Good afternoon, everyone. So 2026 has been a transformational year for Discovery. In January, we announced the acquisition of the Porcupine gold assets from Newmont. They're located in Timmins, Ontario. In April, we closed on the acquisition of those assets, and then just last month, we reported our Q1 as a gold producer. We had a very solid operational performance, significant free cash flow, and we're only just getting started. The market response to the acquisition has been exceptionally strong, however, we feel there's still huge upside that remains. And one of the ways you can sort of frame the valuation analysis of Discovery is if you focus just on what's above the dotted line, we put out a technical report along with the acquisition, what we're calling a baseline scenario. So under that scenario, the net present value currently sits around $2.5-$3.5 billion.
So when you compare that to our market cap, we're trading around 0.8, 0.9 times. So that's already at a meaningful discount to the established Canadian producers. So you've got a relatively attractive entry point just on that baseline scenario. But what you get below the line is basically five key value drivers that are effectively free options. Number one, you get the upside to the existing operations at Hoyle Pond, Borden, and Pamour. Number two, Dome is a huge resource, 11 million ounces that sits next to a mill that we get little to no value for. The TVZ is a large underground deposit that sits adjacent to underground infrastructure. We have a very aggressive exploration program underway. And then the fifth key value driver that you're basically getting a free option on, it's a big one, is Cordero, one of the biggest and best undeveloped silver deposits globally.
This is what we bought: three operating gold mines, Hoyle Pond, one of the highest-grade underground gold mines in Canada. Just south of that is Pamour. That's an open pit that's currently in ramp-up mode. Then the Borden underground mine that sits about 190 km to the southwest. All three mines feed a central processing facility known as the Dome Mill. Adjacent to Dome Mill is a Dome deposit. There's 11 million ounces there. Adjacent to Hoyle Pond is a TVZ zone that I referred to. We also got a very large land package in Timmins. This is a prolific mining belt produced over 70 million ounces historically. We also got a very large land package in and around Borden as well. When we announced the acquisition, we published this technical report. The production rate around this year is going to be around 200,000 ounces.
So you're going to have around 50,000-60,000 ounces coming from Hoyle Pond, 120,000 ounces from Borden, and then Pamour is in ramp-up mode. And that should take production well north of 300,000 ounces. So just on this sort of baseline scenario, we're already showing more than 50% production growth over the coming years. Now, we were under a very tight timeline to get this report out when we announced the acquisition. So this does not reflect the upside opportunities that we identified during our due diligence. And there's really three big opportunities we're going to be targeting. Number one, at Hoyle Pond. So the current mining rate there is around 600 tonnes per day. There's been very little in terms of underground infrastructure investment.
By putting in that investment to de-bottleneck, especially around ventilation, we feel we should be able to get the mining rate up to over 1,000 tonnes a day. Similarly, at Borden, proper investment, especially around ventilation, is going to de-bottleneck. We should see at least a 20% increase in the mining rate there. Then the third key area is expanding the mill. And so right now, the capacity at the mill is around 12,000 tonnes a day. We're going to look to take that up to 30,000 tonnes a day. So this production profile that we showed in our technical report, with those three key growth opportunities in terms of mining rates, the undergrounds, and then getting that mill throughput up, we should see production well north of 500,000 ounces once we execute on that. The second key value driver beyond the upside to the technical report is at Dome.
Dome, there's an 11 million ounce resource that sits within that purple outline around the outside. And I think one of the reasons we don't get much value for that is that resource pit swallows up all the process infrastructure. What we're looking at doing with our proposed mill expansion is getting rid of all this existing crushing infrastructure and putting in a brand new primary crusher and SAG mill on the western edge of the pit. When you then float pit shells constraining just that western edge of the pit, you then get this pit outline in red, which you can actually see is not too dissimilar in size to that 11 million ounce resource pit. But now, with that 30,000 tonnes per day processing rate, you now have capacity to process Dome mineralization.
So we'll have an update on this in 2026 once we flesh out the numbers a bit. But right now, we get little to no value for Dome. But we expect that to change with the updates there next year. Another key value driver is at TVZ. So this is a large underground deposit. It sits next to Hoyle Pond. Hoyle Pond is one of the existing underground mines. This is a relatively new discovery by Goldcorp in 2009. There's actually been quite a lot of work done already. There's been four exploration drifts put in and more than 400 holes drilled. Outlined a main zone with some vein splays, vertical extent of around 1,000 meters, strike extent of 600 meters, and it's open in both directions on strike and laterally at depth.
