The Q2 earnings miss is entirely driven by non-cash and non-recurring items (Bolivian tax revaluation and CVR mark-to-market), while the underlying operational performance and cash generation are strong. Traders should watch for the sale of the $36.4M in accumulated concentrate inventory in Q3, which will boost cash flow, and monitor the LME zinc price—if it sustains above $3,850/t, the CVR could become a real cash liability. The Bolivian boliviano's 40% devaluation is a structural change that will continue to impact reported earnings and tax liabilities.
Price Chart
Executive Summary
Santacruz Silver Mining Ltd. reported Q2 2026 results with revenue surging 55% YoY to $113.5M and gross profit doubling to $51.1M, driven by a 118% increase in the average realized silver price to $72.17/oz. However, net income collapsed 90% to $2.0M due to a $36.1M income tax expense from non-recurring Bolivian tax items (Bolivia's transition to a floating exchange rate and a downward revision in inflation assumptions) and a $15.8M non-cash loss on the revaluation of the Glencore contingent value right (CVR) liability. Adjusted EBITDA rose 74% to $46.7M, and the company generated $24.1M in operating cash flow YTD, ending the period with $50.4M in cash and $86.1M in working capital. The underlying operational performance was strong, but the headline earnings miss due to these one-time items creates a mixed picture for traders.
Key Facts
- Revenue increased 55% YoY to $113.5M (Q2 2026 vs Q2 2025), driven by a 118% increase in the average realized silver price to $72.17/oz.
- Gross profit doubled to $51.1M (up 102% YoY), and Adjusted EBITDA rose 74% to $46.7M.
- Net income fell 90% to $2.0M (Q2 2026 vs Q2 2025), impacted by a $36.1M income tax expense from non-recurring Bolivian tax items and a $15.8M non-cash loss on the CVR revaluation.
- Consolidated silver production increased 11% YoY to 1.57M oz, and zinc production rose 10% to 23,240 tonnes.
- Cash and cash equivalents stood at $50.4M, with working capital of $86.1M as of June 30, 2026.
- The CVR liability to Glencore increased to $35.1M (from $20.2M at Dec 2025) as the average zinc price ($3,476/t) approaches the $3,850/t payment trigger.
- Bolivia transitioned to a floating exchange rate in June 2026 (BOB weakened 40% to 9.77 per USD), generating a significant non-recurring taxable gain.
- Road blockades in Bolivia (~53 days) temporarily disrupted concentrate exports, increasing concentrate inventory to $36.4M, expected to be sold in Q3 2026.
Financial Impact
Revenue +55% YoY to $113.5M; Gross Profit +102% to $51.1M; Net Income -90% to $2.0M; Adjusted EBITDA +74% to $46.7M; Cash $50.4M
Risk Factors
- Zinc price approaching the CVR trigger ($3,850/t) could lead to real cash payments to Glencore, with the liability already marked at $35.1M.
- Bolivia's new floating exchange rate regime introduces ongoing currency volatility and higher Bolivian tax liabilities.
- Concentrate inventory build-up from road blockades ($36.4M) creates execution risk on timely sales in Q3.
- High customer concentration (68% from one Bolivian customer) poses credit and operational risk.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 3 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 6-K Filing (SCZM) — Batch item 1 | 0001493152-26-038621 |
| Exhibit: ex99-2.htm | 0001493152-26-038621 |
| 6-K Filing (SCZM) — Batch item 3 | 0001493152-26-038621 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 22, 2026 4d ago | 6-K | $6.95 | awaiting T+20 | — | $7.04 (+1.29%) |
Sep 18, 2026 5w ago | 6-K | $9.03 $8.39 | ▼ −7.09% | ▼ −6.18% | $7.04 (−22.04%) |
Sep 9, 2026 6w ago | 6-K | $10.43 $8.45 | ▼ −18.98% | ▼ −20.93% | $7.04 (−32.50%) |
Aug 17, 2026 10w ago | 6-K | $8.75 $8.64 | ▼ −1.26% | ▲ +0.72% | $7.04 (−19.54%) |
Aug 7, 2026 11w ago | 6-K | $8.98 $9.97 | ▲ +11.02% | ▲ +11.94% | $7.04 (−21.60%) |
Jun 30, 2026 16w ago | 6-K | $6.49 $6.31 | ▲ +2.77% | ▲ +1.75% | $7.04 (−8.47%) |
Jun 9, 2026 19w ago | 6-K | $6.03 $6.67 | ▲ +10.61% | ▲ +6.99% | $7.04 (+16.75%) |
May 4, 2026 25w ago | 6-K | $7.78 $8.33 | ▲ +7.07% | ▲ +2.12% | $7.04 (−9.51%) |
Apr 17, 2026 27w ago | 6-K | $9.10 $8.56 | ▼ −5.93% | ▼ −10.14% | $7.04 (−22.64%) |
US Market Status
Subscribe to SecBot
Get Real-Time SEC Filing Intelligence
Comprehensive SEC filing analysis delivered the moment filings hit EDGAR. Sentiment scoring, impact analysis, and actionable insights for every material event.
Create a free account Live analysis, Telegram alerts, watchlists and the MCP server for subscribers