Pinnacle Silver & Gold Corp ( TSX-V:PINN , OTCQB:PSGCF , FRA:P9J ) has secured an environmental permit for surface drilling at its past-producing El Potrero gold-silver project in Durango, Mexico, as it advances permitting for a potential mine and processing plant.
The permit, issued by Mexico's environmental ministry SEMARNAT, covers 110 drill sites and is valid for two years.
The company plans an initial 48-hole program covering 5,540 metres.
The approval required a full Manifiesto de Impacto Ambiental (MIA), an environmental impact assessment, rather than a standard drilling permit because of the area's classification.
Pinnacle said the baseline data collected for the application will also support permits for the mine, processing plant, tailings storage facility, powerline and water supply. Work on those applications is underway as the company targets a formal production decision in early 2027.
Pinnacle has completed a feasibility study for a proposed 3.3-kilometre powerline extension to supply the processing plant and auxiliary operations.
Grupo Electrocontructor Rueda carried out the study, while Mexico's state-owned utility Comisión Federal de Electricidad confirmed that sufficient power capacity is available.
The remaining steps toward final approval include obtaining environmental and land-use change permits for the powerline right of way.
Water supply is another key part of the permitting process, following changes to Mexico's water laws in December 2025 that replaced a system allowing water licences to be bought and sold with a more rigorous approval framework tied to environmental and sustainability requirements.
Pinnacle has commissioned Geids Hydroagricultural Engineering to prepare water studies for Mexico's national water authority, which has confirmed sufficient river water is available for the project, with field work underway.
Elsewhere, the company intends to use dry tailings at El Potrero, with waste material stored in a dry-stack facility.
Pinnacle has also completed baseline environmental studies covering flora and fauna, climate, weather and topography. Infrastructure surveys have been completed and engineering drawings prepared.
Shares of Pinnacle were up over 6% on Monday at around C$0.09.
