Capitan Silver: Strategically Advancing Mexico’s Next Billion-Dollar Silver Mine
@TheSilverAdvisor · · 6 upvotes · 0 replies
-Ted Butler, Senior Analyst
From Pan American's $2.1B acquisition of Juanicipio to Coeur’s $1.7B buyout of SilverCrest, Mexico has consistently proven fertile ground for “company making” primary silver deposits.
Along with others such as Vizsla Silver’s Panuco, these Intermediate Sulphidation Epithermal systems are both extremely rare and highly sought after for their grade, continuity, and often immense scale.
Located in Eastern Durango, #CapitanSilver's flagship Cruz de Plata project fits this geological signature like a glove, yet continues to fly under the radar at a substantial discount to its peers.
Specifically, Capitan Silver (TSXV: CAPT; OTCQX: CAPTF; FSE:2CD) trades around a C$300 million market cap – a valuation that fails to properly reflect the sheer scale and potential of Cruz de Plata.
Indeed, the silver mineralisation at the Jésus María Zone already extends along 2.5km of continuous strike and up to 400 metres down-dip, with most of the 25,000 metres drilled in 2025 concentrated within the upper 150 metres from surface.
More recently, however, extensive geophysics and a fully-funded 60,000 metre drill program are beginning to unveil a silver system that could extend up to 800 metres deep and at least 3.7km laterally, with additional continuity beyond Jesus Maria to the west and north.
For context, a system of that size would extend deeper than Pan American Silver’s Juanicipio, which reaches ~740 metres below surface, as well as wider than First Majestic’s Los Gatos, which spans roughly 1.8km along strike.
Not to mention, neither of those systems begin immediately at surface like Cruz de Plata, which also holds the potential to be higher-grade if recent drill results continue their exceptional form.
As such, Cruz de Plata may hold the key to an even larger system than the billion-dollar buyouts below, leaving Capitan poised for successive re-ratings once investors wake up to this potential.
From Bear Market Moves to Billion-Dollar Potential
While we rejoice at $80/oz silver today, Capitan has been de-risking since the far less hospitable ~$25/oz price environment of 2020-2025, consolidating what we know today as Cruz de Plata.
During this time, Capitan focused on expanding its land position and removing royalties during the market downturn in 2022, structuring a buyout of one royalty for C$1M in cash and stock.
A second royalty held by the original owners was also negotiated away during this period, with the agreement fully extinguished as of 2025, after Capitan completed its land package by acquiring additional claims from Fresnillo in 2022.
That relationship deepened further in August 2025, when Capitan acquired seven additional Fresnillo concessions for US$4 million – half of which has already been paid by the company.
Crucially, this deal secured Capitan’s position around the Jesus Maria silver trend, which sits on the original mine and property that launched the Peñoles Mining Company in the late 1890s.
Among Mexico’s largest and longest-standing mining companies, Peñoles historically produced grades up to 2,000 g/t silver at Jesus Maria before the Mexican Revolution halted output in 1910.
Since then, Cruz de Plata has remained largely untouched, with Capitan being the first in more than a century to consolidate and advance the property using modern exploration tools.
Incidentally, those tools – which currently include 3 diamond drill rigs and 1 RC rig – have fared well to say the least, as evidenced by the results from Capitan’s ongoing 60,000 metre program.
Case in point, May 2026 assays returned silver-rich highlights of 934.6 g/t AgEq over 1.3 metres, within a broader interval of 157.3 g/t AgEq over 20.0 metres – of which 84% was pure silver.
Drilled west of the Peñoles Fault at just 172 metres depth, the above hole (26-ERDD-08) merely scratches the surface of Jesus Maria, which is developing into Capitan’s high-grade silver hub.
This bullish thesis is solidified by bonanza-grade holes such as JM DDH 13 06, which cut through 3,567 g/t AgEq – of which 3,409 g/t of the AgEq grade was pure silver – over 0.9 meters within a broader 13.7 metres interval at 381 g/t AgEq.
A potentially younger, cross-cutting structure to Jesus Maria, the Gully Fault Zone also remains open in all directions, delivering superb hits such as 7.2 metres of 988.43 g/t Ag and 1.24 g/t Au.
More broadly, there are at least 11 targets across 6km of strike length for Capitan to test. However, that number is expected to rise upon receipt of results from an aerial geophysical survey in Q2 2026, with the company ultimately targeting a cumulative 21km of mineralized structures this year.
The Bottom Line
To conclude, Capitan has quietly consolidated a property that increasingly appears to host the massive scale silver system that earned its Mexican peers billion-dollar buyouts in recent years.
In 2026, the company has the opportunity to prove this to investors with its aggressive 60,000 metre drill program – the results of which will be later incorporated into a resource estimate.
Already, the company has a 2015 resource estimate based on a meagre 3,000 metres of drilling for an area of the property called Capitan Hill – a pit-constrained oxide gold deposit hosting 525,000 oz of gold at 0.41 g/t across 39.8 million tonnes.
While higher grades have been drilled since then, some investors interpret the relatively low 15 Moz silver figure for the Capitan Hill resource – which was completed as an open pit with a 15 g/t Ag cutoff – as the total for Cruz de Plata, which partly explains Capitan’s excessively subdued C$300 million market cap.
In reality, however, we conservatively expect the broader Cruz de Plata resource to reach 100 Moz silver equivalent by the end of the 60,000 metre program, with at least 60% – and potentially up to 90% – of that being pure silver.
That ongoing 60,000 metre program is fully-funded after a C$29M raise in December 2025, which was emphatically punctuated by participation from Jupiter Asset Management, Michael Gentile, and Schroders.
Collectively, a few investors and management account for 70% of Capitan’s common shares, resulting in a notably tight share structure with less than 1/3 the shares outstanding of its peers.
Speaking of management, Capitan CEO, Alberto Orozco, brings 30 years of Mexican mining industry experience, including a tenure as Exploration Director at Argonaut Gold, before it was ultimately acquired by Alamos Gold for US$325 million in 2024.
A further string to Capitan’s bow, Fernando Alanís Ortega – retired, long-standing CEO of Industrias Peñoles, Former President of the Mexican Chamber of Mines and former president of the Silver Institute – serves as a Director on the board.
Ultimately, with an experienced management team at the helm and a world-class scale silver project on the cards, we believe Capitan is poised for a potentially explosive re-rating over the coming months, as drilling continues to reveal the extent of this massive silver system.
Peter has owned the stock since the fall of 2025 and is happy to hold on with the prospect of significant re-rating potential as exploration leads to a landmark resource.
Naturally, we are excited to make Capitan Silver our newest addition to the Silver Advisor portfolio, and will be covering the company’s material news releases from here on in.
Editor’s Note: Capitan Silver is a sponsor/advertiser and supports the site financially. This allows us to bring free newsletter-quality analysis of stocks we personally own.