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Feature article November 30, 2015:


Discovery acquires 100%-ownership of Max Mill for fraction of replacement value, targets pouring first Gold bar in Q3-2016


Discovery Ventures Inc.



Discovery's WillaMAX project presents an exceptional risk-reward scenario.


'WillaMAX' is the marrying together of two assets; its now 100%-owned Max Mill with its flagship Willa Gold Property.


  • WillaMAX is a turnkey gold mine & mill operation with robust economics in PEA as a low cost producer.

  • Discovery Ventures Inc. is fully financed.

  • >CDN$100 million (replacement value) in assets were acquired for <5 cents on the dollar.

  • DVN.V is also acquiring a loss-carry-forward windfall on the books of ~$50 million, the impact should generate >$15 million in tax credits, valuable for when Gold begins pouring starting in Summer-2016.

  • Large Gold resource growth expansion potential.



Valuation Commentary: Discovery Ventures Inc. (TSX-V: DVN) (OTCQX: DTVMF) (Frankfurt: 0DV) this Q4-2015 acquired 100% ownership of the Max Mill & Mine located in the Revelstoke mining division of British Columbia, Canada, and is aiming to pour its first Gold dore bar before the end of the summer-2016. Ore for the mill will be mined from its high-grade Willa Gold Project located ~135 km south. By combining these two assets, the Max Mill and the Willa deposit (collectively referred to as 'The WillaMAX Project'), together form a turnkey operation that positions DVN.V to be cash flowing within 9 months following the receipt of its initial 10,000 tonne bulk permit (On November 5, 2015 DVN.V announced it has been granted the bulk sample permit). This Q4-2015 Discovery acquired 100%-ownership of the Max Mill for a fraction of replacement value along with acquiring a loss-carry-forward windfall on the books of ~$50 million. The Company is fully financed through till its commencement of operations, at which time it is expected to generate sustained cash flow pouring Gold. The 2012-Preliminary Economic Assessment ('PEA') revealed robust economics with cash costs of US$680/oz Gold, even lower with Cu & Ag credits. An updated PEA is in the process of being commissioned. DVN.V is expected to cash flow between $20M to $30M per year for the first 4 years.


The intrinsic value of the DVN.V relative to its current market capitalization of ~$15 million (~80M shares outstanding X ~19 cents) appears disproportionate and presents exceptional opportunity for investors establishing a long position; shares of DVN.V are poised for upside revaluation as the inherent value and accomplishments are appreciated by the market, and apt to respond in multiples as gold retrenches and strengthens. Contrast the current market cap to the following list of known intrinsic assets a) the Max Mill by itself has a replacement value of ~65+ million, b) the WillaMAX Gold Project is worth $54 million (as per PEA), and c) the moly resource under the MAX Mill is worth $40 million (as per PEA).


Discovery Ventures' new CEO, Dan Omeniuk, has struck three phenomenal deals for shareholders since coming onboard in mid-2015. Deals like this are rare (almost unheard of) and the combination is a serious 'company-maker':


1) DVN.V negotiated 100% ownership of the MAX Mill & Mine for pennies on the dollar, it would cost ~$115 million to replace what DVN.V is acquiring for only $3.7 million (all-in) plus the issuance of 3 million shares (see related Oct. 6, 2015 news release entitled "Discovery Ventures Inc. Announces 100% Acquisition of FortyTwo Metals Inc. (Max Mine and Mill)").

