Santacruz Silver, 5.6M Oz Silver Producer Trading at Low Multiples, 100X Per-Share Upside in $200 Silver

Disclaimer

This material is provided for informational and educational purposes only and should not be considered financial, investment, legal, tax, or other professional advice. The views expressed are based on publicly available information, company filings, technical reports, news releases, company presentations, and personal analysis at the time of writing, and they may change without notice. While every effort has been made to present accurate and reasonable information, no representation or warranty is made regarding completeness, accuracy, or reliability.

Mining and resource investments are highly speculative and involve substantial risks, including commodity price volatility, underground mining risk, grade reconciliation risk, political risk, jurisdictional risk, permitting risk, taxation risk, operating cost inflation, water inflow risk, exchange-rate risk, concentrate treatment charges, debt risk, dilution risk, and changes in market conditions. Past performance is not indicative of future results.

Any discussion of valuation, upside potential, project economics, management quality, future catalysts, or possible share-price outcomes reflects opinion rather than certainty. Readers should conduct their own due diligence and consult a licensed financial advisor before making any investment decisions.

Santacruz Silver Mining Ltd. TSXV: SCZ / NASDAQ: SCZM / OTCQX: SCZMF

Introduction

Santacruz Silver Mining Ltd. is a Latin America-focused silver and base-metals producer with operating assets in Bolivia and Mexico. Unlike many junior silver companies that are still waiting for permits, studies, financing, and construction, Santacruz is already producing meaningful metal today. The company operates four producing mines, one ore feed sourcing and trading business, and one exploration-development project. Its production mix includes silver, zinc, lead, and copper, with silver as the main investment story.

The bull case is simple: Santacruz is already a cash-flowing silver producer with multiple operating assets, strong leverage to higher silver prices, and a much-improved balance sheet after settling the major Glencore acquisition liability. In 2025, the company produced 14.4 million silver equivalent ounces, including 5.6 million ounces of silver and 87,295 tonnes of zinc. Even with the Bolivar water inflow disruption in 2025, Santacruz still generated strong full-year revenue, operating cash flow, and net income.

The company’s strongest attraction is that this is not a “maybe one day” silver story. This is already a producer. The market is valuing Santacruz as a real operating company, and the stock has already re-rated heavily. That means the opportunity is no longer hidden like it was before 2025, but if silver moves into a much higher price environment, Santacruz still has serious torque because the production base is already running.

The main risk is also clear: Santacruz is operationally complex. It has assets in Bolivia and Mexico, it produces multiple metals, Bolivar and Porco are only 45 percent economic interests under agreements with COMIBOL, and the company’s costs can move sharply depending on production mix, by-product prices, silver-equivalent conversion ratios, and operating disruptions.

Projects / Location / MRE / Grades

Project 1: Bolivar Mine, Bolivia (Silver-Dominant Polymetallic Producer)

Bolivar is one of Santacruz’s key Bolivian assets. It is located in the Oruro Department of Bolivia and was acquired by Santacruz in 2022. The mine is operated under a Net Profit Agreement with COMIBOL, where Santacruz receives 45 percent of net profits and the remaining 55 percent is allocated to the Bolivian government. Bolivar is an underground silver-dominant polymetallic mine producing silver, zinc, and lead concentrates.

The operation has a processing facility with nominal capacity of about 1,100 tonnes per day. The 2025 operating grades were approximately 158 g/t silver, 6.73 percent zinc, and 0.41 percent lead, which makes Bolivar a strong-grade underground polymetallic mine by modern operating standards.

Bolivar’s 2025 production was affected by a water inflow event in May 2025, which restricted access to higher-silver-grade areas. For the full year 2025, Bolivar produced 2.37 million AgEq ounces and 1.06 million ounces of silver on a 100 percent basis. By Q1 2026, the mine showed recovery progress, with silver output rising 28 percent quarter over quarter to 259,635 ounces, although it was still below Q1 2025 levels.

