This article is a sponsored feature from Mining.com.au partner Pinnacle Silver and Gold. It is not financial advice. Talk to a registered financial expert before making investment decisions.
Pinnacle Silver and Gold (TSX-V:PINN) is pushing hard into its next chapter, reshaping itself around a strategy to fast-track production at the past-producing El Potrero Project in the heart of the Sierra Madre Gold-Silver Trend in Mexico.
After several years of difficult markets and a corporate reset, President and CEO Robert Archer is steering the company back to the same proven model that he used to build Great Panther into a mid-tier producer — acquiring historic mines, restoring them, and getting them into production quickly to generate early cash flow.
With underground drilling underway, a clear path to near-term production, and a US$5 million ($7.17 million) Auramet financing facility to help accelerate development, Pinnacle is positioning El Potrero as the first step in a broader plan to rebuild a cash-generating precious metals company.
Pinnacle first picked up the El Potrero project in February 2025, leading to a new strategic focus for the company.
Archer had previously taken the helm of the company in 2021 and, with the acquisition of El Potrero, saw a clear path ahead.
Archer recalls that when building Great Panther from concept to a mid-tier producer, the main goal was to reach production quickly and then grow the company from cash flow rather than relying on capital markets.
This strategy worked incredibly well for Great Panther, with Archer stepping down in 2017 while the company had three operating mines in Mexico and a new acquisition in Peru.
With Pinnacle, Archer says he’s pivoting his focus from exploration to that same business model: acquire past-producing mines, get them back into production, and then build the company from there.
To that end, he is establishing Pinnacle’s team in Mexico with former Great Panther employees, and one of his fellow directors, a Metallurgical Engineer, is currently involved in building four other plants in Mexico.
El Potrero: Reawakening a historic mine
El Potrero closed in 1990 and hasn’t seen any production since, with three small-scale historic mines extending over 500m of strike length.
Archer says that Pinnacle has traced the mineralised system to around 1,600m along strike, though only 500m has been developed, with no underground connections between the historic mines.
“What we have done is rehabilitate the old mines to make them safe for our team to go in and do some systematic channel sampling, giving us a good idea of where most of the mineralisation was occurring in those mines,” Archer says.
“We went on to develop an underground delineation drill program, which is what we’re doing right now.”
Archer explains that the underground drill program is drilling through the vein and out the other side to determine the overall size, shape, and grade of the mineralised zones within the underground workings.
“Once this is complete, we’ll transition to a surface program which will drill in between the underground mines, along strike from those, and also on top of or even below, to drill some of the areas that we can’t get to with the underground drill.
“Then we can step out and start drilling the other veins as well which have never been drilled.”
Archer stresses that there’s considerable upside potential at the project. However, Pinnacle wants to properly delineate it all and de-risk the project before that production milestone.
“We’re going to go from the detailed drilling into a resource estimate and a geological model, and then a mine plan. Each of those steps will gradually de-risk the project.”
The way Archer describes Pinnacle’s plan for El Potrero is quite different from the typical steps in a Preliminary Economic Assessment (PEA) and Prefeasibility Study (PFS).
Given El Potrero’s relatively small scale and the team’s expertise and familiarity with the area, Pinnacle plans to ‘bootstrap’ the project and put it into production on its own.
A rapid restart strategy built for today’s market
Pinnacle’s executive team has significant experience with this fast-track strategy, and they understand the upside: faster cash flow.
“Seeing the metals prices run up the way they did over the past year, while the cost of production has also come up with inflation — it hasn’t risen nearly as quickly as the metal prices,” Archer says.
“That means that the profit margins have just accelerated at a rapid pace and that producers are making unprecedented profits that this industry has never seen.
“The faster we can get to that point, the better off we’ll be, because then we can just continue to build the company from there.”
Archer stresses that Pinnacle is not interested in doing production financings in the current market environment, which would inevitably lead to shareholder dilution.
He adds that while the Australian market can sometimes see exploration companies with a billion shares on issue, that’s not what the TSX-V is used to.
Pinnacle’s focus on shareholder value is underpinned by strong alignment at the top.
Between Archer and the company’s largest shareholder, Michael Kott, the two collectively hold 19% of the company — a position that ensures that their interests are firmly aligned with all shareholders as the company works to build long-term value.
Auramet partnership gives Pinnacle the green light to advance
In early July, Pinnacle announced that Auramet Capital Partners was appointed as lead project financier, providing non-equity project financing up to US$5 million for the development of El Potrero.
