Sierra Madre Acquires First Majestic’s Second Asset in Mexico

Sierra Madre Gold & Silver is further growing its operations in Mexico with the acquisition of the Del Toro silver mine in Zacatecas from First Majestic Silver, marking its second purchase from the company. The move positions Sierra Madre to increase production and explore significant new resources in a historically underexplored district.

This week, Sierra Madre announced it has entered an agreement to acquire First Majestic’s Del Toro mine in a deal valued at up to US$50 million. “The Sierra Madre team is incredibly grateful to participate in yet another transaction with First Majestic, which has been a strategic shareholder since 2023. We look forward to working to unlock the full potential of this past-producing operation."

Under the agreement, Sierra Madre will pay US$30 million upfront at closing, split between US$20 million in cash and US$10 million in shares. An additional US$10 million, payable in cash or shares, is scheduled within 18 months, while two further US$10 million payments are contingent on achieving operational milestones at Del Toro. The transaction depends on a CA$40 million private placement, with shares priced at CA$1.30 each, the same valuation as the upfront payment. The second payment’s shares will be issued at the market price on the day prior, and shareholder approval, expected by the end of April, is also required.

Greg Liller, Executive Chairman and COO, Sierra Madre, emphasized the alignment with the company’s business model. "Del Toro fits in with this business model with an already built production plant and a strategic land position in the large, under-explored Chalchihuites District. Finally, as was the case with La Guitarra, First Majestic has done an exceptional job in keeping permits current and maintaining the mine and plant in an operations-ready state." 

The property comprises 70 mining concessions spanning 21.6km. According to First Majestic, the site holds a historical resource of 7.57Moz of silver equivalent in the measured and indicated category and 11.18Moz in the inferred category.

Sierra Madre plans to advance exploration at Del Toro while pursuing a two-phase expansion at La Guitarra. Initial exploration will include approximately 50,000m of drilling, with a new mineral resource estimate expected in early 2028. The company noted that an earlier restart could be possible within 12 months if silver prices continue rising.

First Acquisition From First Majestic

In 2023, Sierra Madre Gold & Silver acquired the La Guitarra silver-gold mine in Temascaltepec, State of Mexico, also from First Majestic. The transaction added La Guitarra to Sierra Madre’s portfolio, which included the La Tigra and Tepic projects. Shareholders approved the deal, under which over 69 million common shares were issued to First Majestic, valued at approximately US$44.89 million. The TSX Venture Exchange conditionally accepted the acquisition, and Mexican antitrust approval was obtained before trading resumed.

The La Guitarra acquisition provided near-term production and cash flow from the fully permitted mine and its 500-tonne-per-day mill, while allowing continued exploration at Tepic and La Tigra. Langer highlighted the role of shareholder,  First Majestic, and government support in completing the transaction. 

La Guitarra is a high-grade underground silver mine covering more than 39,000ha. Between 2015 and 2018, it produced over 1.5Moz of silver and gold annually before operations were halted. Its infrastructure includes two underground centers, La Guitarra and Coloso, a flotation mill, and tailings facilities. At the time, Liller highlighted the project’s exploration potential, especially in the eastern district, which contains historically rich high-grade ore yet remains largely undeveloped despite its long-standing mining history.