MTH: Hits 7 g/t gold, 370 g/t silver - Silver price surges nearly 10% overnight.

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 2,211,336 MTH Shares and 2,177,000 MTH Options at the time of publishing this article. The Company has been engaged by MTH to share our commentary on the progress of our Investment in MTH over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs. Any forward-looking statements are uncertain and not a guaranteed outcome.

What on earth happened at 9pm AEST last night...?

2 days ago we said:

Over the last week silver looks like it MIGHT be thinking about possibly considering going on another run...

48 hours later, it looks like silver got off the fence and made up its mind to run.

Over the last 12 hours the silver price delivered us a glorious green beanpole - up nearly 10% since 9PM AEST last night:

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

...and it's still going this morning

We are overweight silver stocks because we think if the silver price goes on a run, ASX listed silver stocks will go with it.

And the 2025 silver run demonstrated that this can happen.

Our ASX silver stock prices running during the previous silver price run:

(source)

So silver up = silver stocks go up.

Silver up PLUS strong silver announcement = silver stock goes up even more?

We could be about to see...

(Past performance is not an indicator of future performance)

Our Investment Mithril Silver and Gold (ASX:MTH) just announced a nice high grade extension to its 373k ounce gold, 11 million ounce silver JORC resource.

(529k gold equivalent ounces averaging ~6.81g/t in grade)

A big 9.65m extension averaging 7.00 g/t gold and 370 g/t silver.

Which should mean that when MTH upgrades its resource the numbers should get bigger.

MTH has just flagged the resource upgrade for next month

(So only a few weeks to go)

(source)

Our favourite grumpy resources analyst Warwick Grigor from Far East Capital gave MTH a positive write up a few weeks ago - read it here

and mentioned MTH again last week here:

(big coming from Warwick, who generally prefers picking apart all the problems with a stock - which we appreciate)

And our favourite affable market commentator Simon Catt from Catt Calls (also a die hard silver bull, he got me onto Hycroft, thanks Simon) put out this explainer on investing in Mexico and a bit of analysis on MTH: (read it here)

(source)

(Both Warwick and Simon are worth subscribing to and reading - it's free, no AI slop and actual market people with real opinions)

MTH has to date drilled only ~5% of its project area.

And so far has a 529k gold equivalent JORC resource.

That resource sits across a tiny part of its ~70 square kilometre project area.

And comes from one of the 6 main targets on the project.

The other five have barely been drilled.

And when they have been, MTH has hit gold and silver mineralisation every single time.

Over the past five months MTH has:

• hit extensions to the west of the existing resource at Target 1 (January 2026)
• mapped targets across ~9.6 km2 at Target 5 (February 2026),
• hit a discovery hole at the northern end of Target 5 and visible gold in drillcores at Target 3 (April 2026)
• MTH hit more extensions to its Target 1 resource (today)

(source)

So MTH has mineralisation starting at Target 3, going through the existing defined resource, all the way down to Target 5.

And right now only what’s been drilled at Target 1 is inside MTH’s existing resource estimate:

(source)

Again, MTH has the resource upgrade coming next month.

(source)

If MTH can get to something like 700-800k ounces equivalent while maintaining the resource's average 6.81g/t gold equivalent grade we will consider a win for MTH.

Especially with all of the exploration upside on MTH’s project.

The size of the prize - multi-million ounces beyond Target 1

We think the upcoming resource upgrade from MTH should give us a fairly decent idea of just how big Target 1 could be as a standalone discovery.

BUT a big part of why we are Invested in MTH is to see it drill out its entire package and define the "district scale” system the company keeps talking about.

We are really here to see MTH drill out the rest of its targets and test the limits of this system.

And if any of those can replicate what MTH has at Target 1, we could be looking at a multi-million ounce system in a few years.

(assuming MTH gets lucky and has exploration success)

Below is our interpretation of what MTH is trying to say when it says “district scale”.

A 9km (strike) by 1.2km (vertical extent) west to east across the project area:

(source)

(Most gold/silver districts in Mexico like MTH’s sit across ~2-5km of continuous strike. MTH's sits across ~9km.)

The vertical extent is a big part of the theory too - a big part of how we think MTH could eventually come to define a multi million ounce system.

Why?

Because it’s similar in structure to a mine like Fruta Del Norte (the absolute dream scenario for MTH).

