Mr. James Anderson reports

GUANAJUATO SILVER PROVIDES OPERATIONS UPDATE

Guanajuato Silver Company Ltd. has provided an operations update and revised 2023 production guidance for the company's four wholly owned producing silver mines: the El Cubo mines complex, Valenciana mines complex (VMC) and San Ignacio mine in Guanajuato, Mexico, and the Topia mine located in Durango, Mexico. The company has, and will be, implementing a number of operational changes to enhance profitability as each mine continues to ramp up production.

James Anderson, chairman and chief executive officer, said: "The numerous mineralized systems in the Guanajuato district have exhibited high grades for over 450 years -- with this in mind, we are adjusting a number of our operational strategies in order to focus on mining higher-grade material at abridged volumes. At Valenciana, we continue to add infrastructure improvements to allow for the targeting of higher-grade areas of the mine; at El Cubo, we are completing the dewatering of sections of the mine known to hold high-grade vein areas; at San Ignacio, a new ventilation raise will allow us to target the area of the mine that generated one of our best drill intercepts to date -- drill hole 6, which intercepted the Melladito vein and returned almost five metres of over 1,200 grams per tonne [g/t] AgEq [silver equivalent] (see Guanajuato Silver news release dated Feb. 23, 2023); and at Topia, we are now transitioning to a new business model where we will engage exclusively in the mineral processing of third party ore, which we believe will prove significantly more profitable. We are convinced that these changes will enhance operations across all our silver-producing assets -- with a number of these initiatives expected to take the remainder of the year to implement, we expect the implementation of these changes will influence total silver-equivalent production for 2023."

Valenciana mines complex

The company continues to demonstrate marked progress at the Valenciana mines complex. Since commercial restart at VMC in January, 2023, steady production improvements, aided by the refurbishment of both the Cata shaft and a new underground locomotive system, have enabled the company to achieve production at the Cata mill averaging over 20,000 tonnes per month from material sourced from Valenciana and San Ignacio. The company is now working to access the more northern areas of the mine, such as the Guanajuatito zone, where higher-grade material has been identified. Furthermore, the recovery of higher-grade mineralized material from old pillars has, and will continue to, contribute to monthly throughputs.

El Cubo mines complex

Located to the east of the city of Guanajuato, the company's El Cubo operation is now milling at the rate of approximately 22,000 tonnes per month -- this rate represents approximately half of the total capacity at the mill. The company is implementing a number of operational upgrades designed to minimize dilution and maximize higher-grade vein material, such as:

• Utilizing more targeted mining practices, such as using mine explosives within tighter limits of the various vein structures.
• Reducing the processing of mineralized backfill due to the high volatility in grades found within this material. Henceforth, the company will mine and process only virgin vein material from the Villalpando and Santa Cecilia areas of El Cubo.
• Continuing to expand the number of production stopes -- over the past quarter, development work has been conducted at El Cubo with the objective that the number of production stopes increase from 12 to 20.
• Within the next two months, completing dewatering that will allow access to higher-grade areas located deeper within the Villalpando mine area.

San Ignacio mine

The company, in conjunction with the Secretaria De Trabajo (the Federal Ministry of Labour), have been working to improve safety and security conditions at the mine in response to the unfortunate fatality that occurred in August, 2023. After curtailing some mineral extraction activities for a period of 15 days, the mine is again fully operational. Improvements to the ventilation system have been installed, which will allow for development and exploitation of the Melladito vein and other associated high-grade veinlets in Q4.

Topia mine

The mineralized systems currently being mined at Topia are extraordinarily high grade yet are associated with higher extraction costs because of the narrow nature of the vein structures. With the goal of improving profitability at Topia, the company intends to dramatically transform its operations through the exclusive use of local mine contractors. With this new business model, Guanajuato Silver will curtail most of its mining activities, and focus almost entirely on acquiring and processing mineralized material from these contractors. Additional cost-saving measures are in the process of being implemented, including staff reductions, as the company moves to position the Topia mine for long-term sustainability and profitability.

Mr. Anderson added: "At Topia, throughout 2023, we have significantly grown the business of acquiring high-grade mineralized material from local miners. We have determined that this business model is more profitable than having our own mining crews as it provides us with higher margins, more revenue and more potential profit than does our previous owner-operator model. This is particularly true when working with Topia's high-grade but very narrow vein structures."

AgEq production guidance

The company now anticipates that full-year AgEq 2023 production will range from 3.4 million ounces to 3.6 million ounces.

The purpose of the production guidance is to assist investors, shareholders and others in understanding certain metrics relating to expected 2023 production for evaluating the performance of the company's business, and is dated as of the date of this press release. This information may not be appropriate for other purposes. Information about the company's guidance, including the various assumptions underlying it, is forward looking.

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 complex, 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 for 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 National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.

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