Capitan Silver update boosts contained metal over 120% at Cruz de Plata

[Ben Graham]

A resource update for Capitan Silver’s (TSXV: CAPT) Cruz de Plata silver-gold project in north-central Mexico’s Durango state lifts contained ounces in the inferred category by more than 120%.

The update, which focuses only on the Capitan Hill portion of the project, gives the deposit about 39.8 million inferred tonnes grading 0.41 gram gold per tonne for 525,000 oz. gold and 3.3 grams silver for 4.2 million silver oz., Capitan said in a release on Friday. That represents a 72% rise in contained gold and a 129% increase in contained silver compared to the initial resource from 2020.

“While silver remains our primary focus and the strongest driver of value at Cruz de Plata, the updated in-pit constrained gold resource at Capitan Hill adds real strength to the project,” Capitan Silver CEO Alberto Orozco said in a release. “The growth we achieved with limited drilling highlights the quality of the system and the optionality it brings to our silver-focused district.”

Mid-tier by metal

The update positions Capitan Hill as a mid-tier gold-silver project in silver-rich Durango by contained metal, though its comparatively low grade and early-stage deposit puts it behind larger projects like Silver Storm’s (TSXV, US-OTC: SVRS) La Parrilla and Southern Silver’s (TSXV: SSV) Cerro Las Minitas.

Capitan Silver shares gained 2% to C$2.40 apiece on Friday morning in Toronto, valuing the company at C$282.1 million. The stock has traded in a 12-month range of C22¢ to C$2.48.

The pit-constrained update for Capitan Hill gave it a cut-off grade of 0.18 gram gold and assumed a gold price of C$3,465 ($2,500) per ounce. Cruz de Plata is made of the Capitan Hill and Jesus Maris deposits, with the former accounting for about 1% of the total project area.

12,209 metres of drilling

The resource update was based on 12,209 metres of reverse circulation (RC) drilling across 49 holes conducted at Capitan Hill in 2020-2021. Capitan Silver has finished about two-thirds of its expanded 15,000-metre drilling program for this year.

Drilling is expected to continue at Cruz de Plata until Dec. 20, with another six to seven RC holes targeted for drilling before the holiday break. The drilling is to focus on the down-dip expansion of the Jesus Maria silver trend and other high-grade areas.