Capitan Mining (CAPT) - High-Grade Silver & Gold with Big Backer
Capitan Mining Inc. is a Canadian gold-silver mining exploration company engaged in exploring the Peñoles project in Durango Mexico. Capitan is composed of a group of highly experienced professionals with a proven track record on exploration, development and operation of similar mining assets in Mexico. Capitan will work on expanding the mineralization at the Peñoles project.
We had a recent opportunity to speak with Alberto Orozco, CEO and Director of Capitan Mining, whose company is actively pursuing the Peñoles gold and silver opportunity located in Durango, Mexico. He discussed current activities and plans for development at the site.
Capitan Mining is a Vancouver, Canada-based gold and silver exploration company actively exploring the Peñoles project in Durango State, Mexico. The company is composed of a group of experienced professionals with proven track records in exploration, development and operation of similar mining assets in Mexico. Capitan’s work focuses on expanding the opportunity at the Peñoles project.
In addition to Orozco, the leadership of Capitan consists of Rob Scott, CFO; and Oscar Jimenez, Operations. The three-man board of directors consists of Orozco, John-Mark Staude, and Arturo Bonillas.
The Peñoles Project
The Peñoles Project includes an oxide gold prospect (referred to as El Capitan) and two historic silver mines (Jesus Maria and San Rafael) located in the historic Peñoles Mining District of Durango, Mexico. Gold and silver are hosted in mineralized vein networks, fault systems, skarns, and silicified volcaniclastic rocks. Historic mining appears to have been selective and non-systematic.
Over 85 holes have been drilled to date, totaling over 11,500 m of penetration. The results of this drilling indicate wide intervals of near-surface mineralization at El Capitan and Jesus Maria that may be amenable to open-pit development. The project has an established inferred resource of 305,000 oz. AU at 0.46 g/t and 15 M oz. AG at 62 g/t.
Orozco’s Company Brief
The CEO told us that Capitan is a new company solely focused on gold and silver. At the moment, they have a single project, the Peñoles project in the Durango jurisdiction of Mexico. The company has put together a great team with an excellent track record. Capitan is still early in the discovery process and resource-building process. It has a number of high-quality targets in addition to the historic mines on the property.
Management Assembly and Plan
The plan is to build the resource and value, then take the project through construction and into production. But first they had to build a competent team. So, over the last 16 years, they have been assembling a highly skilled and experienced group of people that have been working together for three different companies prior to Capitan: Piedmont Gold, Argonaut, and Linear Gold. All of these tenures were devoted to projects similar to the current Capitan opportunity, i.e. focused on developing the resource, recognizing the value and then taking them on to construction and production.
In the earlier situations, and now at Capitan, we started with an inferred resource but early on we recognized that more value was to be had. More exploration had to be done because the geology was highly supportive of that. We like to develop real projects in top-notch jurisdictions, he indicated. We also like to have good working relationships with the local community, he said.
Who Does What On The Team?
Given the emphasis he places on the team, we asked Orozco to fill us in about them. Bonillas is a well-known mine operator in Mexico, he told us, who brings the expertise to bring a project up to mine status. Staude is an explorer who has worked in Mexico since the 1980s. I myself, he said, have been involved in all stages of resource development including early discovery, development, construction and corporate affairs. The team’s network within Mexico is key to advancing projects such as Capitan, he told us.
The Attraction At Peñoles
We started looking at this project and early on we recognized undeveloped potential, the CEO told us. We thought that the resource estimate given from earlier work was premature. We knew as a team the recipe for success and wanted to apply that here. So, our main immediate focus, he said, is to expand the near-surface gold zone and develop an open-pit resource.
We pressed Orozco as to why he thought the earlier resource estimates were premature. They realized, he replied, that the geology shows great continuity along strike and laterally, and that there simply had not been enough drilling to evaluate the full extent of the resource. So far, their work has been confirming the continuity of the resource at the Capitan Zone proper and the ore deposit continues to be extended, he told us.
The whole project is reminiscent of the activity at the El Castillo and Saint Augustine projects just to the south, he told us. Both of those have a similar geology and have already been developed as mines.
Another thing about Peñoles that the team found attractive was the extensive database from earlier activities on the site. There was an entire package to be studied and evaluated.
Drilling Results So Far
We’ve seen some press releases come out regarding drilling. So we asked: Can you tell us about them? Orozco responded that they are exploring through the drill bit and reporting out the results as they go. He likes what they have seen so far: Consistency and continuity in the geology, the addition of new ore-bearing zones, and completely new targets, especially for silver. There are some new geologic features that will add materially to the resource estimate, he shared with us.
They are focused on delineating the size of the prize via step-out drilling, but not going too far out, at least at first. They are keeping with 50 to 100 m step outs for now. He was pleased to say that they have been “hitting on every hole”.
Funding and Spending Plan
We were aware that Capitan has recently raised US $3.2M, so we asked the CEO how he intends to deploy that. He responded that the bulk of this money would go into the drilling program. They have enough, he said to “take us a long way”, not only at Capitan itself, but at other targets as well.
This prompted another question: Can you tell us what the market expects when you release the additional drilling results? He told us that they intend to have some results on all three principal deposits, Capitan, San Rafael, and Jesus Maria, as well as other targets that they have in mind.
Orozco shared with us that one of their big shareholders is Mike Gentilly, a guy that is very aggressive and is interested in delivering value. They are delighted to have him as a strategic partner in the project. He tends to focus on things that have a real chance at becoming productive. He was impressed with the team and the quality of the opportunity. He clearly sees this as having a high possibility of becoming a mine in the near future.
The Plan Forward for Capitan
Going forward, Orozco laid out these plans for his team. First, they are going to expand the inferred resource. Then, he said, they plan on moving to the PEA. They own 100% of the asset at this point and they are eager to see this through.
We asked Orozco what could hold his plans back? He answered by saying that they are moving in a logical, stepwise fashion regarding the permitting process. For now, they are focusing on ensuring that they have the exploration permitting in place. They are saving the permitting for production, which is different, for later in the game, he told us.
He also shared that there are other opportunities like Capitan still available in Mexico. They are looking, and if the right one comes along, they may be interested.
The company has a long-term vision, he said: “We're here to transform this into a reality and to develop it as much as we can moving forward to its full potential”. He left us with this: “We believe that the target for 1Moz inferred resource gold equivalent is very real”.