The agreement with Auramet aligns with the company’s business model, securing non-dilutive project financing while adding credibility and financial flexibility as development advances.
Archer comments that the Pinnacle management team has a long-standing relationship with Auramet, who have been largely supportive of the company.
“Going public with this announcement lets the market know that we’re serious about moving forward quickly into production,” Archer says.
“The US$5 million gives us the confidence that we have what we need to get this project into production, provided we can de-risk the project in a way that works for all parties.”
Archer points out that Auramet has access to Pinnacle’s data, giving it an insider view of company plans and all project details.
For now, the focus is on drilling, permitting, and, ultimately, de-risking the project over the coming months to a place where all parties are sufficiently comfortable to proceed with development and a clear offtake agreement.
The financing will be structured as a drawdown facility that will allow the company to order the long-lead-time items — crushers and ball mill, Merrill Crowe circuit for the plant, power line extension, rehabilitation of the underground workings, and building a new dry stack tailings facility.
“Knowing we have the ability to access those funds when we need them gives us a huge confidence boost and security that we can achieve this. It takes the uncertainty out of the equation.”
Why this cycle is set for producers
Another part of that certainty comes from the long-term fundamentals underpinning both silver and gold.
Archer observes that while the last six months have delivered a strong run-up followed by a healthy correction, today’s pricing environment remains heavily influenced by external pressures — from ongoing geopolitical conflicts to rising interest rates to broader macroeconomic instability.
“I think we’re now in a period of consolidation, and that’s likely to continue for some months, or even the remainder of the year, where gold and silver are going to be fairly volatile.”
Archer describes gold and silver trading in different patterns. Gold typically rises gradually before easing back, while silver tends to trade flat for extended periods before breaking sharply higher in a near-parabolic ‘hockey stick’.
He points to 2000–2011 when silver repeated this pattern four times, seeing roughly 18 months of consolidation, a steep rise, a 50% retracement, and then another consolidation phase.
With silver sitting around US$60 now, it appears to be set to continue consolidating before its next major move.
Silver generally follows gold’s lead, and as gold begins to rise gradually and then accelerates, silver lags initially and then ‘catches up’ in a dramatic surge.
Its smaller market size makes it far easier to move when investment demand spikes.
The metals outlook makes it clear: operators who reach production during this consolidation phase will be best placed to benefit when gold climbs again, and silver makes its parabolic catch-up.
Advancing the restart
As Pinnacle fast-tracks toward production, the company turns its attention to drilling. The underground drill program is well underway, and a transition to surface drilling will follow.
“All of that work will go into an internal resource estimate and from there into a preliminary mine plan,” Archer says.
The Pinnacle team is confident in its ability to bring El Potrero into production through a strictly internal process.
Archer acknowledges that from a regulatory standpoint, the company does need to provide a number of disclaimers, but that doesn’t stop them from moving forward with the build.
From a permitting perspective, the main licence the company is focused on now is for water, regulated through Mexico’s water authority, Comisión Nacional del Agua (CONAGUA), a process that Pinnacle has already initiated.
“We know there is water available, and we just have to go through the steps of telling the water authority how we plan to extract it, what it’s going to be used for.”
The company is also advancing an environmental impact statement for water use, approvals for a 3.3km power line extension, and the six-month military permitting process required for underground blasting.
Archer says that these permits typically take 12–18 months, which aligns with Pinnacle’s target of first production by late 2027.
Community engagement is another critical piece of the company’s current work. Pinnacle has established a strong relationship with the local agrarian community, and the company is in the process of finalising a binding agreement that supports long-term operations and shared benefits.
Production as strategy, not the endpoint
For Pinnacle, El Potrero is a first step. It is a small, affordable project that can be rapidly advanced into production for just US$5 million.
Archer emphasises that this approach mirrors the proven model at Great Panther.
“With this project, we can actually move forward, get it into production, and, with the profit margins that we’re anticipating, we can start to generate cash flow and build out the company from there.
“From that perspective, I’m already looking for our next project.”
Pinnacle’s message to the market is ultimately one of disciplined growth. El Potrero is intentionally small, affordable, and fast to build. It’s a launchpad rather than a finish line.
With drilling advancing, permits in motion, and non-dilutive financing secured, the company is positioned to enter production at a time when gold and silver fundamentals remain highly supportive.
El Potrero marks the beginning of a renewed, production-focused strategy designed to create long-term value through execution, discipline, and a clear path to growth.
Write to Amy Rotman at Mining.com.au
Images: Mining.com.au and Pinnacle Silver and Gold
