Pinnacle Silver & Gold Corp (TSX-V:PINN, OTCQB:PSGCF, FRA:P9J) has taken a strategic leap forward by appointing Auramet Capital Partners as its lead project financier. Under the newly inked agreement, Auramet will work to arrange or potentially provide up to $5 million in non-equity financing. The funds are earmarked for the fast-tracked development of Pinnacle’s El Potrero gold-silver project located in the mining-friendly jurisdiction of Durango, Mexico.
Strategic Non-Dilutive Capital to Shield Shareholders
For junior mining firms, the cost of capital is a critical determinant of long-term shareholder value. Traditional equity raises during early development phases often lead to heavy dilution, reducing the upside for existing investors. By pursuing a non-equity structure, Pinnacle’s President and CEO, Robert Archer, aims to bypass volatile public equity markets.
The deal establishes a seven-month exclusivity window, allowing both parties to finalize a mutually acceptable financing structure. While Auramet holds a “right of last offer,” they are not contractually obligated to fund the entire package. To protect the exclusivity of the negotiations, the agreement includes a non-solicitation clause and a $400,000 break fee, which becomes payable if Pinnacle elects to accept an alternative financing proposal during this period.
De-Risking El Potrero: High Recovery Rates and Strong Mineral Grades
The financing mandate is backed by highly encouraging technical data from the Durango asset. Ongoing metallurgical testing at El Potrero has returned average head grades of 7.7 grams per tonne (g/t) gold and 116 grams per tonne (g/t) silver. From a processing perspective, these grades are highly attractive, particularly when paired with the project’s exceptional recovery profiles:
- Gold Recovery: Tests indicate potential recoveries exceeding 97%, signaling highly efficient extraction dynamics.
- Silver Recovery: Recoveries are estimated at approximately 70%, providing a strong secondary revenue stream.
Currently, the geological team is executing underground delineation drilling to refine the resource model and outline high-grade zones for initial production targeting.
Infrastructure and Permitting Milestones
A mining project’s viability depends heavily on infrastructure readiness and social license. Pinnacle has completed a key feasibility study for a 3.3-kilometre powerline extension, which will secure a stable and cost-effective power supply for the future site. Additionally, baseline environmental and hydrological studies are underway to secure a formal water licence and secondary permits. The company is also actively negotiating community agreements to ensure long-term operational stability and strong local support.