Figure 1. DVN.V's MAX Mill - near Revelstoke, BC


The mill is a perfect fit for DVN.V, it was built in 2008, is a modern facility with a replacement value of ~$65 million, and can process over 1500 Tonnes Per Day ('TPD'). Discovery Ventures is facilitating the transaction by acquiring 42 Metals Inc. which holds all the assets; the mill, the dormant moly mine beneath, it comes with a tax loss carry forward of $50 million, has a $750,000 registered bond with the ministry, it also comes with all the equipment, rolling stock, and it still has a 43 million tonne resource of molybdenum (one of the highest grading in BC) which was defined by Newmont and Esso. Discovery previously owned 35% of 42 Metals inc. which it had paid $3M for when the facility was called the Roca Mine & Mill, now 42 Metals will become a wholly-owned subsidiary of Discovery. The mill and mine operated from 2008 to late-2011 at which time it was put on care and maintenance due to low moly prices. Although DVN.V will be processing ore from its Willa Gold-Copper-Silver Project through the mill, the molybdenum deposit is a stellar asset to hold in abeyance for when moly prices come back. To give perspective of the exceptional latent value; back in 2008 Roca Mines was trading at a ~$half-billion market cap at ~$4/share while producing molybdenum, they spent ~$125 million building the mine and mill, permitting, and getting everything up and running. The MAX Mill & Mine & tailings pond are already permitted, it only requires an amendment changing the type of mineral. Comparing the fact that a little over a year ago Klondex Mines paid an aggregate purchase price of ~CDN$110 million to Newmont for its mill (of smaller capacity and further from its deposit that DVN.V's MAX Mill), Discovery has made pulled off phenomenal deal paying <1/20th the price. 


Figure 2. DVN.V's Willa Gold Mine Project mine plan, located ~135km S. of the MAX Mill

2) DVN.V negotiated 100% interest in the high-grade Willa Gold Property and in the process managed to get old consideration terms dropped, including the elimination of $3,050,00 of cash payments out the door and the elimination of 7 million share dilution (see related September 17, 2015 release entitled "Discovery Ventures Inc. Acquires 100% Interest in the Willa property"). A nominal one time payment of $130,000 was negotiated to pay for the balance which the Company owed.


The Willa is a turnkey gold mine, everything is built and ready to go; the deposit is un-mined to date, however past operators developed the deposit right up to the point is was to be opened for exploitation in the 1980's when a planned mill was under construction ~200 km away -- unfortunately for them (fortunately for DVN.V) that mill construction was stopped due to Gold dropping to $200/oz. The deposit sits on a mountainside and a railed ramp has been built down into the resource, there are 2,575 meters of tunnels developed. The Willa is an epithermal deposit, its wide, and has an average grade between 6 & 7 g/T Gold, ~12 g/T silver, and almost 1% copper. Over $18 million has been spent on the Willa since the 1980s, the exploration has been carried out by BP Minerals and Rio Algom to a very high standard, seeing 596 drill holes totaling 57,250 m of core drilling.


The 43-101 mineral resource estimate published in 2012 identifies close to 1 million tonnes blocked out (based on a 3.5 g/T Au cut-off);

 • Measured and Indicated mineral resources of 748,000 tonnes grading 6.67 g/T gold, 0.85% copper, and 12.54 g/T silver &

 • Inferred resources of 216,177 tonnes grading 6.55 g/T gold. 0.57% copper, 7.32 g/T silver.


Large resource growth potential: The Willa deposit is situated on a mountainside, and it is believed the entire side of the mountain is ripe with high-grade gold-laden material. DVN's neighbour has this summer-2015 affirmed that the Discovery's resource expansion model is sound with the announcement that it drilled-off stellar intercepts near the property line, only about ~600 m from Discovery's Willa deposit, including 16.9 m of 13.58 g/t Gold, including 10.9 m of 20.61 g/t Gold, and 11 m of 20.66 g/t Gold. The Willa deposit itself is open with one of the last holes drilled on the property encountering 105 m of almost 7 g/T gold, also grades tend to increase with depth (e.g. >15g/t Au). DVN.V can continue to drill and quickly expand the deposit from underground with some straight-shot drill holes, some step-outs, and drill some of the inferred sections by 50 m intervals. There is no shortage of gold, and the plan is to use the cash flow from the WilliMAX operation add resources and mine-life non-dilutively. There are also several stranded gold deposits ranging between ~100K to 1 million ounces gold within a 150 km radius of Discovery's MAX mill that DVN.V could target.


