Arturo Préstamo Elizondo, Executive Chairman and CEO of Santacruz Silver Mining Ltd. (TSX.V: SCZ) (NASDAQ: SCZM) (FSE: 1SZ), joins us for a review of the strong Q2 2026 financial and operational results across their portfolio of 4 producing silver-zinc mines and ore feed sourcing business in Bolivia and Mexico. We also review a few of the key growth initiatives that the company has slated for 2026 across multiple projects.
Q2 2026 Highlights
Revenues of $113.5 million, a 55% increase year-over-year.
Gross profit of $51.1 million, a 102% increase year-over-year.
Adjusted EBITDA of $46.7 million, a 74% increase year-over-year.
Cash and highly-liquid marketable securities of $72.8 million, an 82% increase year-over-year.
Working capital of $86.1 million, a 43% increase year-over-year.
Net income of $2.0 million, a 90% decrease year-over-year, reflecting the impact of the non-recurring tax event and non-cash CVR revaluation discussed below.
Average realized price per silver ounce sold of $72.17, a 118% increase year-over-year.
AISC per silver ounce sold of $21.87, a 25% increase year-over-year.
Realized mining margin per silver ounce sold of $50.30, a 222% increase year-over-year.
Average realized price per zinc tonne sold of $3,302, a 12% increase year-over year.
AISC per zinc tonne sold of $2,219, a 46% increase year-over-year.
Realized mining margin per zinc tonne sold of $1,083, a 24% decrease year-over-year.
We had Arturo unpack for listeners how the net income for the quarter was significantly impacted by two non-recurring tax events associated with changes in Bolivia’s exchange rate and inflation assumptions, as well as a non-cash fair value adjustment related to the Glencore contingent value rights (CVRs). He points out that these items obscure the underlying strength of their operating performance this quarter.
The largest impact on net income was an unusually high $36.1 million income tax expense caused by two non-recurring events. One event was the result of the revaluation of the Boliviano following the change in the official exchange rate from 6.96 to 9.77 Bolivianos per U.S. dollar, a 40% decrease. The income tax expense was also impacted by a non-recurring taxable gain related to a reduction in their decommissioning and restoration provision, which was driven by forecasted lower inflation over the lives of our mining operations in Bolivia.
Additionally, their net income was further affected by a $15.8 million non-cash fair value adjustment to the consideration payable balance arising from the CVRs granted to Glencore. The value of the CVR liability is merely a valuation of the payouts that could occur up to the end of 2032. The payments are only triggered when the month’s average LME zinc price exceeds $3,850 per tonne, a threshold that has not been exceeded since the inception of the agreement in 2024. Its important to consider that any payments triggered by higher zinc prices would be accompanied by increased sales revenues from the higher price. Excluding the loss from the change in fair value of the CVR, net income for the quarter would have been $17.8 million.”
At Bolivar silver production increased 32% quarter-over-quarter to 343,522 ounces, driven by ongoing recovery efforts in the areas affected by the localized flooding event that occurred in May 2025. San Lucas processed 22% more ore than in the prior quarter. Consolidated zinc production increased 7% to 23,240 tonnes, driven principally by higher throughput, which more than offset lower zinc grades at Bolivar and Porco. Porco delivered higher silver and zinc production, driven by stronger silver grades and improved metal recoveries, while Caballo Blanco continued to make steady, meaningful contributions.
At Zimapan, operations rebounded from the temporary constraints experienced during the first quarter, including limited ventilation in the higher-grade zones at Level 960 due to a contractor delay in completing the ventilation Robbins incline shaft, as well as repeated power interruptions caused by the local service provider’s maintenance of the power grid. As a result, metal recoveries improved across all four payable metals. There will be the first NI-43-101 compliant maiden resource estimate released in the next month at Zimapan, with the goal to demonstrate the mineral inventory has replenished the ore that has been mined and milled over the last few years, and even grown the resources.
Next we transitioned to future growth, where the operations team is advancing their silver-dominant Soracaya mine towards development and near-term production. There is already a decline ramp into this project with initial stope access in 2 areas, and the team has been working on an optimization plan. Once the permit is received in September, the plan is to get the mine into initial ramp-up production by Q4 of 2026.
Wrapping up, we discussed the potential for future accretive acquisitions in the Americas, and various other growth drivers on tap that could create the catalysts for a rerating higher, that would be more in alignment with other mid-tier silver producer peers.
If you have any follow up questions for Arturo regarding Santacruz Silver, then please email those to us at Fleck@kereport.com or Shad@kereport.com.
In full disclosure, Shad is a shareholder of Santacruz Silver at the time of this recording, and may choose to buy or sell shares at any time.
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