Sierra Madre Finalizes Del Toro Silver Mine Acquisition

Sierra Madre Gold and Silver closed its US$60 million acquisition of the Del Toro silver mine in Zacatecas from First Majestic Silver. The transaction was funded through a CA$57.5 million private placement, with up to US$30 million in additional milestone payments tied to resource and production targets. 

Sierra Madre Gold and Silver has completed its acquisition of the Del Toro silver mine in Zacatecas from First Majestic Silver Corp., closing a transaction valued at up to US$60 million. The sale gives the Canada-based junior miner a second producing-ready asset in Mexico and marks another step in its stated goal of reaching mid-tier silver production.

The deal, announced in December 2025 and approved by Sierra Madre shareholders at a special meeting on April 28, 2026, was structured across cash, shares, and milestone-linked contingent payments. At closing, Sierra Madre paid First Majestic US$20 million in cash and issued 10,870,000 common shares at a deemed price of CA$1.30 per share.

Within 18 months of closing, Sierra Madre must pay an additional US$10 million, in cash or shares at market price, subject to a cap of 10,575,385 common shares. Two further contingent payments of US$10 million each are tied to performance thresholds. The first is triggered if Sierra Madre files a NI 43-101 technical report within 48 months showing mineral resources of at least 100Moz silver equivalent (AgEq). The second is payable if the company achieves commercial production of at least 4,000tpd for 30 consecutive days within 60 months of closing.

Concurrent with the acquisition, Sierra Madre completed a brokered private placement of subscription receipts, raising CA$57.5 million in gross proceeds, including full exercise of the agents' overallotment option, across two tranches closed in January 2026. Beacon Securities served as lead agent and sole bookrunner, with Canaccord Genuity, BMO Capital Markets, and VSA Capital in the syndicate. Net proceeds funded the acquisition, with the remainder allocated to exploration and working capital at Del Toro.

As a result of the transaction, First Majestic now holds 62,433,076 common shares, or approximately 24.77% of issued shares on a non-diluted basis, down from 26.18% prior to closing due to dilution from the concurrent financing. The shares issued to First Majestic are subject to a four-month statutory hold and released in four equal 25% tranches between December 2026 and June 2028.

Del Toro: A Past-Producing Asset in Zacatecas

Del Toro is a permitted, past-producing underground silver-gold-lead mine located in the Chalchihuites District of Zacatecas. The property spans 70 mining concessions covering 2,129ha and operated from 2013 to 2019, averaging 2.54Moz per year of silver equivalent between 2015 and 2018. It includes three underground mining centers, Perseverancia, San Juan, and Dolores, with more than 62.5km of existing underground development.

Processing infrastructure on site includes a 3,000tpd flotation circuit with three mills, configured for both sulphide and oxide concentration, along with a dry stack tailings facility designed for 12 years of operations at 2,000tpd. Historical measured and indicated resources, as compiled in First Majestic's March 2025 regulatory filings, total 592,000t grading 201g/t silver, 0.43g/t gold, 3.90% lead, and 4.27% zinc, representing 7.57Moz AgEq.

"The acquisition of Del Toro marks an important step for Sierra Madre Gold and Silver as we advance towards mid-tier silver production," said Alex Langer, President and CEO, Sierra Madre Gold and Silver. "With existing production infrastructure in place, our focus now turns to near-term resource expansion drilling, with approximately 30,000m planned. This program is expected to support an updated mineral resource estimate, followed by a potential mine restart, positioning the asset for a return to cash flow generation."

Replicating the La Guitarra Model

The Del Toro transaction is Sierra Madre's second acquisition from First Majestic, following the 2023 purchase of the La Guitarra silver-gold mine in Temascaltepec, State of Mexico, in a deal valued at approximately US$44.89 million. La Guitarra, a high-grade underground mine covering more than 39,000ha, had ceased operations between 2018 and the restart Sierra Madre executed after acquiring it. The company has since opened three mining centers at the complex, La Guitarra, Coloso, and Nazareno, with reconciliation of material at Nazareno showing silver grades 40% above the 2023 resource model and gold grades 30% higher.

Sierra Madre intends to apply the same infrastructure-led reactivation approach at Del Toro. Greg Liller, Executive Chairman and COO, Sierra Madre, had previously noted that "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. First Majestic has done an exceptional job in keeping permits current and maintaining the mine and plant in an operations-ready state."

COFECE granted antitrust clearance for the Del Toro transaction prior to closing, a milestone that permitted Sierra Madre to proceed with its financing and finalize the share purchase agreement.

Silver Mining Activity Accelerates

The Del Toro closing arrives as activity across Mexico's silver mining sector intensifies. Guanajuato Silver Company launched a record 75,000M drill program for 2026, spanning five producing underground mines across Guanajuato and Durango. Sinda Ltd., backed by The Electrum Group, filed with the US Securities and Exchange Commission in June 2026 for a NYSE IPO targeting up to US$100 million to advance a pre-production silver-gold project in Guanajuato, a signal of renewed institutional appetite for Mexican precious metals assets.

Mexico leads global silver production with approximately 25% of the world market and ranks among the top 15 producers in 19 minerals, 12 of which the United States considers critical. A comprehensive critical minerals policy, according to projections cited at the Mexico Mining Forum PDAC 2026, could attract US$43 billion in investment by 2030 and create 500,000 jobs.

The sector's investment environment has nonetheless been shaped by regulatory constraints since the 2023 Federal Mining Law reform, which reduced concession terms from 50 to 30 years and imposed stricter environmental and social requirements. As of early 2026, approximately 160 projects remained stalled due to missing environmental permits, though the Sheinbaum administration has accelerated approvals, clearing 100 of 175 pending permits and unlocking an estimated US$11 billion project pipeline. Zacatecas, the state where Del Toro is located, has seen its local permit backlog drop from 25 pending to five in a single year, according to state economy officials.