# EDGAR Filing Document

**Accession Number:** 0001548536
**File Stem:** 0001493152-26-020908
**Filing Date:** 2026-5
**Character Count:** 1121062
**Document Hash:** 0966b24a9302073e91ff5b59999a5d81
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-26-020908.hdr.sgml**: 20260501

**ACCESSION NUMBER**: 0001493152-26-020908

**CONFORMED SUBMISSION TYPE**: 40-F

**PUBLIC DOCUMENT COUNT**: 225

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260501

**DATE AS OF CHANGE**: 20260501

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Santacruz Silver Mining Ltd.
- **CENTRAL INDEX KEY:** 0001548536
- **STANDARD INDUSTRIAL CLASSIFICATION:** GOLD & SILVER ORES [1040]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 000000000
- **STATE OF INCORPORATION:** A1
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 40-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-43051
- **FILM NUMBER:** 26933449

**BUSINESS ADDRESS:**
- **STREET 1:** BLVD. DIAZ ORDAZ 140, PISO 5 TORRE II
- **STREET 2:** SANTA MARIA, MONTERREY
- **CITY:** NUEVO LEON
- **STATE:** O5
- **ZIP:** 64250
- **BUSINESS PHONE:** (604) 639-4521

**MAIL ADDRESS:**
- **STREET 1:** BLVD. DIAZ ORDAZ 140, PISO 5 TORRE II
- **STREET 2:** SANTA MARIA, MONTERREY
- **CITY:** NUEVO LEON
- **STATE:** O5
- **ZIP:** 64250

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 40-F**

[Check one]

---

| | |
|:---|:---|
| ☐ | **REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934** |
|  | **OR** |
| ☒ | **ANNUAL REPORT PURSUANT TO SECTION 13(A) OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934** |

---

**For the fiscal year ended December 31, 2025**

**Commission File Number 001-43051**

**Santacruz Silver Mining Ltd.**

(Exact name of Registrant as specified in its charter)

**British Columbia, Canada** 

(Province or other jurisdiction of incorporation or organization)

**1040**

(Primary Standard Industrial Classification Code Number (if applicable))

**Not Applicable**

(I.R.S. Employer Identification Number (if applicable))

**480 – 1140 West Pender Street**

**Vancouver, British Columbia**

**Canada V6E 4G1**

(Address and telephone number of Registrant's principal executive offices)

**Puglisi & Associates** 

**850 Library Avenue, Suite 204**

**Newark, Delaware 19711**

**(302) 738-6680**

(Name, address (including zip code) and telephone number (including area code)

of agent for service in the United States)

***Copies of all communications, including communications sent to agent for service, should be sent to:***

**Rick A. Werner, Esq.**

**Alla Digilova, Esq.**

**Haynes and Boone, LLP**

**30 Rockefeller Plaza, 26th Floor**

**New York, New York 10112**

**Tel. (212) 659-7300**

**Fax (212) 884-8234**

Securities registered or to be registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common shares, no par value | SCZM | Nasdaq Capital Market |

---

Securities registered or to be registered pursuant to Section 12(g) of the Act: None.

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None.

For annual reports, indicate by check mark the information filed with this Form:

☒ Annual
 information form ☒ Audited
 annual financial statements

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: 92,401,115 common shares

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

---

| | | | |
|:---|:---|:---|:---|
| Yes | ☒ | No | ☐ |

---

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

---

| | | | |
|:---|:---|:---|:---|
| Yes | ☒ | No | ☐ |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.

Emerging growth company ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

**EXPLANATORY NOTE**

Santacruz Silver Mining Ltd. (the "**Company**" or the "**Registrant**") is a Canadian public company whose common shares are listed on the TSX Venture Exchange, the Frankfurt Stock Exchange, and the Nasdaq Capital Market. The Company is eligible to file its annual report pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the "**Exchange Act**"), on Form 40-F (this "**Annual Report**") pursuant to the multi-jurisdictional disclosure system of the Exchange Act. The Company is a "foreign private issuer" as defined by Rule 3b-4 under the Exchange Act. The equity securities of the Company are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3 of the Exchange Act.

**FORWARD-LOOKING STATEMENTS**

This Annual Report and the exhibits attached hereto may contain certain forward-looking information and statements, including statements relating to matters that are not historical facts and statements of the Company's beliefs, intentions and expectations about developments, results and events which will or may occur in the future, including "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995, as amended, and within the meaning of Canadian securities laws, collectively referred to as "forward-looking statements." The forward-looking statements contained in this Annual Report are made only as of the date hereof. The forward-looking statements contained in the exhibits incorporated by reference in this Annual Report are made only as of the respective dates set forth in such exhibits. The Company does not have, or undertake, any obligation to update or revise any forward-looking statements whether as a result of new information, subsequent events or otherwise, unless otherwise required by law.

Without limitation, these statements relate to the expectations of management about future events, results of operations and the Company's future performance (both operational and financial) and business prospects. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate," "plan," "contemplate," "continue," "estimate," "expect," "intend," "propose," "might," "may," "will," "shall," "project," "should," "could," "would," "believe," "predict," "forecast," "target," "aim," "pursue," "potential," "objective" and "capable" and the negative of these terms or other similar expressions are generally indicative of forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied on.

In particular, this Annual Report and the exhibits attached hereto contain forward-looking statements or information pertaining to the following: future financial or operational performance; the expected timing for release of forecasts for 2026, including our estimated production of silver, zinc, lead and copper, and for our estimated cash costs, all-in sustaining cost, capital and exploration, mine operation, general and administrative, care and maintenance expenditures; future anticipated prices for silver, zinc, lead and copper and other metals and assumed foreign exchange rates; the impacts of inflation on the Company and its operations; whether the Company is able to maintain a strong financial condition and have sufficient capital, or have access to capital, to sustain our business and operations; the timing and outcome with respect to the Company's environmental, social and governance activities, and the Company's corporate social responsibility activities and our reporting in respect thereof; the ability of the Company to successfully complete any capital projects, the expected economic or operational results derived from those projects, and the impacts of any such projects on the Company; the potential maximum consideration payable pursuant to the omnibus agreement (the "**Omnibus Agreement**") dated October 3, 2024 between Glencore Finance (Bermuda) Ltd., Glencore International AG (collectively, "**Glencore**") the Company and certain subsidiaries of the Company; the future results of our exploration activities, anticipated mineral reserves and mineral resources; the costs associated with the Company's decommissioning obligations; the Company's plans and expectations for its properties and operations; and expectations with respect to the future anticipated impact of pandemics on our operations.

These forward-looking statements and information reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant operational, business, economic, competitive, political, regulatory, and social uncertainties and contingencies. These assumptions, include: our ability to implement environmental, social and governance activities; tonnage of ore to be mined and processed; ore grades and recoveries; that the Company will receive all required regulatory approvals to operate; that the market price of zinc may be above certain minimum thresholds for the payment of the contingent payments to Glencore pursuant to the Omnibus Agreement; prices for silver, zinc, lead, copper remaining as estimated; currency exchange rates remaining as estimated; capital, decommissioning and reclamation estimates; our mineral reserve and mineral resource estimates and the assumptions upon which they are based; prices for energy inputs, labour, materials, supplies and services (including transportation); no labour-related disruptions at any of our operations; no unplanned delays or interruptions in scheduled production; protection of our interests against claims and legal proceedings; all necessary permits, licenses and regulatory approvals for our operations are received in a timely manner and can be maintained. The foregoing list of assumptions is not exhaustive.

The Company cautions the reader that forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements or information contained in the Company's Management's Discussion and Analysis attached hereto as Exhibit 99.2 (the "**MD&A**") and the Company has made assumptions and estimates based on or related to many of these factors. Such factors include, some of which are described in the "Risk Factors" section of the MD&A without limitation: fluctuations in silver, zinc, lead and copper prices; fluctuations in prices for energy inputs; fluctuations in currency markets (such as the MXN, BOL and CAD versus the USD); risks related to the technological and operational nature of the Company's business; required regulatory approvals; changes in national and local government, legislation, taxation, controls or regulations and political, legal or economic developments in Canada, the United States, Mexico, Bolivia or other countries where the Company may carry on business, some of which might prevent or cause the suspension or discontinuation of mining activities, including the risk of expropriation related to certain of our operations, particularly in Bolivia; risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected geological or structural formations, pressures, cave-ins and flooding); risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom the Company does business; inadequate insurance, or inability to obtain insurance, to cover these risks and hazards; employee relations; relationships with and claims by the local communities and indigenous populations; availability and increasing costs associated with mining inputs and labour; the Company's ability to secure our mine sites or maintain access to our mine sites due to criminal activity, violence, or civil and labour unrest; that changes to the market price of zinc may affect the total consideration payable to Glencore pursuant to the Omnibus Agreement; the speculative nature of mineral exploration and development, including the risk of obtaining or retaining necessary licenses and permits; challenges to, or difficulty in maintaining, the Company's title to properties and continued ownership thereof; diminishing quantities or grades of mineral reserves as properties are mined; global financial conditions; the Company's ability to complete and successfully integrate acquisitions, and to mitigate other business combination risks; the actual results of current exploration activities, conclusions of economic evaluations, and changes in project parameters to deal with unanticipated economic or other factors; increased competition in the mining industry for properties, equipment, qualified personnel, and their costs; having sufficient cash to pay obligations as they come due; the duration and effects of any epidemics or pandemics on our operations and workforce, and their effects on global economies and society. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described, or intended.

**PRINCIPAL DOCUMENTS**

The following documents, filed hereto as Exhibits 99.1, 99.2 and 99.3, respectively, are hereby incorporated by reference into this Annual Report:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Annual
 Information Form of Santacruz Silver Mining Ltd. for the fiscal year ended December 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;(b) Management's
 Discussion and Analysis of Santacruz Silver Mining Ltd. for the fiscal year ended December
 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;(c) Audited
 Annual Consolidated Financial Statements of Santacruz Silver Mining Ltd. for the fiscal years
 ended December 31, 2025, and December 31, 2024.

**DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTICES**

The Company is permitted, under a multijurisdictional disclosure system adopted by the United States, to prepare this Annual Report in accordance with Canadian disclosure requirements, which are different from those of the United States. The Company prepares its financial statements, which are filed with this Annual Report, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards"). The Company's financial statements have been audited in accordance with Canadian generally accepted auditing standards, which differ from the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"). Consequently, the Company's financial statements may not be comparable to those prepared by U.S. companies. The Company's audited financial statements as at and for the years ended December 31, 2025, and 2024 are attached hereto as Exhibit 99.3 to this Annual Report and incorporated by reference herein.

**MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES**

Unless otherwise indicated, all mineral resource and mineral reserve estimates in this Annual Report and the documents incorporated by reference herein have been prepared in accordance with the requirements of Canadian provincial securities laws, which differ from the requirements of United States securities laws.

As a result, the Company reports the mineral reserves and resources of the projects it has an interest in according to Canadian standards. Canadian reporting requirements for disclosure of mineral properties are governed by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. These standards differ from the requirements of the SEC that are applicable to domestic United States reporting companies under subpart 1300 of Regulation S-K ("SK 1300") under the Exchange Act. As an issuer that prepares and files its reports with the SEC pursuant to the multijurisdictional disclosure system, the Company is not subject to the requirements of SK 1300. Any mineral reserves and mineral resources reported by the Company in accordance with NI 43-101 may not qualify as such under or differ from those prepared in accordance with SK 1300. Accordingly, information and documents included or incorporated by reference in this Annual Report concerning descriptions of mineralization and estimates of mineral reserves and resources under Canadian standards may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements of SK 1300.

**CURRENCY**

Unless otherwise indicated, all dollar amounts in this Annual Report are in United States dollars.

**ADDITIONAL DISCLOSURE**

(a) *Certifications*. See Exhibits 99.4, 99.5, 99.6 and 99.7 to this Annual Report.

 

(b) *Evaluation of disclosure controls and procedures*. As of the end of the period covered by this report, an evaluation was carried out under the supervision of and with the participation of the Company's management, including the Company's principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act). Based on that evaluation, the Company's principal executive officer and principal financial officer have concluded that, as of the end of the period covered by this report, the Company's disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's (the "**Commission**") rules and forms and (ii) accumulated and communicated to the Company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

It should be noted that while the Company's principal executive officer and principal financial officer believe that the Company's disclosure controls and procedures provide a reasonable level of assurance that they are effective, they do not expect that the Company's disclosure controls and procedures or internal control over financial reporting will prevent all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute assurance that the objectives of the control system are met.

(c) *Management's Annual Report on Internal Control Over Financial Reporting.* This Annual Report does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of the Company's registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies.

