Sierra Madre Reports Solid Q2 2026 Financial Results, Advances Growth Plans
Sierra Madre Gold and Silver Ltd. (SM) reported financial results for the quarter ended June 30, 2026, highlighting $8.23 million in net revenues and $1.58 million in gross profit from its La Guitarra operations. The company closed the acquisition of the Del Toro silver mine in June 2026 and concurrently completed a financing for gross proceeds of CAD$57.5 million. Operational updates include a 34% increase in daily production throughput to 672 tonnes per day, the full repayment of a US$5 million loan to First Majestic Silver, and progress on the Phase I expansion of the La Guitarra mill, which is now expected to be completed by the end of Q3 2026.
For the second quarter of 2026, net revenues rose to $8.23 million compared to $5.76 million in Q2 2025. Gross profit was recorded at $1.58 million, down slightly from $1.69 million in the same period last year. Looking at the first half of 2026, adjusted EBITDA increased to $3.5 million from $2.6 million in H1 2025, while cash from operations grew to $1.89 million from $1.37 million. As of June 30, 2026, the company held $22.2 million in cash and cash equivalents and reported working capital of $25.0 million.
Production metrics for Q2 2026 showed that 41,567 tonnes of material were processed. The company produced 137,313 AgEq ounces, comprising 64,315 silver ounces and 945 gold ounces, while selling 123,483 AgEq ounces. Cash cost per AgEq ounce was $49.28, and the all-in sustaining cash cost per AgEq ounce stood at $54.73. Daily production reached up to 672 tonnes per day, marking a 34% increase over the previous 500 tonnes per day level.
Corporate transactions included the closure of the Del Toro acquisition in June 2026, following shareholder and Mexican Antitrust approval, granting Sierra Madre a 100% interest in the silver mine. Concurrent with this acquisition, the company finalized a financing round for gross proceeds of CAD$57.5 million. Additionally, Sierra Madre fully repaid a US$5 million non-revolving, secured term loan with First Majestic Silver as of July 8, 2026.
Operational updates indicate that the Phase I capacity increase at La Guitarra, expanding from 500 tonnes per day to 750-800 tonnes per day, is now expected to be completed by the end of Q3 2026, ahead of the previous schedule, due to the purchase of a larger-than-planned mill. Phase II commissioning is expected prior to the end of Q3 2027. The company installed two 1,500-kW back-up diesel generators for the plant, which are expected to be fully operational by September 2026. Sierra Madre also acquired two haul trucks and two scoops, and transferred a Muki jumbo drill to Guitarra.
Mining activities have resumed at Coloso, which restarted at the end of Q1 2025, and Nazareno, which restarted in September 2025. Nazareno began full production from long-hole stopes on the 180 level in late April 2026. Exploration efforts include approved drilling for the East District of the Guitarra complex, with drilling expected to start in H2 2026. At Del Toro, geologic mapping and sampling have started, with drilling expected to commence in mid-2027.
Q2 2026 cash costs were negatively impacted by ramp-up and development work at Coloso and Nazareno, sourcing from lower-grade mineralization, increased royalties and taxes due to higher commodity prices, a strengthening Mexican peso, inflation, and rising worker pay rates.
Alex Langer, CEO, stated, "Q2 was a very productive quarter for Sierra Madre with $8.23 million in net revenues and $1.58 million in gross profit from La Guitarra, as we made significant progress on the expansion, continued the ramp up of the Coloso and Nazareno mines and added equipment and staff to support increased production." He added, "Throughput levels have reached up to 672 tonnes per day so far in August. In June, we also closed the acquisition of a second substantially production-ready asset, the Del Toro silver mine in Zacatecas State, building on our Mexico production-focused platform."