Mr. James Anderson reports

GUANAJUATO SILVER PRODUCES RECORD 836,375 AGEQ OUNCES IN Q4

Guanajuato Silver Company Ltd. has released consolidated production results for the three months ended Dec. 31, 2022. Production results are from the company's wholly owned El Cubo mines complex, Valenciana mines complex (VMC) and San Ignacio mine in Guanajuato, Mexico, and the Topia mine in Durango, Mexico.

Q4 2022 production highlights:

• Record production during the quarter of 836,375 silver equivalent (AgEq) ounces (oz) derived from 401,244 ounces of silver, 3,907 ounces of gold, 811,492 pounds of lead and 1,261,554 pounds of zinc. Silver equivalent production for all of 2022 totalled 2.15 million ounces.
• Average silver recoveries of 86.8 per cent continue to surpass historical recoveries.
• The dry stack tailings project at El Cubo has been initiated and advanced engineering has been completed. The company is awaiting regulatory approval to begin construction of a dry stack facility that would increase tailings capacity at El Cubo from 2.5 years to approximately 15 years of additional tailings storage.
• A new gravity circuit at El Cubo was completed during the quarter with the objective of recovering gold and silver from the Mastrantos IV historical tailings pond (see the news release dated June 22, 2022). The new gravity circuit is expected to begin commercial operations in Q1 2023.
• Installation of a new exhaust fan at El Cubo with the capacity to circulate 250 cubic feet per minute has been completed -- ventilation at the mine has been substantially improved.
• Substantial cost reductions were realized during the quarter through the purchase of compressors and a wholly owned scoop tram fleet. Further savings were realized as the company reduced the total number of outside contractors it utilizes in its mining operations.
• All recently acquired mining assets are now in production -- all assets acquired through the MMR transaction (San Ignacio, VMC and Topia) in August, 2022, are now fully operational. Toward the end of the quarter, the Cata mill at VMC was recommissioned and is currently processing mineralized material from San Ignacio and the Los Pozos mine at VMC. The Topia mine in Durango did not lose a single day of production during the MMR ownership handover.

"We ended 2022 with record production of precious metals from five mines and three processing facilities," said James Anderson, chairman and chief executive officer. "Capital investments made during Q4 are already generating improved efficiencies and our operations team continues to look for opportunities to enhance profit margins as we strive to continue our trend of quarterly increases in silver production across all of our producing assets."

Q4 2022 mine operations continue trend of quarter-over-quarter production increases

Consolidated silver production increased 22 per cent to 401,244 ounces in Q4 2022 compared with Q3 2022, similarly, consolidated gold production increased by 21 per cent to 3,907 ounces over the same period. During the fourth quarter, mineralized material from San Ignacio was sent to the El Cubo mill for processing. In 2023, the company expects to process all mineralized material from San Ignacio at the recently reactivated Cata mill at VMC. (See news release dated Jan. 17, 2023.)

In Durango, third party mill feed from local operations in the vicinity of the Topia mine added to production during the quarter. This supplemental production amounted to 20 per cent of all tonnes processed at Topia during the quarter and contributed to higher grades. There are several small mining operations located nearby the Topia mine, and the company intends to use the Topia processing facilities as the centerpiece of a hub-and-spoke strategy that would bring in supplemental material for processing in partnership with neighbouring operations.

Consolidated silver equivalent production in Q4 was 19 per cent higher than the previous quarter. This increase reflects the continuing ramp-up of operations at all of Guanajuato Silver's mining assets. Total production for 2022 was 2.15 million ounces AgEq. The company ended the year at a commercial run-rate of 3.5 million AgEq ounces, which was approximately 8 per cent higher than initially anticipated for 2022.

About Guanajuato Silver Company Ltd.

Guanajuato is a precious metals producer engaged in reactivating past-producing silver and gold mines in central Mexico. The company produces silver and gold concentrates from the El Cubo mine, Valenciana mines complex and the San Ignacio mine; all three mines are located within the state of Guanajuato, which has an established 480-year mining history. Additionally, the company produces silver, gold, lead and zinc concentrates from the Topia mine in northwestern Durango. With four operating mines and three processing facilities, Guanajuato Silver is one of the fastest-growing silver producers in Mexico.

Technical information

Reynaldo Rivera, vice-president of exploration for Guanajuato, has approved the scientific and technical information contained in this news release. Mr. Rivera is a member of the Australasian Institute of Mining and Metallurgy (AusIMM registration No. 220979) and a qualified person as defined by National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.

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