Recovers silver from a single ore body in Chihuahua, Mexico using a carefully tuned heap leach process.
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- Depends onUpstream position: supplies 4 industries, depends on 1
- ScaleMarket cap is above the global median
Recovers silver from a single ore body in Chihuahua, Mexico using a carefully tuned heap leach process.
Discovery Silver Corp. recovers silver from its Cordero deposit in Chihuahua, Mexico, by crushing oxidized ore, stacking it on lined pads, and irrigating it with acidified solution that dissolves the silver out of the rock — a method called heap leach that works here specifically because Cordero's oxidized mineralogy makes the silver soluble in acid, while also making every other processing route inapplicable. The exact crush size, acid dose, and flow rates that achieve target recovery were derived from years of testing on Cordero's specific rock, so those parameters cannot be borrowed by a competitor at a different deposit, who would have to run the same multi-year test program from scratch. Scaling production means running more solution across more pad area, which requires more water drawn from a semi-arid watershed already parceled out by Mexico's National Water Commission among agricultural and municipal users with prior claims — so the ceiling on annual silver output is set by a regulatory queue, not by how much Cordero is willing to spend. If the full-scale pad underperforms the pilot recovery rates due to ore variability or acid channeling through the heap, there is no fallback processing method to switch to, because the same oxidized chemistry that made heap leach viable is what rules out every alternative.
How does this company make money?
Cordero sells silver by the ounce at prices set by the London Bullion Market Association's daily fix. Revenue from each sale is reduced by refining charges and the cost of transporting the metal to refineries and industrial buyers. When silver prices rise, revenue rises directly; when they fall, so does every dollar coming in, because the entire business is built around that single commodity price.
What makes this company hard to replace?
If buyers wanted to replace Cordero's silver with output from a new project, they would wait years for that project to clear permitting and build its infrastructure. Industrial users such as electronics and solar manufacturers also face internal qualification delays when they switch silver suppliers, because their production processes are certified against specific purity standards and supply chain requirements that a new source has to meet before it can be used.
What limits this company?
The size of the active leach pad — and therefore how many ounces of silver come out each year — is capped by how much water Mexico's National Water Commission allows Cordero to draw from the surrounding Chihuahua watershed. Farmers and towns in the same area already hold water rights, and expanding Cordero's allocation is a multi-year regulatory fight that money alone cannot shortcut.
What does this company depend on?
Cordero cannot operate without Mexican federal mining concessions and environmental impact permits, Chihuahua state water rights and extraction permits, electrical grid power from Mexico's CFE utility, a steady supply of sulfuric acid for the leach circuit, and road access for heavy equipment and reagents via the Highway 16 corridor.
Who depends on this company?
Silver refineries and fabricators that supply electronics manufacturers would face feed shortages if Cordero stopped producing. Solar panel makers that use silver paste in their cells would run short of that material. Investment silver dealers and exchange-traded funds that hold physical silver would lose access to a major primary source, affecting how much metal backs their products.
How does this company scale?
Crushing ore, stacking it onto pads, and running the solution circuit can be expanded relatively straightforwardly as production grows. The hard ceiling is water: getting more process water out of the Chihuahua watershed means competing with existing agricultural and municipal rights holders through a regulatory process that takes years and cannot be resolved by spending more money.
What external forces can significantly affect this company?
Because Cordero's operating costs are paid in pesos while silver is sold in dollars, swings in the peso-dollar exchange rate directly affect profit margins. Mexican federal policies on mining taxes and environmental review timelines — shaped by the AMLO administration and whoever follows — can delay or increase the cost of permits. On the demand side, North American efforts to reduce reliance on Chinese-sourced materials in electronics manufacturing are pushing buyers toward non-Chinese silver suppliers, which benefits Cordero.
Where is this company structurally vulnerable?
If the silver recovery rates achieved at full scale fall below what the pilot tests predicted — because the ore varies across the deposit, because liquid finds shortcuts through the pad, or because acid consumption runs higher than modeled — the economics fall apart. There is no backup processing method: the same chemistry that makes heap leach work here makes flotation and pressure oxidation useless on this ore.
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