Sierra Madre Gold and Silver Ltd. (SM:TSX.V; SMDRF:OTCQX) announced that it has fully repaid the US$5 million non-revolving, secured term loan between the company and First Majestic Silver Corp. (AG:TSX; AG:NYSE; FMV:FSE). The company noted that the original loan was announced on May 8, 2024, its maturity date was extended to May 8, 2027, as announced on June 5, 2025, and a partial prepayment was announced on March 24, 2026.
Alex Langer, Sierra Madre's President and CEO, said in a company news release, "We are happy to announce the full repayment of our loan facility with First Majestic, which reflects the strong cash generation from our La Guitarra operation. The Company is currently debt free and producing positive operating cash flows. By reducing our financial obligations, we are on a strong path to advance exploration and development activities at both La Guitarra and Del Toro."
Precious Metals Continue to Outperform Despite Recent Market Volatility
Gold remained elevated compared with a year ago despite recent volatility in precious metals markets. According to GoldPrice.org, spot gold traded at approximately US$4,098.46 per ounce on the morning of July 10, after easing modestly during the session. The metal has remained near the US$4,100 level following sharp gains earlier this year, with investors continuing to monitor inflation, geopolitical developments, and expectations for U.S. interest rates.
Bloomberg reported on July 7 that gold continued to trade within a relatively narrow range as investors looked for additional clarity on the Federal Reserve's interest rate outlook. The publication said renewed U.S. airstrikes in Iran "stok[ed] concerns around a return to higher energy prices and inflation," while bullion remained above US$4,100 per ounce after falling 1.4% in the previous trading session as crude oil prices advanced.
Silver also remained well above year-ago levels, although prices continued to fluctuate after reaching record highs earlier in 2026. The metal traded near US$60 per ounce on July 10 after rallying the previous session, with market participants continuing to weigh both industrial demand and macroeconomic conditions.
In a July 10 update, Sprott said gold continues to be supported by persistent central bank demand and its role as a strategic store of value amid currency debasement concerns. The firm also said silver's structural supply deficit reflects tightening physical supply while demand from industrial applications continues to underpin the broader investment case for the metal. Sprott added that macroeconomic and geopolitical developments remain important drivers for precious metals markets.
Analyst Highlighted Expansion Progress and Operational Trends
In a May 19 research report, VSA Capital analyst Oliver O'Donnell reviewed Sierra Madre Gold & Silver's first-quarter 2026 financial and operating results, noting that the company reported net revenue of US$10.1 million, up 22% from the previous quarter and 109% year over year. He wrote that the results reflected "strong Q1 2026 financials largely due to higher silver and gold prices."
O'Donnell reported adjusted EBITDA of US$2.8 million for the quarter, which he said represented "47% of the full year 2025 total." He noted that higher mining costs were "significantly explained by a spend on the expansion (non-capitalized spend such as headcount) and additional contractors as well as inflationary pressure."
The report stated that the first phase of the company's mill expansion to between 750 and 800 tonnes per day remained "on track to complete in Q2." O'Donnell also wrote that "Coloso and Nazareno are expected to contribute higher grades through the balance of 2026," which he described as "a significant contributor to the forecast earnings uplift."
Commenting on operations, O'Donnell said development work had affected recovery rates during the quarter but added, "Recovery rates are expected to improve as development advances into higher-grade in-resource areas at both mines." He also wrote, "Production over the balance of the year is expected to increase" as the plant expansion progresses and higher grades and optimized recoveries are achieved.
On costs, O'Donnell said the company had incurred expenses related to workforce expansion, mine ramp-up activities, and contractor spending. He added that "the cost base for higher production is somewhat in place and we expect unit costs to fall through the year."
VSA Capital maintained its Buy rating and increased its target price to CA$2.70 per share. O'Donnell wrote, "Quarterly EBITDA of US$2.8m and operating cashflow of US$3.5m is a significant achievement." He added, "With rising capacity, expected higher grades and a strong pricing outlook, we anticipate US$53m in EBITDA for 2026, highlighting the significant impact of the low-cost expansion and the company's gearing to pricing." He concluded, "We reiterate our BUY Recommendation and adjust our target."
Streetwise Ownership Overview*
Sierra Madre Gold and Silver Ltd. (SM:TSX.V; SMDRF:OTCQX)
| Date | Old Symbol | Old Shares | New Symbol | New Shares |
|---|---|---|---|---|
| 07/09/13 | QRS:TSXV | 1 | SM:TSXV | 0.6355 |
Sierra Madre Operations and Development Activities
According to the company's June 2026 corporate presentation, La Guitarra entered full commercial production on Jan. 1, 2025, while Coloso and Nazareno are ramping up. The presentation states that the first phase of the La Guitarra expansion is expected to be completed in Q2 2026, with a second phase expected in Q3 2027. The company also plans a drill program of more than 30,000 meters at the East District concessions beginning in the second half of 2026.
The presentation outlines Phase 1 expansion work to increase the site's nameplate capacity from 500 tonnes per day to between 750 and 800 tonnes per day. Activities include construction of a new paste fill and thickener plant, installation of a fourth ball mill and second cone crusher, increased conveyor circuit material handling capacity, installation of a new cone crusher and conveyor, ongoing ball mill installation and equipment purchases, and construction of a tailings thickener tank.
Phase 2 is designed to expand throughput to between 1,200 and 1,500 tonnes per day. Planned work includes construction of a permitted 5.8 million tonne dry stack tailings storage facility with Q3 2027 commissioning, addition of a second crushing circuit, replacement of a smaller-capacity ball mill, and crushing circuit additions intended to produce a finer one-quarter-inch product. The presentation also states that no additional permits are required for the expansions and that the expansion is expected to be fully self-funded from treasury and cash flow.
The presentation also describes activities at the East District, where district-scale geologic mapping has identified 59 kilometers of mineralized quartz veins and breccias. It states that more than 1,400 drill holes totaling 236,000 meters have been completed, and that detailed surface mapping, surveying, and sampling of historic workings are underway ahead of a planned drill program of more than 30,000 meters in the second half of 2026.
Ownership & Share Information1
Sierra Madre Gold and Silver Ltd. has a market cap of CA$348 million, with 252.1 million shares outstanding. The company's 52-week range is CA$0.696-CA$3.25.
Institutions own 41.44% of shares, while Strategic Investors (First Majestic) own 24.74%. Management & Founders own 19.21%, and the remaining shares are held by Retail.
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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, contractors, shareholders, and/or employees of Streetwise Reports LLC (including members of their household) own securities of Sierra Madre Gold and Silver Ltd. and First Majestic Silver Corp.
- 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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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.
