Episode Details

Alex Langer, President and CEO of Sierra Madre Gold And Silver (TSXV: SM) (OTCQX: SMDRF), joins me to recap the Q1 operations and financial update at their La Guitarra silver-gold mine complex in Mexico, which includes 3 producing mines:  La Guitarra, Coloso, and Nazareno.   We look ahead to the 2-phase mill expansion and upcoming increased 30,000 meters of drilling planned across the La Guitarra property.  Additionally, we discussed the closing of the transaction for the Del Toro mining complex this week,  and the increased drill program to 30,000 - 50,000 meters of drilling at the property starting in the second half of this year.

Highlights

• Revenues: Gross silver revenues for the quarter totalled $5.9 million ($85.14 per ounce) and gold revenues totalled $5.1 million ($4,906 per ounce). Silver revenues for the quarter ended March 31, 2025 ("Q1 2025") totalled $2.3 million ($31.13 per ounce) and gold revenues totalled $2.9 million ($2,828 per ounce).
• Sales: In Q1 2026, the Company sold 69,006 ounces of silver ("Ag") and 1,038 ounces of gold ("Au") or 128,827 silver equivalent ("AgEq") ounces, based on the ratio of silver and gold prices realized for each shipment in the quarter. This compares to 75,137 ounces of Ag and 1,022 ounces of Au or 165,093 AgEq ounces sold in Q1 2025.
• Cash Costs for the quarter were $42.55 per AgEq ounce produced, as compared to $33.63 per AgEq ounce produced in Q4 2025 and $22.51 in Q1 2025 due to a number of factors including the ramp up of operations at Coloso and Nazareno and inflationary pressures on our input costs, as detailed below.
• Adjusted EBITDA of $2.8 million for Q1 2026 compares to $1.1 million for Q1 2025.
• Cash from Operations: the Company generated $3.5 million of cash from operating activities in Q1 2026 as compared to $729 thousand in Q1 2025.
• Gross Profit was $3.61 million for Q1 2026, as compared to $1.36 million for Q1 2025.
• Cash and cash equivalents and short-term investments at March 31, 2026 totalled $13.2 million and working capital totalled $14.4 million.
• Cost Drivers: Ramp-up and development activities at Coloso and Nazareno drove a significant share of the current production from off-book, out-of-resource, lower-grade material, which weighed on unit mining costs. Gold and silver recovery declines stemmed from feed blend optimization across the three mines, further pressuring costs. 
• Coloso and Nazareno: Mining restarted at the higher-grade Coloso underground mine at the end of Q1 2025 (estimated resource grades at Coloso are significantly higher in both silver and gold compared to the Guitarra mine veins). In September 2025, Sierra Madre also announced the restart of mining at the Nazareno mine. The Company is focused on ramping up operations at Coloso and Nazareno ahead of the increased plant throughput levels anticipated upon completion of Phase I of the Guitarra expansion.
• Phase I and II production targets: In late April, Sierra Madre selected a special services contractor to provide equipment and manpower to accelerate mine development at Coloso and Nazareno. The contractor began mobilization to site in early May. Once the contractor is in place, the Company will be able to transfer its miners and equipment to the Guitarra mine to accelerate production.
• Expansion Progress: For the two-phase expansion of the La Guitarra plant, Sierra Madre has acquired key equipment— including a second crusher (tested and installed) and a 600-700 tpd ball mill, now refurbished and under contract for installation, with commissioning expected in late Q2 2026. Construction crews for the ball mill foundation work have been mobilized to site and the purchase of critical equipment has begun.
• Once the first stage of the expansion is completed, the planned second phase would increase processing capacity to a range of 1,200 tpd to 1,500 tpd by Q3 2