The proverbial saying that gold and silver aren’t cash-generating assets is true across the mining lifecycle, unless you’re a producer, allowing you to add value beyond the price of gold through income, as well as operational leverage through exploration and development.
The prospects for becoming a gold and/or silver producer are extremely encouraging at the moment, thanks to an ounce of the former costing you about 70 per cent more since 2023, sitting comfortably near an all-time-high at about US$3,400 as of June 12, and an ounce of the former costing you about 50 per cent more over the period at just over US$36. The factors motivating these price increases will come as no surprise to investors familiar with precious metals’ value proposition:
- Given the uncertainty surrounding the Trump tariffs, as well numerous major wars continuing to unfold in Ukraine and Gaza, investors have turned to silver and gold’s centuries-long track records as safe-haven assets, where geopolitical tension can be waited out until the dust clears.
- Despite inflation stabilizing after a precipitous descent from its COVID high in 2022, consumer prices remain elevated as lower interest rates slowly trickle through the global economy, a process made all the more difficult by the potential of tariffs to re-ignite inflation across the world. This dynamic has provided ample demand for silver and gold’s demonstrated hedging properties, allowing investors to benefit from price increases in their portfolios and offset increases in their daily expenses.
- Finally, the currently unsettling blend of economic uncertainty and persistent inflation has led more investors to learn that silver and gold have generated respectable long-term returns – 9.5 per cent and 16.9 per cent over the past decade as of May 20, respectively – justifying their presence in a portfolio as diversifiers, as well as contributors to growth and the ultimate fulfilment of your financial goals.
This bullish environment is incentivizing mining companies to fast-track their journeys through exploration, development and production, while incentivizing investors to identify companies ideally positioned for operational excellence and the leveraging of rising gold and silver prices into significant shareholder value.
A junior miner on a path to production and self-funded growth
A name worth putting on your radar to put this thesis in play is Pinnacle Silver and Gold (TSXV:PINN), market capitalization C$4.07 million, a near-term producer active in Mexico and Canada looking to replicate past successes re-starting high-grade, past-producing mines and scaling operations with internal cash flow, minimizing the volatility associated with shareholder dilution and commodity market trends (see slide 4 from the most recent investor deck).
Pinnacle intends to capitalize on an attractive project portfolio, a tailor-made leadership team and favorable gold and silver market conditions, with eyes on delivering at least one of these to production over the next two-to-three years.
This trajectory follows in the footsteps of analogous value-accretive outcomes in Mexico from the likes of First Majestic Silver (TSX:AG), Endeavour Silver (TSX:EDR) and Great Panther Mining, the latter a mid-tier precious metals producer co-founded by Pinnacle’s president and chief executive officer (CEO), Robert Archer, that reached a market capitalization of C$600 million.
The El Potrero project
Pinnacle’s main focus is on its flagship 1,074-hectare El Potrero project in Durango, Mexico, which contains three historic mines last operational in 1989-1990, resides in the Sierra Madre Trend – one of the top gold-silver producing regions in the world – and is on track for gold and silver production within the next two to three years. Here are the project’s main drivers:
- High-quality infrastructure, including road access, a power line within 3 km, underground mine workings across a 500-metre (m) strike length and an on-site 100-ton-per-day (tpd) processing plant (easily scalable) with minimal refurbishment costs, minimizing environmental impact compared to building the asset from the ground up.
- High-grade mineralization sampling up to 37.3 g/t gold and 395 g/t silver, substantiating a historic resource of 45,561 tons grading 8 g/t gold and 186 g/t silver.
- A more streamlined permitting process and higher ESG standards without affecting nearby communities thanks to being located on private land.
El Potrero’s high-conviction case for near-term production is made all the more prospective by its proximity – within a 35-kilometre (km) radius – to four operating silver, gold, copper, lead and zinc mines across a well-mineralized district, including:
- Fresnillo’s 4,000 tpd Ciénega mine, one of the largest underground gold and silver mines in Mexico.
- Luca Mining’s 1,000 tpd Tahuehueto mine.
- Guanajuato Silver’s 250 tpd Topia mine.
- The 150 tpd San Geronimo mine privately owned by El Potrero’s vendor.
Having never been systematically explored, Pinnacle took hold of its first-mover advantage at El Potrero in 2025, delivering systematic channel samples up to 19.4 g/t gold and 266 g/t silver over 4.1 m from the Pinos Cuates mine, as well as grab samples up to 13.2 g/t gold and 2,280 g/t silver from a vein between Pinos Cuates and the Dos de Mayo mine.
Results corroborate the historic resource referenced above and verify the presence of a surface-level gold and silver vein system extending along strike to the northwest for 1,600 m from Dos de Mayo, establishing the potential for significant resource development.
The company has also cleared the roads to the project and up to the mine portals, as well as finalized its plant clean-up, setting the stage for an inspection slated for mid-June to assess costs and scheduling for a return to production.
