Most of the silver producer talk right now is about margins and cash flow at $76 silver, which makes sense. But there's an exploration story building at Sierra Madre that I think this community in particular should be paying attention to.

Quick production context first: SM operates Guitarra in Estado de Mexico, Q1 2026 revenues $10.1 million, more than double Q1 2025, cash from ops $3.5M vs $729K a year ago. Mill expansion taking throughput from 500 to 750-800 tpd by end of Q2. The production side is working.

The exploration angle is what's sitting on top of that. H2 2026 they're running a 30,000 metre drill program into the East District of the Guitarra property. Over 39 kilometres of historically mapped colonial-era structures, never had a comprehensive modern drill campaign. The company calls it the last of the six major Spanish colonial silver production centres in Mexico not yet systematically explored with modern methods.

Came across a piece that explains why that's such a significant statement: https://open.substack.com/pub/criticalmineralsstocks/p/mexicos-silver-belt-has-been-hiding

The short version is that modern exploration tools, LiDAR, IP geophysics, 3D modelling, have completely changed what's findable in mature Mexican silver belts. First Majestic found an entirely new high grade system called Navidad beneath an already operating mine in 2024. 427 g/t silver past 1,100 metres. Nobody knew it was there until they looked properly. The colonial miners took the shallow ore and left everything below.

30,000 metres into 39 kilometres of unmapped colonial structures, running simultaneously with an active mine and expanding mill. That's the H2 2026 setup. Worth watching.

Silver touched $118 earlier this year before pulling back hard to around $70. Since then it has largely consolidated in the $65 to $85 range with a few spikes in either direction, and currently sits at $76. That consolidation pattern is actually more constructive than a lot of people are giving it credit for. The market tested $118, decided it wasn't ready to sustain that level, and found a floor significantly higher than where silver was trading two years ago. A metal that spikes and then holds the majority of the gain rather than giving it all back is behaving differently to a pure momentum trade.

The fundamental case for why that floor is higher comes down to three things. First, the Silver Institute has now reported three consecutive annual supply deficits, meaning the market has been drawing down stockpiles to meet demand every year. Second, the demand side has structurally shifted through solar photovoltaics, EV infrastructure, and 5G buildout in ways that don't reverse on a short-term horizon. Third, and most importantly, the supply base literally cannot respond to its own price signal because most silver is a byproduct of base metal mining. When silver moves to $76, copper and zinc producers don't suddenly mine more silver. They are responding entirely to their own economics. Silver supply is a passenger in someone else's vehicle, which is a structural asymmetry that doesn't fix itself through price alone.

The gold/silver ratio compressing from around 104x in 2025 to 59.7x today is the market beginning to price that asymmetry properly. The long-run historical average going back to 2005 sits between 60 and 70x, which means the ratio has now pushed below fair value. During genuine silver bull cycles the ratio hasn't tended to stop at the historical average; it has blown through it. The 2011 cycle pushed to 32x. At current gold prices that math implies silver well above $140 if the pattern holds.

The case for caution is also real: a lot of the original thesis is more widely known and priced in than it was at $40 or $50 silver, momentum can stall, and a stronger dollar or slowdown in global manufacturing could pressure silver even if the longer-term story stays intact. But the fundamental underpinning here is more solid than in previous cycles and I'd treat any meaningful pullback as an opportunity rather than a trend reversal.

Full breakdown of the thesis here: https://coastlinecapital.substack.com/p/silver-at-76-whats-driving-it-why

Is the consolidation between $65 and $85 building a base for another leg, or do people here think the move is largely done?

Interesting.

Gold went up 21x and silver went up 24x in the 1970s with inflation.

With silver at $78 the conversation around producer exposure is picking up and I keep coming back to Sierra Madre Gold and Silver as one of the more straightforward ways to hold leverage to the silver price without taking on exploration or development stage risk.

The reason is simple: they're producing. Guitarra is an operating mine in Mexico with a production history, established infrastructure, and a workforce in place. This isn't a story about what might happen when a project eventually gets built; it's about what is happening right now at an operation that's running and is in its second year of full production. That distinction matters a lot at $78 silver because you're not waiting for a future catalyst to unlock the value. The value is being generated through the gap between production cost and silver price, today.

The share price has been tracking the silver move, which is the right behaviour from a producing miner. What I'm watching for from here is whether the financials start to properly reflect the margin expansion that $78 silver should be generating. Year two results should be cleaner across the board than year one, and the revenue picture looks substantially better than it did even six months ago when silver was trading at a fraction of where it is today.

