Silver-Gold Double Play Attracts $5.3M For 10,000m Drilling Campaign

• Capitan Silver is an exploration company focused on silver and gold in Durango, Mexico, led by CEO Alberto Orozco, with a project located in the middle of Mexico's silver belt.
• The company's main asset features high-grade silver mineralization with intercepts showing 3 kg/ton silver within broader 10-meter zones of 300+ g/ton silver.
• The project involves an intermediate sulfidation deposit (similar to silver deposits acquired by majors) with 1.3 km of drill-confirmed mineralization along a 2.6 km surface trend, with mineralization starting at surface.
• Capitan Silver recently raised $5.3 million (at a premium) including investment from Jupiter Asset Management, and announced a 10,000-meter drill program targeting extensions of their Jesus Maria vein.
• The company has both a high-grade silver vein system and a separate oxide gold deposit (currently 300,000 oz. inferred) on the same property, potentially allowing for combined development.

Capitan Silver (TSXV:CAPT) is advancing an exploration project in Durango, Mexico, strategically positioned in the heart of Mexico's prolific silver belt. In a recent interview, CEO Alberto Orozco outlined the company's exploration activities, recent financing, and the dual nature of their property that features both high-grade silver veins and a separate oxide gold resource. The company has recently raised capital at a premium and secured strategic investment to fund an upcoming 10,000-meter drill program. With Mexico potentially becoming more mining-friendly under its new administration, Capitan Silver is positioning itself to capitalize on its geological advantages in a jurisdiction that produces more silver than any other country in the world.

Strategic Location in Mexico's Silver Belt

Capitan Silver's project is located in Durango, Mexico, positioned between Zacatecas and Chihuahua in what is known as the Mexico Silver Belt. According to Orozco, 

"Mexico is the largest silver producer in the world. 80% of that silver produced in Mexico comes from the Mexico silver belt between Zacatecas and Chihuahua. Right in the middle is Durango, and right in the middle of that silver belt, that's where our project is located."

This regional positioning places the company in a prolific geological setting with a long history of silver production. The property includes three historical mines that operated in the late 1800s until the early 1900s when operations ceased during the Mexican Revolution. The property subsequently became fragmented until 2022, when Capitan Silver acquired the final piece from Fresnillo PLC, completing their land position along the silver trend.

Geological Characteristics and Mineralization

The company's primary asset features a high-grade intermediate sulfidation epithermal system. This deposit type is particularly significant as Orozco points out: 

"Two good examples of intermediate sulfidation deposits today [are] Silver Crest, and Gatos Silver in Chihuahua." 

He emphasized that these types of systems tend to have "deep roots" with extensive scale both along strike and vertically.

Drilling has revealed impressive grades, including intercepts of 0.9 meters of over 3 kilograms per ton silver with significant gold values and base metals. Another notable intercept included 7 meters of just under 1 kilogram per ton silver with approximately 1 gram per ton gold in a different style of mineralization without base metals.

What distinguishes this project from many others is that the high-grade zones are contained within broader mineralized envelopes. The 3 kg/ton silver intercepts are typically within 10-meter zones averaging around 380 g/ton silver plus base metals, creating a more continuous mineralized body that could be more amenable to mining than narrow, isolated high-grade intercepts.

Current Project Status and Recent Progress

Capitan Silver has mapped and sampled their main vein system over a strike length of 2.5-2.6 kilometers on surface. Drilling has confirmed mineralization along 1.3 kilometers of this trend, with all holes encountering the target structure. Importantly, the mineralization outcrops at surface, which provides a significant advantage compared to many deposits that only start hundreds of meters below ground.

Orozco highlighted this advantage: 

"The mineralization comes right to surface. It outcrops. You can go visit the project and stand right on the veins, which is something that is a real advantage to our project. Because if you go to... many of these deposits start at 500 meters, 300 meters from surface before you start seeing mineralization. We are right on surface."

The company has completed approximately 11,000 meters of drilling (including 3,000 meters of historical drilling), primarily focused on the western part of the Jesus Maria vein. Recently, they acquired five additional drill holes from Fresnillo that immediately extended their mineralized trend by 500 meters to the east.

Recent Financing and Strategic Investment

In early 2025, Capitan Silver raised $5.3 million in a financing that featured several positive aspects for investors. The round was completed at a 40-cent price point, which represented a premium to the then-trading price in the low 30-cent range. This marks their second consecutive financing at a premium.

The company attracted Jupiter Asset Management as a strategic investor, along with continued support from existing investors including Michael Gentile and Mexican investors with regional expertise. The financing included a full warrant at 50 cents, which the company described as unusual for them but justified by the quality of strategic investment.

"We're funded," Orozco stated, noting that the capital would support their next phase of exploration. The company has demonstrated capital discipline while managing to attract institutional investment, which can be challenging for junior explorers.

