Mr. Chris Wright reports

DEFIANCE SILVER CLOSES SECOND TRANCHE OF PRIVATE PLACEMENT

Defiance Silver Corp. closed on March 14, 2024, the final tranche of its previously announced non-brokered private placement (the second tranche), with the first tranche having closed on Feb. 27, 2024, for units of the company at a price of 10 cents per unit, for aggregate gross proceeds of $1,550,350 for the second tranche. In total, the company issued 26,443,500 units in the course of the offering for total gross proceeds of $2,644,350.

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 second tranche 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 second tranche are subject to a four-month hold period, expiring on July 15, 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.

In connection with the closing of the offering, the company paid finders' fees composed of a cash commission and non-transferable warrants to arm's-length finders. Each finder's warrant entitles the holder thereof to purchase a common share of the company at a price of 10 cents per common share for a period of two years following the date of issuance of the finders' warrants, the whole in accordance with the rules and policies of the TSX Venture Exchange. In total, the company paid an aggregate amount of $29,193 in cash commissions and issued 291,930 finders' warrants to the arm's-length finders in connection with the offering.

Related-party transaction

Windermere Capital Fund SPC -- Breakaway Strategic Resource SP, an insider of the company, purchased 11,998,000 units for total consideration of $1,199,800. Immediately after the closing of the second tranche, Windermere Capital owns directly or indirectly, or exercises control or direction over, a total of 41.5 million common shares and 3,045,750 warrants of the company.

Windermere is considered a related party and insider of the company for the purposes of applicable securities laws and stock exchange rules. The subscription and issuance of common shares for Windermere constitute a related-party transaction, but the shares 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 Windermere, nor the consideration paid by Windermere exceeds 25 per cent of the company's market capitalization.

Chris Wright, chairman, chief executive officer and director of the company, is an affiliate of Windermere. As such, Mr. Wright did not vote on the resolution of the board of directors to approve the offering and the agreements relating thereto.

About Defiance Silver Corp.

Defiance (TSX Venture Exchange: 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 advance its projects through capital-efficient exploration focused on resource growth and new mineral discoveries.

We seek Safe Harbor.