According to a press release from the company, Sierra Madre Gold and Silver Ltd. (SM:TSX.V; SMDRF:OTCQX) is hoping to begin operations of the La Guitarra project again.
Gregory K. Liller, the Executive Chairman and CEO of Sierra Madre, commented, "We are very pleased with the progress at La Guitarra since the March 2023 closing of the acquisition from First Majestic Silver. Work towards a new resource estimate in accordance with NI 43-101 is underway, concurrent with evaluating historic cost data that would feed into a Mine Restart Study. On the ground, we are focused on prepping the mine, plant, and equipment for a prompt restart."
According to the press release, the company is hoping to put out a Mine Restart Study, along with revitalizing the mine's infrastructure. The company reports that it hopes to complete the mine restart within 22 months.
According to Technical Analyst Clive Maund, Sierra Madre "is a junior mining stock that looks like it has virtually no downside but a lot of upside."
Sierra Madre reports that it has already begun several parts of the plan, including the New Resource Estimation of La Guitarra, which it hopes to complete by the end of the year. Sierra Madre reports that the project is being assessed using 3D surveying data acquired with a laser.
La Guitarra, according to the press release, is estimated to have historic reserves of 6.8 million tonnes of gold and silver mineralization, grading 0.75 g/t gold and 81 g/t silver. The company is hoping to identify new drill targets, especially underground. The company reports that it is preparing for deep drilling and has expanded its transportation and blasting infrastructure.
Looking Ahead With Gold
According to Technical Analyst Clive Maund, gold is unlikely to be heavily affected by a market crash, representing a reliable opportunity for investors in times of financial insecurity.
Maund highlighted both the 1987 crash and the 2008 market crash, where gold briefly dipped but recovered quickly.
According to the tech. analyst, "the best approach, generally speaking, is therefore thought to be to buy the better ones as we see them, but also to remain partly liquid so that you can double down and pick up more of them at even lower prices should they eventuate."
A Strong Speculative Buy With Catalysts Underway
Clive Maund rated the company's stock as a "Strong Speculative Buy" for potential investors in July.
According to Maund, Sierra Madre "is a junior mining stock that looks like it has virtually no downside but a lot of upside." Maund highlighted the company's recovery in May and June, the company's successful drilling operations, and effective fundraising.
Sierra Madre reports several catalysts on the horizon, including the acquisition of Guitarra, already finalized in the first quarter of 2023, the results of the first stage of drilling at La Tigra, and the second phase results from Tepic, and the new resource report for La Guitarra and Tepic.
Ownership and Share Structure
Streetwise Ownership Overview*
Reuters provides a breakdown of the company, with management and insiders owning 5.22% of the company.
According to Reuters, Alexander Langer, CEO and director, owns 2.06% with 2.94 million shares, Jorge Ramiro Monroy, lead director, owns 1.42% with 2.02 million shares, Alejandro Caraveo, director and country manager, owns 1.24% with 1.77 million shares, Kerry Melbourne Spong, controller and corporate secretary, owns 0.32% with 0.46 million shares, and Gregory F. Smith, director, owns 0.18% with 0.25 million shares.
Institutions own 11.1% of the company.
First Majestic Silver Corp. owns 47.7% with 69.06 million shares, and Commodity Capital AG owns 1.37% with 1.95 million shares.
The company reports that it has CA$7 million in the bank, with a monthly burn rate of CA$200k and CA$500k.
Reuters reports that 142.7 million shares outstanding, with 66.19 million free-float traded shares.
The company has a market cap of CA$54.72 million, and trades in the 52-week period between CA$0.37 and CA$0.74.
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- Sierra Madre Gold and Silver Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
- Amanda Duvall wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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