Sierra Madre Announces Solid Q3 2025 Financial Results, La Guitarra Plant Expansion Underway
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Sierra Madre Gold and Silver announced its Q3 2025 financial results, reporting revenues of US$5.5 million and a gross profit of US$1.7 million. Adjusted EBITDA increased by 27% over Q2 2025 to US$1.86 million, which the company attributes to stronger realized silver and gold prices.
Operationally, the company sold 153,583 silver equivalent (AgEq) ounces, comprised of 68,741 ounces of silver and 960 ounces of gold. All-in sustaining costs (AISC) for the quarter were US$34.42 per AgEq ounce.
The company also confirmed that the La Guitarra plant expansion is underway, with the first phase aiming to increase capacity from 500 tonnes per day (tpd) to 750-800 tpd by Q2 2026. Additionally, a US$3.5 million exploration program commenced at the East District in October 2025.
The headline financial figures are presented positively, but a critical look at the underlying operational metrics reveals significant weakness. This release is material and negative for the following reasons:
- Declining Production: The 153,583 AgEq ounces sold in Q3 represents a meaningful sequential decline from 173,562 ounces in Q2 2025 and 165,093 ounces in Q1 2025. This drop is a result of fewer tonnes milled (38,433 in Q3 vs. 41,235 in Q2) and slightly lower recoveries. This negative operational trend is concerning, especially after positive updates on bringing higher-grade mining areas like Coloso and Nazareno online.
- Spiking Costs: All-in sustaining cost (AISC) jumped to US$34.42 per AgEq ounce. This is a substantial and alarming increase from US$30.10 in Q2 and US$28.98 in Q1. This spike severely compresses margins and makes the company highly vulnerable to any drop in precious metals prices. Profitability in Q3 was a function of higher metal prices, not improved operational efficiency.
- Negative Context: This news of weakening operations comes just eight days after the company's largest shareholder and original asset vendor, First Majestic Silver, disclosed the sale of 17.5 million shares. The timing raises concerns that the seller may have anticipated these weaker results. This large sale has already created a technical overhang on the stock, and these poor operating results will only add to negative market sentiment.
While the confirmation of progress on the expansion and exploration programs is positive, it is expected news following the C$19.5 million financing in July. The core of this release is the operational performance, which missed expectations and showed a negative trend in both production and, most critically, cost control.
Sierra Madre Gold and Silver Ltd. is a precious metals producer focused on its La Guitarra Silver-Gold Mine Complex in the Temascaltepec mining district, Mexico. The company acquired the fully permitted mine and 500 tpd processing plant, which had been on care and maintenance, from First Majestic Silver in 2023. Sierra Madre successfully restarted the mine, achieving commercial production on January 1, 2025. The company's current strategy is to optimize and expand production at La Guitarra while exploring the surrounding district. The property has a 2% NSR royalty, of which 1% can be bought back for $2.0 million.