Alex Langer

Sierra Madre Gold and Silver – Ramp Up To 720tpd At The La Guitarra Complex & Exploration Strategy

• Top takeaway He argues the La Guitarra East District could be the largest undeveloped silver district in Mexico, calling the upcoming 30,000 m drill program the reason the company acquired the mine three and a half years ago.
• He expects unit costs to fall about $5 per quarter over the next four to five quarters as development and rental costs roll off, staffing stays flat, and grades rise with throughput.
• He is targeting 1,200-1,500 tpd by around this time next year, pointing to the larger 900-tpd ball mill being installed about 8 months sooner than planned and the dry stack tailings facility as the main remaining requirement.
• He says early work at Del Toro - mapping nearly complete across its roughly 4,000 hectares, old core logging, and mag and geophysics about to fly - could pull its 30,000 m drill program forward from next summer to this spring.
• His stated plan is to build a mid-tier silver producer, with Del Toro's 3,000 tpd plant adding significant production once more resources are found and La Guitarra potentially producing about 2.5 million ounces of silver equivalent annually at expanded rates.

Phase 1 expansion lifted La Guitarra throughput over 40% to 720 tonnes per day (tpd — ore milled daily), with 1,500 tpd targeted by next year. Management expects costs to drop about $5 per quarter for the next four to five quarters as development charges roll off and grades rise. A 30,000-metre drill program across the La Guitarra East District targets up to 40 veins in mines untested by modern drilling since the late 1930s. The Del Toro acquisition adds a past-producing, fully permitted complex with a 3,000 tpd plant, plus a parallel 30,000-metre drill program from next year. About $25 million in working capital and positive cash flow fund the expansion and 60,000 metres of planned drilling across the two projects.

Sierra Madre Gold & Silver – Q1 Operations/Financials/Expansion At La Guitarra and Del Toro Strategy

• Top takeaway He argues Q1 2026 results show the plan working, with adjusted EBITDA of $2.8 million up $1.3 million year over year, while the team lines up a two-phase throughput expansion at La Guitarra.
• He contends the roughly $42 per silver-equivalent-ounce cash cost is temporary: about $10 was catch-up development and $5 was rental equipment, and he expects costs to fall as development catches up and throughput rises.
• His Del Toro strategy is to explore first, with about 30,000 metres to start, aiming to grow the historic resource of roughly 18 million silver-equivalent ounces toward 25 million before restarting the 3,000-tonne-per-day plant at 800 tonnes per day for about $10 million.
• He argues Del Toro's polymetallic profile of lead, silver, zinc and copper, including historic intercepts of 2-3% copper, could support three concentrate streams and possibly a copper circuit.
• On valuation, he argues the shares will re-rate as throughput rises, costs fall and drill results land, calling the combined 60,000-80,000-metre drill program large for a junior of Sierra Madre's size.

Sierra Madre's Q1 2026 adjusted EBITDA reached $2.8 million on higher silver prices, but cash costs of $42.55 per silver-equivalent ounce stay elevated during ramp-up. Roughly $15 of that cost is temporary: about $10 for catch-up mine development and $5 for rental equipment, both set to fall. Phase one of the La Guitarra mill expansion lifts throughput to 750-800 tonnes per day, with phase two targeting 1,200-1,500 tpd by Q3 2027. The Del Toro acquisition from First Majestic closed, adding three mines and a 3,000 tpd plant, with 60,000-80,000 metres of combined drilling planned. The guest argues high costs partly reflect mining lower-grade, off-resource ore while prices are strong, with better grades returning once full sequencing resumes.