Bolivar Reserve and Resource Summary:

Grade feel

Bolivar is high grade. The resource table shows measured and indicated grades around 313 g/t silver and 12.54 percent zinc, while inferred resources grade around 403 g/t silver and 10.35 percent zinc. This is a strong underground resource profile, but investors must remember that Santacruz only records 45 percent of Bolivar’s revenues and expenses.

Overall, Bolivar is a key turnaround asset. If production fully recovers in 2026, it can become a stronger contributor again. If operational disruption continues, it remains one of the biggest risks in the Santacruz story.

Project 2: Porco Mine, Bolivia (Zinc-Dominant Polymetallic Producer)

Porco is located in the Potosí Department of Bolivia and was also acquired by Santacruz in 2022. Like Bolivar, it is operated under a Net Profit Interest agreement with COMIBOL, where Santacruz receives 45 percent of net profits and COMIBOL receives 55 percent. Porco is an underground zinc-dominant polymetallic mine with a mining history that dates back more than 500 years.

The processing plant has nominal capacity of approximately 1,200 tonnes per day and uses conventional crushing, grinding, and flotation to produce zinc and lead concentrates. 2025 operating grades were approximately 77 g/t silver, 5.77 percent zinc, and 0.36 percent lead.

Porco is not the highest-silver asset in the portfolio, but it is important because it provides zinc production and operating diversification. In 2025, Porco produced 400,000 ounces of silver and 10.7 kt zinc on a 100 percent basis. In Q1 2026, silver production declined to 70,708 ounces, while zinc production increased to 2,833 tonnes, reflecting mine sequencing toward zinc-rich areas.

Porco Reserve and Resource Summary:

Grade feel

Porco is more zinc-dominant than silver-dominant. It is not the main silver leverage asset, but it can provide steady polymetallic cash flow when zinc prices are strong.

Project 3: Caballo Blanco Group of Mines, Bolivia (Stable Silver-Zinc-Lead Contributor)

Caballo Blanco is a wholly owned silver-zinc-lead mining complex near Potosí, Bolivia. The group includes the Tres Amigos, Esperanza, and Colquechaquita underground mines, supported by the Don Diego processing plant. The complex has more than 20 years of continuous operating history.

Caballo Blanco has a 1,300 tonne per day milling facility and produces separate zinc and lead concentrates. Average 2025 operating head grades were approximately 170 g/t silver, 7.28 percent zinc, and 1.34 percent lead, which gives this operation a good grade profile and makes it one of the more stable contributors in the portfolio.

2025 production was approximately 1.2 million ounces of silver and 16.1 kt zinc. In Q1 2026, Caballo Blanco produced 306,888 ounces of silver, up 6 percent quarter over quarter, with strong silver recovery of 93 percent. The company described Caballo Blanco as a consistent contributor and noted that it continued to show strong operating consistency.

Caballo Blanco Reserve and Resource Summary:

Grade feel

Caballo Blanco is a strong polymetallic underground asset. It is not massive on its own, but it is meaningful because it is 100 percent owned and has stable production history.

Project 4: Zimapan Mine, Mexico (Highest-Volume Mexican Operation)

Zimapan is located in Hidalgo, Mexico and was acquired by Santacruz in 2021. It is a 100 percent owned underground silver-zinc-lead-copper polymetallic mine. The district has a very long mining history, dating back more than four centuries, and includes historic mines such as Lomo de Toro, El Monte, and Carrizal.

Zimapan is important because it is Santacruz’s largest-volume operation. It has a processing facility with approximately 3,200 tonnes per day of milling capacity and exploits skarn-hosted polymetallic mineralization. 2025 operating grades averaged approximately 78 g/t silver, 2.74 percent zinc, 0.73 percent lead, and 0.26 percent copper.

In 2025, Zimapan produced 1.6 million ounces of silver and 18.8 kt zinc. In Q1 2026, it produced 362,863 ounces of silver, 4,040 tonnes zinc, 1,005 tonnes lead, and 308 tonnes copper. The quarter was weaker for silver, zinc, and lead because of lower grades, lower recoveries, ventilation limitations in higher-grade Level 960 areas, and intermittent power interruptions.