(d) *Attestation report of the registered public accounting firm*. In accordance with the United States Jumpstart Our Business Startup Act (the "**JOBS Act**"), the Company qualifies as an "emerging growth company" (an "**EGC**"), which entitles the Company to take advantage of certain exemptions from various reporting requirements. Specifically, the JOBS Act defers the requirement to have the Company's independent auditor assess the Company's internal controls over financial reporting under Section 404(b) of the Sarbanes-Oxley Act for so long as the Company remains an EGC. Accordingly, this Annual Report does not include an attestation report of the Company's registered public accounting firm due to the Company's status as an EGC.

(e) *Changes in internal control over financial reporting*. There were no changes in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting during the period covered by this Annual Report.

**NOTICES PURSUANT TO REGULATION BTR**

The Company was not required by Rule 104 of Regulation BTR to send any notices to any of its directors or executive officers during the fiscal year ended December 31, 2025.

**IDENTIFICATION OF THE AUDIT COMMITTEE**

The Company has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act and satisfies the requirements of Exchange Act Rule 10A-3. The members of the audit committee are: Federico Villaseñor, Larry Okada and Barry Girling.

**AUDIT COMMITTEE FINANCIAL EXPERT**

The Company's Board of Directors (the "**Board**") has determined that Larry Okada is (i) an audit committee financial expert, under the applicable criteria prescribed by the Commission in the general instructions of Form 40-F and the listing rules of the Nasdaq Stock Market LLC ("**Nasdaq**") and (ii) independent, under the applicable listing rules of Nasdaq.

The Commission has indicated that the designation of a person as an audit committee financial expert does not make such person as "expert" for any purpose, impose on such person any duties, obligations or liability that are greater than those imposed on such person as a member of the Audit Committee and Board in the absence of such designation, or affect the duties, obligations or liability of any other member of the Audit Committee or Board.

**CODE OF ETHICS**

The Company's Board has adopted a written Code of Business Conduct and Ethics (the "**Code**"), by which it and all employees, officers, directors and consultants of the Company, including the Company's principal executive officer, principal financial officer and principal accounting officer or controller, abide. The Code is posted on the Company's website at https://santacruzsilver.com/. The Code meets the requirements for a "code of ethics" within the meaning of that term in General Instruction 9(b) of the Form 40-F.

There were no waivers granted in respect of the Code during the fiscal year ended December 31, 2025. If there is an amendment to the Code, or if a waiver of the Code is granted to any of the Company's principal executive officer, principal financial officer, principal accounting officer or controller, the Company intends to disclose any such amendment or waiver by posting such information on the Company's website within five business days of the amendment or waiver and such information will remain available for a twelve-month period. Unless and to the extent specifically referred to herein, the information on the Company's website shall not be deemed to be incorporated by reference in this annual report.

**TAX MATTERS**

Purchasing, holding, or disposing of securities of the Registrant may have tax consequences under the laws of the United States and Canada that are not described in this Annual Report.

**PRINCIPAL ACCOUNTANT FEES AND SERVICES**

Davidson & Company LLP (PCAOB ID No. 731), is the Company's independent registered public accounting firm.

The required disclosure is included under the heading "Audit Committee" in the AIF, filed as Exhibit 99.1 to this Annual Report.

For a description of the Company's pre-approval policies and procedures related to the provision of non-audit services, see "Pre-Approval Policies and Procedures" on page 159 of the AIF, which is attached as Exhibit 99.1 to this Annual Report and incorporated by reference herein. The fees for services rendered by Davidson & Company LLP and Deloitte LLP (PCAOB ID No. 1208) are set forth on page 159 of the AIF. All fees have been pre-approved by the Audit Committee and therefore none of the services therein were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

**OFF-BALANCE SHEET ARRANGEMENTS**

The Company does not have any "off-balance sheet arrangements" (as that term is defined in paragraph (11) of General Instruction B to Form 40-F) that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors, which are not otherwise discussed in the Company's Management's Discussion and Analysis for the fiscal year ended December 31, 2025, filed as Exhibit 99.2 to this Annual Report.

**TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS**

The required disclosure is included under the heading "Contractual Obligations" in the Company's Management's Discussion and Analysis for the fiscal year ended December 31, 2025, filed as Exhibit 99.2 to this Annual Report.

**MINE SAFETY DISCLOSURE**

Not applicable.

**DIFFERENCES IN NASDAQ AND CANADIAN CORPORATE GOVERNANCE PRACTICES**

The Registrant is a foreign private issuer and its common shares are listed on the Nasdaq Capital Market.

Nasdaq Rule 5615(a)(3) permits a foreign private issuer to follow its home country practice in lieu of the requirements of the Rule 5600 Series, the requirement to distribute annual and interim reports set forth in Rule 5250(d), and the Direct Registration Program requirement set forth in Rules 5210(c) and 5255; provided, however, that such a company shall comply with the Notification of Material Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640), have an audit committee that satisfies Rule 5605(c)(3), and ensure that such audit committee's members meet the independence requirement in Rule 5605(c)(2)(A)(ii).

The Registrant has reviewed the Nasdaq corporate governance requirements and confirms that except as described below, the Registrant is in compliance with the Nasdaq corporate governance standards in all significant respects:

The Registrant does not follow Rule 5605(b)(2), which requires companies to have regularly scheduled meetings at which only independent directors are present. In lieu of following Rule 5605(b)(2), the Registrant follows the rules of the TSX Venture Exchange.

The Registrant does not follow Rule 5620(c), under which the Nasdaq minimum quorum requirement for a shareholder meeting is 33-1/3% of the outstanding shares of a company's voting stock. In addition, a registrant listed on Nasdaq is required to state its quorum requirement in its by-laws. The Registrant's quorum requirement is set forth in its articles. Pursuant to the Registrant's articles, a quorum for a meeting of shareholders of the Registrant constitutes two shareholders or proxyholders that hold or represent, as applicable, at least 5% of the shares entitled to vote at the meeting present in person or represented by proxy. In lieu of following Rule 5620(c) (shareholder quorum), the Registrant follows applicable Canadian corporate and securities laws and the rules of the TSX.

The Registrant does not follow Rule 5605(d)(1), which requires that the formal written compensation committee charter of an issuer specifies that the compensation committee may select, or receive advice from, a compensation consultant, legal counsel or other adviser to the compensation committee only after taking into consideration the specific factors enumerated in Rule 5605(d)(3)(D). In lieu of following Rule 5605(d)(1), the Registrant follows the rules of the TSX Venture Exchange.

The Registrant does not follow Rule 5635, which establishes shareholder approval requirements prior to the issuance of securities in certain circumstances, such as the acquisition of shares or assets of another company, the establishment of or amendments to equity-based compensation plans for employees, rights issues at or below market price, certain private placements, directed issues at or above market price and issuance of convertible notes. In lieu of following Rule 5635, the Registrant follows the rules of the TSX Venture Exchange.

The Registrant does not follow Nasdaq Rule 5620(b), under which a listed company that is not a limited partnership must solicit proxies and provide proxy statements for all meetings of shareholders, and also provide copies of such proxy solicitation materials to Nasdaq. The Company is a "foreign private issuer" as defined in Rule 3b-4 under the Exchange Act, and the equity securities of the Company are accordingly exempt from the proxy rules set forth in Sections 14(a), 14(b), 14(c) and 14(f) of the Exchange Act. In lieu of following Nasdaq Rule 5620(b), the Registrant solicits proxies in accordance with applicable rules and regulations in Canada.

The Registrant does not follow Rule 5605(e)(1), which requires independent director involvement in the selection of director nominees, by having a nominations committee comprised solely of independent directors. In lieu of following Rule 5605(e)(1), the Registrant follows the rules of the TSX Venture Exchange.

The foregoing is consistent with the laws, customs, and practices in the province of British Columbia and Canada.

Further information about the Registrant's governance practices is included on the Registrant's website.

**DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**

Not applicable.

**RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION**

Not applicable.

**UNDERTAKING AND CONSENT TO SERVICE OF PROCESS**

**A.** **Undertaking** 

The Company undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

**B.** **Consent to Service of Process** 

The Company has previously filed with the Commission a written consent to service of process and power of attorney on Form-F-X. Any changes to the name or address of the Company's agent for service shall be communicated promptly to the Commission by amendment to the Form F-X referencing the file number of the Company.

**SIGNATURES**

Pursuant to the requirements of the Exchange Act, the Company certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this Annual Report to be signed on its behalf by the undersigned, thereto duly authorized.

Date: May 1, 2026

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| | |
|:---|:---|
| **SANTACRUZ SILVER MINING LTD.** | **SANTACRUZ SILVER MINING LTD.** |
| By: | */s/ Andres Bedregal* |
| Name: | Andres Bedregal |
| Title: | Chief Financial Officer |

---

**EXHIBIT INDEX**

The following documents are being incorporated by reference or filed with the Commission as Exhibits to this Annual Report:

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| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 97.1 | [Clawback Policy (Incorporated by reference to Exhibit 99.55 to the Registration Statement on Form 40-F of Santacruz Silver Mining Ltd. filed with the Commission on January 12, 2026).](https://www.sec.gov/Archives/edgar/data/1548536/000149315226001226/ex99-55.htm) |
| 99.1 | [Annual Information Form for the fiscal year ended December 31, 2025.](ex99-1.htm) |
| 99.2 | [Management's Discussion and Analysis for the year ended December 31, 2025.](ex99-2.htm) |
| 99.3 | [Audited Consolidated Financial Statements for the years ended December 31, 2025, and 2024.](ex99-3.htm) |
| 99.4 | [Certificate of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex99-4.htm) |
| 99.5 | [Certificate of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex99-5.htm) |
| 99.6 | [Certificate of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex99-6.htm) |
| 99.7 | [Certificate of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex99-7.htm) |
| 99.8 | [Consent of Davidson & Company LLP.](ex99-8.htm) |
| 99.9 | [Consent of Deloitte LLP.](ex99-9.htm) |
| 99.10 | [Consent of Garth Kirkham, P. Geo.](ex99-10.htm) |
| 99.11 | [Consent of Richard Mervin Goodwin.](ex99-11.htm) |
| 99.12 | [Consent of Shane Tad Crowie, P. Eng.](ex99-12.htm) |
| 99.13 | [Consent of Garth Kirkham, P. Geo.](ex99-13.htm) |
| 99.14 | [Consent of Paul Thornton, P. Eng.](ex99-14.htm) |
| 99.15 | [Consent of Shane Tad Crowie, P. Eng.](ex99-15.htm) |
| 99.16 | [Certificate of Qualified Person, dated April 30, 2026](ex99-16.htm) |
| 99.17 | [Certificate of Qualified Person, dated April 30, 2026](ex99-17.htm) |
| 99.18 | [Certificate of Qualified Person, dated April 30, 2026](ex99-18.htm) |
| 99.19 | [Technical Report on the Zimapan Mine Operations, dated December 31, 2025](ex99-19.htm) |
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema |
| 101.CAL | Inline XBRL Taxonomy Calculation Linkbase |
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Document |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101) |

