0001493152-26-020908
SEC filingRevenue grew 15% to $326M driven by higher realized metal prices, while net income fell to $42M from $164M due to absence of a one-time gain.
For the year ended December 31, 2025, Santacruz Silver reported revenue of $326.4 million, a 15% increase from $283.0 million in 2024. The growth was driven primarily by higher average realized prices per silver equivalent ounce, which rose to $39.00 from $28.74, partially offset by a 22% decline in silver equivalent ounces sold (10.9 million vs. 14.1 million). Gross profit more than doubled to $109.4 million (91% increase) as cost of sales decreased 3% to $199.5 million, benefiting from the change in the Bolivian boliviano exchange rate to a bank-rate estimate starting January 1, 2025. Operating income surged 159% to $85.1 million, reflecting the improved gross profit and lower general and administrative expenses ($22.3 million vs. $24.3 million). Net income fell 74% to $42.2 million because 2024 included a $133.3 million gain on adjustment to consideration payable related to the Glencore omnibus agreement; excluding that one-time item, net income grew substantially. EPS basic was $0.47 versus $1.86 in 2024.
As of December 31, 2025, total assets were $445.8 million, up from $374.0 million a year earlier, driven by higher cash ($44.3 million vs. $35.7 million), marketable securities ($22.5 million vs. nil), and increased inventories ($57.5 million vs. $32.4 million). Working capital improved to $63.7 million from $46.3 million. Total liabilities rose to $266.7 million from $242.7 million, largely due to higher loans payable ($51.9 million vs. $19.6 million) and an increase in trade payables. The consideration payable to Glencore decreased to $20.2 million (entirely CVR) from $44.8 million as the base purchase price was fully settled. Shareholders' equity increased to $179.1 million from $131.3 million, supported by retained earnings turning positive ($26.2 million vs. -$16.0 million).
Cash generated by operating activities was $79.1 million, up 45% from $54.4 million in 2024, driven by improved profitability and higher net income adjusted for non-cash items. Net cash used in investing activities increased to $92.4 million from $20.9 million, primarily due to $40.0 million in payments to Glencore for the accelerated settlement, $34.3 million in purchases of marketable securities, and higher capital expenditures ($30.6 million vs. $22.6 million). Financing activities provided $21.7 million versus a use of $2.5 million in 2024, as the company drew down $73.0 million in new loans and repaid $51.6 million, and received $3.7 million from option exercises. The net increase in cash was $8.5 million, ending the year with $44.3 million. Capital expenditures of $30.6 million (9.4% of revenue) were directed mainly toward mine development and equipment at Zimapan and Bolivar.
Management highlighted that the Bolivar mine experienced a localized water inflow in mid-May 2025 that restricted access to higher-silver-grade areas for most of the year, reducing total silver equivalent production by 11%. Recovery efforts progressed through the second half, and full production is expected to return during 2026. Other operations—San Lucas, Caballo Blanco, and Zimapan—remained stable or improved, demonstrating the benefit of a diversified asset base. The company's strategic priorities for 2026 include restoring Bolivar's production, improving metallurgical recoveries and concentrate quality at Zimapan (on which capital has already been spent), and maintaining cost discipline across Bolivian operations. The omnibus agreement with Glencore was modified in 2024 to settle the base purchase price with a $40 million acceleration option, which was fully exercised and paid by September 2025; the remaining obligation is a contingent value right (CVR) tied to zinc prices above $3,850/tonne, with no payments triggered to date. Management believes the company has sufficient liquidity from cash on hand and operating cash flows to meet near-term obligations.
The company reports in IFRS and has changed its accounting for Bolivian boliviano exchange rates from the official rate (6.96 BOB/USD) to an estimated bank rate (average 11.92 BOB/USD in 2025), applied prospectively from January 1, 2025. This change reduced reported costs, contributing to the gross profit improvement. Segment-wise, Zimapan led revenue growth with a 25% increase to $102.4 million, driven by higher zinc production and prices. San Lucas revenues rose 23% as it processed more third-party ore under its margin-based sourcing model. Caballo Blanco revenues grew 16% despite lower throughput, benefiting from higher metal prices. Bolivar and Porco revenues declined 15% and 9%, respectively, due to production disruptions. The company had two customers accounting for all concentrate sales, with one customer representing 69% of revenue. Goodwill remained unchanged at $15.5 million. Share-based compensation rose to $2.0 million from $0.1 million due to higher option grants and stock price. A reversal of impairment of $4.1 million on the Bolivar CGU was recorded after reassessing long-term silver prices. The CVR liability was remeasured at $20.2 million, with a fair value loss of $10.1 million recognized in finance costs.