By Charles Pitts
ZACATECAS, MEXICO : Sierra Madre Gold and Silver Ltd. (TSXV: SM) has received final antitrust approval from the Mexican Federal Economic Competition Commission (COFECE) to complete the acquisition of the Del Toro Silver Mine from First Majestic Silver Corp. (TSX: FR). The clearance marks the final regulatory milestone for the US$60 million transaction, clearing the path for Sierra Madre to consolidate its position as a primary silver producer in Mexico.
The acquisition, first announced in late 2025, involves the transfer of 100% of the shares of First Majestic Del Toro, S.A. de C.V. With shareholder approval already secured in April 2026, the company expects the formal closing of the deal to occur within the next business week. The move comes as mining M&A deals 2026 continue to favor mid-tier producers looking to acquire non-core assets from senior operators.
Transaction Terms and Financial Structure
The US$60 million deal is structured to provide First Majestic with immediate liquidity and long-term exposure to the asset’s upside. Under the terms of the agreement, Sierra Madre will pay US$20 million in cash and issue US$10 million in common shares at closing.
The remaining US$30 million is tied to deferred payments and operational milestones:
- 18-Month Payment: US$10 million in cash or shares due 18 months post-closing.
- Resource Milestone: US$10 million due if Sierra Madre reports a mineral resource of at least 100 million ounces of silver-equivalent (AgEq).
- Production Milestone: US$10 million due if the Del Toro mine achieves commercial production of 4,000 tonnes per day (tpd) for 30 consecutive days.
To fund the upfront costs and initial exploration, Sierra Madre recently completed a C$50 million subscription receipt offering. These receipts will automatically convert into common shares upon the formal closing of the Del Toro acquisition.
Del Toro Asset Profile and Infrastructure
Located in the Chalchihuites District of Zacatecas, the Del Toro Silver Mine is a past-producing asset consisting of three fully permitted underground mines. The site includes a 3,000 tpd flotation plant, which has been maintained on care and maintenance since 2020.
For Sierra Madre, the attraction lies in the existing infrastructure and the geological potential of the 2,158-hectare property. The mine historically focused on high-grade silver-polymetallic deposits, with significant lead and zinc components.
“Del Toro represents a transformative leap for our company,” said a Sierra Madre spokesperson during a recent technical briefing. “The facility is world-class, and having the mill already in place significantly reduces the capital intensity of our production ramp-up compared to a greenfield build.”
Restart Timeline and La Guitarra Synergy
Sierra Madre has set a mid-2027 target to begin mine restart activities at Del Toro. This timeline allows for an intensive 50,000-meter drilling program aimed at updating the NI 43-101 resource estimate by early 2028.
The company is leveraging its recent success at the La Guitarra mine in Mexico, which reached commercial production in January 2025. The operational team that revitalized La Guitarra is expected to oversee the Del Toro restart, applying the same lean operational model.
| Asset Feature | Del Toro Mine | La Guitarra Mine |
|---|---|---|
| Status | Care & Maintenance (Restart mid-2027) | Commercial Production (Active) |
| Mill Capacity | 3,000 tonnes per day | 500 tonnes per day |
| Primary Metals | Silver, Lead, Zinc | Silver, Gold |
| District | Chalchihuites, Zacatecas | Temascaltepec, Mexico State |
Silver Price Prediction 2026: The Economic Backdrop
The timing of the Del Toro acquisition aligns with a bullish silver price prediction 2026. Analysts point to a widening structural deficit in the silver market, driven by record-breaking demand from the solar photovoltaic industry and the expansion of 5G infrastructure.
Current market data suggests that silver supply from primary mines has remained stagnant for over a decade. With silver prices stabilizing above the US$30/oz mark in the first half of 2026, the economics of restarting high-capacity mills like Del Toro’s 3,000 tpd plant become increasingly attractive.
Investment banks have recently revised their base cases, suggesting that if industrial demand continues to outpace mine supply, silver could challenge multi-year highs by late 2026. This macro-environment provides a favorable tailwind for Sierra Madre as it transitions from an explorer to a multi-asset producer.
Broader Mining M&A Deals 2026
The Sierra Madre–First Majestic deal is indicative of a broader trend in mining M&A deals 2026. Senior producers are increasingly divesting non-core, smaller-scale assets to focus on “tier-one” operations that produce over 500,000 ounces of gold or 10 million ounces of silver annually.
This has created a vibrant secondary market where well-capitalized mid-tier companies can acquire significant infrastructure at a fraction of replacement cost. For First Majestic, the sale streamlines its portfolio while retaining significant upside through its stake as Sierra Madre’s largest strategic shareholder.
Next Steps for Sierra Madre
Following the closing, Sierra Madre plans to initiate a site-wide technical audit and begin the first phase of its 50,000-meter drill campaign. The focus will be on the San Juan and Perseverancia mines, which historically provided the highest-grade feed for the Del Toro mill.
Investors are also monitoring the company’s efforts to optimize the flotation circuit. Potential upgrades to the processing plant could allow for better recovery of base metals, further insulating the project’s margins against commodity price volatility.
With the regulatory path now clear, Sierra Madre is positioned to become one of the most significant silver stories in Mexico for the latter half of the decade.
Related Links:
