Sierra Madre Gold and Silver (SM.V) has released more details on its expansion plans. While the site is currently operating at a rate of 500 tonnes per day, the team thinks it can easily increase this by 50% to 750 tonnes per day by the second quarter of next year. That’s pretty fast as Sierra Madre would only need a paste fill and thickener plant, a fourth ball mill and a second cone crusher.
Increasing the capacity by 50% is a good first step that will result in an increased output (assuming the grades remain consistent) and the economies of scale should result in a lower operating cost per processed tonne. This also is just the first expansion step as Sierra Madre ultimately eyes a capacity of 1,200-1,500 tonnes per day at La Guitarra, and this should be realized in the second half of 2027. The timeline for the second expansion is subject to the completion of the construction of a new dry stack tailings storage facility. This new tailings facility will have a capacity of 5.8 million tonnes, supporting in excess of 10 years of operations at 1,500 tonnes per day.
Both phases of the expansion plan should be funded by the existing cash position and anticipated cash flow from the current production. No additional permits are needed either, so we expect Sierra Madre to complete the expansion within the proposed timelines.
Disclosure: The author has a small long position in Sierra Madre Gold & Silver. Sierra Madre is a sponsor of the website. This post is for educational purposes only; be mindful investing in junior mining stocks is risky and you may lose your entire investment if things go wrong. Please read the disclaimer.
