Precious Metals Producer Delivers Breakthrough in Mexico

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Sierra Madre Gold and Silver Ltd. (SM:TSX.V; SMDRF:OTCQX) has reported the results of its Annual General Meeting (AGM) held on June 18, 2025, in Vancouver. The meeting saw 75,415,346 votes cast, representing 48.989% of the company’s outstanding eligible shares. All resolutions were approved by an overwhelming majority, including the election of directors, the appointment of auditors, and the renewal of the company’s stock option plan.

Shareholders voted 99.959% in favor of setting the number of directors at five. The five director nominees - Alexander Langer, Greg Smith, Alejandro Caraveo-Vallina, Jorge Ramiro Monroy, and Sean McGrath, were each elected with more than 99.87% support. Davidson & Company LLP was reappointed as the company’s auditor, with 99.954% of represented shares voting in favor. The company’s 10% rolling stock option plan also received strong backing, with 99.936% approval.

The AGM comes at a time of solid operational performance for Sierra Madre. The company recently entered commercial production at its La Guitarra Mine in Mexico on January 1, 2025. In the first quarter, Sierra Madre generated US$4.8 million in revenue, including US$2.34 million from silver and US$2.89 million from gold. Gross profit for the quarter reached US$1.2 million, as noted in the announcement.

According to Sierra Madre’s Q1 update, the company milled 39,167 tonnes of material, producing 165,093 silver-equivalent ounces. The all-in-sustaining cost for the quarter was US$28.98 per silver-equivalent ounce sold. First concentrate shipments from the Coloso Mine began in April 2025, contributing higher-grade material to the processing plant.

The 2023 mineral resource update for La Guitarra confirmed 27.2 million indicated and 20.2 million inferred silver-equivalent ounces, marking increases of 373% and 204% respectively over prior estimates. The mine complex includes a 500-tonne-per-day crushing, grinding, and flotation facility and a newly permitted 5.8-million-tonne tailings facility. These assets place Sierra Madre in a favorable position as it continues to expand output.

Silver Strengthens Amid Geopolitical Unrest and Market Volatility

According to a June 17 report from Bloomberg, gold experienced a historic rally in early 2025, rising by 30% and setting a record in April. The surge was attributed to heightened haven demand amid geopolitical instability and U.S. fiscal concerns. Despite the recent highs, analysts at Citigroup projected that gold could retreat to between US$2,500 and US$2,700 an ounce by the second half of 2026, citing expectations for improved global growth and reduced investment demand. At the time of the report, spot bullion remained around US$3,396 per ounce.

While gold faced potential headwinds, silver showed notable strength in the same period. Kelvin Wong of Market Pulse wrote on June 18 that silver had outperformed gold over a 48-hour window, increasing by 3.5% and reaching an intraday high of US$37.26 on June 17. Wong noted that the divergence between gold and silver indicated "short-term positioning shifts," with traders rotating into silver from gold. He further reported that the price of silver had broken out of a symmetrical triangle pattern earlier in June, hitting a 13-year high of US$37.12. He added that the silver-to-gold ratio suggested continued outperformance by silver.

The broader context of silver’s rise was shaped in part by geopolitical tensions. Wong reported that renewed conflict in the Middle East, spurred by statements from U.S. President Trump, led to a surge in oil prices and increased market uncertainty. This environment contributed to a risk-off sentiment, traditionally favorable to precious metals like silver. Wong observed that the MACD trend indicator for silver continued to show upward momentum, with key support identified at US$35.90.

Stewart Thomson in a separate June 17 article for 321 Gold emphasized the shifting investor sentiment in favor of silver and junior mining stocks. He wrote, “Silver looks ready to essentially maul the US stock market,” citing its steady performance and relative strength compared to gold. Thomson noted that silver had been making new highs while gold prices had stalled. He concluded that, “Silver bugs are ready to have their day in the sun,” positioning the metal as a standout performer in the current market landscape.

In a June 19 analysis for FXStreet, Sunil Kumar Dixit described how gold had encountered resistance at US$3,400 and briefly dipped to US$3,347 before rebounding. He emphasized the importance of the US$3,378 level as an immediate resistance point and stated that, “bulls need to make a strong move breaking above this US$3,378 hurdle to advance further.” While his focus was primarily on gold, the analysis underlined broader volatility in the precious metals market.

VSA Capital Reiterated Buy Rating with Significant Upside Potential

In a December 2024 report, Beacon Securities analyst Bereket A. Berhe maintained a Speculative Buy rating on Sierra Madre Gold and Silver Ltd., with a 12-month target price of CA$0.85 per share. Following a site visit to the La Guitarra mine, Berhe highlighted that mining and milling rates were ahead of expectations, with the mill operating 24 hours a day at 500 tonnes per day. He noted, “Mining and milling rates are well ahead of our expectation,” and reported strong average recoveries of 80 percent for silver and 85 percent for gold.

