Pinnacle Silver & Gold Corp (TSX-V:PINN, OTCQB:PSGCF, FRA:P9J) said it has made substantial progress at its high-grade El Potrero Project in Durango, Mexico, moving closer to a production decision by the end of 2026.
The company, which has been advancing the project for a year, said it is set to begin rehabilitation of historic mine workings along the main Dos de Mayo vein trend. Underground delineation drilling will follow, with surface drilling planned once a pending environmental permit is approved.
“The commencement of underground rehabilitation is a significant milestone in the advancement of the project as it is not often that the first drill program on a project comprises underground delineation drilling rather than surface exploration,” Pinnacle CEO Robert Archer said. “We believe that the underground drilling program will be followed immediately by surface drilling.”
The company has completed extensive underground and surface channel sampling, and 3D modeling, and has prioritized drill stations in two of the three historic mines to accelerate the underground program. Pinnacle plans 14 underground drill stations across the Dos de Mayo and Pinos Cuates mines, with 2,423 metres in 107 holes targeted across all sites. Drilling is expected to start in late March or early April.
Pinnacle also submitted an application to Mexico’s environmental authority SEMARNAT for a surface drilling permit, which could be issued within 90 days. A water permit has been verbally approved and is awaiting formal notification.
A second round of metallurgical testing is underway at SGS Labs in Durango, following initial results that returned an average 95.1% gold recovery. Recent head assays from the composite sample returned 7.7 grams per tonne (g/t) gold and 116 g/t silver, while samples from the Estrella and Capulin veins yielded 6.6 g/t gold, 169 g/t silver and 4.5 g/t gold, 91 g/t silver, respectively. Testing will include advanced mineralogical analysis using automated scanning electron microscopy.
The company has also commissioned a feasibility study for extending a powerline to the project site, which will support discussions with Mexico’s Federal Electricity Commission. The study is expected within 45 days.
In addition, Pinnacle signed a one-year agreement with the local Ejido El Carmen covering access to the northern block of the project, including the mines and plant area. The agreement ensures local support and allows the company to advance construction and operational planning.
Pinnacle said it will continue providing regular updates as work progresses.