Mr. Greg Liller reports

SIERRA MADRE PROVIDES UPDATE ON PRODUCTION EXPANSION AND EQUIPMENT PURCHASES AT LA GUITARRA

Sierra Madre Gold and Silver Ltd. is providing an update on the progress of the planned two-stage expansion at its La Guitarra silver-gold mine complex. The first stage of the expansion would increase production rates from the current 500 tonnes per day (tpd) to 750 tpd to 800 tpd of processing capacity. Processing plant and tailings handling upgrades and equipment purchases for the planned production expansion are under way.

Once the first stage of the expansion is completed, the planned second phase would increase processing capacity to a range of 1,200 tpd to 1,500 tpd by the third quarter of 2027. Please see the company's Sept. 8, 2025, press release for details of the expansion plans.

Greg Liller, chief operating officer and executive chairman, commented: "Once completed, the first stage of the expansion is expected to not only deliver increased throughputs but also efficiencies across the operation -- such as deposition of a portion of the tailings underground and higher equipment availability. The next major work milestones are the ball mill and thickener installation."

Crushing capacity expansion

The current crushing circuit consists of a primary jaw crusher, a two-tier vibrating screen plant and a three-foot short head cone crusher. The installation of a new three-foot standard head crusher is expected to expand crushing capacity to 750 tpd to 800 tpd.

Construction began in December of 2025 with initial testing of the circuit under way.

Options are now being evaluated for the construction of a second crushed ore storage bin for additional backup storage capacity. Depending on the water content of the mine product, a second crushed bin may allow for the crushed mineralization to be reduced from three-eights inch to a nominal one-quarter inch for enhanced recoveries.

Tailings thickener tank

Earthworks for the foundations of the 750 tpd to 800 tpd thickener are nearly complete. This thickener will allow a portion of the tailings to be deposited as paste fill in old stopes, thus extending the life of the existing tailings impoundment. It will also allow for the construction of a filter circuit to produce dry stackable tailings.

Fabrication of the tank, mixing rake, electrical components and support structures is well advanced with project completion on track for the end of the second quarter.

Grinding capacity expansion

A used 11-by-12.5 ball mill has been purchased and is in the process of being refurbished. The mill's capacity is a nominal 600 tpd at a three-eights-inch feed size and, when used in combination with one of the two existing plus-200 tpd mills, is expected to expand processing capacity to the 750 tpd to 800 tpd objective. The mill will be installed where the old five-foot by nine-foot mill was located. Installation will involve the construction of a new foundation based on the manufacturer's construction blueprints. Projected completion is on target for late Q2 of this year.

Equipment purchases for greater mine productivity

To achieve the planned production increases, the company has been purchasing key equipment to accelerate mine development and boost material movement capabilities, including:

• Mining fleet purchases -- The company has acquired two new scoop trams, one used scoop and is in the process of rebuilding two existing scoops. These purchases and rebuilds will allow the company to dedicate one three-cubic-metre scoop to the newly reopened Nazareno mine and allow for production improvements in both the Guitarra and Coloso mines. The increased number of scoops also improves equipment availability during maintenance down time. Additionally, a second StopeMate long hole drill has been purchased and the rebuilding of a second Jumbo drill has been completed.

• Haulage and materials movement -- The company has purchased four haulage trucks and a second front-end loader. Two of the trucks are sized for both surface and underground use and two are 14-cubic-metre trucks for surface haulage and use in the main San Rafael level. The front-end loader is sized for both surface use and underground loading.

Grant of stock options

Pursuant to its stock option plan, the company has granted stock options to employees of La Guitarra Compania Minera, S.A. de C.V., and consultants of the company to purchase an aggregate of one million common shares of the company at a price of $2.18 per share for a period of five years from the grant date. The options shall be granted under and subject to the terms and conditions of the company's stock option plan and subject to the rules and policies of the exchange. Of these options, 100,000 were granted to an investor relations consultant, Triomphe Holdings Ltd., doing business as Capital Analytica, an arm's-length service provider, and will vest one-fourth three months after the date of the grant; one-fourth six months after the date of the grant; one-fourth nine months after the date of the grant and one-fourth 12 months after the date of the grant. The remaining options will vest immediately. This stock option grant is subject to acceptance by the TSX Venture Exchange.

Qualified person

Gregory Smith, PGeo, director of Sierra Madre, is a qualified person as defined by NI 43-101, and has reviewed and approved the technical data and information contained in this news release. Mr. Smith has verified the technical and scientific data disclosed herein.

About Sierra Madre Gold and Silver Ltd.

Sierra Madre Gold and Silver is a precious metals precious metals producer and exploration company focused on the Guitarra mine in the Temascaltepec mining district, Mexico, and the exploration and development of its Tepic property in Nayarit, Mexico. The Guitarra mine is a permitted underground mine, which includes a 500 tpd processing facility that operated until mid-2018 and restarted commercial production in January, 2025.

We seek Safe Harbor.