22 Metres of Logged Sulphides in Metalsource's Southern Step-Out at Silver Hill

In July a hole angled south at Silver Hill logged zinc and lead sulphides beyond anything drilled there before. On October 22, Metalsource Mining reported that a new hole had found mineralization about 80 metres further south.

Hole SH26-45 intersected approximately 22 metres of polymetallic mineralization, including widespread zones in which sulphide minerals make up much of the rock, along with vein-style mineralization, the company said in its October 22, 2026 release. It is the second southern step-out in three months to log sulphide-bearing core, and each came from a hole aimed beyond the one before it.

Two holes have now moved the southern edge

A step-out is a hole drilled past the known limit of mineralization to test whether it continues. Silver Hill, in Davidson County, North Carolina, is described by Metalsource as America's first silver mine, in a mining district the company dates to 1839. Its known lenses reach about 550 metres from surface, according to the company's October 7, 2026 release. The 2026 drilling has been asking how far those lenses run beyond the old workings.

The southern progression, as the company's releases report it:

Sphalerite is the main zinc mineral and galena the main lead mineral. The October 22 release places the new interval between 335 and 357 metres down the hole.

Chief executive Joe Cullen framed the result as part of a widening search. In the release he described "an 80 metre southern step out intersecting approximately 22 metres of visually identified polymetallic mineralization". Dale Moore, whom the October 22 release titles project geologist, said the objective is "not simply to keep extending individual drill sections", pointing instead to the shape of the whole system.

What the core shows and what the laboratory will add

Three facts in the release set the weight of the result. The 22 metres is a core length, the distance measured along the hole, and the release gives no true width, which is the thickness of the zone measured across it. The mineralization was identified by eye, and the release states that "Assay results remain pending". Grades will come from ALS Geochemistry in Reno, Nevada, and ALS Canada in Vancouver, using a four-acid digest with ICP and fire-assay finishes on sawn half core, with certified standards, blanks and duplicates inserted into the sample stream.

In those zones, by the release's description, metal-bearing sulphide minerals make up a large share of the rock's volume. At Silver Hill those sulphides have carried silver, gold, lead and zinc where they were assayed. The ALS assays will give the grades for SH26-45.

SH26-45 was drilled from a collar at 572089E, 3951715N (UTM zone 17N) at an angle of 49 degrees below horizontal, heading south-southeast, to a length of 396 metres, the release's drill table shows. The 80-metre step-out describes where the intercept lies relative to SH26-27, not the distance between the two collars. On a straight-line estimate that ignores any bending of the hole, the midpoint of the interval sits roughly 260 vertical metres below the collar.

The release is explicit about the stage. "The exploration results described herein are preliminary in nature and are insufficient to define a mineral resource," it says. No NI 43-101 mineral resource estimate had been published for Silver Hill as of October 22, 2026; the release says the company is "advancing toward a modern resource estimate"; the company's July 21, 2026 release targets an inaugural mineral resource estimate for early 2027.

The assayed core near the old mine sets the benchmark

The southern holes matter because of what assays have already shown closer to the historic workings. On June 10, 2026 the company reported 434 grams per tonne silver equivalent over 10.64 metres, including an interval at 2.1 kilograms per tonne. On April 13 it reported 48.04 grams per tonne gold equivalent over 12.62 metres. Silver equivalent converts every metal in an interval into one silver-grade figure using assumed metal prices and recoveries; Metalsource uses 200-day average prices as at February 6, 2026 (silver at US$1.58 a gram, about US$49 an ounce) and recoveries from 1988 metallurgical tests.

The September 16 release added assays from depth. SH26-22 returned 261 grams per tonne silver equivalent over 7.32 metres of core, and SH26-23 returned 140 grams per tonne over a longer 12.31 metres, with zinc a large part of both. Cullen said then that the two holes "give us continued confidence in the continuity of the Silver Hill mineralization at depth."

SH26-45 extends mineral-bearing rock southward. Whether it also extends grades of that order is what the ALS results will settle. My own view is that the progression is a real one: two southern holes in three months, each further out, each with sulphide in the core.

