Mithril uncovers new Copalquin target as Target 1 study begins

Target 4 delivers Mithril’s next exploration focus

Mithril Silver and Gold (ASX:MTH) has found what it describes as a potential second resource area at its Copalquin silver-gold project in Mexico, with first systematic drilling at Target 4 confirming mineralisation over 550 metres of strike and 200 metres vertically.

The strongest result was an 11.70-metre downhole intercept grading 456 g/t silver equivalent, including 3.40 metres at 1,239 g/t AgEq and a 0.60-metre interval at 3,877 g/t AgEq. Two further holes returned 13.95 metres at 387 g/t AgEq and 6.50 metres at 320 g/t AgEq. Mithril cautions that true widths have not yet been established, so the headline grades should not be read as estimates of mineable thickness.

The Copalquin-Zaragoza structure remains open in both directions, with about 400 metres of strike extending northwest towards Target 1 and 600 metres southeast towards the historic San Manuel mine. Two drills are continuing at Target 4, with assays pending. The results build on the August Target 4 drilling, which had already confirmed a 550-metre mineralised strike.

Target 1 moves from resource growth towards economics

At Target 1, Mithril has commenced a Scoping Study and Preliminary Economic Assessment based on an upgraded resource in which 75% of contained gold and silver is classified as Indicated. The resource contains 464,000 ounces of indicated gold equivalent within preliminary underground mining shapes and incorporates expected dilution.

The PEA is targeted for completion in early 2027 and is intended to provide a basis for continuing permitting work. That is a meaningful shift in the project’s progression, although the study remains preliminary and the resource is not a mineral reserve or a demonstration of economic viability. Post-resource drilling also produced notable results at La Soledad and El Refugio, including 13.45 metres at 1.55 g/t gold and 16.6 g/t silver at La Soledad.

The development work follows the 75% Indicated Target 1 resource, which was described earlier this year as a 196% increase in indicated ounces. Mithril’s current filing adds the next test: whether that higher-confidence resource can support a credible underground development case.

Exploration momentum comes with a funding question

Mithril ended September with A$4.1 million in cash and no debt, after spending A$2.58 million on exploration during the quarter and recording total relevant cash outgoings of A$3.12 million. On the company’s calculation, that represents about 1.32 quarters of funding at the reported rate.

The company says its 25,000-metre 2026 drilling program is due to finish in late October, followed by the usual December operating break. It also says it expects to rely on existing cash and future capital raising, through debt and/or equity, to fund current activities. The timing and terms of any such funding are not specified in the quarterly report.

Next assays and the early 2027 study set the test

Near-term news flow is concentrated on pending Target 4 assays, geological modelling and the next drilling phase. Mithril plans to continue Target 4 resource drilling in 2027, while La Dura, Targets 3 and 5 and Cucaracha are scheduled to enter the drilling pipeline. A 0.50-metre La Maquina intercept grading 1,702 g/t AgEq has also extended that high-grade discovery 150 metres northwest.

The central tension is now clear. Target 4 offers a potentially larger exploration runway, while Target 1 must convert a resource upgrade into credible project economics. Both paths require more drilling and technical work, and the company’s stated funding position means the market will have to weigh exploration momentum against the prospect of another capital raise.