Silver and Gold Company Makes Progress on Mine Restart
Sierra Madre Gold and Silver Ltd. has released an update on its mine restart study, which it expects to finish in Q2 of 2024. Read on to see what analysts are saying about this company's stock.
Sierra Madre Gold and Silver Ltd. (SM:TSX.V; SMDRF:OTCQX) announced in a press release that it has an update on the progress of its mine restart at the company's 100%-owned La Guitarra silver and gold project. La Guitarra, located in Estado de Mexico, should see the mine restart study finished in Q2 of 2024.
Sierra Madre reports that it contracted TechSer Mining Consultants, a Canadian company, to conduct the mine restart study, which will include new estimates of underground mine material on Guitarra, Coloso, Nazareno mines, and the Los Angeles deposit and an operating cost estimate. The company reports that the restart study will also include a capital cost estimate.
The company's processing plant is undergoing maintenance as part of the restart, encompassing all of the plant's circuits.
The mine restart study will study an initial production level of 350 tonnes per day with additional evaluation on potentially increasing the grinding circuit's capacity to greater than 500 tonnes per day.
On November 9, 2023, Bereket Berhe with Beacon Securities also rated Sierra Madre as a "Speculative Buy" with a share target price of CA$0.75.This increased capacity will be factored into the company's upcoming economic analysis.
The company's explosive permit was approved on January 29, 2024, and compressed air lines were installed near the San Rafael and La Cruz portals, and compressors and electrical substations have been serviced.
Gold Reaches US$2,150
Katusa Research reported on February 7, 2024, that it expects gold to do well if the American economy takes a bad turn. So far, gold has been driven upwards to US$2,150 per ounce by global conflicts, wavering confidence in the U.S. economy and the possibility that the Federal Reserve may cut rates. Central banks demonstrated extraordinary interest in gold in 2023 and don't seem to be letting up anytime in the near future.
John Rubino reviewed the gold market on February 7, 2024, and reiterated many of Katusa's points. Rubino believes that a weak dollar will drive investors towards gold as a stabilizing element, but also commented that the GDX to gold ratio is incredibly favorable for investors looking to buy in or add shares to their portfolio.
Strong Speculative Buy
Technical Analyst Clive Maund reviewed the company in July of 2023, rated the company as a "Strong Speculative Buy," and stated that he believes it to be low risk for a speculative junior stock. Maund was encouraged by the high-quality gold and silver grades found on the La Tigra property.
In August of 2023, Maund released an updated review of the company, where he reiterated his "Buy" rating and stated that the stock had outperformed the sector and looked set to advance.
Carlisle Kane of Equedia Investment Research reviewed Sierra Madre in November of 2023 and seemed encouraged by the interest of First Majestic Silver Corp. (FR:TSX; AG:NYSE; FMV:FSE), which acquired shares in Sierra Madre in exchange for the La Guitarra project in the company.
On November 9, 2023, Bereket Berhe with Beacon Securities also rated Sierra Madre as a "Speculative Buy" with a share target price of CA$0.75. The report commented on the company's stock, "The analyst views Sierra Madre as undervalued based on progress advancing La Guitarra towards a near-term restart of production. With exploration upside from Tepic and La Tigra, Beacon Securities sees potential for the stock to re-rate."
The company's investor presentation discussed a number of catalysts and expects the mine restart study to conclude in Q2 of 2024, while the company anticipates its equipment procurement and mill repairs to finish in Q4 of 2024 and hopes to begin commercial production in Q1 of 2025.
Ownership and Share Structure
Streetwise Ownership Overview*
Sierra Madre Gold and Silver Ltd. (SM:TSX.V; SMDRF:OTCQX)
*Share Structureas of 2/14/2024Source: Sierra Madre Gold & SilverSierra Madre provided a breakdown of the company's ownership and share structure, where management and founders own approximately 21.1% of the company. According to Refinitiv, President and CEO Alexander Langer owns 2.01% of the company with 2.99 million shares, Executive Chairman and COO Gregory K. Liller owns 1.83% of the company with 2.72 million shares, Director Jorge Ramiro Monroy owns 1.36% of the company with 2.02 million shares, Director Alejandro Caraveo owns 1.19% of the company with 1.77 million shares, Director Kerry Melbourne Spong owns 0.44% of the company with 0.66 million shares, and Director Gregory F. Smith owns 0.17% of the company with 0.25 million shares.
Institutional investors own 11.1% of the company. Commodity Capital A.G. owns 4.51%, with 6.72 million shares.
First Majestic Silver Corp., a strategic investor, owns 47.7% of the company with 69.06 million shares.
The rest is with retail and high-net-worth investors.
According to Refinitiv, there are 149.12 million shares outstanding and 69.63 million free float traded shares, while the company has a market cap of CA$41.04 million and trades in the 52-week period between CA$0.28 and CA$0.74.
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Important Disclosures:
Sierra Madre Gold and Silver Ltd. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000. Amanda Duvall wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.For additional disclosures, please click here.