Sierra Madre Gold and Silver Ltd. (SM:TSX.V; SMDRF:OTCQX) reported financial and operating results for the quarter ended June 30, 2026, including US$8.23 million in net revenues and US$1.58 million in gross profit from its La Guitarra operation. The company sold 123,483 silver-equivalent ounces during the quarter and ended June with US$22.2 million in cash and cash equivalents and US$25.0 million in working capital.
Silver revenues totaled US$5.0 million at US$75.65 per ounce, while gold revenues totaled US$4.3 million at US$4,529 per ounce. For the comparable quarter ended June 30, 2025, silver revenues were US$2.2 million at US$33.36 per ounce, and gold revenues were US$3.6 million at US$3,272 per ounce. Gross profit was US$1.58 million in Q2 2026 compared with US$1.69 million in Q2 2025. Adjusted EBITDA for the first six months of 2026 was US$3.5 million, compared with US$2.6 million for the same period in 2025. Cash generated from operating activities during the first half of 2026 was US$1.89 million, compared with US$1.37 million in the prior-year period.
"Q2 was a very productive quarter for Sierra Madre with US$8.23 million in net revenues and US$1.58 million in gross profit from La Guitarra, as we made significant progress on the expansion, continued the ramp up of the Coloso and Nazareno mines, and added equipment and staff to support increased production," Chief Executive Officer Alex Langer said in the company news release.
The company processed 41,567 tonnes during Q2 2026 and produced 137,313 silver-equivalent ounces, including 64,315 ounces of silver and 945 ounces of gold. It sold 66,691 ounces of silver and 943 ounces of gold during the quarter. The average realized price per silver-equivalent ounce sold was US$75.45. Silver recovery was 73.58% and gold recovery was 67.97%, while silver and gold grades were 65.27 grams per tonne and 1.05 grams per tonne, respectively. Development totaled 1,188 meters, compared with 591 meters in Q2 2025.
Cash cost of production was US$142.44 per tonne, cash cost per silver-equivalent ounce produced was US$49.28, and all-in sustaining cash cost per silver-equivalent ounce produced was US$54.73. The company said Q2 costs were affected by ramp-up and development work at Coloso and Nazareno, which resulted in a significant share of production coming from development drives and out-of-resource, lower-grade mineralization. Increased commodity prices also increased royalty payments and taxes, while the strengthening Mexican peso against the U.S. dollar, inflation on inputs, and rising worker pay rates affected costs.
Gold and silver recoveries declined as development work opened new mining areas and resulted in feed being blended from three mining centers. Sierra Madre built a metallurgical laboratory at the site to optimize its blending protocol. Power outages related to weather also continued during Q2 and increased costs. The company acquired a 1,250-kilowatt backup diesel generator for Coloso and Nazareno and two 1,500-kilowatt generators for the plant. Installation of the two Guitarra generators was completed in mid-August, with full operation expected in September.
Sierra Madre also added mining equipment. A narrow-profile Muki jumbo drill was transferred to the Guitarra mine to support development and production in the San Raphael area and the Juliet vein. A rebuilt 0.5-yard scoop tram reduced dilution and mining costs at Juliet, while two haul trucks purchased in April replaced rental units used in the tailings buttress program and for Coloso haulage. Two additional scoops were acquired to support increased mining rates associated with the expansion.
Contractor operations to ramp up production from the Coloso and Nazareno mines began in mid-June, with Sierra Madre miners and equipment focused on accelerating production at Guitarra. Nazareno began full production from long-hole stopes on the 180 level in late April 2026. At Coloso, dewatering of the lower levels was accelerated, with production from resource blocks below the existing workings expected to begin in the second half of 2026.
The company reported that modifications to the existing mill and installation of larger-capacity pumps had increased daily throughput to as much as 672 tonnes per day, 34% above the previous 500-tonne-per-day level. Sierra Madre now anticipates achieving Phase I production capacity before the end of Q3 2026, after additional foundation and electrical work was required for a larger-than-planned mill. Foundation work for the ball mill, support equipment, and building enclosure had been completed since the end of Q2, and an overhead crane had been installed.