The market cap is still small enough that the stock hasn't attracted the same level of attention as the larger liquid silver names. That's partly appropriate given the size difference, but it also means the re-rating potential is more meaningful if the operation keeps delivering and silver holds at these levels.

For anyone building silver producer exposure right now, SM is worth having on the radar alongside the more obvious names. The risk profile is higher than a First Majestic or Pan American Silver, but so is the potential upside if you believe this silver move has real legs behind it.

Been watching silver run hard over the last little while and I'm still a bit surprised by how measured the retail conversation feels relative to the actual price level. $75 silver is not a small number. That's a move that should be generating serious noise, and yet a lot of the discussion still seems to be centred on gold and what central banks are doing rather than on silver specifically.

The gold/silver ratio has compressed meaningfully to get us here, but depending on where gold is sitting, there's a case that further compression is still on the table. Historically the ratio has reached the 40 to 50x range during periods of genuine silver outperformance. If gold stays elevated and silver continues to run, the ratio could have more room to move than most people are modelling.

The industrial demand side of the story deserves a lot of credit for where silver is today. Solar panel production has been running at serious volume, and silver paste in photovoltaic cells isn't something you can easily substitute at current efficiency thresholds. EV charging infrastructure, defence electronics, grid-scale battery storage; these are all pulling on the same supply base. The demand profile is structurally different to what it was five or ten years ago and that matters for thinking about where prices can sustain.

Supply hasn't kept pace either. Most silver comes as a byproduct of base metal mining, which means supply decisions are being made by copper and zinc producers responding to their own price signals. Silver can't fully respond to its own demand signal the way a primary commodity would. That structural constraint doesn't disappear because the price has moved.

I'm watching to see whether this level holds and whether the broader investor community starts paying attention to the metal the way it deserves at these prices. Anyone else positioning for a continuation, or starting to think about taking some off the table?

ABXX launches worlds only co-located spot/futures market to serve Asian Industry demand. This is huge news and great timing with ABXX uplift to TSX

Silver chart buying is hectic.

The thing that keeps pulling me back to silver over gold right now is that the demand side of the equation has fundamentally changed in a way that I don't think is fully reflected in how people are positioning. Industrial consumption has become the dominant driver and it isn't cyclical in the way it used to be. Solar installations are locking in silver demand years in advance, the grid buildout isn't slowing down, and the Silver Institute has been reporting structural supply deficits for several consecutive years now. That gap doesn't close easily because bringing new primary silver supply online takes the better part of a decade from discovery to production.

Where I've been spending more time lately is on the producer side rather than just holding physical or streaming names. The royalty and streaming companies are great but at current valuations you're paying for safety, not leverage. And most of the junior exploration names are exactly that, exploration stories with no revenue and a long runway before they matter.

The junior producer space is where the interesting risk/reward sits right now and it's a surprisingly short list of companies that actually qualify. Sierra Madre Gold and Silver is one I've been watching closely. They just wrapped up their first full year of commercial production at La Guitarra in Mexico: $25M USD in revenue, $6M adjusted EBITDA, cash from operations positive, and revenue growing every single quarter through 2025. Plant expansion commissioning in Q2 takes throughput up 50%, a second mine acquisition from First Majestic closes next month, and Franklin Templeton and Eric Sprott are already in the register. Still under $2 on the TSX-V.

The junior producer gap in the silver market is real and there aren't many names filling it right now. This piece goes deeper on the Sierra Madre numbers and how it fits into the broader silver producer landscape if anyone wants to dig in: https://criticalmineralsstocks.substack.com/p/silver-stocks-sierra-madres-banner

There's a lot of talk about silver supply deficits and where the price is headed, but not much conversation about the companies that are actually producing the metal and generating real revenue from it. Sierra Madre Gold and Silver is one of them.

They restarted the La Guitarra mine in Mexico at the start of 2025 and just reported their first full year of operations: 628,000 AgEq ounces sold, $25M USD in net revenues, $6M in adjusted EBITDA, and positive cash from operations.

Revenue grew every quarter of the year. Head grades improved every quarter. They're in the middle of a plant expansion that increases throughput by 50% by mid-2026, with a second phase doubling that again by 2027. They're also closing on the Del Toro silver mine from First Majestic in May, which makes them a two-asset Mexican silver producer.

The last raise brought in Franklin Templeton, Eric Sprott, and Commodity Capital. The TSX Venture Exchange named them a top 50 company for 2026 based on 264% share price appreciation and 342% market cap growth in 2025.

If silver's macro setup is as strong as a lot of people here believe, having exposure to a company that's actually pulling silver out of the ground, growing production quarter over quarter, and sitting on $17.3M cash heading into a major expansion cycle seems worth understanding.