Exclusive CEO Interview, producer Guanajuato Silver

If one’s bullish on precious metals despite a modest pullback, high-quality exploration & development plays are attractive at today’s levels, but still risky. The chasm between “a few years” from production and being IN PRODUCTION is wide and fraught with risk.

I like producer Guanajuato Silver (TSX-v: GSVR) / (OTQX: GSVRF). Admittedly, it hasn’t been smooth sailing. Keeping costs under control and a strong Mexican peso (until about a year ago) have been headwinds.

This is a Company with four mines + three mills, all in operation. Three have resource grades ranging from 280 to 410 g/t Ag Eq., roughly 2.8 to 4.1 g/t Au Eq. The fourth mine, Topia, has 19.3M ounces at nearly 1,000 g/t Ag Eq. That’s almost 10 g/t Au Eq.

Importantly, all four mines are open for resource expansion. CEO James Anderson teases readers about an upcoming press release on recent exploration efforts in the following interview.

With Au around $3,265/oz (down from $3,500 late last month) & Ag ~$32.50/oz, Guanajuato has reported three profitable quarters. The Au: Ag ratio, currently around 100:1, has been this high or higher less than 2% of the time in the past 50 years.

The long-term average is ~61:1. If Au remains at $3,265, and the ratio falls to 80:1, we’re looking at $40.8/oz. Ag. The ratio was 73:1 in May 2024. That would launch Ag to $44.7/oz. Readers are reminded that the inflation-adjusted all-time high in 1980 is ~$205/oz in today’s dollars.

While not company guidance, I’m hopeful Guanajuato can exit 2025 at an annual run-rate of 3.50-3.75M Ag Eq. ounces and an AISC of US$22-$23/oz. I base that indicative AISC range solely on the benefits of an uptick in volume, which is not a sure thing.

By the end of next year, I hope to see M&A having increased annual run-rate production to > 4.0M Ag Eq. ounces, perhaps > 5.0M, but again, that’s not company guidance.

Debt is under control as the Company rescheduled its gold loan with Ocean Partners such that it now owes ~132 ounces/month (~10% of monthly Au produced) for 36 months.

Guanajuato Silver is valued at a significant discount to peer producers, albeit much larger ones. In the above chart, compare the Company’s 2.4x 2026e EBITDA multiple to peers at an average of 5.2x.

To learn more about the latest happenings at Guanajuato Silver, I caught up with CEO Anderson for a timely update. This interview was conducted on April 30th & May 1st.

In what ways have the U.S. President’s tariffs, economic uncertainty, and negative comments on Mexico impacted the operating environment for Guanajuato Silver? 

Guanajuato Silver was Mexico’s fastest-growing producer for several years, but in recent quarters, growth has stalled. Why has growth stalled, and what can be done to fix the problems? 

Is Guanajuato Silver looking at tuck-in acquisitions? If not this year, perhaps next year? 

Has the Mexican peso been a problem in the past few quarters?

Can you update readers on the status of various operational initiatives, some of which have yet to materialize?

Please comment on the exploration potential across your portfolio, the organic growth of resource ounces. 

Thank you James. It seems as if the Company has turned the corner and that 2026 could be a BIG year. Of course, I thought that 2024 and 2025 would be BIG years…

This time is different, most notably as operations have been, and continue to be, fine-tuned, and Ag/Au prices have soared. I look forward to the press release you mentioned and to the possibility of tuck-in acquisitions.

Disclosures/disclaimers: While Guanajuato Silver is not a current advertiser on Epstein Research, it was in the recent past and could be again. Peter Epstein of Epstein Research should be considered biased in favor of the Company. Mr. Epstein owns shares of Guanajuato Silver bought in the open market. This is a high-risk, high-reward investment opportunity. Readers should consult with investment professionals before investing in small-cap stocks like this one.

The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about Guanajuato Silver, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is not to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market-making activities. [ER] is not directly employed by any company, group, organization, party, or person. The shares of Guanajuato Silver are highly speculative and not suitable for all investors. Readers understand and agree that investments in small-cap stocks can result in a 100% loss of invested funds. Readers assume and agree that they will consult with their own licensed or registered financial advisors before making investment decisions.

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