Sierra Madre Gold and Silver Ltd. (SM:TSX.V; SMDRF:OTCQX) announced that the TSX Venture Exchange has accepted for filing documentation related to its non-arm's-length acquisition of all of the issued and outstanding shares of First Majestic Silver Corp. (AG:TSX; AG:NYSE; FMV:FSE), which holds a 100% interest in the Del Toro silver mine in Mexico.
The company and First Majestic Silver Corp. previously announced the closing of the acquisition on June 22, 2026. Under the share purchase agreement dated Dec. 17, 2025, Sierra Madre acquired the shares of the subsidiary holding the Del Toro mine.
Under the terms of the agreement, Sierra Madre paid US$20 million in cash and issued 10.87 million common shares to First Majestic at a deemed price of CA$1.30 per share at closing. The agreement also includes additional payments of up to US$40 million tied to specified payment schedules and milestone conditions.
Within 18 months of closing, Sierra Madre is required to pay First Majestic US$10 million in cash or, at its option, common shares, subject to the terms outlined in the agreement. Additional milestone payments of US$10 million each are required if, within 48 months of closing, the company files a National Instrument 43-101 technical report or issues a news release demonstrating mineral resources of at least 100 million ounces silver equivalent, and if, within 60 months of closing, commercial production at Del Toro reaches at least 4,000 tonnes per day for 30 consecutive days. Each payment may be made in cash or common shares, subject to the conditions described in the agreement.
The common shares issued to First Majestic at closing are subject to a four-month-and-one-day hold period. First Majestic also agreed to contractual resale restrictions providing for four equal releases of the escrowed shares beginning Dec. 19, 2026, and continuing through June 19, 2028.
Because First Majestic is an insider of Sierra Madre, the acquisition constituted a related party transaction under Multilateral Instrument 61-101. Sierra Madre stated it relied on an exemption from the formal valuation requirement, while minority shareholder approval was obtained at a special meeting held on April 28, 2026.
Concurrent with the acquisition, Sierra Madre completed a brokered private placement of 44,231,300 subscription receipts at CA$1.30 each for aggregate gross proceeds of CA$57,500,690. Each subscription receipt converted into one common share immediately prior to closing. The company stated that net proceeds funded completion of the acquisition, with the remaining proceeds intended for exploration and development at Del Toro and for general working capital.
President and Chief Executive Officer Alex Langer said in a company news release, "The acquisition of Del Toro marks an important step for Sierra Madre Gold and Silver as we advance towards mid-tier silver production. With existing production infrastructure in place, our focus now turns to near-term resource expansion drilling, with approximately 30,000 meters planned."
Metals Markets Navigate Shifting Sentiment
In a June 23 market update, Chen Lin of the What's Chen Buying? What's Chen Selling? Newsletter said precious metals had come under pressure as "gold and silver were hit hard again as the dollar index is popping," adding that Wall Street firms were raising interest rate expectations while lowering their gold price targets. Lin said he had previously warned subscribers about weakness in the gold market, writing that "a good investor knows when to play offense and when to play defense." Despite the pullback in bullion prices, he noted that "juniors are actually doing fine. I have seen strong responses to good drilling results this month."
NFTRH Premium wrote on June 26 that the risk and reward profile for precious metals had shifted following the sector's correction earlier this year. He stated that "risk/reward is distinctly back with the precious metals vs. the stock market" as the Gold/SPX ratio tested a target range. He also wrote, "It paid handsomely to respect the poor precious metals risk/reward situation entering 2026," adding that "with the precious metals risk/reward picture back in line, I don't want to get caught forgetting the second thing." While noting that "the precious metals correction may not yet be over," he concluded that "risk/reward does not care about that. It is a whole different thing, and it is now positive."
According to a June 27 market update from Couloir Capital, precious and base metals broadly declined during the week as easing geopolitical tensions reduced safe-haven demand while a stronger U.S. dollar and higher Treasury yields weighed on commodity prices. The report stated that gold prices fell 1.7% during the week because "a stronger U.S. dollar and expectations that the Federal Reserve will keep interest rates higher for longer pushed the U.S. dollar higher and lifted Treasury yields, reducing the appeal of non-yielding assets like gold." It also noted that silver declined 8.8%, with the selloff "exacerbated by silver's dual exposure as both a monetary and industrial metal," while weaker physical demand and adequate global inventories also weighed on prices. For base metals, the report said copper declined 1.8% as a stronger U.S. dollar and expectations for higher interest rates weighed on industrial commodities, but added that "supply-side concerns also continue to provide a floor for prices" in the zinc market despite price weakness.