3) The new CEO brought a financing to Discovery of $7 million to take WillaMAX through to production. DVN.V is capitalized to complete the acquisitions and prep both the MAX Mill and Willa Gold Mine for the initial planned 10,000 tonne bulk sample at which time DVN.V becomes a cash flow funded growth story. The $7 million financing is essentially a line of credit from the Dan Omeniuk; $2 million of it is convertible into shares and $5 million is at a line of credit rate. Of the $7 million, ~$2.5M will go towards prepping & operating the Willa Mine, and $4M will be put into the Max Mill -- the biggest expense will be the installation of a dory bar plant over the next six months.


'The WillaMAX' - Willa Gold Mine and MAX Mill combined operation


The Willa Mine is connected to the MAX Mill via 135 km of road, almost entirely along provincial highway.


Salient details from the 2012-PEA:

(based on 4.25-year mine life, operating at 500 TPD, using US$1,200/Au, US$3.00 Cu, US$20/Ag, no inferred resources were used in this PEA)

   • Total revenue: CDN$164 million

   • CAPEX: CDN$12.8 million

   • OPEX: CDN$82.8 million

   • NPV (10% discount) after tax: CDN$54,958,000

   • IRR after tax: 412%

   • Cash costs of US$680/oz gold

   • All in Costs of US$781/oz gold


Production growth potential: Discovery will start slow as engineers tweak equipment to capture the highest percentage of grade back, capturing all of the minerals possible in the gravity circuits, and ramp-up from there. In year-1 DVN.V should generate 20,000+ ounces gold and aim to take the operation to another level. Shareholders have to keep a big window of opportunity open; by year-5 it is possible that DVN.V could be producing 30,000 - 50,000 ounces gold and gold equivalent assuming the Company expands the resource and/or takes on other sources and takes advantage of the fact the mill can operate up to 1,500 TPD. The ball mills are currently installed to do up to 1,500 TPD, however the MAX mill actually has enough floatation cells in the mill to handle 2,500 TPD. Also in the future, the possibility exists for DVN.V to juxtapose Willa Au-Cu-Ag ore with the moly ore from beneath the mill should molybdenum prices come back, the PEA on the moly alone yields a Net Present Value (@10% discount) of $40M when using $15/lb Mo.


The bottom line: DVN.V should be able to generate comparable quality numbers in the new PEA being commissioned, and in the first 4 years of operation, with the $50 million tax loss carry forward, the Company should nail those numbers and put a lot of money in the treasury. Discovery is also protected to the downside by forex gains from US to CDN, if pouring gold today it would receive ~$350/oz price differential for gold in Canadian dollars over US dollars.


Discovery Ventures Inc. TSX-V: DVN

Shares issued:



2,000,000 @ 0.18 &

3,991,999 @ 0.25


22,247,580 @ 0.35

Fully Diluted Shares:



Following Planned Share Issuances:

Max Acquisition:


Fully Diluted Cash:


Future incentive stock options:


Planned Total and Fully Diluted Shares



Below is expanded insight on Discovery and its key assets.


     Content found herein is not investment advice see Terms of Use, Disclosure & Disclaimer


Location, Region, and Infrastructure


Discovery's WillaMax is located in a stable mining-friendly jurisdiction, has excellent infrastructure, and has a local population workforce within short driving distance.



Figure 4. Location Map - British Columbia, Canada is a stable, mining friendly region and is ranked as a top-tier jurisdiction by the Fraser Institute.  The Willa Gold Mine Project is located in one of the most highly mineralized regions for base and precious metals in southeastern British Columbia. The Willa deposit is located 8 km south of Silverton on Red Mountain, named because of the extensive red soils resulting from weathering of sulphide minerals in the local bedrock. Ore from Willa will be loaded into trucks and transported along highway 6 right to the Max Mill.