---

## Exhibit 99.1

**Exhibit 99.1**

**ANNUAL INFORMATION FORM**

**For the fiscal year ended December 31, 2025**

**DATED: April 30, 2026**

**<u>**TABLE OF CONTENTS**</u>**

---

| | |
|:---|:---|
| **GLOSSARY OF TERMS** | **4** |
| **ANNUAL INFORMATION FORM** | **8** |
| **CURRENCY PRESENTATION** | **8** |
| **FORWARD-LOOKING STATEMENTS** | **8** |
| **Compliance with NI 43-101** | **12** |
| **Cautionary Note to U.S. Investors Concerning Estimates of Mineral Reserves and Mineral Resources** | **13** |
| **CORPORATE STRUCTURE** | **14** |
| &nbsp;&nbsp;&nbsp;Name, Address, and Incorporation | 14 |
| &nbsp;&nbsp;&nbsp;Intercorporate Relationships | 14 |
| **GENERAL DEVELOPMENT OF THE BUSINESS** | **15** |
| &nbsp;&nbsp;&nbsp;Overview & Background | 15 |
| &nbsp;&nbsp;&nbsp;Three Year History | 15 |
| **DESCRIPTION OF THE BUSINESS** | **18** |
| &nbsp;&nbsp;&nbsp;General Overview | 18 |
| &nbsp;&nbsp;&nbsp;Principal Markets and Distribution Methods | 19 |
| &nbsp;&nbsp;&nbsp;Specialized Skill and Knowledge | 19 |
| &nbsp;&nbsp;&nbsp;Competitive Conditions | 20 |
| &nbsp;&nbsp;&nbsp;Cycles | 20 |
| &nbsp;&nbsp;&nbsp;Economic Dependence | 20 |
| &nbsp;&nbsp;&nbsp;Employees | 20 |
| &nbsp;&nbsp;&nbsp;Environmental Protection | 21 |
| &nbsp;&nbsp;&nbsp;Social and Environmental Initiatives | 21 |
| **RISK FACTORS** | **23** |
| &nbsp;&nbsp;&nbsp;Changes in the Price of Silver, Zinc, Lead and Other Metals in the World Markets | 23 |
| &nbsp;&nbsp;&nbsp;Foreign Operations | 24 |
| &nbsp;&nbsp;&nbsp;Illegal, artisanal and Small-Scale Mining | 25 |
| &nbsp;&nbsp;&nbsp;Mineral Resource and Mineral Reserve Estimates and Revisions | 26 |
| &nbsp;&nbsp;&nbsp;Failure to Achieve Production, Cost and Other Estimates | 27 |
| &nbsp;&nbsp;&nbsp;Inaccurate Assumptions Regarding Capital, Operating Costs, Production Schedules and Economic Returns | 27 |
| &nbsp;&nbsp;&nbsp;Remote Locations | 28 |
| &nbsp;&nbsp;&nbsp;Speculative Nature of Mineral Exploration and Development | 28 |
| &nbsp;&nbsp;&nbsp;Price and Availability of Infrastructure and Energy | 29 |
| &nbsp;&nbsp;&nbsp;Supply Chain Disruptions | 29 |
| &nbsp;&nbsp;&nbsp;Forced or Child Labour in Supply Chains | 30 |
| &nbsp;&nbsp;&nbsp;Nature of Mineral Exploration and Mining | 30 |
| &nbsp;&nbsp;&nbsp;Safety, Health, and Environmental Regulations | 31 |
| &nbsp;&nbsp;&nbsp;Management | 31 |
| &nbsp;&nbsp;&nbsp;Ability to Implement Business Strategy | 32 |
| &nbsp;&nbsp;&nbsp;Key Personnel | 32 |
| &nbsp;&nbsp;&nbsp;Mining Risks and Insurance | 32 |
| &nbsp;&nbsp;&nbsp;Development Risks | 33 |
| &nbsp;&nbsp;&nbsp;Competition for New Properties | 33 |
| &nbsp;&nbsp;&nbsp;Dependence on Skilled Labour | 33 |
| &nbsp;&nbsp;&nbsp;Reputational Damage to the Company | 33 |
| &nbsp;&nbsp;&nbsp;Uninsured or Uninsurable Risk | 34 |

---

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;Government Regulations | 34 |
| &nbsp;&nbsp;&nbsp;Permitting | 34 |
| &nbsp;&nbsp;&nbsp;Regulatory Risks | 35 |
| &nbsp;&nbsp;&nbsp;Regulatory or Agency Proceedings, Investigations, and Audits | 35 |
| &nbsp;&nbsp;&nbsp;Price Volatility of Publicly Traded Securities | 35 |
| &nbsp;&nbsp;&nbsp;Economic Conditions for Mining | 36 |
| &nbsp;&nbsp;&nbsp;Market Risk for Securities | 36 |
| &nbsp;&nbsp;&nbsp;Securities or Industry Research and Reports | 36 |
| &nbsp;&nbsp;&nbsp;Litigation | 36 |
| &nbsp;&nbsp;&nbsp;Potential Conflicts of Interest | 36 |
| &nbsp;&nbsp;&nbsp;Legal and Accounting Requirements | 37 |
| &nbsp;&nbsp;&nbsp;Accounting Policies and Internal Controls | 37 |
| &nbsp;&nbsp;&nbsp;Risks Related to Dilution | 37 |
| &nbsp;&nbsp;&nbsp;Fraudulent or Illegal Activity by Employees, Contractors, and Consultants | 38 |
| &nbsp;&nbsp;&nbsp;Information Technology Systems and Security Threats | 38 |
| &nbsp;&nbsp;&nbsp;Financing Risk | 38 |
| &nbsp;&nbsp;&nbsp;Tax | 39 |
| &nbsp;&nbsp;&nbsp;Natural Disasters, Terrorist Acts, Civil Unrest, and Other Disruptions | 39 |
| &nbsp;&nbsp;&nbsp;Community Relations and Social License to Operate | 39 |
| **MINERAL PROJECTS** | **41** |
| &nbsp;&nbsp;&nbsp;Bolivar Mine | 41 |
| &nbsp;&nbsp;&nbsp;Porco Mine | 68 |
| &nbsp;&nbsp;&nbsp;Caballo Blanco | 97 |
| &nbsp;&nbsp;&nbsp;Zimapan Property | 127 |
| **DIVIDENDS AND DISTRIBUTIONS** | **136** |
| **DESCRIPTION OF CAPITAL STRUCTURE** | **136** |
| &nbsp;&nbsp;&nbsp;Common Shares | 136 |
| **MARKET FOR SECURITIES** | **136** |
| &nbsp;&nbsp;&nbsp;Trading Price and Volume | 136 |
| &nbsp;&nbsp;&nbsp;Prior Sales | 137 |
| **ESCROWED SECURITIES AND SECURITIES SUBJECT TO RESTRICTION ON TRANSFER** | **138** |
| **DIRECTORS AND OFFICERS** | **138** |
| &nbsp;&nbsp;&nbsp;Name, Occupation and Security Holding | 138 |
| &nbsp;&nbsp;&nbsp;Cease Trade Orders, Bankruptcies, Penalties or Sanctions | 140 |
| &nbsp;&nbsp;&nbsp;Conflicts of Interest | 141 |
| **AUDIT COMMITTEE INFORMATION** | **142** |
| &nbsp;&nbsp;&nbsp;Relevant Education and Experience of Audit Committee Members | 143 |
| &nbsp;&nbsp;&nbsp;Reliance on Certain Exemptions | 143 |
| &nbsp;&nbsp;&nbsp;Audit Committee Oversight | 143 |
| &nbsp;&nbsp;&nbsp;Pre-Approval Policies and Procedures | 144 |
| &nbsp;&nbsp;&nbsp;External Auditor Service Fees (By Category) | 144 |
| &nbsp;&nbsp;&nbsp;Exemption for Venture Issuers | 144 |
| **PROMOTERS** | **144** |
| **LEGAL PROCEEDINGS AND REGULATORY ACTIONS** | **144** |
| **TRANSFER AGENT, REGISTRARS AND AUDITORS** | **145** |
| **INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS** | **145** |
| **MATERIAL CONTRACTS** | **145** |
| **INTERESTS OF EXPERTS** | **145** |
| &nbsp;&nbsp;&nbsp;Names of Experts | 145 |
| &nbsp;&nbsp;&nbsp;Interests of Experts | 146 |
| **ADDITIONAL INFORMATION** | **146** |
| **SCHEDULE "A" – AUDIT COMMITTEE CHARTER** | **147** |

---

**GLOSSARY OF TERMS**

The following is a glossary of terms used in this Annual Information Form.

"**Acceleration Option**" has the meaning ascribed to such term under the heading "*Three Year History – 2024 Year End*";

"**Annual Information Form**" or "**AIF**" means this annual information form of the Company dated April 30, 2026 for the year ended December 31, 2025;

"**ASMs**" has the meaning ascribed to such term under the heading "*Risk Factors – Illegal, artisanal and Small-Scale Mining*";

"**ATE**" means Temporary Special Authorization;

"**Audit Committee**" means the audit committee of the Company;

"**A&R Omnibus Security Agreement**" means the amended and restated omnibus security agreement between the Company and Glencore dated October 3, 2024;

"**Base Purchase Price**" has the meaning ascribed to such term under the heading "*Three Year History – 2024 Year End*";

"**BC**" means the province of British Columbia;

"**BCBCA**" means the *Business Corporations Act* (British Columbia);

"**Board of Directors**" or **"Board**" means the board of directors of the Company;

"**Bolivar Mine**" means the producing Bolivar mine;

"**Bolivar Report**" has the meaning ascribed to such term under the heading "*Mineral Projects – Bolivar Mine*";

"**Bolivian Assets**" has the meaning ascribed to such term under the heading "*Three Year History – 2024 Year End*";

"**Bolivian Producing Mines**" means the Bolivar Mine, the Porco Mine, and Caballo Blanco Mining Complex;

"**Caballo Blanco Mining Complex**" has the meaning ascribed to such term under the heading "*Description of the Business – General Overview*";

"**Caballo Blanco Report**" has the meaning ascribed to such term under the heading "*Mineral Projects – Caballo Blanco*"

"**Chair**" has the meaning ascribed to such term under the heading "*Audit Committee Information – Composition of the Audit Committee*";

"**Charter**" has the meaning ascribed to such term under the heading "*Audit Committee Information – Composition of the Audit Committee*";

"**CIM**" means Canadian Institute of Mining, Metallurgy and Petroleum;

"**CIM Standards**" means "CIM Definition Standards on Mineral Resources and Mineral Reserves";

"**COMIBOL**" has the meaning given to such term under the heading "*Description of the Business – General Overview*";

"**Common Share**" means a common share in the capital of the Company;

"**Company**", "**Santacruz Silver**", "**Santacruz**", "**our**", "**us**" or "**we**" means Santacruz Silver Mining Ltd.;

"**CoOps**" has the meaning ascribed to such term under the heading "*Risk Factors– Illegal, artisanal and Small-Scale Mining*";

"**Davidson & Co.**" means Davidson & Company LLP;

"**Deloitte**" means Deloitte LLP;

"**Disclosure Documents**" has the meaning ascribed to such term under the heading "*Compliance with NI 43-101*";

"**EBIT**" means Earnings Before Interest and Tax;

"**El Monte Plant**" has the meaning ascribed to such term under the heading "*Zimapan Property – Property Description and Ownership*";

"**financial statements**" means the consolidated annual financial statements for the Company for the years ended December 31, 2025 and 2024;

"**forward-looking statements**" has the meaning ascribed to such term under the heading "*Forward-Looking Statements*";

"**Glencore**" means Glencore Finance (Bermuda) Ltd. and Glencore International AG;

"**Glencore Definitive Agreements**" means the Omnibus Agreement and A&R Omnibus Security Agreement;

"**Glencore Share Purchase Agreement**" means the share purchase agreement dated October 11, 2021, as amended on March 18, 2022 between the Company and Glencore;

"**Glencore Transaction**" has the meaning ascribed to such term under the heading "*Mineral Projects - Ownership*";

"**GRI**" means the Global Reporting Initiative;

"**Health, Safety and Environment Committee**" has the meaning given to such term under the heading "*Description of the Business – Social and Environmental Initiatives*";

"**Illapa**" has the meaning ascribed to such term under the heading "*Description of the Business – General Overview*";

"**Illapa JV**" has the meaning ascribed to such term under the heading "*Mineral Projects – History*";

"**JDS**" means JDS Energy & Mining Inc.;

"**LOM**" means Life of Mine Plan;

"**Material Santacruz Properties**" has the meaning ascribed to such term under the heading "*Compliance with NI 43-101*";

"**Minera Cedro**" has the meaning ascribed to such term under the heading "*Zimapan Property – Property Description and Ownership*";

**"Nasdaq"** means the Nasdaq Capital Market;

"**NI 43-101**" means National Instrument 43-101 – *Standards of Disclosure for Mineral Projects;*

 

"**NI 52-110**" means National Instrument 52-110 – *Audit Committees*;

"**NSR**" means net smelter returns;

"**Omnibus Agreement**" means the omnibus agreement between the Company, various subsidiaries of the Company and Glencore dated October 3, 2024;

"**Omnibus Incentive Plan**" means the Company's omnibus equity incentive plan approved by shareholders of the Company on December 20, 2023, and effective November 13, 2023;

"**OTCQB**" means OTCQB® Best Market; a premium tier of the over-the-counter securities marketplace operated by OTC Markets Group Inc.;

"**OTCQX**" means the OTCQB® Venture Market, a tier of the over-the-counter securities marketplace operated by OTC Markets Group Inc.;

"**PCG**" has the meaning ascribed to such term under the heading "*Zimapan Property – Property Description and Ownership*";

"**Penoles**" has the meaning ascribed to such term under the heading "*Zimapan Property – Property Description and Ownership*";

"**Porco Mine**" means the producing Porco mine;

"**Porco Report**" has the meaning given to such term under the heading "*Mineral Projects* – *Porco Mine*";

"**Property**" means the Company's mineral exploration;

"**QP**" means a "qualified person" as defined in NI 43-101;

"**San Lucas Group**" has the meaning ascribed to such term under the heading "*Description of the Business – General Overview*";

"**SEC**" means United States Securities and Exchange Commission;

"**SEDAR+**" means the System for Electronic Document Analysis and Retrieval filing system, available at <u>http://www.sedarplus.ca</u>;

"**Share Consolidation**" means the Company's December 10, 2025 consolidation of its Common Shares on the basis of four (4) pre-consolidated shares for every one (1) post-consolidation share;

"**Shareholders**" means the holders of the Common Shares;

"**Sinchi Wayra**" has the meaning ascribed to such term under the heading "*Description of the Business – General Overview*";

"**Soracaya Project**" means the Soracaya exploration project;

"**Technical Information**" has the meaning ascribed to such term under the heading "*Compliance with NI 43-101*";

"**Technical Reports**" has the meaning ascribed to such term under the heading "*Compliance with NI 43-101*";

"**Terms and Conditions Agreement**" has the meaning ascribed to such term under the heading "*Zimapan Property – Property Description and Ownership*";

"**TSXV**" means the TSX Venture Exchange;

"**UNEP**" means the United Nations Environment Programme;

"**Voluntary Principles on Security and Human Rights**" means the international framework created in 2000 by the Governments of the United States and the United Kingdom, together with leading extractive companies and human-rights organizations, to guide mining, oil, and gas companies in ensuring that their security arrangements respect internationally recognized human rights;

"**Zimapan Property**" has the meaning ascribed to such term under the heading "*Description of the Business – General Overview*";

"**Zimapan Report**" has the meaning ascribed to such term under the heading "*Zimapan Property*"; and

"**Zinc One**" has the meaning ascribed to such term under the heading "*Directors and Officers – Cease Trade Orders, Bankruptcies, Penalties or Sanctions*".

