Strong Metals, Stronger Momentum: Profits Rise as Production Powers Ahead

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1.  Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

Sierra Madre Gold and Silver Ltd. (SM:TSX.V; SMDRF:OTCQX) has reported its third consecutive quarter of commercial production at the La Guitarra mine in Mexico, with revenues reaching US$5.5 million and gross profit totaling US$1.7 million for the period ended September 30, 2025. The company sold 153,583 silver-equivalent ounces during the quarter at an average realized price of US$35.94 per ounce, up from US$30.87 in the second quarter.

Adjusted EBITDA increased by 27% to US$1.86 million, supported by stronger silver and gold prices. However, all-in sustaining costs rose to US$34.42 per silver-equivalent ounce from US$30.10 in Q2, reflecting capital expenditures for new equipment and mine development initiatives funded by a CA$19.5 million private placement closed in July 2025.

Operations at La Guitarra encountered over 187 hours of downtime during the quarter due to power outages linked to an unusually prolonged rainy season. Despite this, silver and gold production reached 67,785 ounces and 967 ounces respectively, while the mill processed 38,433 tonnes of material with silver recoveries averaging 76.96% and gold recoveries at 75.55%. The company has stated its intention to install a backup power generation system before the next rainy season.

Sierra Madre also began a US$3.5 million exploration program at the East District of La Guitarra in October, targeting previously underexplored areas through mapping, sampling, and structural analysis, with 20,000 to 25,000 metres of drilling anticipated to start in Q2 2026. 

Gold and Silver Continue to Shine Amid Economic Shifts and Industrial Demand

Gold and silver markets continued to attract attention in mid-November amid profit-taking, economic uncertainty, and rising industrial consumption. On November 11, Kitco News reported that gold pulled back slightly after touching a three-week high, with December gold futures settling at US$4,113.10 per ounce.

The retreat was attributed to short-term futures traders taking profits, though analysts noted that the metal remained on pace for its strongest annual performance since 1979. Silver held steady at US$50.54 per ounce, supported by consistent industrial and investor demand.

In an October 23 research note, Oliver O'Donnell of VSA Capital reiterated a Buy recommendation for Sierra Madre Gold and Silver Ltd.  Subsequently, in a November 17, 2025, flashnote, O'Donnell increased the target price to CA$1.75 per share (from CA$1.40 per share previously), discussing the Q3 results. 

The article noted that growing expectations of a U.S. Federal Reserve rate cut had helped underpin gold prices, particularly as the resumption of government operations suggested softer economic data on the horizon. These macroeconomic conditions continued to favor precious metals, with gold positioned as a traditional hedge.

On November 12, commentator Matthew Piepenburg reinforced gold's historical role as a store of value.

He highlighted gold's capacity to preserve purchasing power during prolonged periods of fiat currency devaluation and financial instability. Citing the long-term decline in the U.S. dollar since the creation of the Federal Reserve, Piepenburg characterized gold as a financial hedge against monetary distortion and inflationary pressure.

Silver, meanwhile, is drawing increased attention for its role in clean energy applications. In a November 14 report from WRAL News, the metal was described as undergoing a "surge in demand" linked to its essential use in solar panels and electric vehicles. With high electrical and thermal conductivity, silver plays a crucial role in photovoltaic technology and EV circuitry. The article cited industry estimates projecting that solar-related silver demand could exceed 270 million ounces annually by 2030.

This rapid growth is occurring alongside supply constraints, leading to a reevaluation of silver's market positioning. WRAL described silver as entering "a new era," no longer viewed solely as a precious or monetary metal but increasingly as a strategic commodity critical to the global energy transition. Investor sentiment has responded accordingly, with silver prices reaching record levels and reflecting its dual role as both a store of value and a vital industrial input.

Expansion and Development Drive Operational Momentum

Sierra Madre's ongoing ramp-up at the Coloso and Nazareno mines within the La Guitarra Complex is expected to support improved grades and increased production volumes as early as Q4 2025 and into 2026. Coloso, which resumed mining in early 2025, reports resource grades averaging 1.7 times higher in silver and 1.2 times higher in gold compared to the Guitarra mine The company has also delivered over 700 tonnes of mineralized material from the Nazareno development to the La Guitarra plant as of September 30, 2025.

