The mine operator Santacruz Silver Mining Ltd. published its unaudited financial and operating results for the quarter ended March 31, 2026, revealing meaningful improvements across top-line and cash metrics. Management emphasized that the stronger commodity backdrop for silver and disciplined operations were the main drivers behind the quarter’s performance, while also introducing a revised reporting framework to present results more transparently.
Key numbers from the period include revenue of $127.5 million, gross profit of $42.9 million and net income of $28.5 million. The company ended the quarter with $64.9 million in cash and highly liquid marketable securities and a working capital position of $75.9 million, providing flexibility for operations and continued capital allocation.
Financial performance and margin dynamics
Santacruz recorded an 81% year-over-year increase in revenue and a 54% rise in gross profit. Adjusted EBITDA rose to $42.6 million, up 55% compared with the same quarter a year earlier. Management attributes these gains primarily to a higher average realized silver price of $63.30 per ounce, which lifted realized margins despite relatively stable cost metrics.
The company reported an AISC (all-in sustaining cost) for silver of $31.60/oz and a realized mining margin per silver ounce of $31.70, representing a significant year-over-year improvement in margin per ounce. For zinc, average realized price was $3,116 per tonne with an AISC of $2,729 per tonne, producing a lower mining margin compared with the prior year. The quarter also reflected the cash mix: approximately $42.7 million held as cash and $22.2 million in marketable securities, the latter primarily US treasury notes and bills, of which $15.8 million serves as collateral for short-term borrowings.
Changes to reporting and non-GAAP measures
Alongside the financial release, Santacruz revised how it presents performance metrics to provide clearer insight into its dual business model. The company now separates results into Mining operations and Ore processing operations, recognizing that the economics and cost drivers differ between extracting ore from owned mines and processing third-party feed. These changes were applied retrospectively to comparative periods.
Segmentation rationale
Under the new format, the mining segment covers production from Bolivar, Porco, Caballo Blanco and Zimapan, while the ore processing segment reflects activity at San Lucas where third-party ore is purchased and processed. Management explains that ore processing naturally yields lower margins because purchased feed is priced using metal content and prevailing metal prices, whereas mining operations capture the value from ore produced on company-owned deposits.
Co-product costing and margin metrics
Santacruz moved to a co-product costing methodology, reporting costs and margins per actual payable silver ounce and payable zinc tonne sold rather than relying on silver-equivalent cost measures. The company also clarified treatment of incidental metals such as lead and copper by deducting their proceeds as by-product credits when calculating net costs for silver. New non-GAAP indicators introduced include realized mining margin and realized ore processing margin, which subtract AISC from the average realized price per unit to show per-unit profitability.
Operational snapshot and outlook
On a consolidated basis, Santacruz milled 487,777 tonnes across mining and ore processing in the quarter. Total payable silver production was 1,341,499 ounces and payable zinc production reached 21,640 tonnes. Compared with Q1 2026, silver production declined by roughly 16% while zinc output increased by about 4%, reflecting asset-specific variations and the company’s blend of owned and sourced ore.
Operational priorities include continuing restoration work at Bolivar after the May 2026 localized water inflow event, with full recovery targeted in Q4 2026. San Lucas remains strategically important for maximizing plant utilization and absorbing fixed costs through third-party ore sourcing. In Mexico, Zimapan is the company’s largest-volume operation and management continues to invest in improving metallurgical recoveries and concentrate quality to sustain margin gains throughout 2026.
Management highlighted that after paying approximately $31.5 million in taxes during the quarter, the company’s strong cash position supports both operational improvement projects and balance-sheet flexibility. The revised reporting structure and the move to co-product metrics aim to give investors a clearer, more actionable view of where value is generated across Santacruz’s integrated platform.