It’s possible (but certainly not a guarantee) that MTH could be sitting on a geological structure similar to Fruta Del Norte in Ecuador, which hosts a ~13-14M ounce gold equivalent resource.

MTH’s MD John Skeet and Catt Calls’ Simon Catt spoke to the potential upside on project in an interview on site last year here (starts at ~7:00).

In the interview Simon says he spoke to MTH’s technical director Colin Jones who said:

“the worst case scenario is 2 or 3 million ounces at the current resource grade”.

But that...

“maybe it can be a Fruta Del Norte”.

We were also on site when that interview was shot - check out our site visit here.

Fruta Del Norte was discovered by a junior company in 2005-2006 and ended up an almost 100 bagger for the pre-discovery investors.

Check out this X post for a good summary of the Fruta Del Norte story.

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

Warwick’s note (the one we mentioned earlier) was also comparing MTH’s project to a multi million ounce mine:

(source - that mine Warwick mentions produced over 4.5M ounces of gold)

What we know right now is that MTH has 529k ounces of gold equivalent in JORC resources at Target 1.

And at least five other target areas that haven't been drilled out at scale (but have proven mineralised).

(that's before MTH has done any work in that area way up north).

IF MTH can define Target 1 style resources across those other targets the multi-million ounce upside becomes a real possibility.

(source)

Oh and this is all before we look at the asset MTH acquired recently either La Dura - 15km southeast - which could slowly become a big part of the MTH story too.

That asset lives rent-free in our heads because of the photo below.

(the rocks are part of a 4-leveled historic mine working and yes, that is a human)

(Source)

If there was enough gold/silver to warrant historic mine workings that big then it has got our attention.

(more on why we like the new asset later in today’s note)

MTH’s MD has delivered a $1.1BN win before

We are backing MTH MD John Skeet to hopefully deliver similar success to what he had during his time at Bolnisi Gold in Mexico.

Prior to leading MTH, John Skeet was the General Manager of Projects for Bolnisi Gold.

Bolnisi grew its Mexican gold-silver asset from a modest JORC resource to a ~$1.1BN takeover in under 5 years.

(Source)

A quick recap of the Bolnisi story:

• Picked up the asset in 2004,
• Drilled it out over the next ~3 years
• Upgraded the project's JORC resource several times,
• Raised tens of millions of dollars, AND
• Started constructing a mine.

During the construction phase, Coeur Mining came in and took over the asset for US$1.1BN.

In just a few years, the Bolnisi share price went up from ~A$0.16 to ~A$3.27.

A 20X return in just three years.

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

MTH’s asset sits along the same regional trend as Bolnisi’s asset, so MTH MD Skeet should know this geology very well:

We are hoping MTH has similar drilling success to Bolnisi and over the three to five year time horizon, and hopefully deliver us a similar win.

At the same time we recognise that there is no guarantee this happens. Bolnisi style wins are rare and MTH will need to get very lucky with its exploration programs.

Right now MTH is capped at ~A$60M with $10.8M cash in the bank (at 31st March).

Our MTH Big Bet:

“MTH re-rates to a $150M market cap by expanding its Mexican gold-silver resource with new ultra high-grade silver (and gold) drill hits, taking the project into development and/or attracting a takeover bid at multiples of our Initial Entry Price”

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is no guarantee that our Big Bet will ever come true. There is a lot of work to be done, many risks involved, including development risk, country risk and regulatory risk - just some of which we list in our MTH Investment Memo.

Success will require a significant amount of luck and good management. Past performance is not an indicator of future performance.

More on MTH’s new asset - La Dura

In December last year, MTH announced it has a 4 year option on this asset, which it can exercise at any point with a US$4M payment.

The new asset (La Dura) sits 15km southeast of MTH’s main asset:

(source)

The project has actually got a 4-level historic mine AND a 60 tonne per day processing facility that last operated in 2013:

(source)

MTH also ran LiDAR surveys on the project and just like MTH’s main asset this new one has a lot of mining history on it too:

• 18 historic mine shafts
• 44 historic adits (mine tunnels)
• 134 historic mine and prospecting pits

(source)

All across a 1.5km long, 300m wide structural trend that contains 5 stacked / repeated mineralised veins running parallel through the existing mine area.

(source)

Plus a second cluster of workings about 1km south of the main La Dura mine - that's a separate priority drill target. (source)

It all feels eerily similar to MTH’s main asset...

