Sierra Madre Gold and Silver Ltd. (SM:TSX.V; SMDRF:OTCQX) has begun underground development at the Nazareno silver and gold mine, located within the La Guitarra silver-gold complex in Estado de Mexico. More than 700 tonnes of mineralized material have already been delivered to the Guitarra processing facility. This material was not included in the project's most recent mineral resource estimate or mine plan, and is thus a bonus.
Commercial production at the Guitarra complex officially began on January 1, 2025. The site includes a permitted 500-tonne-per-day mill which includes crushing, grinding, and a flotation plant. In the second quarter of 2025, Sierra Madre recorded silver-equivalent production of 168,535 ounces and generated revenues of US$5.4 million, with a gross profit of US$1.3 million.
Recent development at Nazareno included blasting and detailed geological mapping. These activities revealed a vein system up to 8 meters wide where multiple silver and gold-bearing veins converge. Reconciliation between mined material and the 2023 resource model showed that silver grades were 40% higher and gold grades 30% higher than originally modeled in the resource estimate for the surrounding area. The indicated mineral resource for Nazareno includes 309,877 tonnes grading 257.3 grams per tonne silver-equivalent, representing 2.56 million ounces of silver-equivalent mineralization.
To support additional development, Sierra Madre acquired an Ingertrol Sandy 50 drill rig capable of drilling up to 250 meters with portable equipment suitable for both surface and underground use. This investment is expected to reduce development costs by allowing for short-hole drilling from existing underground drives, eliminating the need for more costly and labor intensive parallel headings or crosscuts.
The company also entered into a 6-month agreement with Triomphe Holdings Ltd., operating as Capital Analytica, to provide marketing and social media services for a total fee of US$120,000. Capital Analytica is based in British Columbia and focuses on awareness initiatives for companies in the mining and metals sector. The engagement remains subject to TSX Venture Exchange approval.
Gold and Silver Prices Rise Amid Supply Constraints and Strong Global Demand
Gold prices climbed significantly in 2025, driven by macroeconomic uncertainty, tight supply conditions, debt burden, US-dollar devaluation and shifting investor sentiment. In a September 16 report from RiskHedge, analyst Chris Reilly noted that gold had gained over 40% year-to-date, rising above US$3,700 per ounce. Reilly described 2025 as potentially the strongest year for gold since 1979, citing the metal's perceived detachment from economic cycles and its increased appeal as a long-term store of value.
A separate analysis from Ahead of the Herd on September 18 focused on structural imbalances in the gold market. The report highlighted that global mine output in 2024 reached 3,661.2 tonnes, while total demand rose to 4,974.5 tonnes. The resulting shortfall was covered by an estimated 1,370 tonnes of recycled gold. These figures reflect growing concerns over "peak gold," a scenario where new production fails to keep pace with consumption, even with the development of high-grade deposits.
Silver has also experienced heightened demand following a breakout above US$43 per ounce. In a September 22 update from The Silver Academy, analysts attributed the surge in part to sovereign accumulation and specific contractual obligations in the Chinese bond market. Certain agreements, totaling US$15 billion, reportedly require physical silver delivery if prices exceed US$41 — a threshold that was recently surpassed. Additionally, India saw record-high silver imports in 2025, and domestic futures rose 49% year-to-date, underscoring both rising demand and tightening global supply.
In a September 26 commentary for Ahead of the Herd, Gary Tanashian described current market conditions as highly favorable for gold and silver producers. He pointed to a unique alignment of internal indicators, including gold outperforming inflation expectations and silver outperforming gold — patterns associated with distinct phases of the economic cycle. Tanashian highlighted the rising Silver-to-Gold ratio and a strong TSX-V to TSX ratio as signs of momentum across the sector. He also referenced an elevated Gold/RINF ratio and improving HUI/Gold and HUI/SPX ratios as evidence of continued technical support. While he cautioned that these favorable conditions may not persist indefinitely, Tanashian concluded that the sector remains on solid footing for the time being.
Expert Assessments Reflect Confidence in Sierra Madre's Expansion and Production Strategy
On September 18, Caesars Report noted that Sierra Madre Gold and Silver Ltd. had outlined a phased expansion plan at its La Guitarra silver-gold complex in Mexico. The initial stage involves increasing daily processing capacity from 500 to 750 tonnes, which the report stated "should result in an increased output" and improved cost efficiencies. The publication highlighted that the second phase aims to raise capacity to between 1,200 and 1,500 tonnes per day by late 2027, supported by a new 5.8 million tonne dry stack tailings facility. According to Caesars Report, the expansions are expected to be funded internally, with no additional permits required.
