Discovery to acquire McEwen’s Timmins mineral assets for $55m

Discovery Mining Bolsters Timmins Presence with $55 Million Acquisition from McEwen

Toronto, Canada – In a strategic move poised to significantly enhance its operational footprint within one of Canada’s most prolific gold camps, Discovery Mining, through its wholly owned subsidiary, has announced an agreement to acquire a portfolio of mineral properties in the Timmins region from subsidiaries of McEwen Mining. Valued at $55 million, this acquisition is a critical step in Discovery’s long-term strategy to expand gold production in the historic Timmins camp, particularly by supporting the future development of its flagship Dome Mine.

The transaction, which was publicly announced on October 12, 2026, underscores Discovery’s commitment to consolidating its land position in this richly endowed mining district. For industry professionals and investors, this deal highlights the ongoing strategic importance of established gold regions and the value placed on infrastructure-enabling land assets.

Transaction Mechanics: A Blend of Equity and Cash

The total consideration for the acquired mineral assets stands at $55 million, structured as a combination of Discovery common shares and cash. Specifically, the package includes $50 million payable in Discovery common shares, which translates to C$71.32 million based on prevailing exchange rates at the time of the agreement. The remaining $5 million will be paid in cash. This structure, utilizing a significant equity component, allows Discovery to conserve cash while aligning McEwen as a future shareholder, potentially indicating a shared belief in Discovery’s growth trajectory and the value of the Timmins assets.

The assets included in this acquisition are strategically critical due to their proximity to Discovery’s existing operations. They comprise the Fuller project and a 60% stake in the Paymaster Joint Venture. Importantly, these properties are situated directly adjacent to Discovery’s venerable Dome Mine, creating a contiguous land package that unlocks significant operational synergies and future development potential.

Strategic Imperative: Fueling Growth at the Dome Mine

Discovery Mining’s primary rationale behind this acquisition is to support its ambitious plans for increased gold production within the Timmins camp. The expanded land position contiguous with the Dome Mine is not merely about adding ounces; it is fundamentally about facilitating critical infrastructure development that is essential for large-scale, long-term mining operations.

Tony Makuch, Discovery’s President and CEO, articulated the profound importance of this acquisition, stating, “The transaction announced today is an important step forward as we continue to establish the land position needed to achieve our extensive growth plans in the Timmins Camp.” Makuch emphasized that beyond potential future exploration upside, a key benefit of the acquired land is its suitability as an "ideal location for potential new processing and tailings facilities." Such infrastructure is paramount for supporting the significantly higher production levels Discovery envisions for the Dome Mine.

The Dome Mine itself is a cornerstone asset for Discovery, boasting an impressive 11 million ounce inferred resource. Discovery is actively developing plans to resume operations at Dome within the next five years, initially utilizing the existing Dome Mill for processing. However, the long-term vision is far more expansive. As Makuch elaborated, “Longer-term, we will look to operate the mine at a significantly higher level of production using a new processing facility to be located at the adjacent purchased assets.” This staged approach underscores a methodical and capital-efficient strategy for bringing one of Canada’s historic gold mines back to prominence.

The availability of suitable land for processing and tailings facilities is a common bottleneck in mature mining districts. Environmental regulations, community engagement, and existing land use often make such expansions challenging and costly. By securing this contiguous land, Discovery has proactively addressed a major hurdle, de-risking its future expansion plans and laying the groundwork for substantial long-term production growth.

Reinforcing Partnerships: The Franco-Nevada Royalty Amendment

In conjunction with the asset acquisition, Discovery Mining has also reached a crucial agreement with Franco-Nevada Canada, a subsidiary of the global royalty and streaming giant Franco-Nevada Corporation. This agreement involves an amendment to an existing royalty agreement that was originally entered into regarding Discovery’s Porcupine Operations in April 2025.

Upon the completion of the current acquisition, Franco-Nevada’s royalty interest will be extended to encompass the newly acquired properties. In exchange for this expanded royalty coverage, Franco-Nevada will make an $8 million payment to Discovery. This arrangement is mutually beneficial: it provides Discovery with additional capital to support its development activities while Franco-Nevada expands its exposure to what Discovery believes will be a significantly enhanced gold production profile in the Timmins camp.