We're currently rehabilitating the old exploration drifts so we can get drilling in the next coming months with the objective of publishing an inaugural resource here in 2026. As far as exploration goes, I think those of you who follow Tony Makuch at Kirkland Lake recognize how much value creation happened through aggressive exploration, particularly at Fosterville and particularly at Detour Lake. We have the ideal backdrop to basically replicate that success. The land package in and around Timmins is huge. We have more than 70 million ounces that has been mined in this district, and we also have a very large land package at Borden. Both these land packages have had minimal exploration going back for decades now. We're currently in the process of ramping up to 20 drill rigs. The current program is around 140,000 meters, but I would expect that will be expanded significantly.
Expect to see the first exploration update out in the Q4 of this year. And then there'll be a steady cadence of results from then on in. The fifth key value driver, which you're effectively getting a free option on, is Cordero. This has been, I suppose, a little bit in the backdrop since we acquired Porcupine, but I think that's going to change in the coming months. This is one of the world's largest undeveloped silver reserves. It has certainly a scarcity factor in the silver space, given its location and size. The net present value at $35 silver is around $2.5 billion. As we know, silver is well north of 40 bucks an ounce right now. We applied for our permit in August of 2023.
We've had very positive discussions in the last few months with key government officials down in Mexico, and we're optimistic that we should receive our MIA approval by the end of the year. I think when you look at the analyst valuation for Cordero, it's a very low multiple, 0.1, 0.2 times. I think that'll increase significantly once we receive that permit. So look, just to, I suppose, wrap all this up, we'll get the baseline technical report. It's got an NPV already of around $3 billion. So you get an attractive valuation entry point on that. But when we look out the next 12 months, we're going to be putting an update out in terms of the technical report upside to the operations. We're going to have an update on Dome, the Dome deposit, as well as the Dome mill expansion.
At TVZ, we expect to publish an inaugural resource estimate in 2026. We're going to see exploration results starting to ramp up in the Q4, and then continue on beyond that. And then, like I said, with Cordero, we're quite optimistic about permit receipt by the year end. So it's going to be an incredibly busy, but also catalyst-rich 12 months ahead of us. Anyway, I'll leave it there if there's any questions.
We've got some time left if there are any questions.
Cordero mine is an underground or an open pit?
Yeah, it's an open pit deposit. So just for context here on AMLO, there was some opposition around open pit mining in Mexico since Sheinbaum, new president, has come to power almost 12 months ago now. That's fallen by the wayside. And I think she's been vocal around every project is going to be looked at on its own merits. And I suppose the key things that she's really looking out for are social support and then any environmental sensitivities. We have very strong social license. We're located just north of a key mining town. And I think the key environmental sensitivity is around water in Mexico. We're proposing to use recycled wastewater from the local town of Parral. So I think our project ticks all boxes in terms of what the government are looking for in terms of greenlighting projects to move forward.
Just a quick question, both in Timmins and Cordero, just a general capital number that's going to be spent over the next one, three, five years?
Okay, we're still obviously mapping that out, so the feasibility study at Cordero, that had a $600 million CapEx number, that was from the start of 2024, so you can inflate that out. We'll probably look at getting an updated feasibility study out in the next six, nine months there. Maybe it's more in the $700-$750 range. Let's see where inflation is tracked, and then at Timmins, look, very early days in terms of how we're looking at these big projects. I think the mill expansion, very rough numbers, maybe $200-$300 million to get to 30,000 tonnes a day, and then we do have to open up the Dome pit as well, and so we've got to look at how that would sequence in and how much pre-strip there is. That could be a meaningful number as well.
But we have $250 million of cash right now. We're generating significant free cash flow. And I think we have a lot of levers in terms of what we can look at in terms of funding these big growth opportunities.
Looking down the road, time-wise, just give me a snapshot. When that pit goes into production, what year are you looking at? How many years?
Look, I think if we can execute on that mill expansion at Dome, say by 2028, and then maybe within the next sort of 12 to 24 months, we're starting to sequence in Dome. We still do have capacity at Pamour where we'll be stockpiling Pamour mineralization. So I think, call it 2029 to 2030, you can easily see around that timeframe, we could be north of 500,000 ounces. Then Cordero, we have to sort of sequence that in as well and look at what our project financing options there are. That's a two-year build. On a gold equivalent basis, it's around 400,000 ounces. So we could be a million-ounce gold equivalent producer in the next sort of five years or so.
Great. Thank you.
In the back.
Can you explain, please, the share structure and the shareholders?
Sure. So 800 million shares outstanding. Our biggest shareholder is Eric Sprott. He probably holds around 9% or so. And then the key institutional shareholders below that: Jupiter, BlackRock, Condire, Fourth Sail, Merk, T. Rowe. Yeah, Sprott Asset Management. It's a very strong list of institutional shareholders as well. And I think there's a pretty significant retail component too.
And management?
Management in total, I would say, would be around two or three%. Would that sound about right? I know when we did the financing as part of the acquisition, I mean, the management itself put in around $10 million at that point in time. And Tony Makuch was obviously a key contributor to that.
All right. Thank you, Forbes.
Thanks, Joe.