Skip to main content

Guanajuato Silver – Q2 2026 Financials, Operations, Development, and Exploration Across All 5 Mines

The KE Report Sep 9, 2026 27:21

Summary

Q2 2026 marked Guanajuato Silver's second straight quarter of positive net income ($557K Q2, $6.3M H1) on $42.5M revenue.

The company retired two-thirds of its Ocean Partners gold loan at an effective $3,800/oz, leaving only one final payment due April 2028.

Active hedges cover ~25% of gold output at $5,220/oz and ~34% of silver at $80–$93/oz through year-end 2026.

Five producing mines, plus 16,000 meters of underground development and a 75,000-meter drill program, are running concurrently toward year-end resource updates.

AISC rose quarter-over-quarter as a strong Mexican peso inflated silver-equivalent costs; management wants to move away from silver-equivalent reporting.

Key points on Guanajuato Silver

  • Per CEO James Anderson, the company posted net income positive for two quarters in a row — the only two in its history — totaling $6.3M in H1 2026 with $9.1M of Q2 operating income, on quarterly revenue above $40M (~$160M+ annualized) and trading at roughly 2x revenue
  • The CEO describes paying down about two-thirds of the Ocean Partners gold loan at an effective $3,800/oz — using the early-paydown bonus after gold dropped from above $5,000 to about $4,000 — leaving only ~2,300 oz of gold owed, with no payment due until April 2028
  • The guest defends hedging about 25-30% of forward production through December 2026 — 300 oz of gold at $5,220 and 20,000 oz of silver at $84.50 — as short-term volatility management rather than blanket hedging, given 97% precious-metals revenue mix
  • Per management, Q2 production was deliberately reallocated away from Valenciana toward Cubo, Bolanitos and San Ignacio; the San Ignacio-Bolanitos underground connecting tunnel is reported as roughly 3-4 weeks from completion, and a 75,000-meter drill program (60% underground) is targeted to complete by year-end 2026
  • The host highlights exploration optionality at El Ocon — drilling has now started under a 5,000m program, with ~1,100 prior channel samples and described as a direct Veta Madre extension with polymetallic mineralization — plus the Cebada past-producer (not yet drilled), with updated resources and reserves per mine expected with a December 31, 2026 cut-off

James Anderson's takeaways

  • Top takeaway James argues Q2 2026 was a success because the company posted net income for only the second quarter in its history ($6.3M H1, $9.1M Q2 operating income) while deliberately reinvesting every peso back into development work, drilling-fleet purchases and plant betterments in older, previously underinvested mines — he frames the relatively high all-in sustaining cost as a feature of that reinvestment
  • He frames the debt paydown as opportunistic capital management: extinguishing about two-thirds of the Ocean Partners gold loan at an effective $3,800/oz (via an early-paydown bonus) following gold's drop from above $5,000 to about $4,000 — leaving ~2,300 oz of gold outstanding with no payment due until April 2028
  • He defends short-term, partial hedging — 300 oz of gold at $5,220 and 20,000 oz of silver at $84.50 (about 25-30% of production, through December 2026) — as a prudent volatility tool given the company's 97% precious-metals revenue mix, and says he would do it again on the same short horizon
  • He argues the AISC jump (~$53 to ~$71+) is partly an artifact of gold/silver-ratio volatility (about 92:1 a year earlier to about 67:1 now) and a strong Mexican peso, and he wants the company to move away from silver-equivalent cost reporting as a fairer way to compare quarters and peer companies
  • He is bullish on El Ocon as a potential 'mine #6' — describing it as a direct Veta Madre extension with polymetallic mineralization, ~1,100 prior channel samples and a 5,000-meter drill program now underway; resource growth is the near-term deliverable, with trucking distance to existing plants cited as the main constraint on a production decision

Shad Markwitz's takeaways

  • Top takeaway Shad frames Guanajuato Silver as one of the fastest-growing Mexican silver producers via serial acquisitions (El Cubo, the three Great Panther mines, Bolanitos from Endeavor Silver) where prior owners had pulled back on underground development; he points to the Sant'Annino target at San Ignacio as one of the best places the company has drilled in the last three or four years
  • He calls the hedging strategy — 300 oz of gold at $5,220 and 20,000 oz of silver at $84.50 through December 2026 (about 25-30% of production) — 'savvy' volatility management rather than full hedging, and views the two-thirds Ocean Partners gold-loan paydown (with no payment due until April 2028) as having removed risk from the balance sheet while preserving optionality if gold drops again