Mr. James Anderson reports

GUANAJUATO SILVER PROVIDES DRILL RESULTS FROM TOPIA MINE

Guanajuato Silver Company Ltd. has provided recent drill results from the company's wholly owned Topia mine in Durango, Mexico.

Drill results

Commenting on these results, chairman and chief executive officer James Anderson said: "For 40 years, Industrias Penoles, the largest mining company in Mexico, mined the Argentina vein at Topia. Remarkably, the vein was not pursued to the east of the district, past a significant fault structure; we are very encouraged by these initial results that indicate production potential within two kilometres of our mill facility from this long-lived precious metals vein system."

Infill and resource expansion drilling continues at Topia with good results being generated at the Argentina, Rosario, Santa Cruz and San Gregorio veins. Drilling of the Argentina and Santa Cruz veins is being done from the new El Condor tunnel with the objective of defining the trend of mineralization to the west of the current intercepts. The Rosario and San Gregorio veins, located in the southeastern part of the district, have been drilled from the Rosario ramp; these veins are separated by approximately 350 metres, and the objective there is to follow the trend of mineralization to the west.

Shares for debt

Guanajuato Silver has arranged with certain creditors to settle an aggregate of $1,207,093 in outstanding liabilities of the company by the issuance of an aggregate of 3,772,167 common shares in the capital of the company at a deemed price of 32 cents per share, subject to the receipt of TSX Venture Exchange approval. The debt settlement includes the issuance of shares to one non-arm's-length party totalling approximately $150,000.

The non-arm's-length party, a private company controlled by Hernan Dorado, a director and an officer of the company, will receive 468,750 shares in settlement of $150,000 due as of March, 2023, pursuant to the company's agreement to purchase certain underlying royalties over the company's Pinguico mine as more particularly described in the company's news release dated Aug. 20, 2020; a total of $350,000 remains to be paid to finalize the agreement.

The issuance of shares indirectly to Mr. Dorado, who is an insider of the company, will be considered a related party transaction within the meaning of Policy 5.9 of the TSX-V and Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions, adopted in the policy. The company intends to rely on the exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect of such related party's participation in the debt settlement as neither the fair market value of the debt settlement of nor the fair market value of the shares to be issued thereunder, insofar as it involves related parties, is expected to exceed 25 per cent of the company's market capitalization (all as determined under MI 61-101). It is anticipated that the material change report of Guanajuato Silver to be filed in connection with this announcement of the debt settlement will be filed less than 21 days in advance of the closing of the debt settlement, which Guanajuato Silver considers reasonable within the context of current market conditions and the desire of all parties to complete the debt settlement as expeditiously as possible. The securities of the company that will be acquired by the related party will be acquired pursuant to an exemption from the prospectus requirement in Section 2.14 of National Instrument 45-106, Prospectus Exemptions. The debt settlement is subject to acceptance of the TSX-V, and all shares issued thereunder will be subject to a statutory hold period of four months and one day from the date of issuance in accordance with applicable securities legislation.

Sampling and quality assurance/quality control

Drill core was first reviewed by a company geologist, who identified and marked intervals for sampling. The marked sample intervals were then cut in half with a diamond saw; half of the core was left in the core box and the other half was removed, placed in plastic bags, sealed and labelled. Intervals and unique sample numbers are recorded on the drill logs and the samples are sequenced with standards and blanks inserted according to a predefined QA/QC procedure. The samples are maintained under security on site until they are shipped to the analytical lab. The analytical work reported on herein was performed by Corporacion Quimica Platinum SA de CV in Silao, Guanajuato, Mexico, which is independent of Guanajuato Silver. To validate the company's assay results and its preparation procedures, Guanajuato Silver sends additional random samples representing approximately 20 per cent of all analytical samples to Bureau Veritas in Hermosillo, Sonora, Mexico. Bureau Veritas is an ISO/IEC (International Organization for Standardization/International Electrotechnical Commission) geoanalytical laboratory and is independent of Guanajuato Silver and its qualified person. In order to further validate the company's assay results and its preparation procedures, Guanajuato Silver sent additional random samples representing approximately 10 per cent of all analytical samples to SGS Mexico SA de CV in Durango, Mexico. SGS is also an ISO/IEC geoanalytical laboratory and is independent of Guanajuato Silver and its qualified person. Core samples were subject to crushing at a minimum of 70 per cent passing two millimetres, followed by pulverizing of a 250-gram split to 85 per cent passing 75 microns. Gold determination was by standard atomic absorption (AA) finish 30-gram fire assay (FA) analysis, in addition to silver and 34-element using fire assay and gravimetry termination. Following industry-standard procedures, blank and standard samples were inserted into the sample sequence and sent to the laboratory for analysis. Data verification of the analytical results included a statistical analysis of the standards and blanks that must pass certain parameters for acceptance to ensure accurate and verifiable results. Guanajuato Silver detected no significant QA/QC issues during review of the data and is not aware of any sampling, recovery or other factors that could materially affect the accuracy or reliability of the drilling data referred to herein.

About Guanajuato Silver Company Ltd.

Guanajuato Silver is a precious metal 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, the Valenciana mine 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 of Guanajuato Silver, 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 NI 43-101, Standards of Disclosure for Mineral Projects. Mr. Rivera has verified the data disclosed in this news release, including the sampling, analytical and test data underlying the information or opinions contained in this news release.

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