Cruz de Plata Project Triples Target Footprint as Capitan Silver Launches 60,000-Meter Drill Campaign

• Capitan Silver raised $29 million and announced a 60,000-meter drill program for 2026 to explore its Cruz de Plata silver project in Durango, Mexico, expanding from 7 to 20 kilometers of vein targets
• Company fully consolidated property in 2025, removed major royalty, increased gold resources by 115% to 525,000 ounces, and identified a complete mineral system from high-grade silver to disseminated gold
• Focus remains on shallow drilling (150-300 meters depth) along Jesus Maria trend for cost-effective resource development, with strategy to test multiple new targets using reverse circulation rigs
• Team plans to develop Cruz de Plata into an operating mine rather than early sale, comparing it to successful Mexican intermediate sulfidation systems like Penasquito and MAG Silver's Juanicipio
• Capitan Hill gold deposit provides optionality for potential heap leach starter project, though primary focus stays on high-grade silver system where management sees largest value creation

Capitan Silver CEO Alberto Orozco outlined an ambitious exploration and development strategy for 2026 following a transformative year that saw the company consolidate its Cruz de Plata project in Durango, Mexico. In a comprehensive interview, Orozco detailed how recent property acquisitions, a $29 million financing, and evolving geological understanding have positioned the company to explore what management now views as a complete mineral system rather than a simple high-grade silver trend. With 60,000 meters of drilling planned and multiple technical catalysts ahead, Capitan Silver represents a case study in systematic project de-risking while maintaining discovery upside.

Transformative 2025 Achievements

The company executed several strategic initiatives in 2025 that fundamentally altered Cruz de Plata's scale and potential. Capitan Silver fully consolidated the property through two acquisitions totaling $5 million, eliminated a significant royalty burden, and expanded drilling that delivered what Orozco described as "some of the best results we've had to date."

The team also updated mineral resources on the Capitan Hill gold deposit, increasing resources by 115% to 525,000 ounces of gold in pit-constrained measurements.  

Key personnel additions brought experienced mine developers and operators from Argonaut Gold, where Orozco and several team members previously worked together. The year culminated with a $29 million raise completed between December and early January, providing a substantial runway for the expanded 2026 program.

Geological Understanding Evolution

Property consolidation revealed Cruz de Plata to be substantially larger and more complex than initially recognised. What began as a 7-kilometer silver vein trend has expanded to 20 kilometers of vein targets as geological mapping identified a circular intrusive contact controlling mineralisation.

The system exhibits characteristics of intermediate sulfidation epithermal mineralisation, comparable to major Mexican deposits including Penasquito and MAG Silver's Juanicipio. Mapping revealed the high-grade silver system sits near the contact between an intrusive body and sedimentary rocks, with this contact extending westward and northward. Additional structures cut through the intrusive itself, while the Capitan Hill gold deposit represents the cooler, more distal portion of the system.

2026 Drilling Strategy for Resource Development

Capitan Silver announced a 60,000-meter drill program for 2026, a substantial increase from the 15,000-meter program just completed. The strategy balances resource definition on the advanced Jesus Maria trend with early-stage testing of newly identified targets.

Most drilling will focus on Jesus Maria, where the company has demonstrated high-grade continuity over approximately 2.5 kilometers of strike length. Previous work concentrated on shallow holes (top 150 meters) to cost-effectively test as much structure as possible. The 2026 program will extend drilling to 150-300 meters depth while maintaining shallow exploration on new targets.

"Our goal was to drill as many shallow holes along the trend as we could because we understood that it takes a lot of holes to find the high-grade zones and we wanted to be really effective spending as little amount of money as possible to test as much as we could of the structure." 

The company will deploy both diamond and reverse circulation (RC) rigs, with RC equipment focused on rapid, cost-effective testing of western, northern, and intrusive-hosted targets that have never been drilled. Diamond drilling will concentrate on resource expansion and deeper extensions at Jesus Maria.

Orozco acknowledged that similar intermediate sulfidation systems typically require over 100,000 meters of drilling to fully define resources, suggesting the current program represents early-to-middle stage exploration despite already demonstrating significant silver continuity.

Interview with Alberto Orozco, CEO, Capitan Silver

Economic Advantages of Shallow Mineralisation

Management emphasises that Cruz de Plata's outcropping nature provides substantial economic advantages throughout the project lifecycle. Shallow mineralisation reduces drilling costs during exploration and would significantly lower development capital compared to deeper deposits requiring extensive underground infrastructure.

The company is simultaneously advancing permitting, community relations, and environmental baseline work rather than waiting for resource definition. This parallel-path approach aims to de-risk development timelines while exploration continues. Regarding development strategy, Orozco stated clearly: 

"We're developing this for the long haul. We see a very big system here and we're very excited about it. We don't want to sell it early. The potential is for the long term." 

The team intends to build and operate Cruz de Plata rather than pursue early monetisation, leveraging their collective experience developing and operating mines in Mexico.

