Sierra Madre Gold & Silver (TSXV: SM) turned US$8.23 million in revenue in the second quarter, down from the US$10.1 million it posted three months earlier as fewer ounces went out the door despite higher metal prices.
Gross profit fell harder, dropping to US$1.58 million from US$3.61 million. The company attributed the compression to development spending at the Coloso and Nazareno mines, power outages, and weaker recoveries during the ramp-up. Net income landed at US$37,226 against US$338,839 in the first quarter, with earnings per share nil on a basic and diluted basis.
Adjusted EBITDA totalled US$3.5 million for the first half, US$2.8 million of which came in the opening three months. Operating cash flow tells a similar story, at US$1.89 million for the half after US$3.5 million in the first quarter, implying an outflow across the June period.
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The balance sheet moved the other way. Cash and equivalents stood at US$22.2 million as of June 30 against US$13.2 million three months earlier, while working capital climbed to US$25 million from US$14.4 million. Both stem from a CAD$57.5 million financing raised alongside the June acquisition of the Del Toro silver mine.
Sierra Madre meanwhile repaid the balance of its US$5 million First Majestic loan on July 8.
La Guitarra processed 41,567 tonnes in the quarter, producing 137,313 silver equivalent ounces comprising 64,315 ounces of silver and 945 ounces of gold. Sales lagged output at 123,483 silver equivalent ounces. Head grades held at 65.27 g/t silver and 1.05 g/t gold, but recoveries slipped to 73.58% for silver and 67.97% for gold.
Costs kept climbing. Cash costs reached US$49.28 per silver equivalent ounce, up from US$42.55 in the first quarter, with all-in sustaining costs at US$54.73. Realized prices of US$75.45 per silver equivalent ounce leave the margin comfortably intact, if narrower than in March.
Phase I of the Guitarra mill expansion, once slated for the end of the second quarter, has slipped by several weeks to the end of the third. Chief executive Alexander Langer pinned that on foundation and electrical work for a larger than planned mill the company bought mid-search, plus shipping delays on other components. That mill is now expected to serve both phases, and Sierra Madre “continues to expect Phase II commissioning prior to the end of Q3 2027,” he said.
Sierra Madre Gold and Silver last traded at $1.73 on the TSX Venture.
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