Episode Details

Alex Langer, President and CEO of Sierra Madre Gold And Silver (TSXV: SM) (OTCQX: SMDRF), joins me to recap the Q2 operations and financial update at the 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 District.  Additionally, we discussed the path forward at the recently acquired Del Toro mining complex, and the increased drill program to 30,000+ meters of drilling at the property starting in the second half of this year.

Q2 2026 Highlights

• Revenues: Silver revenues for the quarter totaled $5.0 million ($75.65 per ounce) and gold revenues totaled $4.3 million ($4,529 per ounce). Silver revenues for the quarter ended June 30, 2025 ("Q2 2025"), totaled $2.2 million ($33.36 per ounce) and gold revenues totaled $3.6 million ($3,272 per ounce).
• Adjusted EBITDA of $3.5 million for the six months ended June 30, 2026 ("H1 2026") compares to $2.6 million for the six months ended June 30, 2025 ("H1 2025").
• Gross Profit was $1.58 million for Q2 2026, as compared to $1.69 million for Q2 2025.
• Cash from Operations: the Company generated $1.89 million of cash from operating activities in H1 2026 as compared to $1.37 million in H1 2025.

• Cash and Cash Equivalents at June 30, 2026 totaled $22.2 million, with $25.0 million in working capital, compared to $13.2 million and $14.4 million at March 31, 2026, respectively.
• Daily Production is now reaching up to 672 tonnes per day ("tpd"), a 34% increase over the previous level of 500 tpd.
• Del Toro Acquisition: Following shareholder approval (April 28, 2026 news release) and Mexican Antitrust approval (announced May 22, 2026), the Company closed the acquisition of a 100% interest in the Del Toro silver mine, as announced on June 22, 2026. With this acquisition, Sierra Madre completed a concurrent financing for gross proceeds of CAD$57.5 million.
• Geologic mapping and sampling have started at Del Toro with a re-evaluation of surveys underway and drilling expected to start in mid-2027.
• East District Exploration: Following quarter-end, as released on July 14, 2026, Sierra Madre received approval to start drilling in the East District of the Guitarra complex. Target definition work is underway with drilling bids in hand for a long-hole sub-horizontal drill program planned from the Tlacotal property (a permitted area designated for mining). Drilling is expected to start in H2 2026.
• First Majestic Loan Repayment: As announced on July 8, 2026, the Company has fully repaid the US$5 million non-revolving, secured term loan with First Majestic Silver.

Operational Details

• Production: Ahead of the Phase I and II expansion plans, Sierra Madre selected a contractor to ramp up production from the higher-grade Coloso and Nazareno mines; contractor operations started mid-June. Sierra Madre miners and equipment are now focused on accelerating production at the Guitarra mine.
• Costs: The Q2 2026 cash costs were negatively impacted by the ramp up and development work at Coloso and Nazareno, leading to a significant share of production being sourced from development drives and out-of-resource, lower grade mineralization. While adding to top-line revenues, increased commodity prices also add to our cash costs through increased royalty payments and taxes. The strengthening Mexican peso against the US dollar, inflation impacts on inputs, and rising worker pa