Sierra Madre Gold and Silver Ltd. (SM:TSX.V; SMDRF:OTCQX) provided an update on the progress of its planned two-stage expansion at the La Guitarra silver gold mine complex. The company stated that the first stage of the expansion was designed to increase production rates from the current 500 tonnes per day to between 750 tonnes per day and 800 tonnes per day of processing capacity. Processing plant upgrades, tailings handling improvements, and equipment purchases related to the expansion were reported to be underway.
The company said that once the first stage was completed, the planned second phase would increase processing capacity to a range of 1,200 tonnes per day to 1,500 tonnes per day by the third quarter of 2027.
Greg Liller, chief operating officer and executive chairman, stated in a company news release, “Once completed, the first stage of the expansion is expected to not only deliver increased throughputs but also efficiencies across the operation, such as deposition of a portion of the tailings underground and higher equipment availability. The next major work milestones are the ball mill and thickener installation.”
The current crushing circuit consisted of a primary jaw crusher, a two-tier vibrating screen plant, and a three-foot short head cone crusher. The company reported that installation of a new three-foot standard head crusher was expected to expand crushing capacity to between 750 tonnes per day and 800 tonnes per day. Construction began in December 2025, and initial testing of the circuit was underway.
Earthworks for the foundations of the thickener, designed for 750 tonnes per day to 800 tonnes per day, were described as nearly complete. Fabrication of the tank, mixing rake, electrical components, and support structures was reported as well advanced, with project completion on track for the end of the second quarter.
The company also reported that it had purchased a used 11 by 12.5 ball mill that was being refurbished. The mill had a nominal capacity of 600 tonnes per day at a minus three-eighths-inch feed size and was expected to expand processing capacity to the 750 tonnes per day to 800 tonnes per day objective when used with one of the existing mills. Projected completion was reported as on target for late in the second quarter.
To support the planned production increases, the company reported equipment purchases, including two new scoop trams, one used scoop, and the rebuilding of two existing scoops. It also purchased a second StopeMate long hole drill and completed the rebuilding of a second Jumbo drill. For haulage and materials movement, the company purchased four haulage trucks and a second front-end loader.
Unwrapping The Precious Metals and Mining Markets
Alasdair Macleod wrote on February 17 that derivatives had played a central role in precious metals markets for decades, noting that “derivatives have been used to suppress their prices.” He stated that expansion of derivative trading had diverted speculative demand away from physical markets, adding that it “was the basis of the massive expansion of gold trading on the LBMA, and of gold futures under the control of the large U.S. banks.”
He also described changes in trading activity over time, writing that in London “44 million ounces were cleared daily in 1998,” while more recently “17 million ounces were cleared, but at higher prices, they were valued at US$71 billion.” He noted that physical demand trends had shifted, stating that “physical gold is now being drained out of London and New York directly or indirectly by a combination of central bank and wider Asian demand.”
Macleod also pointed to broader commodity implications, explaining that “the approaching problems in paper gold contracts will almost certainly be transmitted into higher dollar prices for commodities generally, as paper hedging in the form of derivatives diminishes.” He added that “the contraction of outstanding commodity derivatives will not be without accidents,” and that banks would face “enormous write-offs” as markets adjusted.
Stewart Thomson wrote on February 17 that seasonal factors continued to influence short-term metals pricing, stating that the Chinese New Year holiday “is typically associated with softness in the fiat price of gold.” He also described broader demand dynamics, writing that an emerging “gold bull era” was linked to economic growth in Asia, where “gold-oriented citizens of Asia will buy much more gold than they’re already eagerly buying now.”
Thomson also commented on mining sector cost structures, noting that “most gold producers sport AISCs in the sub US$2000/oz area, and silver producers are at about US$20.” He added that sector performance was tied to broader market trends, stating that “junior mining stocks up trending action should resume” when technical indicators strengthened.
According to a February 18 commentary from Excelsior Prosperity with Shad Marquitz, precious metals markets experienced notable short-term volatility tied to global market conditions, including holiday closures across North America and Asia. The commentary stated that “we saw more selling pressure today,” with gold, silver, and mining stocks declining following the holiday period. It also noted that Chinese market closures “took out of the markets many strong buyers of precious metals in the East.”
In a related discussion cited in the same commentary, Jordan Rusche described the longer-term market cycle, stating that “we are 10 years into this gold bull market already.” He also discussed structural characteristics of mining business models, noting that royalty and streaming companies benefited from mine development activity because “they get access to lots of the upside from the mine and you’re typically paying one time upfront for the asset in perpetuity.”
Commentary Focused on Del Toro Acquisition and East District Development
Dominic Frisby of The Flying Frisby wrote on December 31 that his “Top Pick silver, Sierra Madre Gold and Silver Ltd., has been great. The company is growing nicely and solidly . . . there is plenty left in the tank as Sierra Madre is expanding in just the right way at just the right time.”
