Mexico Mining Co. Reports Strong EBITDA Growth

1. Sierra Madre Silver and Gold Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$3,000 and US$6,000. 
2. As of the date of this article, officers, contractors, shareholders, and/or employees of Streetwise Reports LLC (including members of their household) own securities of Sierra Madre Silver and Gold Ltd. and First Majestic Silver Corp.
3. Cori Fisher wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
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1. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

On May 19, 2026, Sierra Madre Gold and Silver Ltd. (SM:TSX.V; SMDRF:OTCQX)  released Q1 2026 financial and operational results, with over 120,000 ounces of silver equivalent ounces sold by March 31.

Financial result highlights are as follows:

• Gross silver ("Ag") revenues for the quarter totaled US$5.9 million (US$85.14 per ounce) and gold ("Au") revenues totaled US$5.1 million (US$4,906 per ounce). Silver revenues for the quarter ended March 31, 2025 ("Q1 2025") totaled US$2.3 million (US$31.13 per ounce) and gold revenues totaled $2.9 million (US$2,828 per ounce).
• In Q1 2026, the company sold 69,006 ounces of silver and 1,038 ounces of gold or 128,827 silver equivalent ("AgEq") ounces, based on the ratio of silver and gold prices realized for each shipment in the quarter. This compares to 75,137 ounces of Ag and 1,022 ounces of Au or 165,093 AgEq ounces sold in Q1 2025.
• Cash costs for the quarter were US$42.55 per AgEq ounce produced, as compared to US$33.63 per AgEq ounce produced in Q4 2025 and US$22.51 in Q1 2025 due to a number of factors, including the ramp up of operations at Coloso and Nazareno and inflationary pressures on input costs.
• Adjusted EBITDA of US$2.8 million for Q1 2026 compared to US$1.1 million for Q1 2025.
• The company generated US$3.5 million of cash from operating activities in Q1 2026 as compared to US$729,000 in Q1 2025.
• Gross profit was US$3.61 million for Q1 2026, as compared to US$1.36 million for Q1 2025.
• Cash and cash equivalents and short-term investments at March 31, 2026, totaled US$13.2 million, and working capital totaled US$14.4 million.
• On February 6, 2026, the Company made a principal payment of US$2.5 million on the US$5 million senior secured project financing loan with First Majestic Silver Corp. (AG:TSX; AG:NYSE; FMV:FSE). 

Ramp-up and development activities at Coloso and Nazareno weighed significantly on Q1 2026 costs. Sierra Madre said in the release that, "Gold and silver recovery declines stemmed from feed blend optimization across the three mines, further pressuring costs. Additional headwinds included higher pay rates and a ~29% expansion of La Guitarra's staff base ahead of the planned expansion; elevated commodity prices driving higher mine royalty payments and production taxes; a strengthening Mexican peso increasing the cost of peso-denominated operating expenses; and broader inflationary pressures — all of which contributed to quarterly cost performance."

Another aspect was the company's pending acquisition of the Del Toro silver mine from First Majestic, which subsequently closed in escrow for gross proceeds of CA$57.5 million.

Regarding Q1 2026 operational results, highlights are as follows:

• The Company milled 41,699 tonnes of material, with silver recoveries averaging 71.98% and gold recoveries averaging 71.61%. In Q1 2025, the company milled 39,167 tonnes of material, with silver recoveries averaging 79.21% and gold recoveries averaging 78.77%.
• Sierra Madre produced 58,506 ounces of silver and 932 ounces of gold in Q1 2026, compared to production of 70,176 ounces of silver and 1,001 ounces of gold in Q1 2025.
• Over 750 meters of development were completed in Q1 2026, compared to 775.70 meters in Q1 2025.
• Mining restarted at the higher-grade Coloso underground mine at the end of Q1 2025. In September 2025, Sierra Madre also announced the restart of mining at the Nazareno mine. The Company is focused on ramping up operations at Coloso and Nazareno ahead of the increased plant throughput levels anticipated upon completion of Phase I of the Guitarra expansion.
• On October 23, 2025, the Company announced the start of a US$3.5 million exploration program at the East District of the Guitarra mine complex. Upon completion of mapping, sampling and drill target delineation, a 30,000-metre drill program would then be undertaken to further assess the targets' economic potential. Drill permit preparation is underway and drilling is expected to start in H2 2026. Sierra Madre is also sourcing a large core rig for drilling long sub-horizontal holes from the fully permitted, mining-designated Tlacotal area.