**ANNUAL INFORMATION FORM**

In this Annual Information Form, unless otherwise noted or the context indicates otherwise, the "Company", "Santacruz", "Santacruz Silver", "we", "us", and "our" refer to Santacruz Silver Mining Ltd.

This Annual Information Form should be read in conjunction with the Company's consolidated financial statements and management's discussion and analysis for the years ended December 31, 2025 and 2024. The financial statements and management's discussion and analysis are available under the Company's profile on SEDAR+ at <u>http://www.sedarplus.ca</u> and through the United States Securities and Exchange Commission's ("**SEC**") Electronic Data Gathering and Retrieval System ("**EDGAR**") at <u>www.sec.gov</u>.

All financial information in this Annual Information Form is prepared in accordance with IFRS Accounting Standards (IFRS® Accounting Standards) as issued by the International Accounting Standards Board (IASB). This Annual Information Form contains certain non-GAAP measures. The non-GAAP measures do not have any standardized meaning within IFRS Accounting Standards, and therefore may not be comparable to similar measures presented by other companies. These measures provide information that is customary in the mining industry and that is useful in evaluating our projects. This data should not be considered as a substitute for measures of performance prepared in accordance with IFRS Accounting Standards.

The information contained in this Annual Information Form is dated as of April 30, 2026 unless otherwise stated.

**CURRENCY PRESENTATION**

This Annual Information Form contains references to Canadian dollars ("C$" or "CAD") and United States dollars ("$", "US$", or "US dollars"). All dollar amounts referenced, unless otherwise indicated, are expressed in United States dollars.

**FORWARD-LOOKING STATEMENTS**

This AIF contains certain information that may constitute "forward-looking information" and "forward-looking statements" (collectively, "**forward-looking statements**") within the meaning of applicable Canadian and United States securities legislation, which are based upon the Company's current internal expectations, estimates, projections, assumptions, and beliefs. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget" or "budgeted", "scheduled", "estimates", "projects", "intends", "proposes", "complete", "anticipates" or "does not anticipate", "believes", "likely", "may", "will", "should", "intend", "anticipate", "proposed", "potential", or variations of such words and phrases or state that certain actions, events, or results "may", "can", "could", "would", "might", "will be taken", "occur", "continue", or "be achieved", and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions "may" or "will" happen, or by discussions of strategy. Forward-looking statements include, but are not limited to estimates, plans, expectations, opinions, forecasts, projections, priorities, strategies, targets, guidance, or other statements that are not statements of fact. Forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause the actual results, level of activity, performance, or achievements of the Company to be materially different from those expressed or implied by such forward-looking information. The forward-looking statements included in this AIF are made only as of the date of this AIF. Forward-looking statements in this AIF include, but are not limited to, statements with respect to:

● the performance of the Company's business and operations;

● the development, expansion, and assumed future results of operations of the Company's projects;

● the intention to grow the business and operations of the Company;

● the price of silver, zinc, lead and other minerals;

● production, costs and other estimates;

● the applicability of certain laws, regulations, and any amendments thereof;

● the ability to access sufficient capital from internal and external sources and the ability to access sufficient capital on favourable terms;

● anticipated outcomes of lawsuits and other legal issues, and their direct and indirect impacts on other activities of the Company, particularly in relation to (but not limited to) potential receipt or retention of regulatory approvals;

● anticipated actions of various governments;

● the estimation of mineral resources;

● anticipated conclusions of economic assessments of projects;

● the accuracy of capital and operating cost estimates for projects;

● the need for additional experienced employees, third-party consultants and contractors;

● the ability to attract and retain skilled staff and consultants under existing or future agreements;

● requirements for additional capital;

● the ability of the Company to generate cash flow from operations;

● expectations of market prices and costs;

● income and sales tax regulatory matters, competition, sales projections, currency, and interest rate fluctuations;

● the competitive and business strategies of the Company;

● the success of exploration programs;

● the realization of mineral resource estimates;

● continuation of rights to explore and mine;

● exploration, development and expansion plans and objectives;

● the ability to expand existing mineral resources, generally;

● the future development, costs and outcomes of the Company's exploration projects;

● the success of undeveloped mining activities;

● permits and licenses, treatment under governmental regulatory regimes;

● estimated production rates for silver and other payable metals we produce, timing of production and estimated cash and total costs of production;

● our anticipated operating cash flow and the estimated cost and availability of funding for working capital requirements and capital replacement, improvement or remediation programs, care and maintenance programs, and for future construction and development projects;

● our ability to obtain necessary permits and licenses, including for current or future operations, project development and expansion;

● the effects of laws, regulations and government policies affecting our operations, including, without limitation, expectations relating to or the effect of certain laws and regulations applicable to mining in Bolivia;

● estimated exploration expenditures to be incurred on our various exploration properties;

● compliance with environmental, health, safety, and other regulations;

● our goal to continue to be a responsible company, committed to sustainable development and conducting our activities in an environmentally and socially responsible manner, including the development and implementation of policies and practices in support of these goals, and our ability to achieve future environmental, social and governance targets and goals;

● future sales of the metals, concentrates or other products produced by us, the availability and location of refining facilities and sales counterparts; and

● continued access to necessary infrastructure, including, without limitation, access to power, water, lands and roads to carry on activities as planned.

With respect to the forward-looking statements contained in this AIF, we have made assumptions regarding, among other things: (i) our ability to generate cash flow from operations and obtain necessary financing on acceptable terms; (ii) general economic, financial market, regulatory, and political conditions in which we operate; (iii) existence of a basic level of public-support for mine development from the local community; (iv) competition; (v) anticipated and unanticipated costs; (vi) government regulation of our activities and production and in the areas of taxation and environmental protection; (vii) the timely receipt of any required regulatory approvals; (viii) our ability to obtain qualified staff, consultants, management, equipment, and services in a timely and cost efficient manner; (ix) our ability to conduct operations in a safe, efficient, and effective manner; (x) the ability to obtain permits or approvals required to conduct planned exploration programs; (xi) the results of exploration; (xii) the accuracy of geological and engineering assumptions; (xiii) the likelihood of future operational difficulties (including cost escalation, unavailability of materials and equipment, industrial disturbances or other job action and possible events related to health, safety and environmental matters); (xiv) the likelihood of social unrest; (xv) the likelihood of the failure of counterparties to perform their contractual obligations; (xvi) changes in priorities, plans, strategies and prospects; (xvii) general economic, industry, business and market conditions; (xviii) disruptions or changes in the credit or securities markets; (xix) changes in law, regulation, or application and interpretation of the same; (xx) the ability to implement business plans and strategies, and to pursue business opportunities; (xxi) rulings by courts or arbitrators, proceedings and investigations; (xxii) inflationary pressures; (xxiii) the future impacts of pandemics or future significant new diseases; and (xxiv) various other events, conditions or circumstances that could disrupt Santacruz's priorities, plans, strategies and prospects; (xxv) future metals prices, cut-off grades, operating costs, capital costs, metallurgical recoveries, that the actual ore mined is amenable to mining or treatment, environmental considerations, labour volumes, permitting and other factors, any of which may prove to be inaccurate; (xxvi) the availability of commodities and goods.

Certain of the forward-looking statements and forward-looking information and other information contained herein concerning the mining industry and the general expectations of Santacruz concerning the mining industry are based on estimates prepared by Santacruz using data from publicly available governmental sources, market research, industry analysis, and on assumptions based on data and knowledge of the mining industry, which Santacruz believes to be reasonable. However, although generally indicative of relative market positions, market shares, and performance characteristics, such data is inherently imprecise. While Santacruz is not aware of any misstatement regarding any industry or government data presented herein, the mining industry involves risks and uncertainties that are subject to change based on various factors.

Forward-looking statements are based on certain assumptions and analyses made by the Company in light of the experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate, but which are subject to risks and uncertainties. Although we believe that the assumptions underlying these statements are reasonable, they may prove to be incorrect, and we cannot assure that actual results will be consistent with these forward-looking statements. Given these risks, uncertainties, and assumptions, readers should not place undue reliance on these forward-looking statements. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. In particular, but without limiting the foregoing, disclosure in this Annual Information Form under "*Description of the Business*" as well as statements regarding the Company's objectives, plans, and goals, including future operating results, economic performance, and planned exploration, development and production activities may make reference to or involve forward-looking statements. A number of factors could cause actual events, performance, or results to differ materially from what is projected in the forward-looking statements.

Whether actual performance, or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors, including those listed under "*Risk Factors*" in this AIF. The purpose of forward-looking statements is to provide the reader with a description of management's expectations, and such forward-looking statements may not be appropriate for any other purpose. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. For the reasons set forth above, investors should not attribute undue certainty to or place undue reliance on forward-looking statements. Historical results of operations and trends that may be inferred from the information contained in this AIF may not necessarily indicate future results from operations. In particular, the current state of the global securities markets may cause significant reductions in the price of the Company's securities and render it difficult or impossible for the Company to raise funds.

Additional information on these and other factors which could affect the Company's operations and financial results are discussed in the sections relating to risk factors of our business filed in the Company's required securities filings with applicable securities commissions or other securities regulatory authorities and which may be accessed through the SEDAR+ website at <u>www.sedarplus.ca</u> and the Company's documents filed with, or furnished to, the SEC, which are available on EDGAR at <u>www.sec.gov</u>.

**Compliance with NI 43-101**

As required by NI 43-101, the Company has filed the following technical reports for its material mineral properties (collectively, the "**Technical Reports**"):

● a report relating to the Bolivar Mine entitled "*NI 43-101 Technical Report, Feasibility Study, Bolivar Mining Operations*" that has an effective date of January 1, 2024, and was prepared by Richard Goodwin, P.Eng., Garth Kirkham, P. Geo., and Tad Crowie, P.Eng.;

● a report relating to the Porco Mine entitled "*NI 43-101 Technical Report, Feasibility Study, Porco Mining Operations*" that has an effective date of January 1, 2024, and was prepared by Richard Goodwin, P.Eng., Garth Kirkham, P. Geo., and Tad Crowie, P.Eng.;

● a report relating to Caballo Blanco Mining Complex entitled "*NI 43-101 Technical Report Caballo Mining Operations, near Potosi Bolivia*" that has an effective date of January 1, 2024, and was prepared by Richard Goodwin, P.Eng., Garth Kirkham, P. Geo., and Tad Crowie, P.Eng.; and

● a report relating to the Zimapan Property entitled "*Technical Report, Zimapan Mine, Hidalgo State, Mexico*" with an effective date of December 31, 2025, and was prepared by Garth Kirkham, P. Geo., Paul Thornton, P. Eng., and Shane Tad Crowie, P. Eng.

For the purposes of NI 43-101, the Company's material mineral properties are the Bolivar Mine, Porco Mine, Caballo Blanco Mining Complex and Zimapan Property (collectively, the "**Material Santacruz Properties**"). Unless otherwise indicated, the Company has prepared the technical information in this Annual Information Form ("**Technical Information**") based on information contained in the Technical Reports, news releases and other public filings (collectively, the "**Disclosure Documents**") available under the Company's profile on SEDAR+ and on EDGAR. Technical Information contained in each Disclosure Document was prepared by or under the supervision of a "qualified person" as defined in NI 43-101. For readers to fully understand the information in this Annual Information Form, they should read the Disclosure Documents in their entirety, including all qualifications, assumptions and exclusions that relate to the information set out in this Annual Information Form which qualifies the Technical Information. The Disclosure Documents are each intended to be read as a whole, and sections should not be read or relied upon out of context. The Technical Information is subject to the assumptions and qualifications contained in the Disclosure Documents.

Unless otherwise indicated, all scientific and technical information relating to the Company's mineral projects contained in this Annual Information Form has been reviewed and approved by Garth Kirkham, P. Geo., and who by reason of education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, fulfills the requirements of a "qualified person" as defined in NI 43-101. All scientific and technical information relating to the Material Santacruz Properties and incorporated by reference from the Technical Reports have been reviewed and approved by the authors of the Technical Reports, who by reason of education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, fulfill the requirements of a "qualified person" as defined in NI 43-101, and is independent of the Company applying all of the tests in Section 1.5 of NI 43-101CP.