Interview with CEO Alberto Orozco

Dual Asset Strategy: Silver Veins and Gold Oxide Deposit

A distinctive aspect of Capitan's property is that it hosts both high-grade silver veins and a separate oxide gold deposit within the same project area. While the company has pivoted its focus more toward the silver system, the gold deposit provides additional optionality.

The oxide gold resource is located just meters away from the silver vein system, creating potential synergies in development. Orozco explained that the gold deposit resembles the El Castillo and San Agustin mines that his team previously operated with Argonaut Gold, suggesting it could be developed as an open-pit, heap-leach operation.

This dual nature could enable a phased development approach: 

"If this works out to be a viable open-pit, heap-leachable deposit, talking about the gold, that could be a good starter, low-capex for your mine that could help you fund the underground milling operation for silver."

This strategy could potentially reduce initial capital requirements while providing early cash flow to support the more complex underground development of the silver resource.

Upcoming Work Program

Capitan Silver has announced a 10,000-meter drill program targeting several objectives:

1. Extension of the Jesus Maria vein to the east
2. Testing of the "Gully Fault" zone, which features gold-silver mineralization without base metals and appears to represent a different, potentially younger pulse of mineralization
3. Continued refinement of parallel vein targets to the north, including the Santa Teresa and San Rafael veins
4. Potential updating of their oxide gold resource

The company plans to update the resource estimate for their oxide gold deposit, which currently stands at 300,000 ounces in the inferred category. Since that initial estimate, Capitan has completed an additional 12,000 meters of drilling that doubled the footprint of the deposit, but they have not yet updated the resource figure.

Mexico Mining Environment

Orozco provided perspective on the mining environment in Mexico, acknowledging challenges under the previous administration but expressing optimism about improvements under the new President Claudia Sheinbaum.

"Mexico's been tough the last six years... [but] Mexico is really not that hard when you compare it to the rest of the world. Permitting has become impossible anywhere." 

He expressed confidence in President Sheinbaum's appointments for Secretary of Economy and Secretary of Environment, suggesting these officials understand the balance between economic development and responsible operation.

The company has already secured permits for their planned drilling program, and Orozco indicated that the new administration appears more supportive of mining investment, particularly for projects with strong community relations and environmental practices.

The Investment Thesis for Capitan Silver

• Strategic Location: Positioned in the heart of Mexico's Silver Belt in Durango, where 80% of Mexico's silver production occurs. Mexico is the world's largest silver producer.
• High-Grade Mineralization: Demonstrated high-grade silver intercepts (up to 3 kg/ton) within broader mineralized zones (10m of 300+ g/ton), creating mining-friendly geometries.
• Surface Exposure Advantage: Mineralization comes directly to surface, unlike many competing projects that only begin hundreds of meters underground, potentially reducing development costs.
• Intermediate Sulfidation Deposit Type: Similar to deposits acquired by majors like Silver Crest and Gatos Silver, with potential for significant depth extensions and scale.
• Two-in-One Asset: Property contains both high-grade silver veins and a separate oxide gold deposit (currently 300,000 oz inferred), offering development optionality and potential phased approach.
• Expanding Footprint: 1.3 km of drilled mineralization along a 2.6 km surface trend, with recent acquisition from Fresnillo providing immediate 500m extension.
• Funded for Growth: Recently raised $5.3M at a premium with institutional backing from Jupiter Asset Management, funding a 10,000m drill program.
• Strong Team: Management with regional experience from Argonaut Gold and notable board addition of Fernando Alanís, former CEO of Peñoles and Mexican Chamber of Mines president.
• Improving Jurisdiction: New Mexican administration under President Sheinbaum showing more mining-friendly approach, with permits already secured for drilling.

Macro Thematic Analysis

The silver market presents a compelling investment case driven by both industrial demand and monetary considerations. Silver's dual role as both a precious metal and industrial commodity positions it uniquely in the current macroeconomic landscape. Industrial applications continue to expand, particularly in green energy (photovoltaics), electronics, and medical uses, while silver's monetary properties remain attractive during periods of currency debasement and inflation concerns.

Mexico's position as the world's leading silver producer makes it a critical jurisdiction for silver supply. Companies operating in Mexico's silver belt, like Capitan Silver, benefit from established infrastructure and geological understanding while facing potential regulatory improvements under the new administration of President Sheinbaum. The consolidation trend among silver producers seeking to replace depleting reserves has put a premium on high-grade, scalable exploration projects.

Intermediate sulfidation deposits have become particularly attractive acquisition targets due to their scale potential and favourable metallurgy. This deposit type, which characterizes Capitan's project, has seen multiple acquisitions by major mining companies in recent years. Combined with surface-exposed mineralization that reduces development complexity, Capitan's project aligns with the attributes major miners seek in the current environment.

As CEO Alberto Orozco noted about the scarcity of quality projects: 

"We were just depleting the current good projects... We certainly felt while it was at Argonaut that we run out of good projects to build and develop." 

This highlights the growing premium for advanced exploration assets with demonstrated high grades in established mining districts.

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