Pan American drill results boost outlook at La Colorada

[Ben Graham]

Pan American Silver (NYSE, TSX: PAAS) reported major drill results from its La Colorada mine in Zacatecas, Mexico, pointing to new high-grade silver veins that could expand mineral resources, extend mine life and improve economics.

The company’s shares rose 3.6% to $35.80 in pre-market trading in New York following the news. Pan American, with a market capitalization of $15.1 billion, called the results a key success of its ongoing exploration program targeting the eastern zone of La Colorada, its largest silver-producing mine.

Senior vice-president of exploration and geology, Christopher Emerson, said drilling identified high-grade intercepts both below and along strike of the established vein system. The findings include a new style of high-grade replacement mineralization in the San Geronimo and Cristina zones. 

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The Canadian silver giant said these discoveries will be incorporated into updated mineral resource estimates when it reports annual reserves as of June 30, 2025.

Seven-month program

The results stem from about 65,000 metres of drilling across 170 holes completed between November 2024 and June 2025. The program extended the Mariana and NC2 vein systems, with Mariana now spanning roughly 1,000 metres and NC2 exceeding 2,000 metres. Both veins show significant vertical extents, reaching more than 350 metres and 500 metres respectively. Exploration development has advanced more than 300 metres eastward across four mine levels between 1,900 and 2,100 metres above sea level.

The company also reported higher gold grades than previously seen, suggesting untapped gold potential in future operations. In addition, a new high-grade silver and base metal replacement zone was found at the contact between volcanic and sedimentary rocks in the southeastern section of the mine. Pan American said this breakthrough strengthens geological understanding of La Colorada and highlights a promising exploration target in the Cristina/San Geronimo corridor south of the current operation.