Mr. Arturo Prestamo Elizondo reports

SANTACRUZ SILVER ACQUIRES NEW 500-TONNE-PER-DAY MILLING FACILITY TO UNLOCK FURTHER PRODUCTION GROWTH IN BOLIVIA

Santacruz Silver Mining Ltd. has completed the acquisition of a 500-tonne-per-day (tpd) milling facility located in Bolivia, comprising two 250-tonne-per-day processing circuits, each equipped with selective flotation systems for the recovery of lead and zinc with high-grade silver contents. The newly acquired facility will be solely dedicated to processing ore sourced through the company's wholly owned Bolivian subsidiary, San Lucas, providing additional milling capacity to support continued expansion of its third party ore-sourcing business.

By transitioning materials from San Lucas to the acquired facility, Santacruz will free up capacity at its existing three mine processing facilities, allowing the company to advance its mine development plans and increase production from its own operations in Bolivia without internally competing for available processing capacity.

Strategically located approximately five kilometres from Santacruz's Reserva mine, part of the company's Caballo Blanco group of mines, the acquired facility provides logistical and operational advantages as Santacruz continues to develop and expand its Bolivian asset base. The acquisition also strengthens Santacruz's vertically integrated operating model in Bolivia by providing greater flexibility and control over the processing of third party sourced ore. Together with the company's existing facilities, it establishes an expanded processing platform in one of Santacruz's key operating districts, supporting longer-term production and development plans.

The facility is expected to be commissioned during the fourth quarter of 2026 and to reach commercial production by year-end 2026. Commissioning activities will include the testing and optimization of the milling and selective flotation circuits, followed by the ramp-up of operations toward commercial production. The total investment in the milling facility is expected to be approximately $14-million (U.S.), inclusive of acquisition, commissioning and all costs required to bring the facility to commercial production.

Arturo Prestamo, executive chairman and chief executive officer of Santacruz, commented: "This acquisition is a win-win for Santacruz's operating platform. The addition of 500 tpd of milling capacity gives San Lucas a clear path to continue increasing its volumes, while freeing up capacity at our existing milling facilities for ore from our own mines. This will allow our mining operations to advance their development and production growth plans without being constrained by milling capacity. This is exactly the type of operating leverage we look for at Santacruz-one investment that allows two parts of our business to grow at the same time."

Mr. Prestamo continued: "The new facility also creates a significant opportunity to accelerate growth across our Bolivian operations. We expect the additional processing capacity, together with ongoing mine development, operational optimization initiatives and increased ore availability, to support continued production growth across Santacruz's platform. As a result, we anticipate increased consolidated production in 2027, while San Lucas is expected to further expand its standalone production, demonstrating the scalability and operating leverage of the company's vertically integrated Bolivian platform. Importantly, this acquisition is consistent with Santacruz's strategy of leveraging our existing infrastructure, expanding processing capacity and maximizing production growth while maintaining a disciplined approach to capital allocation."

Transaction details

The company has paid $4.6-million (U.S.) toward the $9.2-million (U.S.) total purchase price, with the remaining $4.6-million (U.S.) payable on Nov. 8, 2026, one month following receipt of the milling facility, expected on Oct. 8, 2026. A further $4.8-million (U.S.) will be allocated to milling upgrades and working capital through commissioning and the achievement of commercial production.

About Santacruz Silver Mining Ltd.

Santacruz Silver is engaged in the operation, acquisition, exploration and development of mineral properties across Latin America. In Bolivia, the company operates the Bolivar, Porco and Caballo Blanco mining complexes, with Caballo Blanco comprising the Tres Amigos and Colquechaquita mines. The Reserva mine, whose production is provided to the San Lucas ore sourcing and trading business, is also located in Bolivia. Additionally, the company oversees the Soracaya exploration project. In Mexico, Santacruz operates the Zimapan mine.

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