Note: Discovery has no issues, the mill is already permitted, and in 2009 when Discovery's MAX Facility was processing moly it won the 2009 B.C. Mining & Sustainability Award.


Recent news releases regarding accomplishments and developments:


• November 10, 2015 "Discovery Ventures Inc. Appoints Process Metallurgist to the Max Mill"


• November 5, 2015 "Discovery Ventures Inc. Receives Bulk Sample Permit from B.C. Ministry of Energy & Mines"


• October 14, 2015 "Discovery Ventures Inc. Deploys Working Crew to Upgrade WillaMax Project"


• October 6, 2015 "Discovery Ventures Inc. Announces 100% Acquisition of FortyTwo Metals Inc. (Max Mine and Mill)"


• September 17, 2015 "Discovery Ventures Inc. acquires 100% interest in the Willa Property"


• September 16, 2015 "Discovery Ventures Inc. Announces Release of Agreement with 0951719 B.C. Ltd"


• September 4, 2015 "Discovery Ventures Inc. Announced Debt Settlement"


• August 5, 2015 "Discovery Ventures Inc. Provides Update on Progress of Amended Preliminary Economic Assessment"


• July 9, 2015 "Discovery Ventures Inc. appoints new CEO and Chairman of the Board"


• July 6, 2015 "Discovery Ventures Makes Formal Application for a 10,000 Tonne Bulk Mine Permit for Willa Project"


• July 3, 2015 "Discovery Ventures Inc. Clarifies Technical Disclosure"


• June 10, 2015 "Discovery Ventures Announces Definitive Agreement For $7 Million"


Willa Gold Project Summary - 5,329 hectares, 2.5% NSR royalty


• The project has seen $18M in exploration costs from 1980 – 2005 exploration costs by BP Minerals, Rio Algom and others.

• 596 drill holes totaling 57,250 m & 2,575 m of Underground workings


Figure 5. Willa Gold Project - Willa is situated on mountainside with steep topography and little opportunity for mill site, tailings storage or other facilities.


2012 Updated 43-101 Resource Estimate:

shown with different cut-off grade ranges of 1.5, 2.5 and 3.5 g Au/t:



(g Au/t)


Gold(g Au/t)


(g Ag/t)
















The base case estimate in the measured resource category is 496,000 tonnes grading 7.18 g/t gold, 0.94 % copper and 12.16 g/t silver. 


(g Au/t)


Gold(g Au/t)


(g Ag/t)
















The base case estimate in the indicated resource category is 262,000 tonnes grading 5.71 g/t gold, 0.67 % copper and 13.26 g/t silver.



(g Au/t)


Gold(g Au/t)


(g Ag/t)
















The base case estimate in the inferred resource category is 74,000 tonnes grading 3.39 g/t gold, 0.29 % copper and 5.42 g/t silver.

Click to access

November 2012

NI 43-101 Technical Report

on Willa Property




Figure 6. (above) Willa Gold Mine Project resource model, with inset images of both portals and past drilling - never previously mined, turnkey ready.


View a short embedded video showing the Willa gold deposit in 3D and overview of the WillaMAX operation:




Large resource growth expansion potential:


Discovery's neighbor's recent results affirm belief that the entire mountainside hosts multiple mineralized zones




Figure 7a. (above) partial claim map of discovery's Willa (in white) & location of neighbor (seen to the left) - The Willa deposit is ideally situated on a mountainside, and it is believed the entire side of the mountain is ripe with high-grade gold-laden material. DVN's neighbor has this summer-2015 affirmed that the Discovery's resource expansion model is sound with the announcement (on August 18th, 2015) that it drilled-off stellar intercepts near the property line, only about ~600 m from Discovery's Willa deposit, including 16.9 m of 13.58 g/t Gold, including 10.9 m of 20.61 g/t Gold, and 11 m of 20.66 g/t Gold.