As mapping and sampling at Dos de Mayo continues – with 113 samples taken to date targeting the southeastern extension of the vein system and potential parallel veins along strike – Pinnacle is preparing for a LiDAR survey across the entire project to map out sub-surface geology.
All of this field work will guide a maiden 2025 drilling program with the goal of establishing mineral continuity, generating positive news flow and demonstrating El Potrero’s potential to the market.
“We are extremely pleased to have the opportunity to develop and explore the El Potrero property,” Archer told Stockhouse in a recent interview. “It is centered in a well-mineralized district and has had high-grade historic production of its own.”
Pinnacle has the option to earn a 100-per-cent interest in El Potrero, subject to a 2 per cent net smelter return royalty, as laid out in the company’s April 2025 investor presentation. It will earn an initial 50-per-cent interest once production gets off the ground.
Pinnacle’s Canadian portfolio
The near-term gold and silver producer complements its flagship El Potrero with a pair of almost contiguous 100-per-cent owned projects spanning almost 4,500 acres in Ontario’s prolific Red Lake District. Proximal to First Mining Gold’s 4.9-million-ounce Springpole gold deposit, the projects grant investors exposure to high-quality district-scale prospects for Pinnacle to replicate its production and cash flow strategy. Here’s a breakdown:
- The 604-hectare Argosy mine (slide 18), 10 km from Sprinpole, is a past-producing asset with robust depth potential backed up by historical drilling indicating that gold extends below the mine workings, as highlighted by numerous intercepts including 28.16 g/t gold over 0.55 m from 286.45 m to 287 m deep. The mine produced 101,875 ounces at 12.7 g/t gold from 1931 to 1952.
- The 3,850-hectare North Birch project, only 12 km from Springpole, resides in a folded iron formation thought to be structurally similar to Orla Mining’s more than 7-million-ounce Musselwhite gold mine. Initial Pinnacle drilling supports geology prospective for gold mineralization (slide 29).
Pinnacle’s path to transforming exploration upside into cash flow is, of course, only possible thanks to a leadership team optimally fit for the task, reinforced by directly applicable experience and firmly aligned 25 per cent insider ownership. Let’s meet them now:
Mining-savvy leadership built to deliver shareholder value
- Robert Archer, P. Geo, president, CEO and director, has built an over 45-year career in the mining industry throughout the Americas. This includes over 15 years with major miners, several senior management positions in the junior mining sector and co-founding Great Panther Mining, where he served as president and CEO from 2004-2017 and as director until 2020. He became a director at Pinnacle, then Newrange Gold, in 2018, and was appointed as CEO in 2019 and president in 2021.
- David Cross, CPA, CGA, chief financial officer (CFO), brings over 21 years of experience in the junior mining sector specializing in finance and corporate governance. He is also CFO of Ashburton Ventures, as well as partner at Cross Davis and Company LLP Chartered Professional Accountants, an accounting and management services firm for private and publicly-listed mining companies.
- Colin Jones, independent director, works as a principal consultant for Orimco Resource Investment Advisors in Perth, Australia. He is a 40-year veteran in the mining, exploration and consulting geologist space across all continents and covering numerous geological environments. His experience extends to large project management and due diligence, including bankable technical audits, technical valuations, independent expert reports and due diligence studies, most on behalf of banks and major international resource financing institutions.
- David Salari, QP, independent director, is a metallurgical engineer with more than 35 years of global experience designing, building and operating metallurgical extraction plants. He is currently the president and CEO of DENM Engineering.
- Ron Schmitz, independent director, is the principal and president of ASI Accounting Services, which has been providing administrative, accounting and office services to public and private companies since 1995. Schmitz has held the roles of director and/or CFO at numerous public companies since 1997.
De-risked by a high-potential portfolio, strong precious metals prices and executives as comfortable in the C-Suite as they are in the field, Pinnacle Silver and Gold reveals itself to be a strong contender for a significant share price re-rating catalyzed by near-term production.
Data-driven upside at a discount
Despite Pinnacle’s clear path to value creation, supported by high grades, on-site facilities and soaring target commodities, the average investor has yet to open a position in the stock because of El Potrero’s nascent market visibility, having only been in the company’s possession for just over three months.
Additionally, junior mining stocks as a whole have only recently reappeared on investors’ radars – supported by demand for gold and silver – with their pre-revenue operations and penchant for higher volatility representing barriers to entry for unseasoned investors.
As Pinnacle pursues more positive news flow from drilling at El Potrero, look for an increasing number of investors to recognize the high-conviction, near-term production thesis, nudging the stock into reflecting the company’s data-driven path to a potentially exponential outcome.
Join the discussion: Find out what everybody’s saying about this gold and silver explorer and near-term producer on the Pinnacle Silver and Gold Corp. Bullboard and check out Stockhouse’s stock forums and message boards.
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