Sierra Madre Gold and Silver Ltd V.SM

(TSXV:SM) - How Permitted Silver Mine Mitigates Uncertainty

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6.6 K Views Nov 10, 2023

Interview with Alex Langer, President & CEO of Sierra Madre Gold & Silver Ltd.

Our previous interview: https://www.cruxinvestor.com/posts/si..
Recording date: 10th November 2023

Mitigating Risk in Mexico's Shifting Political Landscape With recent political changes in Mexico creating uncertainty around mining policies, Sierra Madre Gold and Silver provide a compelling investment opportunity for investors seeking to gain exposure to silver production while minimizing country risk.

In a recent interview, Sierra Madre CEO Alex Langer explained how the company's strategic approach in Mexico is designed to navigate the challenging political environment and create value for shareholders.

Fully Permitted Asset De-Risks Execution Sierra Madre's focus is restarting the fully permitted La Guitarra silver mine located in the Mining District southwest of Mexico City. Langer highlights that acquiring a past-producing mine with permits already in place provides a major advantage in the current climate.

"Having that as a leg up really de-risked the project and allows us to focus on just operations and getting the mine up and running vs. permitting," said Langer.

This effectively avoids the potential years-long permitting process required for new mines which would face substantial uncertainty. Sierra Madre can instead devote its capital to sustaining operations and expanding resources.

Fast Track to Production By targeting near-term production at La Guitarra, Sierra Madre aims to start generating cash flows quickly rather than facing the dilution required to finance extensive exploration. Langer estimates restarting production will cost just $10-12 million, far less than building a new 500 ton per day mine.

"Once we're able to get back into production, generate cash flows, we will be able to use that capital, that excess capital for exploration to explore the rest of the project and make this quite a bit larger," explained Langer.

This strategy offers stability even in uncertain markets by reducing reliance on external capital. As Langer stated, "I want to build wealth here."

Exploration Upside in Prolific District
Beyond the permitted La Guitarra mine, Sierra Madre controls a large district covering over 40,000 hectares with historical high-grade silver production. Langer highlights the property has been the site of extensive past drilling and seven producing mines. This provides tremendous upside for growing into a multi-asset mid-tier producer.

Bullish Long-Term Outlook
Despite current challenges, Langer maintains mining will continue to play a major role in Mexico’s economy. He expects the industry to work with government to adjust policies, noting mining provides significant investment, tax revenue, and high-paying jobs. Sierra Madre’s production may benefit from rising silver demand.

Key Takeaways
- Fully permitted mine de-risks execution risk amid policy uncertainty
- Near-term production allows self-funding growth from internal cash flow
- Large land package provides exploration upside to expand resources
- Tremendous leverage to rising silver prices as primary silver producer
- Sierra Madre offers a compelling opportunity to gain silver exposure with reduced permitting and political risks relative to many explorers in Mexico’s challenging current environment. By targeting quick restart of production at La Guitarra, the company aims to build a strong foundation for long-term growth.

Sierra Madre Gold & Silver (TSXV:SM) - How Permitted Silver Mine Mitigates Uncertainty - YouTube