Grade feel

Zimapan is not as high-grade silver as Bolivar or Caballo Blanco, but it has scale, infrastructure, and long operating history. The key near-term improvement area is Level 960 development and plant/recovery optimization.

Project 5: San Lucas Ore Feed Sourcing, Bolivia (Margin-Based Processing Platform)

San Lucas is Santacruz’s wholly owned Bolivian ore sourcing and processing business. It is not a traditional mine in the same way as Bolivar, Porco, Caballo Blanco, or Zimapan. It sources third-party material and processes it through Santacruz’s operating platform.

This business is important because it helps increase plant utilization, improves fixed-cost absorption, and gives Santacruz flexibility across its Bolivian operations. In 2025, San Lucas produced 1.31 million ounces of silver and 27.4 kt zinc.

The advantage is flexibility. The risk is margin compression. When metal prices rise, ore purchase costs can also rise because feed is priced based on metal content and value. This means San Lucas can be profitable, but it may not have the same margin profile as ore mined from Santacruz’s own properties.

Project 6: Soracaya Project, Bolivia (Development Optionality)

Soracaya is a 100 percent owned silver-dominant brownfield project in the Potosí Department of Bolivia. It was acquired in 2022 and gives Santacruz additional optionality beyond its producing asset base.

This is not the main valuation driver today. The main story is current production and cash flow from Bolivia and Mexico. But Soracaya gives the company a potential future growth project if management can advance permitting, mine planning, and development work.

Consolidated Production and Cost Structure

For the year ended 2025, Santacruz processed 1,945,261 tonnes of ore and produced 14,399,019 silver equivalent ounces, including 5,598,680 ounces of silver and 87,295 tonnes of zinc. This is already meaningful producer scale.

The company’s 2025 consolidated AISC was US$30.81 per silver equivalent ounce sold, compared with US$26.09 in 2024. The increase was mainly caused by lower silver-equivalent ounces sold after the Bolivar water inflow disruption and higher ore purchase costs at San Lucas. Importantly, the company noted that cash cost per tonne actually declined from US$101.35/t to US$95.80/t, meaning the per-ounce AISC increase was more about production mix and silver-equivalent conversion rather than a simple collapse in site-level cost control.

In Q1 2026, Santacruz reported revenue of US$127.5 million, gross profit of US$42.9 million, net income of US$28.5 million, adjusted EBITDA of US$42.6 million, and cash plus highly liquid marketable securities of US$64.9 million. AISC per silver ounce sold was US$31.60, while realized mining margin per silver ounce sold was US$31.70.

Cost structure feel

Santacruz is not the lowest-cost silver producer in the world, but it is profitable in a strong silver price environment. The company’s cost base is acceptable, but investors must watch AISC carefully because it can move sharply depending on Bolivar recovery, Zimapan recoveries, San Lucas ore purchase costs, zinc prices, and the silver-equivalent conversion ratio.

Share Structure / Ownership / Insiders

Capital Structure

Santacruz’s company website lists the following share structure as of December 31, 2025:

Recent public market data showed Santacruz trading around C$12.02 on May 15, 2026, with quoted market value around C$1.11 billion and shares outstanding around 92.49 million.

Using the company’s fully diluted share count of 94,382,820 shares and a share price of C$12.02, the fully diluted market capitalization is approximately: C$1.13 billion

Using a rough CAD/USD exchange rate around 0.727, the fully diluted market capitalization is approximately: US$825 million

Ownership / Insiders

Public data from Simply Wall St shows CEO Arturo Préstamo Elizondo owns around 5 percent of Santacruz. That is positive alignment.

People / Management

Risks / Catalysts / Timeline

Key Risks

Catalysts

Expected Timeline to Full Production

Santacruz is already in production, so the key question is not “when production begins.” The real question is when the company reaches a stronger, more normalized production run-rate after the 2025 Bolivar disruption and after Zimapan improvements.

