Silver and Gold Co. Increases Indicated Resources by 373%

Sierra Madre Gold and Silver Ltd. (SM:TSX.V; SMDRF:OTCQX) announced in a press release that it has the mineral resource estimate for its newly acquired La Guitarra project, located in Mexico, which was produced by TechSer Mining Consultants, Ltd.

The mineral resource estimate states that the property contains 3,842,000 indicated tonnes of mineralization, grading 220 grams per tonne (g/t) of silver equivalent (AgEq), which includes 146 g/t silver (Ag), and 0.96 g/t gold (Au). The report also states that the property contains 4,105,000 tonnes of inferred mineralization, grading 153 g/t AgEq, which includes 113 g/t Ag, and 0.52 g/t Au.

Executive Chairman Gregory K. Liller commented on the results of the new estimate, saying, "I am extremely pleased with the results of the new mineral resource estimation. This study validates our belief that La Guitarra has a significantly overlooked resource base. Since April, our staff has been working on validating the project-wide database, incorporating historical data, auditing the previously mined areas, and refining the geologic interpretation of the vein and models. The next step to reopening the Guitarra mine will be a mine and restart plan, due in the first quarter of 2024, consisting of a capital and operating cost study, the results of which will be used to evaluate the economic potential of the mine."

The Independent Speculator released a report explaining gold grades, where it qualified 8.00 g/t of gold as a high-grade find and 150 g/t silver as high grade.

Global Uncertainty Pushes Gold to US$1,990

On October 27, 2023, Stockhead released a report focused on the gold market, which it believes is still going strong and could see a boost from AI. The article stated that gold is currently going on the market for US$1,990, approaching the record highs of earlier in the year.

"As we were expecting 35 million ounces silver equivalent throughout all categories, the 47 million ounce resource is a nice surprise," Caesar's Report noted.

AI could also play a factor in the rise of precious metals, and Stockhead commented: "The thesis there is that a boom in demand for AI applications creates a boom in demand for the chips and components that help power the tech- a boon for manufacturers such as Nvidia, but also for precious metals producers."

Rick Mills of Ahead of the Herd also chimed in on the gold market, where he believes that uncertainty related to global conflict is pushing up the value of precious metals. Mills stated that there might be a large gap between supply and demand for gold: "Even though major gold miners are high-grading their reserves, mining all the best gold and leaving the rest, they still didn't manage to satisfy global demand for the precious metal, not even close. Only by recycling 1,144 tonnes of gold jewelry could 4,741 tonnes of demand be satisfied during 2022."

A Strong Speculative Buy

Caesar's Report reviewed the company on October 4, 2023, where it highlighted the company's new acquisition of the La Guitarra mine and the company's future catalysts, such as its mine restart project. The report stated that "The next 12 to 18 months will be extremely important for Sierra Madre Gold and Silver" and went on to say that a major step for the company would be exploration to boost cash flow.

On November 4, the outlet released an update regarding the company's mineral resource estimate. It commented, "As we were expecting 35 million ounces silver equivalent throughout all categories, the 47 million ounce resource is a nice surprise."

Technical Analyst Clive Maund also covered the company in July of this year and rated the company as a "Strong Speculative Buy" for potential investors.

Technical Analyst Clive Maund also covered the company in July of this year and rated the company as a "Strong Speculative Buy" for potential investors.

According to Maund, "After starting trading in early June, the stock has been in a gentle converging downtrend, which is a bullish Falling Wedge. The volume has been bullish throughout, which is why the accumulation line has been trending strongly higher. In addition, downside momentum has been dropping out steadily, as shown by the MACD indicator."

The company was also the focus of a report on the silver and gold market by The Equedia Letter, where it considered the company to be a prime opportunity for investors. The report was especially positive about Sierra Madre's timing with regard to its concluding negotiations for La Guitarra just as the precious metals market had begun to take off again. 

Sierra Madre has a number of catalysts to report, according to its investor presentation, including a Mine Restart Study due in Q1 of 2024, equipment procurement and mill upgrades that it expects to complete in Q4 of 2024, and commercial production that it expects to begin in Q1 of 2025.

Ownership and Share Structure

Reuters provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 5.21%.

President and CEO Alexander Langer owns 2.08% of the company with 2.99 million shares, Lead Director Jorge Ramiro Monroy owns 1.41% of the company with 2.02 million shares, Country Manager Alejandro Caraveo owns 1.23% of the company with 1.77 million shares, Controller and Corporate Secretary Kerry Melbourne Spong owns 0.32% of the company with 0.46 million shares, and Director Gregory F. Smith owns 0.17% of the company with 0.25 million shares.

Institutions own approximately 1.35% of the company in the form of Commodity Capital AG, stated Reuters.

Reuters also reported that First Majestic Silver Corp. is a strategic investor and owns 47.96% of the company with 69.06 million shares.

There are 144 million shares outstanding with 67.43 million free float traded shares, while the company has a market cap of CA$54.00 million and trades in the 52-week period between CA$0.30 and CA$0.74.

Important Disclosures:

1. 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. 
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Sierra Madre Gold and Silver Ltd.
3. Amanda Duvall wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
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