Sierra Madre Gold and Silver – Ramp Up To 720tpd At The La Guitarra Complex & Exploration Strategy
The KE Report Oct 7, 2026 16:58
Summary
Phase 1 expansion lifted La Guitarra throughput over 40% to 720 tonnes per day (tpd — ore milled daily), with 1,500 tpd targeted by next year.
Management expects costs to drop about $5 per quarter for the next four to five quarters as development charges roll off and grades rise.
A 30,000-metre drill program across the La Guitarra East District targets up to 40 veins in mines untested by modern drilling since the late 1930s.
The Del Toro acquisition adds a past-producing, fully permitted complex with a 3,000 tpd plant, plus a parallel 30,000-metre drill program from next year.
About $25 million in working capital and positive cash flow fund the expansion and 60,000 metres of planned drilling across the two projects.
Key points on First Majestic Silver
- The guest confirms Sierra Madre acquired the Del Toro silver complex - a past-producing, fully permitted site with three mines and a 3,000 tpd plant - from First Majestic, with the deal closing at the end of June.
- The CEO notes First Majestic was among previous operators that did some mapping and a little drilling in one area of the East District, but there has been essentially no modern exploration there since the late 1930s.
Key points on Sierra Madre Gold and Silver Ltd
- The CEO says La Guitarra reached 720 tonnes per day in late September, up about 40% from the prior 500 tpd nameplate, as phase one of a two-phase plant expansion.
- The company targets 1,200-1,500 tpd by around this time next year, with a 900-tpd ball mill already installed and the dry stack tailings facility - groundwork now started - as the key remaining piece for the full increase.
- Management expects costs to fall by about $5 per quarter over the next four to five quarters as extra development spending, rental charges, and overstaffing roll off and grades improve.
- About 60,000 meters of drilling is planned across two projects: a 30,000 m program at the La Guitarra East District set to begin by the end of October, targeting up to 40 veins, with Del Toro's parallel 30,000 m program possibly pulled forward from next summer to this spring.
- As of the last quarter the company held about $25 million in working capital with positive cash flow, which the CEO says is enough to fund the planned expansions and both drill programs, against a current resource of roughly 47 million ounces of silver.
Cory Fleck's takeaways
- Top takeaway As host, he frames the company's elevated recent costs as the market's main criticism and presses management on how costs will decline as the ramp-up continues.
- He argues the district's historic miners likely left behind material considered low grade in their era but high grade today, since roughly 90 years have passed since meaningful drilling there.
Alex Langer's takeaways
- Top takeaway He argues the La Guitarra East District could be the largest undeveloped silver district in Mexico, calling the upcoming 30,000 m drill program the reason the company acquired the mine three and a half years ago.
- He expects unit costs to fall about $5 per quarter over the next four to five quarters as development and rental costs roll off, staffing stays flat, and grades rise with throughput.
- He is targeting 1,200-1,500 tpd by around this time next year, pointing to the larger 900-tpd ball mill being installed about 8 months sooner than planned and the dry stack tailings facility as the main remaining requirement.
- He says early work at Del Toro - mapping nearly complete across its roughly 4,000 hectares, old core logging, and mag and geophysics about to fly - could pull its 30,000 m drill program forward from next summer to this spring.
- His stated plan is to build a mid-tier silver producer, with Del Toro's 3,000 tpd plant adding significant production once more resources are found and La Guitarra potentially producing about 2.5 million ounces of silver equivalent annually at expanded rates.