 365 8215
Fax to mail: ca_toronto_18_york_fax@pwc.com
“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the Company in accordance with the ethical requirements that are relevant to our
audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities
in accordance with these requirements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements for the year ended December 31, 2025. These matters were
addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How our audit addressed the key audit matter
Valuation of mining interests, plant and equipment
acquired as part of the acquisition of the Porcupine
complex
Refer to notes 3 – Material accounting policies, 5 – Critical Our approach to addressing the matter included the following
judgments and estimates in applying accounting policies and procedures, among others:
6 – Acquisition of Porcupine Complex to the consolidated
 Tested how management estimated the fair values of the
financial statements.
acquired mining interests and plant and equipment, which
On April 15, 2025, the Company entered into a share purchase included the following:
agreement, under which, the Company acquired 100% share
 read the share purchase agreement;
ownership interest in Dome Mine Ltd., which held all title and
interests in the Porcupine Complex (the Transaction). As  tested the underlying data used in the discounted
consideration for the Transaction, the Company paid $200 cash flow models;
million of cash and issued 119.7 million common shares,
Key audit matter How our audit addressed the key audit matter
valued at $232.7 million, and will pay $150 million in deferred  evaluated the reasonableness of significant
cash consideration, payable in four annual payments of $37.5 assumptions such as future metal prices, production
million, commencing on December 31, 2027. based on estimated quantities of mineral resources
and operating and capital expenditures by (i)
Management applied significant judgment in estimating the fair
comparing future metal prices to external market
values of acquired mining interests, and plant and equipment in
and industry data; (ii) comparing production and
the amount of $496.5 million and $431.0 million, respectively.
operating and capital expenditures against current
Management used discounted cash flow models to determine
and past performance; and (iii) assessing whether
the fair values of the mining interests, including the use of
these assumptions were consistent with evidence
significant assumptions such as future metal prices, production
obtained in other areas of the audit;
based on estimated quantities of mineral resources, operating
and capital expenditures and discount rates. In determining the  the work of management’s experts was used in
fair values of plant and equipment, management primarily uses performing the procedures to evaluate the
the depreciated replacement cost approach. Management’s reasonableness of the production based on
estimates of production based on quantities of mineral estimated quantities of mineral resources and
resources are based on information compiled by qualified production and operating and capital expenditures.
persons (management’s experts). As a basis for using this work, the competence,
capabilities and objectivity of management’s experts
We considered this a key audit matter due to (i) the magnitude
were evaluated, the work performed was understood
of the acquired mining interests, plant and equipment, (ii) the
and the appropriateness of the work as audit
significant judgments by management in estimating the fair
evidence was evaluated. The procedures performed
values of acquired mining interests and plant and equipment,
also included evaluation of the methods and
and the underlying assumptions and (iii) significant audit effort,
assumptions used by management’s experts, tests
which includes the assistance of professionals with specialized
of the data used by management’s experts and an
skill and knowledge in the field of valuation.
evaluation of their findings; and
 professionals with specialized skill and knowledge in
the field of valuation assisted in assessing the
following: (i) appropriateness of the discounted cash
flow models and the reasonability of the discount
rates and future metal prices used within the
models; and (ii) appropriateness of the depreciated
replacement cost approach and the reasonability of
the resulting fair values assigned to acquired plant
and equipment.
Other information
Management is responsible for the other information. The other information comprises the Management’s
Discussion and Analysis.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the
consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRS Accounting Standards, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with Canadian generally accepted auditing standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business units within the Company as a basis for forming an opinion on the
consolidated financial statements. We are responsible for th

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