Pinnacle Silver & Gold Corp (TSX-V:PINN, OTCQB:PSGCF, FRA:P9J) announced that it has begun an underground delineation drilling program at its El Potrero gold-silver property in Durango, Mexico, following progress on mine rehabilitation and drill station preparation.
The program is initially focused on the Pinos Cuates mine, where 10 drill stations have been established across two levels.
The company plans 67 drill holes totaling 1,324 metres at the site, including 21 holes on the upper level and 46 holes on the main level.
Work is expected to continue in parallel at other historic workings on the property. At the Dos de Mayo mine, six drill stations are being prepared for 35 planned holes totaling 887 metres, while at the La Dura mine, four stations are planned for six holes totaling 205 metres.
In total, the program is expected to comprise 108 NQ-size holes over 2,416 metres, though the company noted the plan may be adjusted as work progresses.
According to the company, the current drilling is designed to better define the size, geometry, and grade of mineralized zones. Drill holes are being spaced closely and oriented to intersect the Dos de Mayo vein system, with multiple holes drilled from each station at varying angles.
“The commencement of the underground drilling program at El Potrero is a major milestone as it will significantly de-risk the project on the way towards a formal production decision later this year,” Pinnacle CEO Robert Archer said.
Archer said previous underground channel sampling, which included roughly 900 samples, helped identify areas of gold-silver mineralization, with assays returning values of up to 85.1 grams per ton of gold and 520 grams per ton of silver over 0.5 metres.
“Now the close-spaced drilling will give us a better sense of the overall size, shape and grade of the mineralized zones,” Archer said.
Pinnacle said it is also planning a surface drilling program to follow the underground work. The surface campaign is expected to test extensions of known veins and fill gaps between existing mine areas. Results from both programs will be used to support an internal resource estimate and the development of a preliminary mine plan.
The El Potrero property is located in the Sierra Madre Occidental, a region with several operating mines nearby. Mineralization at the site is hosted in a low-sulphidation epithermal vein system, with three historic mines along a 500-metre strike length. The company noted the property has not been extensively explored using modern techniques.
Pinnacle also said an existing 100-tonne-per-day processing plant on site could potentially be refurbished to support near-term production, subject to permitting. The project is accessible by road and is located within three kilometres of a power line.
Under the terms of its agreement, Pinnacle expects to earn an initial 50% interest in the property upon commencing production, with the option to increase its ownership to 100%, subject to a 2% net smelter return royalty.