We remember drawing similar looking parallel lines across MTH’s main asset in a note back in September 2024:

(source - our MTH note from 17 September 2024)

So on this new asset, we could be in the early days of another multi-million ounce exploration upside asset.

No guarantees of course, early stage exploration can be very risky and more often than not new discoveries are not made.

What's next for MTH?

🔄Resource upgrade (expected in June)

We want to see MTH upgrade its existing 373,000 ounce gold and 11 million ounce silver JORC resource.

(529k ounces of gold equivalent).

We also want to see MTH map and run geophysical surveys across its broader project area.

Currently ~65% of the project is yet to be mapped.

Here are the milestones we will be tracking:

• source) 🔄 Aerial magnetics, results pending (
• source) 🔄 Mapping on 65% of project area (
• DONE: Final phase of upgrade drilling complete ✅
• DUE NEXT: Target 1 JORC resource upgrade - June 2026 (inside the next ~6 weeks) 🔲

Drilling across other targets

We want to see MTH drill out its other targets - especially Target 3 and Target 5 where MTH has hit mineralisation with its first few holes.

Here is what we have at Target 3:

• Confirmed 1.2km × 1.2km epithermal silver-gold zone with visible gold in core ✅
• 🔄 Drilling still underway - we want to see MTH test the Jabali / Guadalupe structures

Here is what we have at Target 5:

• ✅ (Apomal) - 350m mineralised strike defined
• ✅ (Tasolera) - ~70m thick zone with elevated silver ✅ (Candelaria) - ~1.5km mineralised zone (4,520 g/t silver in channel)
• ✅ (La Maquina) discovery hole at northern end
• 🔲 Next-phase drilling across Target 5 sub-zones
• 🔲 Maiden JORC resource

Newly acquired asset - La Dura

This one is still at a fairly early stage.

Here we want to see MTH do the early mapping/sampling work to find drill targets.

Here are the milestones we are tracking for the project:

• ✅ Acquisition completed
• ✅ LiDAR survey - 18 shafts, 44 adits, 134 pits mapped
• 🔲 Sampling and historic-data verification
• 🔲 Maiden drilling
• 🔲 Build toward a resource

What could go wrong?

The single biggest risk for MTH right now is exploration risk.

MTH is actively drilling with multiple rigs targeting 25,000m of drilling in the first 8 months of this year - there is no guarantee that drilling delivers any economically viable discoveries.

Any cash burn for negative results could re-rate MTH lower - especially if the market starts to lose faith in the exploration upside of MTH’s project.

Exploration risk:

There is no guarantee that MTH’s upcoming drill programs in Mexico are successful and MTH may fail to find economic silver-gold deposits.

Source: "What could go wrong" - MTH Investment Memo

The second risk is “political/geopolitical risk”.

MTH announced last month a small plane carrying its CEO John Skeet and two geologists was hit by gunfire shortly after taking off from site.

Thankfully, everyone was safe.

But it's a reminder that there are risks operating in this part of Mexico.

We note there have been other incidents of late in Mexico at Canadian company Vizsla Silver’s projects too.

Political and geopolitical risk

Despite being a mature mining jurisdiction, operating in Mexico is not without risk. Political sentiment towards mining companies and associated laws may change, making it harder to operate, i.e there may be reforms to mining royalty rates that incur steeper costs for operating mines in the country. Or alternatively, tenure and access permits may not be granted. Additionally, operations in this part of Mexico may be impacted by criminal activity.

Source: “What could go wrong” - MTH Investment Memo 22 May 2024.

Other risks

Like any early-stage exploration company, MTH carries significant risk, here we aim to identify a few more risks.

With a resource upgrade due in the next few weeks, there is a risk that the new figures may not satisfy the market’s high expectations.

Even if the resource grows, the share price could suffer if the market had already "priced in" a much larger discovery.

There is also the risk that the "district scale" potential doesn't materialise outside of Target 1.

Geological systems are complex, and hitting mineralisation in a few holes does not guarantee that the other targets will ever become economically viable mines.

Investors should consider these risks carefully and seek professional advice tailored to their personal circumstances before investing.

Our MTH Investment Memo

You can read our MTH Investment Memo in the link below.

We use this memo to track the progress of all our Investments over time.

Our MTH Investment Memo covers:

• What does MTH do?
• The macro theme for MTH
• Our MTH Big Bet
• What we want to see MTH achieve
• Why we are Invested in MTH
• The key risks to our Investment Thesis
• Our Investment Plan