On January 15, Ted Butler of The Silver Advisor said it was “great to see Sierra Madre Gold and Silver Ltd., trading near all-time highs of CA$2.34, finally being rewarded for its bold and aggressive growth strategy.” He also stated that “we believe there’s plenty more share price growth to come in 2026, especially once Del Toro becomes the company’s second cash flow-producing mine.”
Dominic Frisby wrote on January 18 that “my silver pick Sierra Madre Gold and Silver Ltd. keeps on giving,” adding that with silver at US$90, “that US$96 target I’ve been speaking about for some time now, based on silver’s cup-and-handle pattern, looks like it’s going to get taken out.”
In a research note dated February 2, Oliver O’Donnell of VSA Capital reiterated a Buy rating on Sierra Madre Gold and Silver Ltd. and raised the target price to CA$3.00 per share. The report stated that “the upgrade follows the company’s completion of a CA$57.5 million fundraise in conjunction with the conditional acquisition of the Del Toro silver mine.”
The VSA note also stated that “Sierra Madre has conditionally acquired the Del Toro Mine in the Chalchihuites District of Zacatecas, Mexico, for total consideration of up to US$60 million.” It further said that “the addition of Del Toro diversifies Sierra Madre’s asset base and offers the potential to replicate the value creation strategy at La Guitarra.”
O’Donnell further wrote that “VSA Capital has significantly upgraded its forecasts,” and expected EBITDA “to increase eleven-fold year-over-year to US$62 million in 2026.” The analyst also stated that the firm’s silver price assumption for 2026 had been increased “to US$95 per ounce from US$56 previously.”
In a February 17 commentary from The Silver Advisor, Ted Butler wrote that Sierra Madre “returns with a decisive update on the production expansion at its flagship La Guitarra project.” He stated that the company had previously outlined a two-stage expansion plan “initially targeting 50% increases in processing rates to between 750 and 800 tonnes per day by Q2.”
Butler also noted that “the growth strategy is well on track, with equipment purchases made, as well as processing plant and tailings handling upgrades underway.” He described operational developments, writing that the company “has added a new 3-foot standard head cone crusher that will help propel throughput toward the 750 to 800 tonne per day target,” and that “construction of the upgraded crushing circuit began in December, with initial testing already underway.”
He further stated that “earthworks for the new 750 to 800 tonne per day thickener foundation are nearly complete,” and that “grinding capacity is being addressed through the purchase of a refurbished 11 by 12.5 foot ball mill, rated at a sizable 600 tonnes per day.” He added that underground fleet expansion included “acquiring two new scoop trams” along with additional equipment purchases and rebuilds.
Expansion Work Streams and Equipment Installations at La Guitarra
The company reported that installation of a new three foot standard head crusher was expected to expand crushing capacity to between 750 tonnes per day and 800 tonnes per day. Construction began in December 2025, and initial testing of the crushing circuit was under way. The company also stated that options were being evaluated for constructing a second crushed ore storage bin to provide additional backup storage capacity and potentially allow crushed mineralization to be reduced to a nominal one quarter inch size depending on water content.
Earthworks for the foundations of the thickener designed for 750 tonnes per day to 800 tonnes per day were nearly complete. The thickener was described as enabling a portion of tailings to be deposited as paste fill in old stopes and allowing for the construction of a filter circuit to produce dry stackable tailings. Fabrication of the tank, mixing rake, electrical components, and support structures was reported as well advanced, with completion on track for the end of the second quarter.
The company stated that a used 11 by 12.5 ball mill had been purchased and was being refurbished. Installation would involve constructing a new foundation based on manufacturer blueprints, and the mill would be placed at the location of a previous mill. Projected completion was reported as on target for late in the second quarter.
To support increased mine productivity, the company reported purchases of two new scoop trams, one used scoop, rebuilding of two existing scoops, acquisition of a second StopeMate long hole drill, and completion of rebuilding a second Jumbo drill. It also reported purchasing four haulage trucks, including two units sized for surface and underground use and two 14 cubic meter trucks for surface haulage and use in the main San Rafael level, along with a second front end loader sized for both surface and underground loading.
Ownership and Share Structure1
Management and founders own approximately 24.3% of the company. According to LSEG, President and CEO Alexander Langer holds 2.68%, Executive Chairman and COO Gregory K. Liller owns 1.77%, Director Jorge Ramiro Monroy holds 1.32%, Director Alejandro Caraveo owns 1.26%, Director Kerry Melbourne Spong owns 0.57%, and Director Gregory F. Smith holds 0.14%, based on data prior to the Del Toro acquisition.
Institutional investors control 33.6% of the company, including a 4.4% stake held by Commodity Capital A.G., per Refinitiv. Strategic investors account for 26.2%, with the remaining ownership held by retail shareholders (pre-acquisition).
Sierra Madre Gold and Silver Ltd. has a market capitalization of approximately CA$420.36 million and a 52-week trading range of CA$0.49 to CA$3.25. The Company has 196,351,971 shares outstanding.
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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.