Refurbishment of the used ball mill purchased in December 2025 was completed at the end of Q1 2026, raising its rated milling capacity to 900 tonnes per day. A standard head crusher purchased in Q4 2025 began full operation in April 2026, two months ahead of schedule. Thickener tank construction was completed in mid-August, with mechanical and electrical circuit testing underway and the thickener expected to be functional by the end of September. Sierra Madre also chose to proceed with construction of a new permitted dry-stack tailings storage facility, with site clearing expected to begin in October.
During the quarter, Sierra Madre closed its acquisition of a 100% interest in the Del Toro silver mine after receiving shareholder and Mexican antitrust approvals. A concurrent financing generated gross proceeds of CA$57.5 million. Geologic mapping and sampling had started at Del Toro, along with a re-evaluation of surveys, and drilling was expected to begin in mid-2027.
Following quarter-end, Sierra Madre received approval to begin drilling in the East District of the Guitarra complex. Target definition work was underway, and drilling bids had been received for a long-hole, sub-horizontal program planned from the permitted Tlacotal property, with drilling expected to start in the second half of 2026. The company also fully repaid a US$5 million non-revolving secured term loan, as announced on July 8.
Silver Climbed Above US$70 as Precious Metals Drew Investor Attention
In an August 27 report, The Motley Fool's Katie Brockman described increased uncertainty across financial markets as major U.S. stock indexes had declined during the previous two weeks. She wrote that "Nearly 40% of investors expect the market to fall over the next six months," while about 35% of respondents to the cited investor survey were bullish and 25% were neutral. Brockman cited technology-sector volatility, uneven earnings reports, and uncertainty surrounding Federal Reserve interest-rate decisions among the factors contributing to the market environment.
Reuters reported through CNBC later on August 27 that precious metals markets had remained focused on interest rates and inflation ahead of Federal Reserve Chair Kevin Warsh's remarks at the Jackson Hole symposium. The report said the Personal Consumption Expenditures price index, the Federal Reserve's primary inflation gauge, had stood at 3.7% in the 12 months through July. Precious metals strategist Christopher Wong said gold had remained supported by exchange-traded fund and futures participation, concerns over U.S. fiscal credibility, and continued official-sector buying. On silver, Wong said, "We remain constructive (on silver), though a cleaner extension higher likely requires renewed weakness in yields, U.S. dollar, and a decisive break above the US$70.60-US$72 resistance area."
Trading Economics data dated August 28 showed silver at US$70.536 per ounce after the metal had climbed above US$70 and reached a more than two-month high. Silver had risen 1.85% for the day, 22.36% over the previous month, and 77.53% over the previous year.
Analyst Highlighted Eastern District Drilling Plans
VSA Capital analyst Oliver O'Donnell focused on Sierra Madre Gold & Silver's Eastern District exploration plans at La Guitarra in a July 14 research report after the company received permits covering 22 drill pads. He said the permits represented the first phase of a fully budgeted 30,000-meter drill program designed to test up to 30 mapped vein systems.
O'Donnell wrote that the initial drilling was planned from the Tlacotal area, where the company held surface ownership and mining-activity permits. The first seven holes were designed as sub-horizontal holes ranging from 1,000 to 1,500 meters. Four were planned from a single pad to target the Magdalena vein system below historic workings, while three were designed to test veins mined at Los Locos, with wedge drilling planned for infill and offsets.
The analyst also pointed to exploration work that had preceded the planned drilling. He wrote that Sierra Madre had spent recent months conducting mapping and soil sampling and reinterpreting historical data to construct a 3D structural model and identify high-priority drill targets. Discussions were also underway to secure surface access at Rincon for a separate permit covering an initial nine holes of 600 to 1,000 meters, while drilling was planned at the Inca and La Palma vein systems, where permits were already in place.
