Mr. Chris Wright reports

DEFIANCE SILVER CLOSES INITIAL TRANCHE OF PRIVATE PLACEMENT

Defiance Silver Corp. closed on Feb. 27, 2024, the first tranche of its previously announced non-brokered private placement of units of the company at a price of 10 cents per unit for aggregate gross proceeds of $1,094,000.

Marketed offering

Each unit is composed of one common share of the company and one-half of one common share purchase warrant. Each warrant will be exercisable by the holder thereof to acquire one common share of the company at a price of 20 cents at any time on or before the date which is 24 months after the closing date. The net proceeds of the offering will be used by the company for exploration and general working capital purposes. Under applicable securities legislation and the policies of the TSX Venture Exchange, the securities issued in this offering are subject to a four-month hold period, expiring on June 28, 2024.

If, at any time after the date which is four months and one day following the closing date, the closing price of the common shares on the TSX Venture Exchange, or such other stock exchange on which the common shares are listed or quoted, is equal to or greater than 25 cents for a period of 20 consecutive trading days, the company shall be entitled to accelerate the expiry date of the warrants such that the holders of warrants shall only have a period of 30 days to exercise the warrants upon deemed receipt of an acceleration notice from the company.

Related-party transaction

Chris Wright, chairman and chief executive officer of the company, purchased 600,000 units through a related entity controlled by Mr. Wright, for total consideration of $60,000. Immediately after the closing of the private placement, Mr. Wright owns, directly or indirectly, or exercises control or direction over, a total of 1,043,800 common shares and 300,000 warrants of the company.

James Bergin, director of the company, purchased 300,000 units for total consideration of $30,000. Immediately after the closing of the private placement, Mr. Bergin owns, directly or indirectly, or exercises control or direction over, a total of 600,000 common shares and 150,000 warrants of the company.

George Cavey, vice-president, exploration, and director of the company, purchased 500,000 units through its related entity, OreQuest Consultants Ltd., for total consideration of $50,000. Immediately after the closing of the private placement, Mr. Cavey owns, directly or indirectly, or exercises control or direction over, a total of 602,565 common shares and 250,000 warrants of the company.

Mr. Wright, Mr. Bergin and Mr. Cavey are hereinafter referred to collectively as the insiders.

The insiders are considered related parties and insiders of the company for the purposes of applicable securities laws and stock exchange rules. The subscription and issuance of common shares for the insiders constitute related-party transactions, but are exempt from the formal valuation and minority approval requirements of Regulation 61-101 (Protection of Minority Security Holders in Special Transactions) as neither the fair market value of the common shares and common share purchase warrants issued to each of the insiders, nor the consideration paid by such insiders exceeds 25 per cent of the company's market capitalization.

Shares for debt

Further to the company's news release of Jan. 11, 2024, and upon receipt of TSX Venture Exchange approval on Feb. 6, 2024, the company confirms that it has issued 337,549 common shares, extinguishing debt in the amount of $46,640.

About Defiance Silver Corp.

Defiance (TSX-V: DEF) (OTCQX: DNCVF) (Frankfurt Stock Exchange: D4E) is an exploration company advancing the district-scale Zacatecas project, located in the historic Zacatecas silver district and the Tepal gold/copper project in Michoacan state, Mexico. Defiance is managed by a team of proven mine developers with a record of exploring, advancing and developing several operating mines and advanced resource projects. Defiance's corporate mandate is to expand the San Acacio and Tepal projects to become premier Mexican silver and gold deposits.

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