Mithril Extends High-Grade Mineralisation To 700 Metres At Copalquin-Zaragoza Structure At Target 4

Mithril Silver and Gold Limited (MSG) has released new drilling and channel-sampling results from Target 4 on the Copalquin-Zaragoza structure in the Copalquin district, Durango. The data includes seven tabulated holes (CO26-004 to CO26-010) and 135 channel samples from the San Manuel area.

Drill intercepts, reported as downhole length with AgEq calculated at US$3,300/oz Au, US$50/oz Ag, and 96% Au / 91% Ag recovery, are as follows:

• CO26-006: 1.15 m @ 1,048 g/t AgEq (2.76 g/t Au, 855 g/t Ag) from 104.75 m.
• CO26-006: 2.65 m @ 411 g/t AgEq (1.50 g/t Au, 305.6 g/t Ag) from 109.80 m, including 0.90 m @ 622 g/t AgEq (2.85 g/t Au, 422 g/t Ag).
• CO26-009: 0.50 m @ 1,738 g/t AgEq (3.11 g/t Au, 1,520 g/t Ag) from 154.50 m.
• CO26-008: 1.95 m @ 0.91 g/t Au, 75.1 g/t Ag (138 g/t AgEq / 1.98 g/t AuEq) from 147.45 m.
• CO26-005: 0.50 m @ 82 g/t AgEq (1.17 g/t AuEq) from 202.90 m.

Holes CO26-007 and CO26-010 returned only narrow low-level values, with the best result being 0.85 m @ 0.52 g/t AuEq. Hole CO26-004 was abandoned before reaching target depth and was subsequently re-drilled as CO26-005.

Structural analysis indicates that the tested strike on the Copalquin-Zaragoza structure extended from 550 m to 700 m across two sub-parallel veins, Copalquin and Copalquin FW, which are 10-15 m apart. The structure remains untested for approximately 400 m northwest toward Refugio (Target 1) and ~400 m southeast toward San Manuel, implying a potential strike of 1.5 km.

Channel sampling results from the San Manuel area, which are not part of the drilling program, showed the best underground result at Mina del Aire of 0.60 m @ 16.55 g/t Au, 616 g/t Ag. Surface sampling at Mina Larga returned 0.80 m @ 10.4 g/t Au, 422 g/t Ag, while underground sampling at Mina Hijo yielded 0.50 m @ 11.2 g/t Au, 402 g/t Ag. More than 50 of the 135 channel samples exceeded 1 g/t AuEq.

The 2026 drilling programme has recorded 24,181 m drilled against a 25,000 m budget, with assays pending for eight holes. The Target 1 Mineral Resource Estimate (MRE) is restated as a reference, comprising 464 koz AuEq Indicated and 151 koz AuEq Inferred. A Scoping Study or Preliminary Economic Assessment (PEA) is targeted for early 2027.

Mithril Silver and Gold Limited (MSG) is an explorer and pre-development company with a market capitalization of approximately A$34 million. The company holds one defined resource at Target 1, comprising roughly 615 koz AuEq total, with 75% classified as Indicated. While exploration news is typically more relevant for companies in this stage than for producers, the specific target under review, Target 4, is pre-resource, lacks a tonnage estimate, and is not included in any Preliminary Economic Assessment (PEA).

Even if Target 4 were fully successful, the potential outcome is modest relative to the company’s existing thesis. A hypothetical scenario involving a 700 m strike, approximately 200 m tested vertical extent, 2 m true width, and a density of 2.7 t/m³ would yield roughly 750 kt of material. At a diluted grade of 3-4 g/t AuEq, this equates to approximately 70-100 koz AuEq, representing a 12-16% increase on the current 615 koz inventory, before accounting for dilution from numerous dyke-truncated segments.

The primary benchmark for Target 4 is the release on 27 August 2026, which reported the following drill intercepts:

• CO26-001: 11.70 m @ 456 g/t AgEq
• CO26-002: 13.95 m @ 387 g/t AgEq
• CO26-003: 6.50 m @ 320 g/t AgEq

These results delivered approximately 12,810 AgEq·m across 32.15 m. The recent release provided approximately 3,470 AgEq·m across roughly 5.8 m, representing about 27% of the anchor's metal-metre total, characterized by higher peak grade but roughly one-tenth the width.

