MTH hits extensions to the west of 529k ounce gold equivalent JORC resource

Our Investment Mithril Silver and Gold (ASX: MTH) just completed another batch of holes extending its 373k ounce gold, 11M ounces of silver JORC resource estimate in Mexico.

MTH’s project sits in Mexico’s Sierra Madre region - one of the biggest silver producing regions in the world - home to over 2 billion ounces of silver. (source)

This part of the world is also home to some of the world’s biggest silver producers - $41.2BN Fresnillo, $11.6BN First Majestic Silver, $27.7BN Pan American Silver and $23.6BN Coeur Mining.

MTH's project sits across a ~70km^2 ground position with 6 main target areas.

At the moment, MTH's focus is on three main target areas:

(source)

Today’s announcement came from MTH’s Target 1 area with five holes going after western extensions to the resource and two holes going after southeastern extensions.

The strongest hit was the 7.25m hit at 4.01 g/t gold, and 225.1 g/t silver to the west:

The cross-section here helps us visualise it a lot better:

Now we wait to see what that means for MTH’s upcoming resource upgrade - which MTH says is due this month (hopefully a big upgrade on the current resource):

(source)

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.

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.

What's next for MTH?

🔄 Target 1 resource estimate - DUE THIS MONTH

This will be the first JORC resource upgrade for Copalquin, a key milestone for the project.

🔄 District-wide exploration with aerial magnetics and a structural geology study

MTH has completed an aerial magnetic survey that is now being processed with a district structural geology study to follow.

This is about understanding the plumbing system so to speak that controls mineralisation across the 70km² project area.

🔄 La Dura property - Recently acquired 20km² brownfield asset

The recently added La Dura property has a 1.5km mineralisation corridor identified from LiDAR, including the historic 4-level La Dura mine.

A 1.5km long mineralised corridor has been identified with an aerial magnetic survey compete with the results being processed, so we could see come activity in the near term here also. (source)

We covered an update form this asset recently here.