*Classification of Mineral Reserves and Mineral Resources*

 

In this Annual Information Form and as required by NI 43-101, the definitions, if any, of proven and probable mineral reserves and measured, indicated and inferred mineral resources are those used by Canadian provincial securities regulatory authorities and conform to the definitions utilized by the Canadian Institute of Mining, Metallurgy and Petroleum ("**CIM**") in the "CIM Definition Standards on Mineral Resources and Mineral Reserves" (the "**CIM Standards**").

**Cautionary Note to U.S. Investors Concerning Estimates of Mineral Reserves and Mineral Resources**

The mineral resource and mineral reserve estimates, if any, contained in this Annual Information Form have been prepared in accordance with the requirements of NI 43-101. The definitions, if any, of the terms "proven mineral reserve," "probable mineral reserve," "measured mineral resource," "indicated mineral resource," and "inferred mineral resource" are those under CIM Standards. Without limiting the generality of the foregoing, there are differences in the definitions used in the United States included in the SEC subpart 1300 of SEC Regulation S-K, based on the Committee for Mineral Reserves International Reporting Standards and the CIM Standards.

As a foreign private issuer that is eligible to file reports with the SEC pursuant to the multijurisdictional disclosure system, the Company is not required to provide disclosures under Regulation S-K 1300, which is applicable to domestic issuers in the United States. Accordingly, investors are cautioned not to assume that all or any part of mineral reserves and mineral resources determined in accordance with NI 43-101 and CIM Standards will qualify as, or be identical to, mineral reserves and mineral resources estimated under the standards of the SEC applicable to U.S. companies under subpart 1300 of Regulation S-K. Under Canadian rules, estimates of "inferred mineral resources" may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. An "inferred mineral resource" is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An "inferred mineral resource" has a lower level of confidence than that applying to an "indicated mineral resource" and must not be converted to a mineral reserve. It is reasonably expected that the majority of inferred mineral resources could be upgraded to indicated mineral resources with continued exploration.

Accordingly, information contained in this Annual Information Form containing descriptions of the Company's mineral deposits may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

**CORPORATE STRUCTURE**

**Name, Address, and Incorporation**

The Company was incorporated pursuant to the *Business Corporations Act* (British Columbia) on January 24, 2011. The Company's head office is located at 480 – 1140 West Pender Street, Vancouver, British Columbia, V6E 4G1. The registered and records office of the Company is located at 1111 West Hastings Street, 15th Floor, Vancouver, British Columbia, Canada V6E 2J3. The Company's Common Shares are listed on the TSXV in Canada under the symbol "SCZ", on the Nasdaq in the United States under the symbol "SCZM", and on the Frankfurt Exchange in Germany under the symbol "1SZ".

**Intercorporate Relationships**

The chart below includes the name and jurisdiction of incorporation of our material subsidiaries and certain subsidiaries holding an interest in mineral projects that the Company considers significant as described in this AIF. All ownership of subsidiaries is 100% unless otherwise indicated. Certain subsidiaries are indirectly owned by us through wholly-owned subsidiaries not reflected below.

![](ex99-1_001.jpg)

**GENERAL DEVELOPMENT OF THE BUSINESS**

**Overview & Background**

Santacruz Silver is a Latin American mining company focused on the acquisition, development, and operation of assets in Bolivia and Mexico. Specializing in the production of silver, zinc, copper, and lead, the Company operates four producing mines and one ore feed sourcing company. In Bolivia, the Company operates the Bolivar Mine, the Porco Mine, and Caballo Blanco Mining Complex (collectively, the "**Bolivian Producing Mines**"), with the Caballo Blanco Mining Complex comprising the Tres Amigos and Colquechaquita mines. The Reserva mine, whose production is provided to the San Lucas Group, is also located in Bolivia. Additionally, the Company owns the Soracaya Project which it is actively advancing the project into the permitting and development stage. In Mexico, Santacruz operates the Zimapan Property.

**Three Year History**

**2023 Year End**

On January 11, 2023, the Company announced the appointment of Mr. Gregg Orr, as the new Chief Financial Officer and Corporate Secretary of the Company. Mr. Orr replaced Mr. Arturo Préstamo, who continued as Executive Chairman of the Company.

On August 10, 2023, Carlos Silva Ramos stepped down from his role as CEO and director of the Company and Arturo Préstamo, Executive Chairman, assumed the role of Interim CEO.

On December 18, 2023, the Company announced that it had sold its shares in Santacruz Holdings, which had 100% ownership in Impulsora Minera Santacruz, S.A. de C.V., a non-core Mexican subsidiary of the Company, to a private buyer. The sale was of a non-core asset of the Company for nominal cash consideration, in addition to the buyer agreeing to accept certain obligations and liabilities from the Company.

**2024 Year End**

On March 28, 2024, the Company entered into a binding term sheet dated March 28, 2024 with Glencore to amend certain transaction documents in connection with the Company's acquisition of, among other things, a 100% interest in the Sinchi Wayra business which includes the Caballo Blanco Mining Complex and the Soracaya Project located in Bolivia, the San Lucas Group and a 45% interest in the producing Bolivar Mine and Porco Mine held through an unincorporated joint venture with Corporación Minera de Bolivia, a Bolivian state-owned entity and certain related properties and assets (collectively, the "**Bolivian Assets**") pursuant to the Glencore Share Purchase Agreement.

On August 21, 2024, the Company announced its NI 43-101 compliant Mineral Resource and Reservice estimates for the Bolivian Producing Mines, and the Soracaya Project, also located in Bolivia. The Mineral Resources and Reserves for the Bolivian Producing Mines were prepared on behalf of the Company by JDS, and the Mineral Resource for Soracaya was prepared on behalf of the Company by Kirkham Geosytems Ltd. The effective date of all of the Technical Reports is January 1, 2024.

On October 3, 2024, the Company entered into the Glencore Definitive Agreements with Glencore to amend certain transaction documents in connection with the Glencore Transaction, which superseded the binding term sheet entered into between the parties dated March 28, 2024. Pursuant to the Glencore Definitive Agreements, the Company and Glencore agreed to, among other things, the following terms:

● the total consideration payable by Santacruz to Glencore under the Glencore Definitive Agreements would be in lieu of all present and future amounts owing or payable by Santacruz under the transaction documents entered into pursuant to the Glencore Transaction;

● subject to the Acceleration Option (as defined below), Santacruz would be pay up to US$80 million in cash to Glencore in eight equal annual instalments of US$10 million each (the "**Base Purchase Price**") with the first payment being made on or before November 1, 2025;

● Santacruz can exercise an option to accelerate the payment of the outstanding balance of the Base Purchase Price in full at any time, such prepayment amount will be US$40 million if exercised prior to November 1, 2025 and shall decrease by US$2 million for each annual instalment of US$10 million that has been paid by Santacruz (the "**Acceleration Option** ");

● the payment obligations of Santacruz under the Omnibus Agreement are secured against the Bolivian Assets of Santacruz pursuant to the A&R Omnibus Security Agreement.

On October 15, 2024, the Company announced that Mr. Gregg Orr had resigned as Chief Financial Officer and Mr. Andres Bedregal was appointed as the Interim Chief Financial Officer.

**2025 Year End**

On February 27, 2025, the Company announced that San Lucas S.A., a wholly owned subsidiary in Bolivia, completed the first offering of promissory notes under its San Lucas Promissory Notes Issuance Program. The offering was oversubscribed, for gross proceeds of 70 million Bolivian Boliviano. The notes had a 6.5% interest rate, a maturity date of February 15, 2026 and were unsecured.

On March 3, 2025, the Company announced the appointment of Mr. Eduardo Torrecillas as Chief Operating Officer.

On March 20, 2025, the Company announced that it had structured and implemented a plan to exercise its Acceleration Option pursuant to the Glencore Definitive Agreements to satisfy the Base Purchase Price owed to Glencore. The Company made an initial payment to Glencore of US$10 million on March 20, 2025. The Company further announced that it would make bi-monthly payments of US$7.5 million commencing in May 2025 until reaching a total of US$40 million, with all payments scheduled to be completed by October 31, 2025.

On May 6, 2025, the Company made the second payment of US$7.5 million to Glencore as part of its plan to exercise its Acceleration Option and to satisfy the Base Purchase Price in connection with the Glencore Transaction and pursuant to the Glencore Definitive Agreements.

On June 16, 2025, the Company announced that Mr. Andrés Bedregal, who was serving as the Company's Interim Chief Financial Officer since October 15, 2024, had been appointed Chief Financial Officer.

On June 26, 2025, the Company announced that it had qualified to trade on the OTCQX®, upgrading from the OTCQB®, under the symbol "SCZMF".

On July 7, 2025, the Company made the third payment of US$7.5 million to Glencore as part of its plan to exercise its Acceleration Option and satisfy the Base Purchase Price in connection with the Glencore Transaction and pursuant to the Glencore Definitive Agreements.

On August 8, 2025, the Company's San Lucas S.A., a wholly owned subsidiary in Bolivia, completed the second offering of promissory notes under its San Lucas Promissory Notes Issuance Program. The offering generated gross proceeds of 70 million Bolivian Boliviano. The notes have a 7.00% interest rate, a maturity date of June 15, 2026 and are unsecured.

On September 4, 2025, the Company announced that it had completed its fourth and fifth payments, including the final installment, totaling US$15 million, to Glencore. The milestone marked the full satisfaction of the US$40 million Acceleration Option and completed the Base Purchase Price in connection with the Glencore Transaction and pursuant to the Glencore Definitive Agreements.

On September 3, 2025, the Company filed a change of auditor notice, announcing that Deloitte would resign as the auditor of the Company effective August 21, 2025. The Company appointed Davidson & Co. as the successor auditor commencing September 1, 2025.

On October 7, 2025, the Company announced the initiation of development activities and the pursuit of full production permitting at its wholly-owned Soracaya Project, located in Potosi Department, Bolivia.

On October 28, 2025, the Company announced it had applied to list its Common Shares on the Nasdaq.

On November 17, 2025, the Company appointed Bruce Wolfson to its Board of Directors.

On December 10, 2025, in connection with the Company's application to list on the Nasdaq, the Company completed the Share Consolidation. The Share Consolidation was intended to increase the quoted share price of the Company's Common Shares to satisfy the Nasdaq's initial listing requirements.

**Subsequent to Year End 2025**

On January 21, 2026, the Company's Common Shares commenced trading on the Nasdaq under the symbol "SCZM". Upon commencement of trading on the Nasdaq, the Common Shares ceased to be quoted on the OTCQB® Best Market.

**DESCRIPTION OF THE BUSINESS**

**General Overview**

Santacruz is engaged in the operation, acquisition, exploration and development of mineral properties in Latin America, with a primary focus on silver and zinc, but also including lead and copper. The Company's asset portfolio include producing, ore feed sourcing and exploration assets, strategically located in Bolivia and Mexico. As at December 31, 2025, the Company had interests in, including mining concessions rights, to the following:

&nbsp;&nbsp;&nbsp;&nbsp;(1) Sinchi
 Wayra S.A. ()"**Sinchi Wayra** "), Sociedad Minero Metalurgico Reserva Ltda.
 and Sociedad Minera Illapa S.A. ()"**Illapa**") which consist of the following
 mineral properties and businesses located in Bolivia:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) 100%
 interest in the producing Tres Amigos and Colquechaquita mines (collectively the "**Caballo Blanco Mining Complex** ");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the
 producing Bolivar Mine and Porco Mine held under an association agreement with Corporación
 Minera de Bolivia ()"**COMIBOL** "), a Bolivian state-owned entity, whereby
 the Company receives 45% of the profits and COMBOL retains 55%;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) 100%
 interest in the Soracaya exploration project; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) 100%
 interest the Reserva mine and the San Lucas ore sourcing and trading business (collectively
 the "**San Lucas Group** "); and

&nbsp;&nbsp;&nbsp;&nbsp;(2) 100%
 interest in the producing Zimapan mine ()"**Zimapan Property**") located in
 Mexico held by Compañia Zilar Mendi S.A de C.V.

The following maps show where our primary assets are located:

![](ex99-1_002.jpg)

![](ex99-1_003.jpg)

**Principal Markets and Distribution Methods**

The Company earns substantially all of its revenue from the production and sale of silver and zinc, with the remainder of the revenue coming from lead and copper, all metals sold is in concentrate form.

The Company has two customers that are well-known and well-established international concentrate buyers, all sales from Bolivian producing mines are made via export to Chile and all sales from the Zimapan Property are exported from Mexico.