In a September 18 article for The Gold Advisor, senior analyst Ted Butler described the development of the Nazareno mine — Sierra Madre's third mining center within the La Guitarra complex — as a value driver. He emphasized that the initial 700 tonnes of mineralized material sent to the processing plant were not included in the 2023 resource estimate. "The rock coming out of Nazareno is richer than expected," Butler wrote, pointing to production silver grades 40% higher and gold grades 30% higher than projected in the resource model. Butler added that the introduction of a portable drill rig would reduce development costs and support ongoing exploration, particularly in zones with densely spaced veins. He cited CEO Alex Langer's view that Nazareno could become "a significant contributor" to future production and maintained his firm's full weighting in the company.
In a brief September 30 update, Ted Butler reiterated his positive stance on Sierra Madre Gold and Silver Ltd. following continued progress at the Nazareno mine. "The latest development at Nazareno confirms our initial view - Sierra is building momentum across its operations," he said. Butler highlighted the ongoing underground work and the potential for Nazareno to improve operational efficiency through long-hole mining, noting, "It’s encouraging to see the company moving swiftly while maintaining a focus on reducing costs and maximizing value from previously unmodeled material." He continues to maintain full weighting in Sierra Madre.
A research note published by VSA Capital also on September 8 reinforced the positive outlook. Analyst Oliver O'Donnell reiterated a Buy recommendation on Sierra Madre
A research note published by VSA Capital also on September 8 reinforced the positive outlook. Analyst Oliver O'Donnell reiterated a Buy recommendation on Sierra Madre with an unchanged target price of CA$1.40, representing an upside from the then-current trading price of CA$1.03.
He cited the company's plan to scale production from 760,000 to 2.1 million silver-equivalent ounces by 2027, supported by a CA$19.5 million capital raise completed in July. O'Donnell projected capital expenditures of US$21 million through 2028, including the construction of a paste plant and the new tailings facility. He noted the expected reduction in unit costs to US$16 per silver-equivalent ounce once ramp-up is complete.
O'Donnell's report included financial estimates, forecasting annual revenues of US$73 million and EBITDA of US$37 million by 2028, based on gold and silver prices of US$3,500 and US$36 per ounce, respectively. He anticipated EBITDA of US$6 million in 2025 and emphasized that the company's operational milestones, including equipment procurement and permitting, position it well to execute the expansion timeline. While he maintained conservative throughput assumptions in the near term, O'Donnell concluded that the company's progress, capital position, and exploration strategy support the existing valuation and investment thesis.
Catalysts: Multi-Mine Complex Supports Expansion Strategy
Nazareno represents the third mining center within Sierra Madre's La Guitarra complex, joining the Guitarra and Coloso mines. While Guitarra has been in commercial production since January 2025, the Coloso mine is undergoing a ramp-up expected to reach 150 tonnes per day by the end of the year. Development work at both Guitarra and Coloso in the second quarter was expected to improve average production grades in the second half of the year.
To support growth, Sierra Madre completed a CA$19.5 million private placement in July 2025 to help fund a multi-phase plant expansion. The company plans to increase processing capacity from 500 tonnes per day to a range of 1,200 to 1,500 tonnes per day by the third quarter of 2027. Expansion plans include the installation of a second cone crusher, an additional ball mill, a new paste-fill and thickener plant, and a 5.8-million-tonne dry stack tailings facility. These are all capital purchases designed to increase production capacity overtime, increasing cash-flow.
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Sierra Madre Gold and Silver Ltd. (SM:TSX.V; SMDRF:OTCQX)
Beyond near-term production gains, exploration remains a key focus. A 20,000-meter drill program is planned for the East District concessions, where more than 100 epithermal veins have been identified across five major systems. Historical production in this area yielded head grades of up to 850 grams per tonne silver and 6.5 grams per tonne gold.
Sierra Madre's development at Nazareno adds to its broader strategy of scaling operations across a fully permitted, multi-mine complex in one of Mexico's most productive silver belts.
Ownership and Share Structure
Sierra Madre provided a breakdown of the company's ownership and share structure, where management and founders own approximately 21.4% 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 24.3% of the company. Commodity Capital A.G. owns 4.4%, Refinitiv reported. Strategic investors hold 37.7%. The rest is retail.
Sierra Madre has a market cap of CA$166 million and 52 week range of CA$0.345 to CA$1.32.
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Important Disclosures:
- Sierra Madre Gold and Silver Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$3,000 and US$6,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Sierra Madre Gold and Silver Ltd.
- James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
- This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
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