Capitan Silver’s 60,000m Drill Campaign Targets Scale at Durango’s Cruz de Plata

• Capitan Silver is roughly halfway through a fully-funded 60,000 metre drill programme, running four rigs simultaneously to test the Jesus María trend alongside newly-permitted step-out targets.
• The Jesus María trend has now been drilled along a continuous strike length of 2.5 km, part of a surface-sampled mineralised trend and a cumulative 21 km of vein structures across the property.
• Silver accounts for 75-95% of the project's AgEq value, and management's internal benchmark for a credible first resource is around 100 Moz AgEq.
• The company maintains a royalty-free, tightly-held capital structure, with over 70% of shares held long-term and no free shares issued to founders, management or bankers.
• Management's technical team includes former Argonaut Gold personnel who built three mines on time and on budget operating in Durango which is ranked Mexico's safest mining state for 2025.

Silver prices near record levels have sharpened investor focus on companies that can demonstrate genuine district-scale potential rather than isolated high-grade hits. Capitan Silver Corp. (TSXV:CAPT) is positioning itself squarely in that category. The company is roughly halfway through an announced 60,000 metre drill programme at its Cruz de Plata silver-gold project in Durango, Mexico, and CEO Alberto Orozco says the priority this year is proving scale, not rushing out a resource.

Cruz de Plata Project Overview

Cruz de Plata sits within the historic Peñoles mining district, first developed in the late 1890s and now being systematically explored for the first time since the Mexican Revolution. The project's most advanced target, the Jesus María trend, has been drilled along a continuous strike length of 2.5 km, part of a broader 3.7 km outcropping mineralised trend and a cumulative 21 km of vein structures mapped across the wider property.

Orozco described the geological continuity as a defining feature of the project. 

"Here the structure is very continuous. It's very predictable. And all of the holes we've drilled, with the exception I think of one, have hit the structure always where we expected it to be."

Grades along that strike length have included intercepts of up to 1 kg/t silver over two to three metres in multiple zones, sitting within broader mineralised envelopes as wide as 40 m at surface, grading between 100 and 300 g/t silver equivalent (AgEq). Orozco estimates the underlying high-grade structure averages five to ten metres in true width along the full strike length.

Importantly for investors weighing silver-equivalent headline numbers against the underlying commodity mix, Orozco was clear that the deposit is a primary silver system rather than a base-metals story dressed up in AgEq terms. Silver typically accounts for 75-95% of the AgEq value depending on location, rising to more than 95% in the eastern portion of the trend. A metal zonation pattern - more base metals to the west, thinning toward the east - is being used by the technical team as a vectoring tool to help target the deeper, un-tested portions of the system, rather than as a meaningful economic contributor in its own right.

Drilling Strategy and Financial Metrics

Four rigs are currently active across the property - one reverse circulation (RC) rig and three diamond core rigs - with drill rates accelerating as additional rigs have come online through the year and the RC rig moves to double shifts. Orozco, whose background includes roughly two decades of RC drilling experience from his time at Argonaut Gold, explained the rationale for leaning on the cheaper, faster method to screen new targets before committing to core drilling.

"It's about getting as many hit points as you can. It gives me more holes to drill with the same budget, but it's also very reliable. We've been using this method for about 20 years with Argonaut and other companies before."

Capitan Silver's balance sheet supports the accelerated pace. The company raised a total of C$29 million in late 2025 to fund the fully-funded 2026 programme, and as reported a market capitalisation of $212.0 million as of August 2026. Over 70% of the share register is tightly held, with no free shares issued to founders, management or bankers, and most shares issued at $0.20. Two of the company's last three financings priced at a premium of more than 30% to market, each led by a new strategic investor. Management has also contracted to eliminate all remaining royalties on the project, a structural feature the company highlights as increasingly rare among Mexican silver developers of scale.

Interview with Alberto Orozco, CEO of Capitan Silver

Exploration Targets and Path to Resource

Beyond Jesus María, the company recently secured permits to drill a series of additional targets identified through geological mapping, surface sampling and a newly-completed airborne geophysics programme, which Orozco said brought the project's mineral system model "really alive" by confirming the same C-shaped structural trend seen at surface in both resistivity and conductivity data at depth. Targets including Casco Norte, La Purísima and Jesus María Northwest have never been drill-tested and are being prioritised using a layered dataset of grade, structural continuity and geophysical response.