2026

The main focus is operational recovery and optimization. Bolivar is expected to gradually recover through 2026, with the company previously indicating a return to full production anticipated in Q4 2026.

Zimapan development toward Level 960 is also important, because better access to higher-grade areas could improve production and recoveries.

2027

If Bolivar is back to full performance and Zimapan improvements are working, Santacruz could look more like a stable multi-asset producer instead of a turnaround story.

2028 onward

A key issue to monitor is the Illapa agreement involving Bolivar and Porco, because the joint operation agreement is disclosed as expiring in 2028. That could become a major renewal, negotiation, or asset-risk point.

Valuation Summary

Producer FCF Multiple Model at US$150/oz and US$200/oz Silver

This is a simplified upside model. Because Santacruz is already producing, Using 2025 operating cash flow as the base rather than a PEA mine-life cash flow model.

This model uses:

The 2025 operating cash flow number comes from Santacruz’s MD&A, which reported US$79.1M cash generated by operating activities in 2025.

US$150/oz Silver Scenario

Step 1 – Silver Price Uplift US$150 – US$39 = US$111/oz

Step 2 – Extra Silver Revenue 5.59868M oz × US$111 = US$621.5M

Step 3 – Adjusted Annual FCF Proxy US$79.1M + US$621.5M = US$700.6M

Step 4 – Valuation Per Share

10× FCF = US$7.006B market value US$74.23/share, or roughly C$102.10/share

15× FCF = US$10.509B market value US$111.35/share, or roughly C$153.14/share

20× FCF = US$14.012B market value US$148.46/share, or roughly C$204.17/share

US$200/oz Silver Scenario

Step 1 – Silver Price Uplift US$200 – US$39 = US$161/oz

Step 2 – Extra Silver Revenue 5.59868M oz × US$161 = US$901.4M

Step 3 – Adjusted Annual FCF Proxy US$79.1M + US$901.4M = US$980.5M

Step 4 – Valuation Per Share

10× FCF = US$9.805B market value US$103.89/share, or roughly C$142.90/share

15× FCF = US$14.707B market value US$155.83/share, or roughly C$214.35/share

20× FCF = US$19.610B market value US$207.78/share, or roughly C$285.80/share

Valuation Summary Table

This valuation is extremely aggressive and should not be treated as a price target. It is designed only to show the torque of an existing producer in a very high silver price environment. In reality, higher silver prices would likely bring higher royalties, higher taxes, higher ore purchase costs, higher labour costs, more working capital needs, and possibly different payable metal economics.

Summary & Quick Scorecard

RT Rating, Commentary

Santacruz Silver is on our watchlist.

We would rate this as: 4 out of 5 stars

Santacruz is one of the more interesting silver producers because it already has scale, real cash flow, multiple operating mines, a tight share structure, and strong leverage to silver. This is not a dream-stage developer waiting ten years for construction. This is already a producer, and that changes the risk-reward profile.

The strongest part of the story is the combination of production scale and share structure. With fewer than 100 million fully diluted shares, Santacruz has very strong per-share torque if silver enters a major bull market. The 2025 production base of 14.4 million AgEq ounces and 5.6 million silver ounces gives the company real operating leverage.

The main issue is that the easy re-rating has already happened. Santacruz was a monster performer in 2025, so the market is no longer asleep. At today’s valuation, investors need continued strong execution, Bolivar recovery, Zimapan improvement, and high silver prices to justify further upside.

The biggest risks are Bolivia jurisdiction exposure, the 45 percent economic interest structure at Bolivar and Porco, cost volatility, and operational interruptions. This is not a clean single-asset story. It is a real producer, but a complicated one.

Overall, Santacruz deserves a strong rating because it has something many silver juniors do not have: production, cash flow, infrastructure, and operating momentum. But because the stock has already re-rated hard, would not call it a hidden deep-value story anymore. It is now a silver producer momentum story with high upside if silver explodes, but also higher expectations built into the stock price.

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