Pinnacle Silver and Gold’s flagship is the El Potrero gold-silver project in Durango, Mexico, a past-producing low-sulphidation epithermal vein system in the Sierra Madre Occidental, roughly 35 km from four operating mines including Fresnillo’s La Ciénega. This interview with CEO Robert Archer, covers progress since the last update including underground rehabilitation and the start of delineation drilling, second-round metallurgical results, the discovery of a separate polymetallic system on the Maria Fernanda 2 (MF2) concession, vendor payment restructuring, and the permitting outlook ahead of a targeted production restart by end of 2027.
TL;DR
Underground delineation drilling is underway on the Dos de Mayo vein system across three historic mines on a 500-metre strike length, with hole 19 complete at the time of recording out of a planned 108-hole, sub-2,500-metre program. No assay results are out yet but CEO Archer says they should start coming in over the next couple of months and will feed directly into an internal resource estimate and preliminary mine plan. A formal production decision is targeted before end of 2026, with a production restart targeted for end of 2027 at an estimated total cost of approximately US$5 million including capex and working capital. The company restructured its vendor payments, splitting a US$750,000 lump sum into three equal US$250,000 tranches plus a deferred production-linked payment, preserving more cash for the project. A second polymetallic system (silver-lead-zinc) has been identified on the MF2 concession and will be drilled separately later this year, with no impact on the El Potrero production timeline. The biggest risk Archer names is permitting timing rather than geology or security.
What have they done for shareholders lately?
Since our last interview, Pinnacle completed underground rehabilitation at El Potrero to make the workings safe and accessible for drilling equipment, brought in an underground drill rig, and started the 108-hole delineation program (19 holes completed at time of recording). The company completed a second and broader round of metallurgical testing at SGS in Chile, which improved gold recoveries from an average of about 95% to over 97% by reducing grind size to 53 microns across composite samples from the three historic mines plus the Capulin and Estrella veins. Gold recoveries were consistent across all veins tested. Silver recoveries remain variable with values ranging from 50% to 80%, averaging around 70%, due to silver sulphide and silver selenide mineralogy (acanthite, argentite, and aguilarite) that does not leach as readily as gold. A gravity circuit was tested and ruled out as it added no meaningful recovery improvement. The LiDAR survey flown last fall led to the discovery of a previously unknown northeast-trending polymetallic vein system on MF2, distinct from the northwest-trending gold-silver system and geologically comparable to the nearby Topia district. Channel sampling on those veins has returned silver, lead, zinc, and some gold values. The vendor payment terms were renegotiated from a US$750,000 lump sum into three equal US$250,000 payments. Two have been made, with the third due end of August, and subsequent payments tied to production cash flow. A feasibility study for a 3-km power line extension to the plant has been completed and submitted to Mexico’s Federal Electricity Commission.
How much money do they have and what are they spending it on?
Pinnacle recently completed a C$2.5 million financing. Total capex to restart El Potrero is estimated at approximately US$4 million for plant refurbishment, with an additional roughly US$1 million in working capital, for a total of around US$5 million. The company’s stated intent is to finance the restart through an advance on an offtake agreement rather than equity. CEO Bob Archer says NDAs have already been signed with metal traders and financing should be readily available. Near-term cash obligations include the third vendor payment of US$250,000 due end of August 2026. The company has 147 million shares outstanding and approximately 184 million fully diluted, with about 30.6 million warrants and 6.5 million options outstanding.
Upcoming catalysts
Technical / Operational: First assay results from the underground delineation drill program expected to start coming in over the next couple of months from the time of recording. Transition from underground to surface drilling program to follow completion of the 108-hole underground program. Surface drilling environmental permit from SEMARNAT expected “fairly soon” with no specified deadline. Internal resource estimate and preliminary mine plan to be compiled once sufficient drilling data is in hand. Finalisation of plant flowsheet and request for quotes on long-lead equipment (ball mills, crushers, Merrill-Crowe circuit) expected soon. Drilling of MF2 polymetallic system targeted for later in 2026. Formal production decision targeted before end of 2026. Feasibility study submission to Federal Electricity Commission for power line extension approval, in process.
Corporate: Advance on offtake agreement discussions ongoing with metal traders under NDA; no announced timeline for closing. Third and final pre-production vendor payment of US$250,000 due end of August 2026.
Risks
The primary risk Archer identifies is permitting timing. Mexico’s environmental regulator is working through a backlog from years of minimal permitting activity under the previous administration, and recently changed water laws have added further bureaucratic delay as approvals now require sign-off from Mexico City rather than only the regional level. A surface drilling permit is pending and without it the company cannot transition from the underground program to step-out and strike-extension drilling. Silver recovery is a known variable at roughly 50 to 80% by sample depending on mineralogy, and further met work is still needed to tighten that range. There is no publicly disclosed resource estimate and the company has explicitly stated it will not produce one. The financing path for the US$5 million restart is contingent on closing an offtake agreement, which has not been formalised.