Orozco was explicit that a maiden resource is not the near-term priority. Because the 2026 programme is entirely step-out drilling rather than infill, any resulting resource would be classified as inferred. Management's internal benchmark for a credible first silver resource is around the 100 Moz AgEq threshold, a level Orozco said the company does not expect to be "too far" from once the current programme concludes, though further drilling would still be required to firm that figure up through additional density.

Competitive Positioning

Capitan Silver frames Cruz de Plata as an intermediate sulphidation epithermal system, a deposit type responsible for some of Mexico's largest and most valuable silver discoveries, including Fresnillo, Juanicipio, Las Chispas, Los Gatos, Panuco and San Dimas. Recent M&A in the sector - SilverCrest's Las Chispas sold to Coeur Mining for US$1.8 billion, Gatos Silver's Los Gatos sold to First Majestic for US$0.97 billion, and Mag Silver's Juanicipio sold to Pan American for US$2.1 billion - has narrowed the pool of single-asset silver explorers offering both grade and scale, a dynamic management believes works in Capitan's favour. Peer-comparison data prepared by Stifel Canada shows Capitan trading at a discount to the average AgEq resource peer group on both market capitalisation and enterprise value, though the company does not yet carry a disclosed resource figure against which to benchmark grade and ounces directly.

Management's pitch to institutional investors centres on three pillars: deposit quality and scale, an execution-proven team, and jurisdiction. On the team, the company has reassembled several of the same individuals responsible for building and operating three mines at Argonaut Gold. On jurisdiction, Durango was ranked the safest state for mining in Mexico in the 2025 Mexico Peace Index, and the project benefits from paved highway access and an existing power line running through the property.

The Investment Thesis for Capitan Silver

• Cruz de Plata is a primary silver system (75-95% of AgEq value from silver) within an intermediate sulphidation epithermal deposit type responsible for several billion-dollar Mexican silver discoveries and recent M&A.
• The Jesus María trend shows 2.5 km of continuously drilled strike length within a broader 3.7 km surface-sampled structure and 21 km of cumulative vein trend identified across the consolidated property.
• Drilling to date has been shallow (targeting the top 500 m in 2026) relative to comparable systems with vertical continuity to 800 m or more, leaving room for depth expansion.
• Four active rigs and an accelerating drill rate through 2026 should generate a steady news flow of assay results for the remainder of the year.
• Management does not intend to rush a maiden resource; the stated internal benchmark is around 100 Moz AgEq, with any near-term estimate likely classified as inferred given the step-out-focused drilling.
• A disciplined, royalty-free capital structure with over 70% tightly held shares, no free founder shares, and premium-priced recent financings supports alignment with new shareholders.
• Monitor upcoming assay results from the western, deeper portion of the Jesus María trend and from newly-permitted targets (Casco Norte, La Purísima, Jesus María Northwest) as the next potential re-rating catalysts.

Macro Thematic Analysis

Silver's structural narrative - industrial demand from solar and electronics running ahead of mine supply, alongside renewed monetary-driven investment interest - has pushed prices to levels not seen in decades, and with that has come a scramble among generalist and specialist funds alike to find single-asset explorers that combine genuine grade with genuine scale. Recent consolidation of the sector's best-known development and production assets through M&A has reduced the number of pure-play silver names available to institutional buyers, a dynamic management at Capitan Silver is explicitly positioning the company to benefit from.

Orozco framed the institutional case for Cruz de Plata around two questions large investors ask before committing capital to a junior explorer, beyond the underlying rock: 

"They need to believe two things: that the project is in good hands, a good management that it's got a team that has done that before, has had success in the past. And the second one is where it's located." 

For Capitan Silver, that translates into a mine-building team with an Argonaut Gold pedigree operating in Durango, a state the company argues offers both the safety record and infrastructure institutional capital increasingly screens for when weighing Mexican exploration exposure against jurisdictions perceived as higher-risk. With Jupiter Gold & Silver Fund, Michael Gentile and Construplan already anchoring the register, and financings consistently priced at a premium, the early institutional signal appears aligned with that thesis - though the company's ultimate ability to convert exploration success into a bankable resource, and eventually a construction decision, remains the test ahead.

TL;DR

Capitan Silver (TSXV:CAPT) is roughly halfway through a fully-funded 60,000m drill programme at Cruz de Plata, Durango, testing its 2.5km Jesus María silver trend at depth and along strike, plus new step-out targets. CEO Alberto Orozco says the priority is proving scale - internally benchmarked around 100 Moz AgEq - before a maiden resource, which would be inferred given the step-out focus. The project is primary silver (75-95% of AgEq), royalty-free, and backed by a tightly-held share register and an Argonaut Gold-alumni team.

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