In a June 29 edition of Metals and Mining Stock Mashup, Excelsior Prosperity's Shad Marquitz reviewed technical conditions across several commodity markets and mining equity indexes. He wrote that gold remained below its 200-day exponential moving average, describing that position as "a bearish technical posture," while adding that "gold bulls will want to see pricing reclaim this price level in the days and weeks to come." Marquitz made a similar observation for silver, stating that its position below the 200-day exponential moving average also reflected "a bearish technical posture."
Despite that backdrop, he wrote that "most of the downside damage in silver has been inflicted at this point" and said he expected "new buying will come into silver around US$54-US$55 again." Discussing mining equities, Marquitz observed that gold and silver stock indexes remained below key moving averages, while copper prices continued to trade above the 200-day exponential moving average, which he described as "keeping it in a bullish posture," even though copper mining shares had not reflected the strength seen in the underlying metal.
Expansion Progress and Grade Improvements Highlighted in Research Note
In a May 19 research note, VSA Capital analyst Oliver O'Donnell reviewed Sierra Madre Gold & Silver's first-quarter financial results and operational developments, writing that the company had delivered "strong Q1 2026 financials largely due to higher silver and gold prices." He noted that net revenue reached US$10.1 million, an increase of 22% quarter over quarter and 109% year over year.
O'Donnell reported that adjusted EBITDA totaled US$2.8 million during the quarter, which he said represented "47% of the full year 2025 total." He added that higher mining costs were "significantly explained by a spend on the expansion (non-capitalized spend such as headcount) and additional contractors as well as inflationary pressure."
The research note stated that the first phase of the company's expansion to 750 to 800 tonnes per day remained "on track to complete in Q2." O'Donnell also wrote that "Coloso and Nazareno are expected to contribute higher grades through the balance of 2026," describing this as "a significant contributor to the forecast earnings uplift."
Addressing operations, O'Donnell wrote that development activities had affected recovery rates but stated, "Recovery rates are expected to improve as development advances into higher-grade in-resource areas at both mines." He also said, "Production over the balance of the year is expected to increase" as plant expansion progresses and higher grades and optimized recoveries are realized.
On costs, O'Donnell said the company had incurred expenses related to workforce expansion, mine ramp-up activities, and contractor spending. He wrote that "the cost base for higher production is somewhat in place and we expect unit costs to fall through the year."
VSA Capital maintained a BUY recommendation and revised its target price to CA$2.70 per share. O'Donnell wrote, "Quarterly EBITDA of US$2.8m and operating cashflow of US$3.5m is a significant achievement." He added, "With rising capacity, expected higher grades and a strong pricing outlook, we anticipate US$53m in EBITDA for 2026, highlighting the significant impact of the low-cost expansion and the company's gearing to pricing." He concluded, "We reiterate our BUY Recommendation and adjust our target."
Streetwise Ownership Overview*
Sierra Madre Gold and Silver Ltd. (SM:TSX.V; SMDRF:OTCQX)
| Date | Old Symbol | Old Shares | New Symbol | New Shares |
|---|---|---|---|---|
| 07/09/13 | QRS | 1 | SM | 0.6355 |
Del Toro Work Program and Milestones
According to the company's June 2026 corporate presentation, Sierra Madre plans a 30,000-meter drill program at Del Toro following completion of the acquisition. The company stated the program is intended to support a new mineral resource report, with a US$12 million exploration budget planned over 24 to 30 months. The exploration program includes four geologists, 10 helpers, 30,000 meters of diamond drilling, approximately 20,400 assays, and a 20% contingency. The presentation states the company is targeting a new resource report within 18 months of the acquisition.
The presentation also states that Del Toro includes three underground mines, a 3,000-tonne-per-day flotation processing circuit, permits, and identifies exploration targets including Mina Perseverancia, Cotorras Mine workings, Mina Esmeralda, and El Picacho.
The company's acquisition timeline also outlines the milestone payments associated with the transaction, including the US$10 million payment due 18 months after closing, a US$10 million payment tied to a 100 million ounce silver equivalent resource milestone within four years, and a US$10 million payment linked to achieving commercial production of 4,000 tonnes per day for 30 consecutive days within 60 months of closing.
Ownership & Share Information1
Sierra Madre Gold and Silver Ltd. has a market cap of CA$440.73 million, with 252.1 million shares outstanding. The company's 52-week range is CA$0.66-CA$3.25.
Institutions own 41.44% of shares, while Strategic Investors (First Majestic) own 24.74%. Management & Founders own 19.21%, and the remaining shares are held by Retail.
Important Disclosures:
- Sierra Madre Gold and Silver Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$3,000 and US$6,000.
- 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 Gold and Silver Ltd. and First Majestic Silver Corp.
- James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
- This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
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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.
