Sierra Madre Gold & Silver: Let The Ramp Begin
A Junior Silver Miner Set To Ramp Production On Its Way To Being A Mid-Tier Producer & With District Scale Upside At Multiple Projects
Summary
Sierra Madre is in the early innings of ramping production at La Guitarra, and I expect the company to produce more than ~1M ounces of silver this year.
The company just announced the acquisition of Del Toro for $60M, and if silver keeps running, we could see production there in the next 12 months. Historically the asset produced ~2.5M ounces annually.
Those two assets have exploration upside, with La Guitarra producing since the Spanish colonial era. Del Toro has closeology going for it, as it is adjacent to an advanced exploration project of one of the majors.
Today’s valuation ($246M US, $337M CAD) is going to turn out to be very cheap if the company executes on ramping production, especially if they can get into the ~3-5M oz range annually in the next couple years.
The company is tied at the hip to First Majestic. Both the La Guitarra transaction and the Del Toro transaction were with First Majestic, who is the largest shareholder of Sierra Madre.
The company is currently profitable, but costs are currently high as they are spending to ramp at La Guitarra. They don’t hedge and they started production at the third mine in the block at the end of Q3, so Q4 numbers should be good.
Over the last month, I have been going down silver miner rabbit hole (“pueblos”, as one of my friends likes to call them), because many of the miners haven’t kept up with the silver price. Most of the big miners aren’t even pricing in $50 or $60 an ounce for 2026, and some of the juniors, even after a very good performance in 2025, are still extremely cheap relative to silver. If you want to hear me ranting more on precious metals, that valuation gap on some of the miners, and current events in Venezuela and where we might be headed on that front, I recorded this pod on Tuesday. In short, I thought I was going to be done buying silver stocks a couple weeks ago, but I kept turning over rocks and deciding that it would be worth owning a little bit of this and a little bit of that. One of those more recent purchases is Sierra Madre Gold & Silver (SM.V on the TSX-V).
Sierra Madre: Production In Mexico Set To Ramp
Sierra Madre is a silver miner with several assets in Mexico. After a recent transaction, Sierra Madre now has three assets worth mentioning. La Guitarra, Del Toro, and the Tepic Project. From my understanding, the Tepic Project is on the back burner for now, but there is more exploration upside there and potential for future production. In December, they bought the Del Toro Mine from First Majestic AG 0.00%↑ for $60M. This is how the company ended up on my radar.
Near-term, our plan for Del Toro is to advance exploration and prepare an updated resource report while our operating team focuses on completing the two-stage expansion at La Guitarra. Our initial plan is to commence the mine restart process at Del Toro in mid-2027, with production currently slated for mid-2028. If silver prices continue on their current upward trajectory, there is a possibility of restarting Del Toro within a 12-month time period."