Berhe valued the project using only 58 percent of La Guitarra’s resources, projecting a post-tax NPV5% of approximately US$208 million and describing the stock as trading at a discount to peers. He cited expansion potential to 1,000 tonnes per day by 2027 and observed that flotation capacity could be doubled with minimal investment. Overall, Beacon’s analysis supported Sierra Madre’s near-term production outlook and strong infrastructure foundation.

In a May 6 research report, VSA Capital maintained its Buy rating on Sierra Madre Gold and Silver Ltd., with a target price of CA$1.30 per share. At the time of publication, this implied a 124% potential return based on the company’s share price of CA$0.58. Analyst Oliver O'Donnell cited ongoing operational progress and early financial results as key drivers of the firm's positive outlook.

The report detailed Sierra Madre’s ramp-up efforts at its mining operations in Mexico, specifically the restart of the Coloso mine located approximately four kilometers from the La Guitarra mill. O'Donnell noted that Coloso had been incorporated into an updated mine plan, and that a metallurgist had been engaged to manage ore blending between Coloso and La Guitarra. “This development highlights the nimble, low cost and focused approach that management has taken to restarting La Guitarra, with the benefit of their past experience combined with new insight,” he wrote.

O'Donnell also pointed to the longer-term potential of Coloso, stating that the deposit could support the La Guitarra processing plant at a rate of 500 tonnes per day for at least seven years. He cited additional exploration opportunities at the Jessica and Joya vein systems as possible sources of upside.

Addressing the company’s initial financial performance, O'Donnell stated, “We continue to believe that Sierra Madre is on track to deliver strong profitability in 2025, while the strong silver grade means that the stock is well-positioned to benefit from the catch-up in the silver price following gold's strong rally.”

On June 11, Peter Krauth of Silver Stock Investor commented positively on Sierra Madre’s financial position following an extension to its US$5 million loan from First Majestic Silver. He noted that the amendment allowed the company to defer its repayment schedule and maintain flexibility for capital expenditures. According to Krauth, the extension would support Sierra Madre’s ability to “potentially increase plant and mill capacity at our Guitarra silver-gold mine in Mexico’s silver belt and also allow us expedite a district-wide exploration program,” quoting President and CEO Alex Langer. Krauth further noted that Sierra Madre shares had gained 58 percent year-to-date and remarked on the company’s strong operational performance during the rise in silver prices.

A Strategic Path Toward Growth

As specified in its investor presentation, Sierra Madre’s growth strategy hinges on a three-pronged plan at La Guitarra: sustained production, aggressive district-wide exploration, and evaluation of bulk mining methods. The company is already executing this plan, having completed 871 dry metric tonnes of silver-gold concentrate deliveries in Q1 2025 and initiating extraction from Coloso in April. Development work targeting high-grade blocks within the 2023 resource has been accelerating, and Sierra Madre is reinvesting cash flow into equipment purchases such as loaders, excavators, and vehicles.

The company is also advancing its second project, Tepic, where exploration work has identified over 15 kilometers of vein structures. In recent drill results, 17 out of 20 holes returned intercepts of at least 75 grams per tonne of silver, with some assays exceeding 1,100 grams per tonne silver-equivalent. Sierra Madre plans to release a resource estimate for Tepic and conduct additional metallurgical testing in the near term.

With a tight share structure and strong backing (First Majestic Silver holds a 44.5% interest), Sierra Madre continues to position itself for operational growth. As of June 5, 2025, the company reported US$4.3 million in current assets and continues to benefit from capital previously secured, including a US$5 million loan from First Majestic in May 2024. The maturity date on that loan was extended to May 2027, providing further flexibility for project development.

Sierra Madre's consistent progress since the restart of La Guitarra has laid the groundwork for potential scaling of production and expansion into district-wide development. The company’s upcoming milestones, including additional revenue disclosures and Tepic resource calculations, may serve as key inflection points as operations evolve.

Ownership and Share Structure

Sierra Madre provided a breakdown of the company's ownership and share structure, where management and founders own approximately 24.8% of the company.

According to Refinitiv, President and CEO Alexander Langer owns 2.68% of the company, Executive Chairman and COO Gregory K. Liller owns 1.77%, Director Jorge Ramiro Monroy owns 1.32%, Director Alejandro Caraveo owns 1.26%, Director Kerry Melbourne Spong owns 0.57%, and Director Gregory F. Smith owns 0.14%.

Institutional investors own 12.9% of the company. Commodity Capital A.G. owns 4.4%, Refinitiv reported.