Mithril Silver and Gold (ASX:MTH) has outlined a range of exploration activities underway and planned at its Copalquin District gold-silver project in Durango State, Mexico, detailing drilling progress across several target areas, delays in laboratory assays, regional exploration initiatives, and an expanded exploration program scheduled for 2026. The update was released on December 22, 2025, by Mr. John Skeet, Managing Director and Chief Executive Officer, and follows a year of sustained exploration work at the 100%-owned project.

The Copalquin District covers approximately 70 square kilometres and encompasses an entire historic mining district that includes several dozen former gold and silver mines and workings, ten of which recorded notable historical production. The district lies within the Sierra Madre Gold Silver Trend, a north–south geological belt along western Mexico that hosts numerous established gold and silver districts. The area is characterized by multiple mineralization events, widespread alteration, extensive surface vein exposures, and young intrusive bodies interpreted as potential heat sources for mineralizing systems, identifying Copalquin as a significant epithermal gold-silver center.

Drilling activity at Copalquin continued throughout 2025 and is set to expand further in early 2026. The company reported that three drill rigs are expected to be operating across the district during the first half of 2026. A third drill rig is scheduled to commence work at the beginning of January 2026, following the Christmas break, marking the start of drilling at Target 3. The initial phase of the maiden drill program at Target 3 comprises approximately 3,300 metres and will begin near the El Jabali historic workings. Recent channel sampling in this area returned results of up to 0.65 metres grading 16 grams per tonne gold and 1,275 grams per tonne silver. Target 3 is described as a large area with substantial historic mining activity, and it has recently been advanced to drill-ready status.

At Target 1, drilling progressed steadily during 2025 and contributed to the development of what the company described as a robust and predictive geological model. This work is intended to support a new mineral resource estimate planned for 2026. Further drilling at Target 1 is planned to test extensions along strike from a recent western step-out hole, MTH-RE25-45, which intersected 8.03 metres grading 7.19 grams per tonne gold and 260 grams per tonne silver. Approximately 3,000 metres of additional drilling are scheduled at Target 1 during the first quarter of 2026, ahead of the anticipated resource update.

Target 5 has also been a focus of exploration activity. A maiden drill program at this target tested structures surrounding the historic Apomal workings and produced results from early drill holes, including 2.75 metres grading 2.28 grams per tonne gold and 500 grams per tonne silver in hole AP25-003. Additional intercepts included 1.00 metre grading 5.80 grams per tonne gold and 1,308 grams per tonne silver, as well as 3.35 metres grading 1.71 grams per tonne gold and 246 grams per tonne silver in hole AP25-005, which itself included a higher-grade interval of 1.05 metres grading 5.35 grams per tonne gold and 771 grams per tonne silver.

Drilling at Target 5 has continued along strike, with five holes completed at the Tasolera workings. Assay results for these holes remain pending. Channel sampling at Tasolera previously reported values of up to 3,300 grams per tonne silver and 2.00 grams per tonne gold over 1.40 metres. Looking ahead to 2026, drilling at Target 5 is planned to extend further along strike toward the Candelaria workings, where channel sampling has returned values of up to 0.60 metres grading 38.3 grams per tonne gold and 4,520 grams per tonne silver.

The company noted that assay turnaround times have been significantly delayed at its external laboratory, an issue that persisted through the second half of 2025. As of the update, final assay results were outstanding for approximately 20 completed drill holes, with an additional 12 drill holes submitted to the laboratory in the preceding two weeks. Results from drilling at Targets 1 and 5 are expected to be reported once all pending assays are received and compiled.

Beyond drilling, Mithril has advanced regional exploration initiatives across its land position. At the recently acquired La Dura concession area, which covers approximately 20 square kilometres, LiDAR surveying has been completed. Interpretation and analysis of the LiDAR data are expected in early 2026. In addition, the company plans to conduct a district-scale aerial magnetic survey over both the Copalquin and La Dura concession areas in January 2026. The purpose of this survey is to refine structural interpretations, identify new exploration targets, and support ongoing district-scale exploration efforts.

As part of the broader context for exploration at Copalquin, Mithril previously delivered a maiden Joint Ore Reserves Committee (JORC) mineral resource estimate at Target 1, within approximately 15 months of initiating drilling in the district. The maiden resource, detailed in an ASX release dated November 17, 2021, and supported by a National Instrument 43-101 technical report filed on SEDAR, outlines both indicated and inferred resources at the El Refugio and La Soledad areas of Target 1.

The indicated resource at Target 1 totals 691 thousand tonnes grading 5.43 grams per tonne gold and 114 grams per tonne silver, containing approximately 121,000 ounces of gold and 2.54 million ounces of silver. The inferred resource comprises 1.725 million tonnes grading 4.55 grams per tonne gold and 152 grams per tonne silver, for an estimated 252,000 ounces of gold and 8.41 million ounces of silver. These estimates were calculated using a cut-off grade of 2.0 grams per tonne gold equivalent, with approximately 28.6% of the total resource tonnage classified as indicated.

Gold equivalent grades were determined using a gold-to-silver price ratio of 70:1, based on cumulative average metal prices for 2021 of USD 1,798.34 per ounce for gold and USD 25.32 per ounce for silver. At the time of the resource estimate, metallurgical recoveries were assumed to be equal at 93%. Subsequent preliminary metallurgical test work reported recoveries of 96% for gold and 91% for silver, and these updated recoveries are expected to be incorporated into future resource updates. The company stated that, in its opinion, there is reasonable potential for both metals to be extracted and sold.

Conceptual mining and metallurgical studies associated with the Target 1 resource have indicated that conventional underground mining methods would be appropriate for the El Refugio–La Soledad system, with processing expected to yield high gold and silver recoveries using conventional techniques. The average vein width across the resource area is approximately 4.5 metres. Mithril holds an exclusive option to purchase a 100% interest in the Copalquin mining concessions by paying US$10 million on or before August 7, 2028. The company is continuing exploration across the district with the stated objective of expanding the existing resource footprint and testing the broader potential of the district-scale system. Reflecting on activities completed during 2025, the company recently reported that multiple targets were advanced in parallel, including continued success at Target 1, the emergence of Target 5 as a new focus area, and the progression of Target 3 to drill-ready status. These developments were described as positioning the company for continued exploration activity in the coming year.

Looking forward, Mithril plans an expanded exploration program in 2026 that includes approximately 25,000 metres of drilling across the Copalquin District. Up to three drill rigs are expected to operate during the first half of the year. Planned work will focus on extending known mineralized zones, testing additional high-priority targets, integrating district-wide geophysical datasets, and continuing regional-scale exploration across Copalquin and the La Dura concession area.