Capitan Hill Gold Optionality

The 525,000-ounce Capitan Hill gold deposit, while not the primary focus, provides strategic optionality as a potential heap leach starter project. The oxide gold mineralisation could support relatively simple, lower-capital development that might generate cash flow to fund underground silver mining.

"The gold deposit makes a lot of sense to do a very quick start. It would be an open pitable heap leach project which tends to be lower in cost, faster to develop, much more simple, which could also give you the capital to move to the next stage and go into an underground milling operation with the silver." 

However, he was emphatic that silver remains the priority: 

"Make no mistake, our focus is the silver and this is where we believe that the big prize is. We're not drilling the gold right now." 

The company conducts only infill drilling to upgrade gold resources from inferred to measured and indicated categories, with all major exploration efforts directed toward silver targets. This positioning reflects both the superior economics management sees in high-grade silver and a desire to avoid market confusion about the company's core value proposition.

Metallurgical Characteristics Across the System

Cruz de Plata exhibits distinct metallurgical zones that inform targeting and economic modelling. The Jesus Maria trend carries high-grade silver with polymetallic credits including lead, zinc, and gold, with gold appearing relatively homogeneous along strike.

A younger mineralisation event created the Gully Fault zone, which contains only silver and gold without base metals. Some eastern portions of the Jesus Maria trend show similar silver-gold-only signatures, though geological relationships remain under investigation.

"Very interestingly this project is very purely silver even when we have some base metals or gold in it the driver of the value is always the silver - very much so." 

Additional targets within the intrusive show silver-gold and sometimes gold-only structures, while the Nube target southeast of Jesus Maria exhibits geology identical to Capitan Hill's gold system. This diversity requires tailored exploration approaches but ultimately enhances the project's development optionality.

Team Capabilities in Advancing Cruz de Plata

Capitan Silver's technical team comprises professionals who worked together through multiple cycles at Argonaut Gold and predecessor companies. This continuity provides both geological expertise specific to Mexican epithermal systems and operational experience building and running mines.

The CEO acknowledged concerns about talent and contractor availability as exploration activity accelerates across Mexico, but expressed confidence that team motivation and project quality will support retention. He compared mineral exploration decision-making to poker, where budget allocation requires constant risk evaluation based on evolving results.

Looking ahead, Orozco expects high news flow throughout 2026 as multiple rigs operate simultaneously and approximately 50 unreleased holes from the previous program continue rolling out in coming weeks. An aerial geophysical survey expected in the first half will further refine targeting across the expanded property position.

The Investment Thesis for Capitan Silver

• Scale Expansion: Property consolidation increased vein targets from 7 to 20 kilometers, transforming Cruz de Plata from a silver trend into a complete mineral system comparable to major Mexican intermediate sulfidation deposits
• Cost-Effective Exploration: Outcropping mineralisation enables shallow drilling that significantly reduces per-meter costs while delivering high-grade silver intercepts, with strategy to test multiple targets rapidly using RC rigs
• Experienced Team: Management and technical personnel with proven track record developing and operating Mexican mines, providing confidence in ability to advance Cruz de Plata through resource definition toward production
• Strong Financing Position: Recent $29 million raise fully funds 60,000-meter drill program with no near-term dilution pressure, allowing systematic exploration of expanded target set
• Development Optionality: 525,000-ounce Capitan Hill gold deposit provides potential heap leach starter project to generate early cash flow, though primary value lies in high-grade underground silver
• Strategic Clarity: Management committed to building operating mine rather than early asset sale, with parallel work on permitting and community relations de-risking development timeline
• Silver Market Tailwinds: Rising silver prices improve project economics while M&A activity in sector validates intermediate sulfidation systems as strategic assets
• Near-Term Catalysts: Approximately 50 unreleased drill holes from previous program plus aggressive 2026 drilling schedule ensures consistent news flow and potential discovery upside

Macro Thematic Analysis

Capitan Silver's Cruz de Plata project exemplifies how systematic property consolidation and geological reinterpretation can unlock substantial value in established mining districts. The transformation from a 7-kilometer silver trend to a 20-kilometer mineral system demonstrates the importance of controlling strategic land positions around high-grade mineralisation. 

Mexico's proven epithermal districts continue attracting capital as intermediate sulfidation systems like Penasquito and Juanicipio validate the exploration model. Rising silver prices create favorable economics for high-grade underground scenarios while reducing pressure for premature development decisions. The outcropping nature of Cruz de Plata provides cost advantages throughout the project lifecycle. As Orozco noted: 

"We have a very complete system. It's still pretty much intact, but it's right at the surface. We have multiplied the length of our targets."

TL;DR

Capitan Silver transformed Cruz de Plata from a 7-kilometer silver trend to a 20-kilometer mineral system through strategic property consolidation, while raising $29 million to fund 60,000 meters of 2026 drilling. The outcropping intermediate sulfidation system offers cost-effective exploration and development potential comparable to major Mexican deposits, with management focused on building an operating mine rather than early monetisation. Additional optionality from the 525,000-ounce Capitan Hill gold deposit provides potential starter-project cash flow, though high-grade silver remains the primary value driver.

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