Discovery Ventures Acquires 100%-Ownership of Max Mill for Fraction of Replacement Value, Targets Pouring First Gold Bar in Q3-2016

NEW YORK, NY / ACCESSWIRE / October 7, 2015 / Discovery Ventures Inc. (TSX VENTURE:DVN) (OTCQX:DTVMF - News) (Frankfurt:0DV.F - News) this week announced securing 100% ownership of the Max Mill & Mine located in the Revelstoke mining division of British Columbia, Canada. Mining MarketWatch Journal has published an overview of the opportunity afforded investors as DVN.V 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 (expected to be received this fall-2015). The best part is Discovery is acquiring 100%-ownership of Max Mill for fraction of replacement value along with acquiring a loss-carry-forward windfall on the books of ~$50 million, and 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 full Mining Journal review may be viewed at http://miningmarketwatch.net/dvn.htm online.

The intrinsic value of the DVN.V relative to its current market capitalization of ~$13 million (~80M shares outstanding X ~16 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 WilliMAX 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)").

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.

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 ~$365/oz price differential for gold in Canadian dollars over US dollars.

Salient share details of Discovery Ventures Inc. TSX-V: DVN
Shares issued: 78,652,498
Options: 2,000,000 @ 0.18 & 3,991,999 @ 0.25
Warrants: 22,247,580 @ 0.35
Fully Diluted Shares: 106,898,077

Following Planned Share Issuances:
Max Acquisition: 6,000,000
Fully Diluted Cash: $6.4M
Future incentive stock options: 5,000,000
Planned Total and Fully Diluted Shares: ~118M

The full Mining Journal review may be viewed at http://miningmarketwatch.net/dvn.htm online.

This release may contain forward-looking statements regarding future events that involve risk and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual events or results. Articles, excerpts, commentary and reviews herein are for information purposes and are not solicitations to buy or sell any of the securities mentioned. Readers are referred to the terms of use, disclaimer and disclosure located at the above referenced URLs.

Contact information:
James O'Rourke, Editor-in-chief
Mining MarketWatch Journal
editor@miningmarketwatch.net

SOURCE: Discovery Ventures Inc.