Royalty and streaming agreements, such as those held by Franco-Nevada, are a common and increasingly vital financing tool in the mining industry. They provide non-dilutive capital to mining companies, allowing them to fund exploration, development, and infrastructure without issuing additional equity or taking on traditional debt. For royalty holders, these agreements offer exposure to commodity prices and mine production without the direct operational risks or capital expenditures, making this amendment a strategic win for both parties.

The Timmins Gold Camp: A Legacy of Riches

The Timmins gold camp, located in northeastern Ontario, is one of Canada's most historically significant and geologically endowed gold-producing regions. Discovered in the early 20th century, the camp has yielded over 70 million ounces of gold, establishing itself as a world-class district. Major players like Newmont (formerly Goldcorp), Pan American Silver, and now Discovery Mining continue to explore and develop deposits within its vast greenstone belts.

The geological setting, characterized by the Abitibi greenstone belt and the presence of numerous gold-bearing structures, makes Timmins highly prospective for both extensions of existing deposits and new discoveries. The longevity of the camp means that extensive infrastructure, skilled labor, and an established regulatory framework are already in place, making new developments or expansions more feasible than in remote, undeveloped regions.

Discovery’s strategy to consolidate land adjacent to its Dome Mine within this camp is particularly astute. It leverages existing knowledge, infrastructure, and a workforce, while positioning the company to maximize the economic potential of the Dome’s substantial inferred resource through efficient, large-scale processing.

Operational Outlook and Future Pathways

The acquisition allows Discovery to embark on a transformative journey for the Dome Mine. The existing Dome Mill offers an initial pathway to production, enabling the company to restart operations within five years and generate early cash flow. This phased approach is prudent, allowing for de-risking and optimization before committing to the larger capital expenditure required for new, large-scale facilities.

The long-term vision of a new processing facility on the newly acquired land signifies a significant step-up in potential throughput and economies of scale. Such facilities typically involve higher capacity mills, modern processing circuits that can achieve better recoveries, and integrated tailings management solutions. Locating these facilities adjacent to the mine minimizes haulage distances, reduces operational costs, and simplifies logistics, all of which contribute to improved economic viability and environmental performance.

Furthermore, the expanded land package offers increased exploration potential. Even in a mature camp like Timmins, new discoveries and extensions of known orebodies are always possible, particularly with modern exploration techniques and a more contiguous land holding. This provides Discovery with both production growth and resource upside.

Conditions and Anticipated Closing

The closing of this significant asset purchase is anticipated in October 2026, subject to the fulfillment of several customary conditions precedent. These conditions are standard for transactions of this scale and include:

• The successful transfer of the relevant properties and claims from McEwen subsidiaries to Discovery.
• The extinguishment of the current net profits interest (NPI) royalty on the Fuller project. This likely involves Discovery purchasing the existing NPI, simplifying the royalty structure and ensuring unencumbered development.
• Obtaining all necessary regulatory approvals from relevant government bodies.
• Approval from the Toronto Stock Exchange (TSX) concerning the issuance of new common shares as part of the consideration package.

The successful fulfillment of these conditions will pave the way for Discovery Mining to fully integrate these assets into its Timmins operations, setting the stage for its planned growth. The detailed nature of these conditions reflects the complexity inherent in large-scale mining asset transactions and the regulatory scrutiny involved.

Conclusion: A Strategic Bet on Canadian Gold

Discovery Mining’s $55 million acquisition of McEwen’s Timmins mineral assets represents a bold and strategic commitment to expanding its gold production profile in one of the world's most prospective mining jurisdictions. By securing critical land adjacent to its Dome Mine, Discovery has addressed key infrastructure needs, enabling a clear pathway for significant production growth and the long-term viability of a historic asset.

The transaction, bolstered by a complementary royalty amendment with Franco-Nevada, showcases a well-thought-out corporate strategy focused on de-risking development, optimizing capital allocation, and leveraging existing assets. As the global demand for gold remains robust, Discovery Mining is strategically positioning itself to become a more prominent player in the Canadian gold landscape, offering a compelling growth story for industry participants and investors alike in the coming years.