Sierra Madre Gold and Silver’s flagship is the La Guitarra mine complex in the Temascaltepec district of Mexico State, acquired from First Majestic Silver in March 2023 for roughly US$35 million in shares. The company recently announced the acquisition of the Del Toro silver mine in Zacatecas from First Majestic for up to US$60 million in deferred and contingent payments, positioning it as a second potential flagship. The conversation covered the La Guitarra ramp-up, the planned mill expansion, the Del Toro transaction and restart plan, exploration programs at both assets, and the company’s longer-term mid-tier strategy.
TL;DR
CEO Langer told me he is building toward 8 to 10 million ounces of silver-equivalent annual production, with dividends or an eventual sale on the table. La Guitarra hit commercial production January 1, 2025, delivered roughly US$24 million in full-year revenue (US$10.7 million silver, US$13.7 million gold), about US$4 million in operating cash flow, and US$6 million EBITDA. The phase one mill expansion from 500 to 800 TPD is targeted for Q2 2026, with phase two to 1,500 TPD targeted for Q3 2027. Q4 2025 cash costs spiked to roughly US$40 per ounce because of underground development catch-up, staffing for the expansion, and rental equipment, with about US$10 per ounce attributable to development. Analysts model the eventual AISC at roughly US$22 per ounce. The Del Toro acquisition is expected to close end of May or early June 2026, financed from the C$57.5 million raise in January at C$1.30. First Majestic owns 51 million shares (about 26 percent, moving to roughly 33 percent post-close) and remains the largest shareholder. The company expects to hold about US$40 million in cash by end of June.
What have they done for shareholders lately?
La Guitarra reached commercial production January 1, 2025, eleven months after acquisition versus a two-year internal target. Nazareno underground development began September 2025 and has delivered over 700 tonnes of unmodeled material to the mill. The Colosso mine, which is the highest-grade of the three on the property, was also brought into the mining sequence. The mill expansion is in progress with a new cone crusher, a refurbished Ford ball mill, and a paste backfill plant. About US$8 million has been spent transitioning from rental equipment to an owned fleet, including a new underground drill rig and smaller units that improve dilution control. The Del Toro acquisition was announced in December 2024 and a C$57.5 million bought deal closed in January 2025 at C$1.30. Jupiter, described as one of the largest silver-gold funds in the world, became a 9.9 percent holder, having visited site three times.
How much money do they have and what are they spending it on?
The company will have roughly US$40 million in cash by end of June 2026 after closing Del Toro. The Del Toro transaction is up to US$60 million in deferred and contingent payments, including a US$10 million contingent payment tied to achieving 4,000 TPD commercial production within 60 months of close (Langer described this as not the most probable outcome). The Del Toro exploration program is budgeted at C$22 million for 30,000 to 50,000 metres. La Guitarra exploration is budgeted at US$5 million for 30,000 metres, and the mill expansion is about US$8.6 million. Drilling costs roughly US$150 per metre all-in at both projects. G&A is targeted at roughly US$1.5 million, with marketing pushing total spend closer to US$2 million annually. Langer’s salary moved to US$35,000 per month, and he has personally invested about US$2 million in the company, mostly at around 40 cents.
Upcoming catalysts
Technical and exploration: La Guitarra drill permitting is being submitted, with drilling targeted to start September 2026 in the East district focused on the Alacran target where historic head grades ran 6.5 g/t gold and 850 g/t silver for 30 years until 1937; first assays expected by year-end 2026; Del Toro exploration work begins September 2026 with drilling targeted for January 2027, testing four mineralization styles (underground veins, CRDs, chimneys, breccias, and copper skarn potential adjacent to Grupo Mexico’s Guantanas). Operational: La Guitarra phase one expansion to 800 TPD completion targeted Q2 2026; phase two expansion to 1,500 TPD starting after the rainy season with completion targeted Q3 2027; full underground development catch-up to 20 working faces expected by end of Q2 2026. Corporate: Del Toro Mexican antitrust approval and deal close expected end of May or early June 2026; Q1 2026 financials; potential Del Toro restart plan and updated resource targeted for early 2027 to early 2028; potential third acquisition opportunistically; possible secondary offering or block trade to manage First Majestic’s position over time.
Risks
Single-jurisdiction concentration in Mexico remains. Cash costs at La Guitarra are elevated and have to come down from the Q4 2025 US$40 per ounce level as development catches up. The mine is wet with 1,200 to 3,000 litres per minute of acidic drainage requiring perpetual lime treatment. Zinc and polymetallic recoveries at Del Toro need optimization and metallurgical work, with a copper circuit planned to be added. First Majestic’s 26 percent (rising to 33 percent) position is a long-term overhang even if not immediate. The Del Toro restart hinges on building the resource to roughly 25 million ounces of silver equivalent before the mill is turned on, and the 4,000 TPD contingent payment milestone is unlikely under current expectations. Cartel activity in Mexico was acknowledged but Langer said both project areas are away from those zones. Execution across simultaneous expansion at La Guitarra, two large drill programs, and a Del Toro restart concurrently is the single biggest delivery risk Langer flagged.
Sierra Madre CEO Interview
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