**Specialized Skill and Knowledge**

The Company's business requires specialized skills and knowledge. Such skills and knowledge include the areas of mineral exploration, environmental permitting, engineering, geology, drilling, metallurgy, construction, community engagement and relations, logistical planning, mine construction and development, mine operation, project management, safety and security and implementation of exploration and development programs as well as legal compliance, finance and accounting. The Company competes with numerous other companies for the recruitment and retention of qualified employees and consultants in such fields. In order to attract and retain personnel with the specialized skills and knowledge required for the Company's operations, the Company maintains remuneration and compensation packages it believes to be competitive. To date, the Company has been able to meet its staffing requirements. See "*Risk Factors – Dependence on Skilled Labour"* for more information.

**Competitive Conditions**

The mineral exploration and mining business is competitive in all phases of exploration, development and production. Santacruz competes with other companies that may have resources in excess of those of the Company and individuals in the search for and the acquisition of quality mineral properties, mineral claims, permits, concessions and other mineral interests, as well as recruiting and retaining qualified employees. The ability of Santacruz to acquire quality mineral properties in the future will depend not only on its ability to develop its present properties, but also on its ability to select and acquire suitable producing properties or prospects for development or mineral exploration. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favourable to the Company. Factors beyond the control of the Company may affect the marketability of minerals mined or discovered by the Company. See "*Risk Factors*".

There is potential that the Company will face intense competition from other companies, some of which can be expected to have longer operating histories and more financial resources and project construction, developing, manufacturing and marketing experience than the Company. Increased competition by larger and better resourced competitors could materially and adversely affect the business, financial condition, and results of operations of the Company.

**Cycles**

The mining business is subject to mineral price cycles. The marketability of minerals and mineral concentrates is also affected by worldwide economic cycles. The price of the Common Shares, financial results, exploration, development and mining activities of the Company may in the future be significantly and adversely affected by declines in the price of silver, zinc, lead and other minerals. Mineral prices fluctuate widely and are affected by numerous factors such as global supply, demand, inflation, exchange rates, interest rates, forward selling by producers, central bank sales and purchases, production, global or regional political, economic or financial situations and other factors beyond the control of the Company.

**Economic Dependence**

The Company's business is not substantially dependent on any single commercial contract or group of contracts either from suppliers or contractors. Even though the Company only has two customers and has off-take agreements with each, if the customers were unable to purchase concentrates the Company could sell to other customers and there are many other potential customers for the sale of concentrate in both Bolivia and Mexico.

**Employees**

As of the date of this AIF, the Company has 3 employees in Canada, 1,463 employees and 810 contractors in Bolivia, and 774 employees and 112 contractors in Mexico. In addition, it retains a number of geologists, engineers, employees and other consultants on a temporary contract basis, as required. No employees are unionized. The Company guarantees freedom of association and the right to collective bargaining.

To continue with the development of its assets, Santacruz is likely to require additional experienced employees and third-party consultants and contractors. The Company has not experienced, and does not expect to experience, significant difficulty in attracting and retaining qualified personnel. However, no assurance can be given that a sufficient number of qualified employees will be retained by the Company when necessary. See "*Risk Factors – Dependence on Skilled Labour"* for more information.

**Foreign Operations**

Our principal operations and assets are located in Bolivia and Mexico. Our operations are exposed to various levels of political, economic and other risks and uncertainties. These risks and uncertainties vary from country to country and include, but are not limited to, government regulations (or changes to such regulations) with respect to restrictions on production, export controls, income taxes, royalties, excise and other taxes, expropriation of property, repatriation of profits, environmental legislation, land use, water use, local ownership requirements and land claims of local peoples, regional and national instability and security, mine safety, corruption and sanctions. The effect of these factors cannot be accurately predicted.

**Environmental Protection**

The mining industry is subject to environmental regulations pursuant to applicable legislation. Such legislation provides for restrictions and prohibitions on release or emission of various substances produced in association with certain mining industry operations, in addition to environmental monitoring, reporting, and reclamation.

The mining industry is subject to extensive laws and regulations governing the protection of the environment, natural resources and human health. These laws address, among other things: emissions into the air; discharges into water; management of waste and hazardous substances; protection of natural resources, cultural heritage and endangered species; and reclamation of lands disturbed by mining operations. The Company is required to obtain governmental permits. Violations of environmental and health and safety laws are subject to civil sanctions and, in some cases, criminal sanctions, including the suspension or revocation of permits. The failure to comply with environmental laws and regulations or liabilities related to hazardous substance contamination could result in project development delays, material financial impacts or other material impacts the Company's projects and activities, fines, penalties, lawsuits by the government or private parties, or material capital expenditures. Additionally, environmental laws Bolivia and Mexico, as well as certain organizations that we are members of, require that we periodically perform environmental audits and impact studies at our mines. These studies could reveal presently unknown environmental impacts that would require us to make significant capital outlays or cause material changes or delays in our intended activities.

**Social and Environmental Initiatives**

Santacruz has adopted a number of environmental, social and human-rights policies that are fundamental to its operations. These policies are supported by a dedicated board committee, are aligned with international standards, and are embedded into the Company's day-to-day activities across its operations in Bolivia and Mexico. The Company's Health, Safety and Environment Committee is a standing committee of the Board mandated to promote the protection of life, health and the environment. The committee is responsible for ensuring compliance with applicable health, safety and environmental laws, assessing operational risks, monitoring incident reporting and response, and reviewing and recommending health, safety and environmental policies. The committee also provides regular reports to the Board and supports open communication with employees, governments, contractors and other stakeholders to promote responsible practices across the Company's operations and supply chain.

The Company has implemented a range of environmental-management practices, including water-stewardship initiatives, greenhouse gas emission reduction measures, and comprehensive waste and tailings management systems that adhere to Canadian Dam Association and UNEP standards. Santacruz uses technologies and operational controls to improve efficiency, reduce environmental impacts and enhance long-term sustainability performance.

**Community Relations and Social Responsibility**

Santacruz is committed to supporting the social and economic development of the communities in which it operates. The Company undertakes a variety of community-development and social-investment programs that include reforestation initiatives involving local students, educational and cultural support, infrastructure improvements and targeted community assistance. The Company also deploys mobile health clinics that provide general medical, dental and nutritional services to remote communities with limited access to healthcare.

Santacruz prioritizes local hiring and procurement wherever possible, with a significant proportion of its workforce and supply chain sourced from nearby communities. Through these efforts, the Company seeks to generate local economic opportunities, strengthen community relationships and maintain its social license to operate.

**Human Rights, Labour Standards and Supply-Chain Integrity**

Santacruz has implemented formal policies and procedures to uphold human rights and prevent forced labour, child labour and other abuses within its operations and supply chain. These include a Code of Business Conduct and Ethics, a Human Rights Policy aligned with international human-rights frameworks, a Supplier Code of Conduct prohibiting modern slavery, a Health and Safety Policy and a Whistleblower Policy that enables anonymous reporting and prohibits retaliation.

The Company conducts due-diligence reviews of suppliers, including screening for human-rights risks, and provides training programs for employees, contractors and suppliers on ethical conduct and modern-slavery compliance. Santacruz also maintains accessible grievance mechanisms for employees, contractors, suppliers and community members to raise concerns confidentially and have them addressed promptly. The Company has reported that no incidents of forced labour or child labour were identified during the reporting period.

**Sustainability Report Initiatives**

In 2024, Santacruz (through its Bolivian operations under Sinchi Wayra) adopted an integrated sustainability-management framework aligned with the 2021 Global Reporting Initiative (GRI) Standards and IFRS S1, including mining-sector guidance. This framework incorporates environmental, social and governance (ESG) factors and double-materiality assessment into corporate strategy, risk-management processes and performance reporting. The Company's 2024 Sustainability Report provides detailed disclosures on environmental performance, community investment, governance, human rights and stakeholder engagement, supported by a GRI Content Index.

As disclosed in the report, the Company invested more than US$2 million during the 2024 year in community-development, social investment and stakeholder-support initiatives. The report further describes formal processes for stakeholder mapping and engagement, impact and risk oversight, and grievance and consultation mechanisms accessible to both workers and communities. Santacruz has also aligned its sustainability efforts with 13 priority United Nations Sustainable Development Goals, including 21 specific targets and 21 indicators derived from its materiality assessment.

**Ongoing Implementation and Continuous Improvement**

Santacruz continues to advance its social and environmental programs by enhancing risk-management procedures, expanding training and awareness initiatives and increasing engagement with local communities and stakeholders. The Company remains committed to continuous improvement in its environmental stewardship, social responsibility and human-rights performance, and to maintaining transparent and structured reporting aligned with global sustainability standards.

**RISK FACTORS**

There are a number of risk factors that could cause future results to differ materially from those described herein. The risks and uncertainties described herein are not the only ones the Company faces. Additional risks and uncertainties, including those that the Company does not currently know about, or that it currently considers immaterial, may also adversely affect the Company's business. If any of the following risks materialize, the Company's business may be harmed, and its financial condition and operational results may suffer significantly. Existing and prospective investors should carefully consider the risk factors set out below and consider all other information contained in this Annual Information Form and in the Company's other public filings before making an investment decision. The information in this section is intended to serve as an overview and should not be considered comprehensive, as the Company may face risks and uncertainties that are not currently known to us, or that we deem to be immaterial, and that are therefore not discussed in this section. All risks to the Company's business have the potential to influence its operations in a materially adverse manner.

**Changes in the Price of Silver, Zinc, Lead and Other Metals in the World Markets**

The profitability of our operations is significantly affected by changes in the market price of silver, zinc, lead and other mineral commodities. Mineral prices fluctuate widely and are affected by numerous factors beyond our control, including: interest rates; the rate and anticipated rate of inflation; world supply of mineral commodities; consumption patterns; forward sales by producers; production costs; demand from the jewelry industry; speculative activities; stability of exchange rates; the relative strength of the U.S. dollar and other currencies; changes in international investment patterns; monetary systems; and political and economic events.

If silver, zinc, lead or other mineral prices decline significantly, or decline for an extended period of time, we may be unable to continue our operations, develop our properties, fulfill our obligations under our permits and licenses or under our agreements with our partners, or continue to pay dividends at the current rate or at all. As a result, we could be forced to discontinue our operations or development activities, or to abandon or sell our interest in some or all of our properties, which could have a negative effect on our profitability and cash flow.

**Foreign Operations**

The Company's projects are located in Bolivia and Mexico, therefore, the Company's current and future mineral exploration and mining activities are exposed to various levels of political, economic, and other risks and uncertainties.

There has been a significant level of political and social unrest in Bolivia in recent years resulting from a number of factors, including Bolivia's history of political and economic instability under a variety of governments and high rate of unemployment.

The Company's exploration and development activities may be affected by changes in government, political instability, and the nature of various government regulations relating to the mining industry. Bolivia's fiscal regime has historically been favourable to the mining industry, but there is a risk that this could change. Accordingly, the Company's current and future mineral exploration, development and mining activities could be affected by adverse political, social or economic factors normally associated with the conduct of business in foreign jurisdictions including, but not limited to: expropriation or nationalization of assets or the creeping expropriation of the economic value of assets; cancellation or forced renegotiation of permits, contracts, licenses or title with or without adequate compensation; changing political regimes; economic instability; civil unrest and rebellion; national strikes; blockades of roads and other means of transportation; states of emergency; the imposition of unfavourable government regulations on foreign investment, production and extraction, prices, exports, income taxes, currency convertibility, environmental compliance, or changes to worker safety legislation; regulations and restrictions with respect to imports and exports; high rates of inflation; extreme fluctuations in currency exchange rates and restrictions on foreign exchange, currencies and repatriation; inability to obtain fair dispute resolution or judicial determinations; abuses of power by governments or officials without regard to the rule of law; difficulties enforcing judgments ruled within the foreign jurisdiction or in another country; and violence or criminal activity, including organized crime, theft and illegal mining.

The Company cannot predict the government's positions on foreign investment, mining concessions, land tenure, environmental regulation, or taxation. A change in government positions on these issues could adversely affect the Company's business and/or its holdings, assets, and operations in Bolivia. Any changes in regulations or shifts in political conditions are beyond the control of the Company. Moreover, protestors and cooperatives have previously targeted foreign companies in the mining sector, and as a result there is no assurance that future social unrest will not have an adverse impact on the Company's operations. Labour in Bolivia is customarily unionized and there are risks that labour unrest or wage agreements may impact operations.

In 2014, the Bolivian government enacted the New Mining Law. Among other things, the New Mining Law set out a number of new economic and operational requirements relating to state participation in mining projects. Further, the New Mining Law provided that all pre-existing contracts were to migrate to one of several new forms of agreement within a prescribed period of time. As a result, we anticipate that our current mining joint operations agreement with COMIBOL relating to the Illapa JV will be subject to such migration and possible renegotiation of key terms. The migration process has been delayed by COMIBOL and has not been completed. The primary effects on the Illapa JV and our interest therein will not be known until such time as we have, if required to do so, renegotiated the existing contract, and the full impact may only be realized over time. We will take appropriate steps to protect and, if necessary, enforce our rights under our existing agreement with COMIBOL. There is, however, no guarantee that governmental actions, including possible expropriation or additional changes in the law, and the migration of our contract will not impact our involvement in the Illapa JV in an adverse way and such actions could have a material adverse effect on us and our business.