The market reaction to the 27 August 2026 release did not embed the anchor into the stock price. Mithril Silver and Gold Limited shares traded at A$0.25 leading into the release, rose to A$0.28 on the day, and have since declined to A$0.18. This current price is below the level held before the anchor was published and sits at the bottom of the 52-week range, indicating the market has not priced in value at Target 4.

For a result to be considered materially positive under the "unpriced upside" rule, it must demonstrate significantly better grade-and-width substance than anything previously shown. The 27 August holes were wider at strong grade, meaning the recent results do not constitute a step change. Instead, they add 150 m of strike and geological linkage across the dykes, representing progress rather than a transformative update.

The dominant near-term factor for the company is its financial position. As of 30 September 2026, Mithril Silver and Gold Limited held A$4.1 million in cash against quarterly spending of A$2.58 million, implying roughly one to two quarters of runway. The FY2026 Management Discussion and Analysis carries a going-concern flag, with dilution identified as a risk. Consequently, a financing is the dominant near-term equity event, and narrow high-grade intercepts do not alter this arithmetic.

Given the stock's history of fading on every 2026 drill release and the funding overhang, the market reaction is expected to be flat to modestly positive, ranging from 0-8%, before fading. The result confirms a system the market has already declined to pay for.

Mithril Silver and Gold Limited (TSXV: MSG, ASX: MTH, OTCQB: MTIRF) is an explorer and pre-development company focused on epithermal silver-gold deposits in Durango State, Mexico. The company holds an exclusive option to acquire 100% of the 70 km² Copalquin district concession by 7 August 2028 for US$10M. The property features 13 target areas, six of which are high-priority, along with more than 100 historical underground workings and approximately 200 surface workings dating from 1850 to 1910.

At Target 1 (El Refugio-La Soledad), a mineral resource estimate effective 29 June 2026 was constrained and diluted within longhole open stoping shapes. The Indicated resource totals 3.391 Mt at 3.15 g/t Au and 77.8 g/t Ag, containing 343 koz Au, 8.48 moz Ag, and 464 koz AuEq. The Inferred resource comprises 1.436 Mt at 2.23 g/t Au and 73.6 g/t Ag, containing 103 koz Au, 3.40 moz Ag, and 151 koz AuEq. The undiluted Indicated grade is 6.85 g/t AuEq, with an operating cost of US$97/t. Discovery cost was less than US$20/oz AuEq over approximately 60,000 m in 204 holes. A scoping study or preliminary economic assessment is targeted for early 2027.

Other key targets include Target 4 (Copalquin-Zaragoza), which features 700 m of tested strike and 200 m vertical extent across two sub-parallel veins, and remains a pre-resource stage. Target 5 (La Maquina/Apomal-Candelaria) is a silver-rich discovery with intercepts to 1,714 g/t AgEq over 1.00 m, with extensions along a 1.5 km corridor. Target 3 (El Jabali-Guadalupe) is scheduled for maiden drilling in 2026, having previously returned narrow high grades including 0.50 m @ 33.2 g/t Au.

The company also holds the La Dura property, comprising 2,052 ha across five concessions, under an option for US$4M within 48 months plus staged payments and a 2.5% NSR, reducible to 1% for US$2.5M. LiDAR has defined a 1.5 km corridor at La Dura, with first drilling guided for early 2027.

Financially, Mithril Silver and Gold reported a FY2026 (to 30 June 2026) net loss of A$5.27M, including A$2.98M in share-based compensation, alongside interest income of A$463.5k. Cash holdings were A$7.26M at 30 June 2026 and A$4.1M at 30 September 2026. The company reported zero debt, a working capital surplus of A$6.81M at year-end, and equity of A$61.85M. The book value was approximately A$0.33/share compared to a share price of A$0.18. The FY2026 MD&A carries a going-concern flag and identifies dilution as a principal risk. The company has 187.5M shares outstanding.