A queue at the laboratory and a second rig on the trend

The October 22 drill table marks SH26-45 and a long run of earlier holes as assay pending, and the release says results are outstanding from "several additional completed holes". The company has given no turnaround date.

In July the company added a second rig and a night shift, which its July 21 release said would roughly triple drilling capacity. One rig is expanding Silver Hill; the other is testing targets along the trend. The October 7 release launched what the company calls Phase 2, aimed at induced-polarization anomalies about 1,120 metres north of the known deposit. Induced polarization is a ground survey that maps rocks able to hold an electrical charge, a property sulphide minerals often share. In that release Cullen framed the programme around "the true scale of this system", and Dale Moore, then titled head geologist, said the work may show by late Q4 2026 or Q1 2027 whether Silver Hill is part of a broader mineralized system.

The October 22 release says the next work is follow-up drilling to test the southern and down-dip potential, and "significantly larger step outs to the north and south".

The money and the shares behind the programme

Metalsource closed a C$5,999,998.50 private placement on March 6, 2026: 7,999,998 units at C$0.75, each with one share and half a warrant exercisable at C$1.00 for three years. Eric Sprott bought 1,333,333 units for C$1,000,000 through a company he owns, the release says. The proceeds were earmarked for exploration at Silver Hill and the Byrd-Pilot project, also in North Carolina, and for working capital. The company's latest filed interim statements, for the period ended March 31, 2026, show cash of C$7,530,314 against accounts payable and accrued liabilities of C$396,412; the annual statements for the year ended June 30, 2026 had not been filed as of October 22, so spending since March 31 is not reflected.

The share count has grown with the property deal. An amended Form 9 dated October 9, 2026 notified the CSE of 5,500,000 shares, including finder's fees, for the second share instalment due a year after closing under the option agreement the company announced in September 2025. A report of exempt distribution filed on SEDAR+ on October 13, 2026 records 5,000,000 common shares issued on October 9 at C$0.155 a share, C$775,000 in total. The CSE listing page showed 79,032,898 shares issued and outstanding and 28,850,598 reserved for issuance when read on October 22, 2026. Reserved shares cover instruments such as options, warrants and restricted share units that could convert into new shares.

The company also pays for market awareness, and has said so in its own releases. On June 8, 2026 it announced five agreements, with Caram Media, Apollo Shareholder Relations, TMI Digital, Investorideas.com and Quantum Ventures, for consulting, investor communications and digital marketing. The initial terms total about C$400,000 to Caram and about US$460,000 to the other four, plus 1,225,000 options and 300,000 restricted share units. On September 29 it engaged Galt Consulting Group, operating as NaturalResourceStocks.net, for six months from October 1 at a one-time US$28,000. The company described the June programme as strengthening communications "as exploration advances", and the releases state that none of the agreements contains performance factors.

No new financing was announced in the October 22 release.

A results-day price and a quiet German line

Metalsource shares closed at C$0.58 on the CSE on October 22, down 7.94 per cent, on 237,102 shares traded, per end-of-day data read at 14:04 Pacific on October 22, 2026 from the CSE listing page. At that price the 79,032,898 listed shares were worth about C$45.8 million. The 52-week range on the CSE page runs from C$0.285 to C$2.29.

The shares also trade in Germany under the symbol E9Z (WKN A4021B, ISIN CA59132M1086) in the open-market Freiverkehr segment, quoted in euros, according to Tradegate's order book page. On October 22 Tradegate showed 10,300 shares changing hands for about €4,000, with a last price of €0.38, when read at about 21:57 Berlin time. Price-setting volume sits on the CSE.

The next core boxes

Silver Hill has gone from a historic mine to an assayed high-grade core, then to a run of step-outs, in the company's 2026 drilling. The next results are the ALS assays for SH26-45 and SH26-27, and the company's July 21 release targets an inaugural resource estimate for early 2027. The company has two rigs turning, assays outstanding on a queue of completed holes, and northern drilling it expects to answer the larger scale question in late Q4 2026 or Q1 2027.