Discovery Silver Corp.

Section 1: Introduction

Inflation Report Coverage:

• Inflation report highlights how inflation impacts sectors differently, favoring value and defensive sectors like Energy, Materials, Consumer Staples, Healthcare, Utilities, select Financials, and REITs with inflation-indexed leases, while rate-sensitive sectors like Consumer Discretionary and high-growth Tech typically underperform.
• The report focuses on companies with proven business models, steady financials, high free cash flow, and solid ROE that can pass on costs to customers and protect margins. The aim is to identify stock that can outperform inflation via capital gains and dividends, supporting diversified sectoral exposure.

Stock Covered:

• Discovery Silver Corp. (TSX: DSV) reported decent Q4 2025 results with a sharp turnaround to profitability, healthy production growth, and robust cash flow generation following the Porcupine acquisition. The company delivered improved operating performance with lower cash costs, maintained a strong debt-free balance sheet, and continued investing in exploration and infrastructure, while advancing production ramp-up and resource expansion across its Porcupine assets to support long-term growth.

Section 2: Company Overview

Discovery Silver Corp. (TSX: DSV) 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%-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.

Kalkine’s Inflation Report covers the Investment Highlights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

The top 10 shareholders together form ~52.40% of the total shareholding. Ontario, Ltd. and Franco-Nevada Corp hold a maximum stake in the company at ~9.95% and ~9.72%, respectively.

The company reported rising financials in Q4 2025, where it clocked healthy growth under its Pretax ROA, which is a key positive. Furthermore, it witnessed elevated Quick Ratio and Pretax ROE, displaying its decent income stability and operational strength.

Section 2: Business Updates and Financial Highlights

The picture below gives an overview of the company’s recent activity, such as an announcement regarding Exploration Success Strengthens Growth Pipeline.

Section 3: Key Risks and Company Outlook

Section 4: Stock Recommendation Summary

The stock has witnessed a downside of ~9.02% and ~14.35% over the last 1 month and 3 months respectively. Moreover, it is trading above the average 52-week high price of CAD 2.48 and 52-week low price of CAD 2.36, providing an opportunity to ride the trend.

Valuation Methodology: EV to Sales Based Relative Valuation (Illustrative):

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is April 23, 2026. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Dividend Yield may vary as per the stock price movement. 

Note 5: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.