The Company's operations in Bolivia may also be adversely affected by economic uncertainty characteristic of developing countries. In addition, operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, currency remittance, income taxes, expropriation of property, foreign investment, maintenance of claims, environmental legislation, land use, land claims of local people, water use, and safety factors.

Criminal activity and violence are also prevalent in Mexico and has, over time, been increasing. Conflicts between the drug cartels and violent confrontations with authorities are not uncommon. Other criminal activity, such as kidnapping and extortion, is also an ongoing concern. Many incidents of crime and violence go unreported and efforts by police and other authorities to reduce criminal activity are challenged by a lack of resources, corruption and the pervasiveness of organized crime. Incidents of criminal activity could occur and might affect our employees and our contractors and their families, as well as the communities in the vicinity of our operations. Such incidents may prevent access to our mines or offices; halt or delay our operations and production; could result in harm to employees, contractors, visitors or community members; increase employee absenteeism; create or increase tension in nearby communities; or otherwise adversely affect our ability to conduct business. We can provide no assurance that possible security incidents will not have a material adverse effect on our future operations.

Local opposition to mine development projects could arise in Mexico, and such opposition could be violent. If the Company were to experience resistance or unrest in connection with its Mexican operations, it could have a material adverse effect on its operations and profitability. To the extent the Company acquires mineral properties in jurisdictions other than Mexico, it may be subject to similar and additional risks with respect to its operations in those jurisdictions.

Mexico is currently subject to political instability, changes and uncertainties, which may cause changes to existing governmental regulations affecting mineral exploration and mining activities. Mexico's status as a developing country may make it more difficult for the Company to obtain any required financing for its projects. Any changes in governmental laws, regulations, economic conditions or shifts in political attitudes or stability in Mexico are beyond the control of the Company and may adversely affect the Company's business.

**Illegal, artisanal and Small-Scale Mining**

Illegal artisanal and small-scale miners ("**ASMs**") are present in Bolivia and have operated on the Company's Bolivian properties.

Illegal ASMs activities may occur and may present significant risks to the Company's operations, including the potential for disruptions, property damage, environmental degradation, and personal injuries, for which the Company could be held responsible. Illegal ASMs can also lead to road blockages, delays, and disputes over access to and development of the Company's mining projects, and such actions may limit the Company's ability to carry out certain activities at its Bolivian properties.

In general, artisanal scale miners may be associated with a number of negative impacts which could present risk to humans and property, including environmental degradation, human rights abuse, personal injury or death, security concerns, destruction of property and funding of conflict. The presence of artisanal scale miners can, on rare occasions, also lead to disputes and delays related to project development or operation of commercial mineral deposits, and potentially lost mineral production as a result of delays or theft.

Notwithstanding the Company's efforts to eliminate illegal ASMs activities in its Bolivian operations, the Company also recognizes the importance of legal ASM Cooperatives ("**CoOps**") that do not encroach on its mineral rights and is establishing a framework to coexist with these non-encroaching CoOps. These non-encroaching CoOps are important to the region's economic and political landscape and the Company is committed to ensuring the shared benefits from a proposed modern mining operation, including access to milling capacity, technology, infrastructure, and capital, are realized. However, there can be no assurance that these measures will be effective in preventing future encroachment, illegal mining activities or conflict.

**Mineral Resource and Mineral Reserve Estimates and Revisions**

Mineral Resources and Mineral Reserves are estimated and revision or restatement of Mineral Resources and Mineral Reserves could have a material adverse effect on our profitability, results of operations and financial condition.

There is a degree of uncertainty attributable to the estimation of Mineral Resources (within the meaning of NI 43-101), Mineral Reserves (within the meaning of NI 43-101) and expected mineral grades. The Mineral Resource and Mineral Reserve estimates included or incorporated by reference herein have been determined and valued based on assumed or estimated future prices, cut-off grades and operating costs.

However, until mineral deposits are actually mined and processed, Mineral Resources and Mineral Reserves must be considered as estimates only. Any such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices.

Mineral Resources and Mineral Reserves may require revision based on actual production experience. Market fluctuations in the price of metals, as well as increased production costs, results of metallurgical testing and reduced recovery rates, may render certain Mineral Reserves uneconomic and may ultimately result in a restatement of Mineral Resources and/or Mineral Reserves. Short-term operating factors relating to the Mineral Resources and Mineral Reserves, such as the need for sequential development of ore bodies, may adversely affect our profitability in any accounting period. Estimates of operating costs are based on assumptions including those relating to inflation and currency exchange, which may prove incorrect. Estimates of mineralization can be imprecise and depend upon geometallurgical assumptions, geological interpretation and statistical inferences drawn from drilling and sampling analysis, which may prove to be unreliable. In addition, the grade and/or quantity of precious metals ultimately recovered may differ from that indicated by drilling results. There can be no assurance that precious metals recovered in small scale tests will be duplicated in large scale tests under onsite conditions or at production scale. Amendments to mine plans and production profiles may be required as the amount of Mineral Resources changes or upon receipt of further information during the implementation phase of the particular project. Extended declines in market prices for silver, zinc, lead and other minerals may render portions of our mineralization uneconomic and result in reduced reported mineralization. Any material reduction in estimates of mineralization, or in our ability to develop its properties and extract and sell such minerals, could have a material adverse effect on our business, financial condition or results of operations.

**Failure to Achieve Production, Cost and Other Estimates**

Our failure to achieve production, cost and other estimates could have a material adverse effect on our future cash flows, profitability, results of operations and financial condition.

Our public disclosure contains guidance and estimates of future production, operating costs, capital costs and other economic and financial measures with respect to our existing mines and certain of our exploration and development stage projects. The estimates can change, or we may be unable to achieve them. Actual production, costs, returns and other economic and financial performance may vary from the estimates depending on a variety of factors, many of which are not within our control. These factors include, but are not limited to: actual ore mined varying from estimates of grade, tonnage, dilution, and metallurgical and other characteristics; short-term operating factors such as the need for sequential development of ore bodies and the processing of new or different ore grades from those planned; mine failures, slope failures or equipment failures; accidents; natural phenomena such as inclement weather conditions, floods, droughts, rock slides and earthquakes; encountering unusual or unexpected geological conditions; regional epidemic or pandemic of disease; changes in power costs and potential power shortages; exchange rate and commodity price fluctuations; price changes or shortages of principal supplies needed for operations, including construction materials, explosives, fuels, water and equipment parts; labour shortages or strikes; litigation; regional or national instability, imposition of sanctions, insurrection, war or acts of terrorism or violent crime; suspensions or closures imposed by governmental authorities; civil disobedience and protests; failure to comply with applicable regulations, or new restrictions or regulations, imposed by governmental or regulatory authorities; permitting or licensing issues; difficulties in resettlement processes, when required; claims by landowners; overlapping with other activities declared as activities for the public benefit; issues arising from the presence of illegal miners; obstacles and requisites imposed by local financial entities; shipping interruptions or delays; or other risks described herein. The failure to achieve production, cost and other estimates could have a material adverse effect on our future cash flows, profitability, results of operations and financial condition.

**Inaccurate Assumptions Regarding Capital, Operating Costs, Production Schedules and Economic Returns**

Our expected capital and operating costs, production schedules and estimates, anticipated economic returns and other projections, estimates and forecasts for its mineral properties that are included or incorporated by reference herein or included in any technical reports, scoping studies, pre-feasibility studies and feasibility studies prepared for or by us are based on assumed or estimated future metals prices, cut-off grades, operating costs, capital costs, metallurgical recoveries, that the actual ore mined is amenable to mining or treatment, environmental considerations, labour volumes, permitting and other factors, any of which may prove to be inaccurate. As a result, technical reports, scoping studies, pre-feasibility studies and feasibility studies prepared for or by us may prove to be unreliable.

Our capital and operating costs are affected by the cost and availability of commodities and goods such as steel, cement, explosives, fuel, electrical power and supplies, including reagents. Significant declines in market prices for silver, zinc, lead and other minerals could have an adverse effect on our economic projections. Management assumes that the materials and supplies required for operations will be available for purchase and that we will have access to the required amount of sufficiently skilled labour. As we rely upon certain third-party suppliers and contractors, these factors can be outside of our control and an increase in the costs of, or a lack of availability of, commodities, goods and labour may have an adverse impact on our financial condition and results of operations.

We may experience difficulty in obtaining the necessary permits for our exploration, development or operational activities, if such permits are obtained at all, and may face penalties as a result of violations of permits or other environmental laws, which may cause delays and increases to projected budgets. Any of these discrepancies from our expected capital and operating costs, production schedules and economic returns could cause a material adverse effect on our business, financial condition or results of operations.

We have in the past, and may in the future, provide estimates and projections of our future production, costs and financial results. Any such information is forward looking. Neither our auditors nor any other independent expert or outside party compiles or examines these forward-looking statements. Accordingly, no such person expresses any opinion or any other form of assurance with respect thereto. Such estimates are made by our management and technical personnel and are qualified by, and subject to the assumptions, contained or referred to in the filing, release or presentation in which they are made, including assumptions about the availability, accessibility, sufficiency and quality of mineralized material, our costs of production, the market prices of silver, zinc, lead and other minerals, our ability to sustain and increase production levels, the sufficiency of our infrastructure, the performance of our personnel and equipment, our ability to maintain and obtain mining interests and permits, the state of governments and community relations, and our compliance with existing and future laws and regulations. Actual results and experience may differ materially from these assumptions. Failure to achieve estimates or material increases to costs could have a material adverse impact on our future cashflows, profitability, results of operations and financial condition. Any such production, cost, or financial results estimates speak only as of the date on which they are made, and we disclaim any intent or obligation to update such estimates, whether as a result of new information, future events or otherwise. Accordingly, such forward-looking statements should be considered in the context in which they are made and undue reliance should not be placed on them.

**Remote Locations**

Certain of our operations are located in remote areas and are affected by severe weather events and climate issues, resulting in technical challenges for conducting both geological exploration and mining operations. Although we benefit from modern mining technology, we may sometimes be unable to overcome problems related to weather and climate, either expeditiously or at a commercially reasonable cost, which could have a material adverse effect on our business, results of operations and financial condition.

**Speculative Nature of Mineral Exploration and Development**

The long-term operation of our business and its profitability is dependent, in part, on the cost and success of our exploration and development programs. Mineral exploration and development is highly speculative and involves significant risks. Few properties that are explored are ultimately developed into producing mines. There is no assurance that our mineral exploration and development programs will result in discoveries of economic quantities of mineralization that are necessary for a property to be brought into commercial production. The commercial viability of a mineral deposit, once discovered, is also dependent upon a number of factors, including, among other things: (i) the particular attributes of the deposit, such as size, grade, and metallurgy; (ii) interpretation of geological data; (iii) feasibility studies; (iv) proximity to infrastructure and availability of labour, power, and water; (v) metal prices; (vi) foreign currency exchange rates; and (vii) government regulations, including regulations relating to development, taxation, royalties, import and export, and environmental protection.

The actual operating results of our projects may differ materially from those we had anticipated due to these and other factors, many of which are beyond our control. There can be no assurance that our acquisition, exploration, and development programs will yield new mineral reserves to replace or expand current mineral reserves, or that they will result in additional production. Unsuccessful exploration or development programs could have a material adverse effect on our operations and profitability.

**Price and Availability of Infrastructure and Energy**

Mining, processing, development and exploration activities depend on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important determinants which affect capital and operating costs. Our inability to secure adequate water and power resources as well as other events outside of our control, such as unusual or infrequent weather phenomena, sabotage, terrorism, community or government or other interference in the maintenance or provision of such infrastructure, or failure to maintain or extend such infrastructure, could adversely affect our operations, financial condition and results of operations.

Profitability is affected by the market prices and availability of commodities that we use or consume for our operations and development projects. Prices for commodities like heavy fuel oil, diesel fuel, electricity, steel, concrete, and chemicals (including cyanide) can be volatile, and in certain circumstances may be fixed by governments, and changes can be material, occur over short periods of time and be affected by factors beyond our control, including war or civil unrest. Our operations use a significant amount of energy and depend on suppliers to meet those needs. Higher costs for such required commodities and construction materials, including as a result of increased taxes on such commodities or construction materials or tighter supplies thereof, can affect the timing and cost of our development projects, and we may decide that it is not economically feasible to continue some or all of our commercial production and development activities, which could have an adverse effect on our profitability.

Higher worldwide demand for critical resources like input commodities, equipment, and skilled labour could affect our ability to acquire them and lead to delays in delivery and unanticipated cost increases, which in turn could have an effect on our operating costs, capital expenditures and production schedules.

