Sierra Madre Gold plans two-stage La Guitarra expansion

Executive Summary

• Sierra Madre Gold and Silver Ltd. provided a progress update on the two-stage production expansion at its La Guitarra silver-gold mine complex, detailing equipment purchases and construction milestones for increasing processing capacity.
• The first stage of expansion aims to increase processing capacity from 500 tpd to 750–800 tpd, with construction and equipment installation underway across crushing, thickening, and grinding circuits.
• The second phase is planned to increase capacity to 1,200–1,500 tpd by the third quarter of 2027, supported by significant acquisitions of mining fleet and haulage equipment to boost productivity and material movement.

Key Details

• Expansion Goals:
  • Stage 1: Increase processing capacity from 500 tpd to 750–800 tpd.
  • Stage 2: Increase processing capacity to 1,200–1,500 tpd by Q3 2027.
• Crushing Circuit:
  • Installation of a new three-foot standard head crusher to expand capacity to 750–800 tpd.
  • Construction began in December 2025; initial testing is underway.
  • Evaluating a second crushed ore storage bin to allow reduction of crushed mineralization from 3/8-inch to 1/4-inch for enhanced recoveries.
• Tailings Thickener:
  • Earthworks for the 750–800 tpd thickener foundations are nearly complete.
  • Fabrication of the tank, mixing rake, and electrical components is well advanced.
  • Project completion targeted for the end of Q2.
  • The thickener will enable paste fill deposition in old stopes and allow for a filter circuit to produce dry stackable tailings.
• Grinding Circuit:
  • A used 11-by-12.5 ball mill has been purchased and is being refurbished.
  • Mill capacity is nominal 600 tpd at 3/8-inch feed size.
  • When combined with one of the two existing >200 tpd mills, it will achieve the 750–800 tpd target.
  • Installation involves a new foundation where the old 5x9 foot mill was located; completion targeted for late Q2.
• Equipment Purchases for Mine Productivity:
  • Mining Fleet: Acquired two new scoop trams and one used scoop; rebuilding two existing scoops. Dedicated one 3-cubic-metre scoop to the Nazareno mine. Purchased a second StopeMate long hole drill and completed rebuilding a second Jumbo drill.
  • Haulage/Movement: Purchased four haulage trucks (two sized for surface/underground use, two 14-cubic-metre trucks for surface/main San Rafael level) and a second front-end loader (sized for surface/underground loading).
• Stock Option Grant:
  • Granted 1,000,000 common share options to employees and consultants at $2.18 per share, exercisable for five years.
  • 100,000 options granted to Triomphe Holdings Ltd. (Capital Analytica) with a vesting schedule of 25% at 3, 6, 9, and 12 months.
  • Remaining options vest immediately.
  • Subject to TSX Venture Exchange acceptance.

Notable Quotes

• "Once completed, the first stage of the expansion is expected to not only deliver increased throughputs but also efficiencies across the operation -- such as deposition of a portion of the tailings underground and higher equipment availability. The next major work milestones are the ball mill and thickener installation." — Greg Liller, Chief Operating Officer and Executive Chairman