Mithril Silver & Gold (ASX: MTH) Launches Target 3 Drilling: Buy the Momentum or Wait?

Mithril Silver & Gold starts Target 3 drilling

Mithril Silver & Gold (ASX: MTH) has started maiden drilling at a new target within its Copalquin project in Mexico. The stock is trading at A$0.58 on Thursday, pulling back about 7% from the previous close of A$0.63. Despite the dip, Mithril has been one of the better performers in the ASX gold-silver space over the past year, climbing from under 10 cents to current levels.

What’s getting investors excited is that Mithril now has three drill rigs working at Copalquin at the same time. That means plenty of news should be coming over the next few months, and each drill program is a fresh chance to hit something big.

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Why Copalquin Has District-Scale Potential

The Copalquin project covers 70 square kilometres in Mexico’s Durango state. This isn’t just a single target. It’s an entire historic mining district with more than 100 old gold and silver mines scattered across the property. Old-time miners found valuable ore here, but they didn’t have modern tools to go deeper or explore properly.

Target 3, where drilling just kicked off, sits near historic workings called El Jabali. Channel sampling at the El Jabali historic workings returned 0.65 m at 16 g/t gold and 1,275 g/t silver. Those numbers explain why management wanted to drill here. The primary near-term catalyst is the Resource Update for Target 1, expected in Q1 2026 following the completion of current infill and expansion drilling.

Mithril already proved the concept at Target 1, where it built a resource of about 373,000 ounces of gold and 11 million ounces of silver. The system runs deep, stretching 1,200 metres from top to bottom. That depth suggests there’s room to find more.

The Bull Case for Mithril Silver & Gold

Investors who like Mithril Silver & Gold point to two things. First, the company looks cheap compared to similar explorers. Mithril trades at a discount to its peers on a per-ounce basis, which means the share price has room to catch up if drilling goes well.

Second, the balance sheet is healthy. With around A$17 million in cash, Mithril can fund its drilling plans without asking shareholders for more money anytime soon. That’s a nice position for an explorer to be in.

What Could Go Wrong

The main near-term risk is uncertainty around pending results. About 20 drill holes are waiting at the lab, and delays have dragged on for months. When those assays finally come back, they’ll either confirm the story or disappoint. Investors should be ready for the stock to move either way.

Operating in Mexico adds another layer of risk. The country has excellent geology and a long mining history, but political and regulatory shifts can create headaches for foreign companies.

The Investor’s Takeaway for Mithril Silver & Gold

Mithril Silver & Gold offers a compelling setup for investors who can manage exploration risk. Three rigs turning, multiple targets to test, and a funded balance sheet make for an interesting story. The recent pullback might even offer a better entry for believers.

But this is still an early-stage explorer, and the pending assays will be crucial. More cautious investors might prefer to wait for those results before making a move.