Author: Atrium Research October 22, 2026
Ben Pirie | Equity Research Analyst | [email protected] | 647-688-9661
Nicholas Cortellucci, CFA | Equity Research Analyst | [email protected] | 647-391-3314
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What you need to know:
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Santacruz produced 3.0Moz AgEq (1.5Moz Ag, 22,080t Zn, 3,316t Pb and 355t Cu) in Q3/26 vs. our 3.2Moz forecast.
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Silver from the Company’s mining operations rose +2% QoQ, including a +19% increase at Bolivar as its recovery continues.
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Consolidated Ag and Zn production declined QoQ as SCZ strategically prioritized mining operations over San Lucas to deliver higher margins.
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Q4 is expected to be stronger as the new 500 tpd mill begins operating, Bolivar fully recovers, and Caballo Blanco gets into higher grades.
Yesterday, after market close, Santacruz Silver (SCZ:TSX, SCZM:NASDAQ) reported Q3/26 production of 3.0Moz AgEq (+7.6% QoQ; +26.7% YoY), which compared to our estimate of 3.2Moz (-5.6%). Consolidated silver and zinc production of ~1.5Moz and ~22.1Kt was modestly lower QoQ (-4.6% Ag, -5.0% Zn) due to lower output from the San Lucas ore sourcing business, where processed volumes and grades were deliberately cut back to free up mill capacity for SCZ’s mining operations. As a result, production from the Company’s own mines grew for a second quarter, with silver production up +2% QoQ (+30% YoY), which included a +19% QoQ increase at Bolivar. Importantly, mining operations generate significantly higher margins, so modestly lower QoQ consolidated volumes due to San Lucas should not impact profitability. Looking ahead, management is guiding for higher consolidated production in Q4 as the new 500 tpd milling facility is expected to start processing San Lucas ore exclusively, freeing up capacity at existing mills (read our note on the acquisition here). We are maintaining our BUY rating and target price of C$27.00/share on SCZ.
Figure 1: Q3/26 Production Summary
| Consolidated | Q3/26A | Atrium Q3/26E | Var. vs Est. | Q2/26A | QoQ | Q3/25A | YoY |
| Tonnes Milled (t) | 509,108 | 513,296 | -0.8% | 521,956 | -2.5% | 486,585 | +4.6% |
| Silver Produced (oz) | 1,500,958 | 1,727,244 | -13.1% | 1,573,100 | -4.6% | 1,241,929 | +20.9% |
| Zinc Produced (t) | 22,080 | 24,942 | -11.5% | 23,240 | -5.0% | 21,581 | +2.3% |
| Lead Produced (t) | 3,316 | 3,240 | +2.3% | 3,165 | +4.8% | 2,603 | +27.4% |
| Copper Produced (t) | 355 | 289 | +23.0% | 337 | +5.3% | 331 | +7.3% |
| Silver Equivalent Produced (oz) | 3,027,229 | 3,208,506 | -5.6% | 2,814,489 | +7.6% | 2,389,032 | +26.7% |
Production Highlights
Bolivar Mine Bolivar delivered a +19% QoQ increase in silver production to 408Koz, which was ahead of our 357Koz (+14%), and included a +6% QoQ increase in tonnes milled to 76.7Kt. As the dewatering process following the May 2025 flooding continues, the high-grade Pomabamba and Nane veins are returning to planned levels, delivering +13% higher QoQ silver grades of 186 g/t. Full recovery remains on track for Q4, which we expect will drive further incremental improvements at the key operation.
Zimapan Mine Q3 silver production of 402Koz modestly increased QoQ from 391Koz (+3%), driven by an improvement in silver recoveries from 72% to 76%, as SCZ is realizing the benefits of its recent investment in operational improvements. We were forecasting 476Koz; however, silver grade of 74 g/t was below our 83 g/t forecast. Tonnes milled of 222.4Kt was essentially unchanged QoQ.
Caballo Blanco Group Silver production declined -12% QoQ from 326Koz to 287Koz. We were forecasting production roughly flat QoQ at 323Koz. While 68.4Kt milled beat our forecast by +6%, silver grade of 145 g/t dropped -21% QoQ from 183 g/t and missed our 165 g/t forecast. Higher silver grades are anticipated in Q4 as the mine plan shifts into higher grade zones. Zinc production of 4.5Kt increased +10% QoQ from 4.1Kt, broadly aligning with our 4.7Kt forecast (-3%).
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Atrium Research Ratings System
BUY: The stock is expected to generate returns of over 20% over the next 24 months.
HOLD: The stock is expected to generate returns of 0-20% over the next 24 months.
SELL: The stock is expected to generate negative returns over the next 24 months.
NOT RATED (N/R): Atrium does not provide research coverage on the respective company.
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