Figure 7b. (above) underground view -- The neighbor's project is called the "LH Property" and the its claims were part of a recent qualifying transaction -- DVN.V can look forward to continued news flow that proves up Discovery's model.


The Willa deposit itself is open with one of the last holes drilled on the property encountering 105 m of almost 7 g/T gold, also grades tend to increase with depth (e.g. >15g/t Au). DVN.V can continue to drill and quickly expand the deposit from underground with some straight-shot drill holes, some step-outs, and drill some of the inferred sections by 50 m intervals.


MAX Molybdenum Mine Project Summary


Although the molybdenum mine is not the focus of Discovery's attention currently (the Mill above the moly is), this moly resource is an exceptionally valuable holding asset that can be put back into production when the commodity price improves. PEA on the moly alone yields a Net Present Value (@10% discount) of $40M when using $15/lb Mo.


Figure 8. Max Mill - above moly mine

• Total mined to date = 430,000 T at 0.5% Mo (mine diluted head grade)

Figure 9. Max Molybdenum Mine design - from Preliminary Assessment Report


  • $80M spent on mine development & expansion.

  • $15m (1980’s) exploration by Newmont and Esso.

  • Phase 1 production late 2007, stalled by sustained low prices late 2011.

  • Phase 2 (1,000 tpd) Expansion and Development 90% completed.

Click to access

Technical Report

MAX Molybdenum Project

NI 43-101


Click to access

MAX Molybdenum Project

Preliminary Assessment

Scoping Study


WillaMAX 2012-PEA Model Summary


The Consolidated Willa + MAX Project includes;
  • Cash flow model estimate based on initial 4.5 years.
  • Mining, trucking, processing 748,826 Tonnes.
  • Production of 105,000 oz Au, 238,000 oz Ag, 6.1MT Cu.
  • Three concentrate products:
      1) Copper Concentrate (Budget costs Trafigura), Gravity,
      2) Gold (sold direct),

      3) Pyrite concentrate (sold or stored),
  • Total Base Case Revenue $164M (@ $1200Au)
  • Total CAPEX $11.8M (includes MAX Acquisition)*


* It appears DVN.V is actually paying less than was anticipated in the PEA.


  • Cash Cost Estimate = $680/ oz Au

  • WillaMAX NPV10 = $55M (*Base Case $1200Au)
  • MAX Molybdenum NPV10 = $40M (@ $15/lb Mo)
  • Gold price improves (NPV10 = $83M @ $1500Au)
  • Moly price increase will trigger production
  • Trucking Willa material to MAX delivers robust economics:





Figure 10. (above) Max Mill Facility


Figure 11. (above) Ball at Max Mill



Figure 12. (above) Max Mill - Metallurgical bulk samples confirmed recoveries between (Au) 80-84 % and (Cu) 90-94% at a concentrate grade of 20-24% copper. Testing has indicated that a pyrite/gold concentrate is viable and should increase gold recoveries and project economics.



Discovery Ventures' Key Technical Leadership and Management  Skip to top


Dan Omeniuk, CEO, Chairman, Director

Dan is the president of Trappers Transport, a North American Leader is providing temperature controlled transportation services. Dan is the founder of Trappers Transport and has led this company from a being a small business to an industry leader over the last 30 years. Dan’s company recently agreed to a $7M credit facility to advance to the WillaMax Project.


Akash Patel, President, Director

Mr. Patel has worked in the investment industry for over 6 years with junior companies from inception and incorporation to final listing. Having acted as CEO and director of several public companies, and as the head of his own consulting firm, Mr. Patel specializes in the assistance of initial public offerings as well as all regulatory filings. Mr. Patel has received a bachelor in accounting from the British Columbia Institute of Technology with a major in accounting and minor in finance. He also has over 10 years of corporate tax experience and has been an active board member and contributed to the start up of Makena Resources Inc (CAJ) and WestKam Gold Corp (WKG). Currently, Mr. Patel is still on the Board of Directors for WestKam Gold Corp.