O'Donnell described Eastern District drilling as "a long-awaited event" and cited an Exploration Target of 0.77 million to 1.54 million tonnes grading 2.4 to 3.6 grams per tonne gold and 440 to 670 grams per tonne silver. He wrote that the combination of the precious metals price environment, the company's balance sheet and positive operating cash flow from La Guitarra had provided an opportunity to conduct "the first systematic exploration programme across the district."
VSA Capital reiterated its Buy recommendation and CA$2.70 per share target price. The report was identified as a marketing communication and non-independent research. VSA Capital disclosed that it acted as corporate adviser and broker to Sierra Madre Gold & Silver, had a holding in securities issued by the company or related derivatives, and had an agreement to be paid a fee as corporate finance advisers and arrangers or had provided investment banking services to the company within the previous 12 months.
Expansion, Drilling, and Mine Restart Programs Set Out in 2026 Plan
At La Guitarra, Sierra Madre's August 2026 corporate presentation outlined a two-stage expansion alongside a large East District exploration program. Phase I called for expansion to 750 to 800 tonnes per day, while Phase II called for expansion to 1,200 to 1,500 tonnes per day by Q3 2027. The program included construction of a paste-fill and thickener plant, addition of a fourth ball mill and second cone crusher, increased conveyor material-handling capacity, a second crushing circuit, replacement of a smaller-capacity ball mill, and construction of a permitted 5.8-million-tonne dry-stack tailings storage facility. The presentation stated that no additional permits were required for the expansions and that the work was expected to be funded from the treasury and cash flow.
The presentation stated a planned 30,000-meter drill program in H2 2026. Detailed surface mapping, surveying, and sampling of historic workings were underway, with more than 25 kilometers of metasediment-hosted veins and more than 13 kilometers of volcanic-hosted veins mapped within the district. The presentation described a planned drill program of more than 30,000 meters in H2 2026.
Sierra Madre had received permits for 22 East District drill pads. Phase One called for four holes targeting the Magdalena vein system in the Rincon area. Seven holes, each planned at between 1,000 and 1,500 meters and drilled sub-horizontally, were planned in the permitted Tlacotal area to intersect multiple vein systems. Three additional holes were planned to test veins that had been productive at the Los Locos mine, with the holes also available for wedge drilling to provide infill, offset holes, and additional drilling. A 3D model incorporating surface mapping, old workings, and historic data was to guide the first phase of the 30,000-meter program, which was designed to test as many as 60 veins.
At Del Toro, Sierra Madre's presentation set out a separate 30,000-meter drilling program and stated that the company intended to commence a restart in mid-2027. The property contains three underground mines and a permitted flotation circuit.
The Del Toro exploration plan carries a US$12 million budget over 24 to 30 months. It provides for four geologists, 10 helpers, 30,000 meters of diamond drilling, and 20,400 assays, with a 20% contingency included in the budget. The presentation said a new resource report was expected within 18 months of the acquisition and separately identified early 2028 as the target for a new resource report.
Sierra Madre also outlined a possible Del Toro mine restart process to begin after the La Guitarra expansion. Existing infrastructure identified in the presentation included the developed San Juan, Perseverancia, and Dolores mines, access through surface portals, an installed dewatering system at San Juan, a process plant, workshops, an analytical laboratory, temporary ore stockpiles, waste-rock and tailings storage facilities, water-management and diversion structures, offices, drill-core and logging facilities, water ponds, power substations, and power lines. The plant includes three mills with a total capacity of 3,650 tonnes per day. The presentation listed production as slated for mid-2028.
The presentation assigned US$10 million over one year to the possible Del Toro restart, with the budget designed for mine startup at an 800-tonne-per-day run rate and an aim to later increase that rate to 1,600 tonnes per day. The restart budget identified US$5 million for mining development, which the company said may be completed from cash flows. It also listed US$5.3 million for mining equipment, US$2.3 million for the plant, US$1.0 million for the laboratory, and US$1.7 million for a 20% contingency. Annual carrying costs were listed at US$2 million while exploration was being completed.