The Phase I plant expansion is now underway, aiming to increase processing capacity from 500 tonnes per day (tpd) to between 750 tpd and 800 tpd by Q2 2026. Key infrastructure work has begun, including the installation of a second crusher and excavation for a new thickener. A Phase II expansion to 1,200 tpd to 1,500 tpd is planned for Q3 2027. Both phases are expected to be funded through existing cash and internal cash flow, with no additional permitting required for the upgrades.

The company ended the quarter with US$16.9 million in current assets, including cash. Sierra Madre remains focused on optimizing operational performance, reducing costs, and advancing exploration across its permitted properties in Mexico's silver belt.

Third-Party Expert Analysis: Positive Coverage Highlights Growth Potential

In an October 23 research note, Oliver O'Donnell of VSA Capital reiterated a Buy recommendation for Sierra Madre Gold and Silver Ltd.  Subsequently, in a November 17, 2025, flashnote, O'Donnell increased the target price to CA$1.75 per share (from CA$1.40 per share previously), discussing the Q3 results. 

The October 23 report emphasized the significance of exploration activities launched in the Eastern District of the company's La Guitarra silver-gold project in Mexico, describing the move as a key growth driver for the company's overall development strategy. 

According to O'Donnell, "The initial budget for exploration is US$3.5 million and covers a mapping and sampling phase enabling drill target definition for a 20– to 25-kilometer drill program." He noted that this first phase was expected to take nine months, with drilling to follow over the subsequent 12 to 18 months.

The Eastern District was described as an area with known high-grade outcroppings and historical workings. O'Donnell reported that modern exploration had only lightly tested the zone and highlighted the high silver grades from past production and drilling. He stated that average silver values ranged from 250 grams per tonne to over 600 grams per tonne, while some zones carried gold values of 3 to 4 grams per tonne, which could translate to silver-equivalent grades of 800 to 1,000 grams per tonne.

The analyst's model was based on a silver price of US$28 per ounce and recently adjusted to reflect higher market prices of US$47 per ounce and US$4,000 per ounce for gold. Based solely on a discounted cash flow analysis, this brought the target valuation to CA$2.30 per share, with potential to reach CA$3.00 per share depending on sustained market conditions.

O'Donnell also emphasized that silver was not yet overpriced, noting that price volatility is common during bull markets and that macroeconomic concerns such as U.S. treasury yields and geopolitical tensions support continued strength in the sector.  

On November 14, Peter Krauth of Silver Stock Investor described Sierra Madre's third quarter as "an upbeat Q3 2025 with rising revenue, solid margins, and steady progress across the La Guitarra Complex." He emphasized that adjusted EBITDA climbed 27% quarter over quarter, citing improved operating leverage and ongoing mine development at Coloso and Nazareno. According to Krauth, "Development at the Coloso and Nazareno mines advanced smoothly, unlocking access to higher-grade zones." He also noted the significant capital improvements underway, including the installation of a second crusher and excavation work for a new thickener and paste plant, part of the Phase I expansion to increase plant throughput to up to 800 tonnes per day by mid-2026.

Krauth reported that Sierra Madre delivered US$5.5 million in revenue and US$1.7 million in gross profit during Q3, with production remaining resilient despite power-related mill downtime. He stated, "The company ended Q3 with a stronger balance sheet, holding US$16.9 million in current assets after completing a CA$19.5 million financing." The financing, he wrote, would support additional equipment purchases and improved mine efficiencies heading into 2026. Krauth also highlighted the ongoing US$3.5 million exploration program in the East District, with drilling expected to begin in the second quarter of 2026. He concluded that Sierra Madre's two-stage plant expansion and exploration strategy positioned the company for continued growth, adding that he viewed market pullbacks as potential buying opportunities.

Ownership and Share Structure¹

Management and founders own approximately 21.4% of the company. According to LSEG, 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 34.3% of the company. Commodity Capital A.G. owns 4.4%, Refinitiv reported. Strategic investors hold 27.7%. The rest is retail.  

Sierra Madre Gold and Silver Ltd. has a market capitalization of approximately CA$204.60 million and a 52‑week trading range of CA$0.345 to CA$1.600.