Walter Marting, Director

Walter A. Marting, Jr. has spent a large part of his career both as a senior executive for a Fortune 500 mining company and starting and running his own junior gold mining company. Mr. Marting joined Amax Inc. as an underground mine Production Supervisor at Amax's Climax Molybdenum property in Climax, Colorado. Mr. Marting spent two years working underground and in Climax's open pit operation before moving to the Company's headquarters in Greenwich, CT. In 1982 Mr. Marting was named Vice President --- Finance for Amax Europe in Paris, France. Mr. Marting helped build Amax's global mining presence from its Paris headquarters and had financial oversight of the company's European and African exploration and development and ore processing activities. He left Amax in 1984 to start his own mining company that undertook the re-opening and operation of the famed 16-1 Mine in Allegheny, CA.


Kenneth C Phillippe, B. Comm, CA., Chief Financial Officer

Mr. Phillippe is a Chartered Accountant licensed to practice in British Columbia. He received a Bachelor of Commerce degree from the University of British Columbia in 1976 and obtained his professional accounting designation in 1981, after articling with the firm of Thorne Riddell (now KPMG). In 1982 he established a private accounting practice. From 2000 to 2005, Mr. Phillippe served in various positions including director, officer and chair of the audit committee of MDX Medical Inc., a Vancouver-based medical device company. In 2006 he accepted the position of Chief Financial Officer of Columbia Goldfields Ltd., a junior gold mining company that reported under the U.S. Exchange Act. In addition, Mr. Phillippe served at times as the Secretary, Treasurer, Chief Financial Officer and Principal Accounting Officer of Amazon Goldsands Ltd. from 2006 to 2010 and of Constitution Mining Corp. from 2007 to 2010, both of which companies report under the U.S. Exchange Act. Since 2006 Mr. Phillippe has been Chief Financial Officer of Exchequer Resource Corp. From 2006 to August 2010 Mr. Phillippe was a director and the Chief Officer of Bold Ventures Inc., the latter of which achieved a listing on the Toronto Venture Exchange in October 2007. In 2009 Mr. Phillippe was appointed Chief Financial Officer of Advanced Proteome Therapeutics Corporation.


Neil Hill Morgan, Director

Mr. Morgan has over 30 years of business experience encompassing a wide range of corporate experience in sales, management and ownership of many successful business enterprises.  


Robert Robson, Process Metallurgist

Mr. Robson is a process metallurgist with over 30 years of experience in the mineral processing industry. His experience includes lab, pilot plant, mill and process supervision as an employee and consultant. His specialties are copper, gold and sulphide flotation, tungsten oxide flotation, gold cyanide heap leaching, and environmental compliance. During his career, he was a process and mill superintendent for 15 years and process metallurgist for 5 years. His responsibilities and duties covered all aspects of metal recoveries and supervision of all mill and assay lab employees. He was also responsible for environmental compliance at three mines in Canada, which included monitoring, waste water treatment and government reporting. Mr. Robson has worked in Canada, the USA and Mexico for copper, gold and tungsten flotation. Mr. Robson holds a Diploma of Mining Technology from BCIT and specialized in the extractive metallurgy aspects of this program.



Note: This article is not intended to be a complete overview of Discovery Ventures Inc. or a complete listing of Discovery's projects. Mining MarketWatch urges the reader to contact the subject company and has identified the following sources for information:


For more information contact Discovery Ventures' head office at: Ph (250).545.0383


Company's web site:   SEDAR Filings: URL


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Content found herein is not investment advice see Terms of Use, Disclosure & Disclaimer. This is a journalistic article and the author is not a registered securities advisor, and opinions expressed should not be considered as investment advice to buy or sell securities, but rather journalistic opinion only. Technical mining terms used by the writer may be used/expressed in simplified layman terms and should not be relied upon as appropriate for making investment decisions unless the reader contacts the company directly for independent verification.




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