Sierra Madre's CEO said in the release, "Our Q1 revenues of US$10.1 million are a record for the Company. With a steady production base, Sierra Madre leveraged the effects of rising commodity prices. We are on solid footing heading into the rest of 2026. Head grades are anticipated to improve as Coloso and Nazareno mines continue to ramp up. We have purchased haul trucks, scoop trams, and invested in backup generators to reduce operating costs and sustain production continuity. The Guitarra plant capacity expansion is anticipated to be completed by the end of Q2 2026 and is expected to increase throughputs by over 50% from current levels. We expect these initiatives to materially increase production while reducing unit costs."

Sierra Madre Gold and Silver Ltd. is a metals development, extraction, and exploration company focused on the Guitarra mine in the Temascaltepec mining district in Mexico.

Metals Sectors Moving Through Political Turmoil

As of the morning of May 20, 2026, spot gold was trading at US$4,503.70 per ounce, while spot silver was trading at US$75.67 per ounce. This marks a rise from yesterday. Kitco reported, "Gold and silver are still trading inside the rate-shock zone created by last week’s inflation sequence, but Wednesday’s early tone is less disorderly than Tuesday’s selloff. The 10-year Treasury yield slipped to around 4.64%, down 2.7 basis points, after testing its highest level since January 2025, while the 30-year yield eased after touching its highest level since 2007."

As has been the case for the past several weeks, tensions between the U.S. and Iran, along with President Trump's flip-flopping peace talk narratives, have kept investors nervous and the metals markets sliding up and down.

In April, S&P Global wrote, "Gold is expected to remain volatile but structurally supported, with central bank demand and geopolitical risk helping to establish a price floor above recent correction lows."

Despite the volatility of gold, the sector as a whole is only showing signs of improvement. On May 7, 2026, Brian Taylor of Recycling Today said that the World Bank Group has predicted that overall global metals prices will rise by 17% in 2026, which would mark the first overall market increase since 2022.

Sierra Madre "Knocked It Out of the Park"

In a May 19, 2026, article for The Gold Advisor, senior analyst Ted Butler said, " Sierra Madre may as well be swinging a baseball bat, as it’s knocked it out of the park with its Q1 2026 financial results."

While some investors may be wary of the company's rising cash costs, Butler assuaged their fears. "Admittedly, cash costs also rose to US$42.55 per AgEq ounce produced, up from US$33.63 in Q4 2025, reflecting ramp-up costs at Coloso and Nazareno and broader inflationary pressures. However, management notes that improved head grades are expected through the remainder of 2026 as higher-grade in-resource material is processed, with unit costs expected to fall in turn," he wrote.

"I have recently upgraded to an overweight position in Sierra Madre, grounded in my belief that management will meaningfully scale up silver production in the coming months. Peter continues to hold a full weighting in the stock," said Butler.

Catalysts for 2026

The first phase of the company's La Guitarra capacity expansion project is on schedule to be completed by the end of Q2 2026. As per the press release, "As announced on September 8, 2025, the company has initiated a plan to expand production capacity at Guitarra in a two-phase program, with the first phase anticipated for completion by the end of Q2 2026, with the aim to increase the nameplate capacity of the mill from 500 tonnes per day ("tpd") to a range of 750-800 tpd. The second phase is anticipated to be completed by Q3 2027, with the aim of increasing the capacity to a range of 1,200-1,500 tpd at Guitarra."

Langer said, "We are also looking forward to closing the Del Toro mine acquisition and preparing for exploration in the East District of the La Guitarra Mine Complex, with over 30,000 meters of drilling planned to start in H2 2026."

Ownership & Share Information¹

Sierra Madre Gold and Silver Ltd. has a market cap of CA$371.86 million, with 196.75 million shares outstanding. The company's 52-week range is CA$0.57-CA$3.25.

Institutions own 33.6% of shares, while Strategic Investors own 26.21%. Management & Founders own 24.3%, and the remaining 15.89% of shares are held by Retail.