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CAPT: Large Resource Update at Capitan Hill Gold Deposit

What you need to know:
• CAPT announced an updated MRE at its Capitan Hill Oxide Gold Deposit.
• The resource increased from 305Koz Au in 2020 to 525Koz today, and today’s resource is pit-constrained.
• Two-thirds of the 2025 15,000m drill program is complete, with only one-third of the assay results released. Assays are pending for 31 holes.
• We have increased our target price to $3.50/share ($2.40 previously).

This morning, Capitan Silver (CAPT:TSXV) announced an updated Mineral Resource Estimate for the Capitan Hill oxide gold deposit at its Cruz de Plata silver-gold project, located in Durango, Mexico. The updated pit constrained resource includes 39.8Mt at 0.41 g/t Au for 525Koz while using a 0.18 g/t Au cut-off grade at a US$2,500/oz gold price. This compares to the previous estimate of 305Koz with only 244Koz being pit constrained (hypothetically), representing a more than doubling in the size of the pit-constrained resource. We are pleasantly surprised with this update, as though open-pit gold is not a focus for the Company going forward, it will provide Capitan with optionality as it advances the project to development. We are maintaining our BUY rating and increasing our target price to $3.50/share (previously $2.40/share) on Capitan Silver.

We remind readers that the additional drilling performed on Capitan Hill since the last resource in 2020 was carried out over two years ago, before the Company heightened its focus on the high-grade silver veins across the property. Today’s update was an effort to realize the return on the costs incurred from the previous drilling, as well as show the investor base the potential value that could be extracted from this open-pit oxide gold portion of the project.