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:TSXV | 1 | SM:TSXV | 0.6355 |
Ownership & Share Information1
Sierra Madre Gold and Silver Ltd. has a market cap of CA$348 million, with 261.3 million shares outstanding. The company's 52-week range is CA$0.84-CA$3.25.
Institutions own 41.44% of shares, while Strategic Investors First Majestic Silver Corp. (AG:TSX; AG:NYSE; FMV:FSE) own 24.74%. Management & Founders own 19.21%, and the remaining shares are held by Retail.
FAQs
What were Sierra Madre Gold & Silver's Q2 2026 financial results?
Sierra Madre Gold & Silver Ltd. reported Q2 2026 net revenues of US$8.23 million and gross profit of US$1.58 million from its La Guitarra operations. The company sold 123,483 silver-equivalent ounces during the quarter.
How much silver and gold did Sierra Madre produce in Q2 2026?
Sierra Madre produced 137,313 silver-equivalent ounces in Q2 2026, consisting of 64,315 ounces of silver and 945 ounces of gold. The company processed 41,567 tonnes during the quarter.
What is Sierra Madre's La Guitarra mine expansion plan?
Sierra Madre's two-phase La Guitarra expansion was designed to increase nameplate processing capacity from 500 tonnes per day. Phase I targeted a capacity of 750 to 800 tonnes per day, while Phase II targeted 1,200 to 1,500 tonnes per day.
When is Sierra Madre's Phase I La Guitarra expansion expected to be completed?
Sierra Madre said in its August 27 results that Phase I production capacity was expected before the end of the third quarter of 2026. The company reported that throughput had already reached as high as 672 tonnes per day in August.
What is Sierra Madre planning for the East District at La Guitarra?
Sierra Madre's August corporate presentation outlined a US$3.5 million East District exploration program and more than 30,000 meters of planned drilling during the second half of 2026. The presentation said permits had been obtained for 22 drill pads and that the program was designed to test as many as 60 veins.
What is Sierra Madre's Del Toro silver mine plan?
Sierra Madre completed its acquisition of a 100% interest in the Del Toro silver mine in Zacatecas State on June 22, 2026. Its August presentation outlined a US$12 million exploration budget over 24 to 30 months, including 30,000 meters of diamond drilling and work toward an updated resource report.
What processing capacity does the Del Toro silver mine have?
Sierra Madre's August presentation described Del Toro as having three mills with a total processing capacity of 3,650 tonnes per day. The property also included three developed underground mines and associated mine and processing infrastructure.
How much is Sierra Madre budgeting for a possible Del Toro mine restart?
The company's August presentation outlined a US$10 million possible restart budget over one year, allowing for startup at 800 tonnes per day with an aim of later increasing production to 1,600 tonnes per day.
What were silver and gold prices in August 2026?
Trading Economics reported on August 28 that silver had reached US$70.536 per ounce, representing gains of 22.36% over the previous month and 77.53% over the previous year. Gold stood at US$4,606.29 per ounce, up 13.25% over the previous month and 33.50% over the previous year.
What is the analyst rating and price target for Sierra Madre Gold & Silver?
In his May 19 research report, VSA Capital analyst Oliver O'Donnell maintained a Buy rating on Sierra Madre Gold & Silver and increased his target price to CA$2.70 per share. O'Donnell reported that the company generated US$10.1 million in first-quarter revenue and US$2.8 million in adjusted EBITDA.
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Important Disclosures:
- Sierra Madre Gold and Silver Ltd. is a billboard sponsor of Streetwise Reports. The company pays a monthly sponsorship fee of US$3,000–US$6,000 for banner advertising and an enhanced company profile page. Streetwise Reports’ editorial content is fully independent and is not influenced by sponsorship.
- 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.
- 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.