**Supply Chain Disruptions**

Our ability to mine, process and sell products is critical to our operations. Our operations depend on the continued availability and delivery of supplies of consumables and capital items to operate efficiently. In addition to consumables, continuous supplies of energy, water, equipment and spare parts, and labour are critical to our operations, the costs of which are subject to worldwide supply and demand as well as other factors beyond our control. Supply chain disruptions; power outages; labour disputes and/or strikes; geopolitical activity, health emergencies in the regions where we operate; weather events and natural disasters could seriously harm our operations as well as the operations of our customers and suppliers. Further, our suppliers may experience capacity limitations in their own operations or may elect to reduce or eliminate certain product lines, all of which is beyond our control but could have a material adverse effect on our operations and revenue.

**Forced or Child Labour in Supply Chains**

The introduction of new supply chain due diligence and reporting requirements could expose the Company to certain risks.

In May 2023 the *Fighting Against Forced Labour and Child Labour in Supply Chains Act* was passed and came into force on January 1, 2024. Pursuant to the new legislation, any company that is subject to the reporting requirements, including the Company, is required to file an annual report with respect to its supply chains. Due to the fact that the reporting requirements are new and the industry standard is still being determined, the Company will be at risk of inadvertently preparing a report that is insufficient. Further, in late 2024 the federal government signaled its intention to create a new and more onerous supply chain due diligence regime overseen by a new oversight agency, whereby reporting entities would be required to scrutinize their international supply chains for human rights risks and take action to resolve any such risks. While the Company is currently unaware of any forced or child labour in any of its supply chains, the increased scrutiny on the supply chains of Canadian companies could uncover the risk or existence of forced or child labour in a supply chain to which the Company has a connection, which could negatively impact the reputation of the Company.

Santacruz is committed to respecting and guaranteeing the dignity and human rights of its employees, contractors, and the communities where it operates. It promotes a fair, safe, and inclusive work environment in compliance with current labor laws, prohibiting discrimination and harassment. The Company upholds workers' rights to freedom of association and collective bargaining while actively combating child labor, forced labor, and human trafficking in its supply chain. Additionally, it ensures fair hiring and remuneration practices, recognizes the rights of communities to maintain their culture and traditions, and applies the Voluntary Principles on Security and Human Rights by training its security personnel to reject violence.

**Nature of Mineral Exploration and Mining**

The Company's future is dependent on its exploration and development programs. The exploration and development of mineral deposits involves significant financial risks over a prolonged period of time, which may not be eliminated even through a combination of careful evaluation, experience and knowledge. Few properties that are explored are ultimately developed into economically viable operating mines. Major expenditures on the Company's exploration properties may be required to construct mining and processing facilities at a site, and it is possible that even preliminary due diligence will show adverse results, leading to the abandonment of projects. It is impossible to ensure that preliminary or full feasibility studies on the Company's projects, or the current or proposed exploration programs on any of the properties in which the Company has exploration rights, will result in any profitable commercial mining operations. The Company cannot give any assurance that its current and future exploration activities will result in a discovery of mineral deposits containing mineral reserves.

Estimates of mineral resources and any potential determination as to whether a mineral deposit will be commercially viable can also be affected by such factors as: the particular attributes of the deposit, such as its size and grade; unusual or unexpected geological formations and metallurgy; proximity to infrastructure; financing costs; precious metal prices, which are highly volatile; and governmental regulations, including those relating to prices, taxes, royalties, infrastructure, land use, importing and exporting of metal concentrates, exchange controls and environmental protection. The effect of these factors cannot be accurately predicted, but the combination of any or all of these factors may result in the Company not receiving an adequate return on its invested capital or suffering material adverse effects to its business and financial condition. Exploration and development projects also face significant operational risks including but not limited to an inability to obtain access rights to properties, accidents, equipment breakdowns, labour disputes (including work stoppages and strikes), and other unanticipated interruptions.

**Safety, Health, and Environmental Regulations**

Safety, health and environmental legislation affects nearly all aspects of the Company's operations, including exploration, mine development, working conditions, waste disposal, emission controls and protection of endangered and protected species. Compliance with safety, health and environmental legislation can require significant expenditures and failure to comply with such safety, health and environmental legislation may result in the imposition of fines and penalties, the temporary or permanent suspension of operations, clean-up costs resulting from contaminated properties, damages and the loss of important permits. Exposure to these liabilities arises not only from the Company's existing operations, but from operations that have been closed. The Company could also be held liable for worker exposure to contagious disease or hazardous substances and for accidents causing injury or death. There can be no assurances that the Company will comply with all safety, health and environmental regulations at all times, or that steps to achieve compliance would not materially adversely affect the Company's business.

Safety, health and environmental laws and regulations are evolving in all jurisdictions where the Company has activities. The Company is not able to determine the specific impact that future changes in safety, health and environmental laws and regulations may have on its operations and activities, and its resulting financial position; however, the Company anticipates that capital expenditures and operating expenses will increase in the future as a result of the implementation of new and increasingly stringent safety, health and environmental regulations. For example, emissions standards are poised to become increasingly stringent. Other examples include the recent imposition of carbon taxes. Further changes in safety, health and environmental laws, new information on existing safety, health and environmental conditions or other events, including legal proceedings based upon such conditions or an inability to obtain necessary permits, may require increased financial reserves or compliance expenditures or otherwise have a material adverse effect on the Company. Environmental and regulatory review can be a long and complex process that may delay the opening, modification or expansion of a mine, extend decommissioning at a closed mine, or restrict areas where exploration activities may take place.

**Management**

The success of the Company is currently largely dependent on the performance of its executive management team. There is no assurance the Company can retain or maintain the services of its management or other qualified personnel required to operate its business. Failure to do so could have a material adverse effect on the Company, its business, and its prospects.

**Ability to Implement Business Strategy**

There can be no assurance that Santacruz's management team will be successful in implementing its strategy (including as set out in this Annual Information Form) or that past results will be reproduced going forward. The management team may experience difficulties in effecting key strategic goals such as the growth, development and investment in the Material Santacruz Properties or the successful exploration and development of exploration projects more generally. The performance of Santacruz's operations could be adversely affected if the Company's management team cannot implement the stated business strategy effectively.

**Key Personnel**

Santacruz's success depends significantly on the continued individual and collective contributions of its senior, regional and local management teams. The loss of the services of members of these management teams or the inability to hire and retain experienced replacement management personnel could have a material adverse effect on Santacruz's business, results of operations and financial condition. In addition, to implement and manage Santacruz's business and operating strategies effectively, the Company must maintain a high level of efficiency and performance, continue to enhance its operational and management systems and continue to successfully attract, train, motivate and manage its employees. If the Company is not successful in these initiatives it may have a material adverse effect on its business, results of operations and financial condition. Any departures of key personnel could also be viewed in a negative light by investors and research analysts, which could cause the price of Santacruz's Common Shares to decline, and could cause difficulty raising capital for continued operations, including exploration and development.

**Mining Risks and Insurance**

The business of mining is generally subject to numerous risks and hazards, including environmental hazards, industrial accidents, contagious disease hazards, labour disputes, encountering unusual or unexpected geologic formations, cave-ins, flooding and periodic interruptions due to inclement or hazardous weather conditions at its existing locations in Bolivia. Such risks could result in damage to, or destruction of, mineral properties or producing facilities, personal injury, environmental damage, delays in mining, monetary losses and possible legal liability. The Company's insurance will not cover all the potential risks associated with its operations. In addition, although certain risks are insurable, the Company may be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance against environmental risks (including potential for pollution or other hazards as a result of disposal of waste products occurring from exploration and production) is not generally available to the Company or to other companies within the industry on acceptable terms.

The Company carries insurance to protect against certain risks in such amounts as it considers adequate. Risks not insured against include, without limitation, environmental pollution, mine flooding or other hazards against which such companies cannot insure or against which they may elect not to insure. Losses from uninsured events may cause the Company to incur significant costs.

The activities of the Company are subject to a number of challenges over which the Company has little or no control, but that may delay production and negatively impact the Company's financial results, including: increases in energy, fuel and/or other production costs; higher insurance premiums; industrial accidents; labour disputes; shortages of skilled labour; contractor availability; unusual or unexpected geological or operating conditions; slope failures; cave-ins of underground workings; and failure of pit walls or dams. If the Company's total production costs per ounce of silver or zinc rise above the market price of silver or zinc and remain so for any sustained period, the Company may experience losses and may curtail or suspend some or all of its exploration, development and mining activities.

**Development Risks**

Future development of the Company's business may not yield expected returns and may strain management resources. Development of the Company's revenue streams is subject to a number of risks, including construction delays, cost overruns, financing risks, cancellation of key service contracts and changes in government regulations. Overall costs may significantly exceed the costs that were estimated when the project was originally undertaken, which could result in reduced returns, or even losses, from such investments. Significant fluctuation in prevailing prices for silver, zinc, lead and other minerals, which may affect the profitability of projects.

**Competition for New Properties**

The mining industry is intensely and increasingly competitive in all its phases, and the Company may have to compete with other companies that have greater financial and technical resources. Competition in the metals mining industry is primarily for mineral rich properties which can be developed and produced economically, and businesses compete for the technical expertise to find, develop, and produce such properties, the skilled labor to operate the properties and the capital for the purpose of financing development of such properties. Such competition could adversely affect the Company's ability to acquire suitable producing properties or prospects for mineral exploration, recruit or retain qualified employees or acquire the capital necessary to fund its operations and develop its properties.

**Dependence on Skilled Labour**

The ability of the Company to compete and grow will be dependent on it having access, at a reasonable cost and in a timely manner, to skilled labour, consultants, management, equipment, parts and components. No assurances can be given that the Company will be successful in maintaining its required supply of skilled labour, consultants, management, equipment, parts and components. The failure to do so could have a material adverse effect on the financial results of the Company.

**Reputational Damage to the Company**

Damage to the Company's reputation can be the result of the actual or perceived occurrence of any number of events, and could include any negative publicity, whether true or not. The increased usage of online media as well as other web-based tools used to generate, publish, and discuss user-generated content and to connect with other users has made it increasingly easier for individuals and groups to communicate and share opinions and views of the Company and its activities, whether true or not. Although the Company believes that it operates in a manner that is respectful to all stakeholders and that it takes care in protecting its image and reputation, the Company does not ultimately have direct control over how it is perceived by others. Reputation loss may result in decreased investor confidence, increased challenges in developing and maintaining community relations, and an impediment to the Company's overall ability to advance its projects, thereby having a material adverse impact on financial performance, financial condition, cash flows, and growth prospects.

**Uninsured or Uninsurable Risk**

The Company may be subject to liability for risks against which it cannot insure or against which the Company may elect not to insure due to the high cost of insurance premiums or other factors. The payment of any such liabilities would reduce the funds available for the Company's normal business activities. Payment of liabilities for which the Company does not carry insurance may have a material adverse effect on the Company's financial position and operations. Risks not insured against include, without limitation, environmental pollution, mine flooding or other hazards against which such companies cannot insure or against which they may elect not to insure. Losses from uninsured events may cause the Company to incur significant costs.

**Government Regulations**

The mineral exploration and development activities of the Company are subject to various laws governing prospecting, development, production, taxes, labour standards and occupational health, mine safety, toxic substances, land use, water use, land claims of local people and other matters in local areas of operation. Although the Company's production, exploration and development activities are currently carried out in accordance with all applicable rules and regulations, no assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could limit or curtail exploration, development or production. Amendments to current laws and regulations governing the Company's operations, or more stringent implementation thereof, could have an adverse impact on the Company's business and financial condition.

The Company's operations may be subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation provides for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain mining operations, such as seepage from tailings disposal areas, which would result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties. In addition, certain types of operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner that means standards are stricter, and enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and their directors, officers and employees. The cost of compliance with changes in governmental regulations has the potential to reduce the profitability of the Company's future operations.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities that could cause operations to cease or be curtailed. Other enforcement actions may include corrective measures requiring capital expenditures, the installation of additional equipment or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of such mining activities and may have civil or criminal fines or penalties imposed upon them for violations of applicable laws or regulations.

**Permitting**

Certain operations of the Company may require licenses and permits from various governmental authorities. The Company will use its best efforts to obtain all necessary licenses and permits to carry on the activities which it intends to conduct, and it intends to comply in all material respects with the terms of such licenses and permits. However, there can be no guarantee that the Company will be able to obtain and maintain, at all times, all necessary licenses and permits required to undertake its proposed exploration and development, or to place its properties into commercial production and to operate mining facilities thereon. In the event of commercial production, the cost of compliance with changes in governmental regulations has the potential to reduce the profitability of operations or preclude the economic development of the Company's properties.

With respect to environmental permitting, the development, construction, exploitation and operation of mines at the Company's projects may require the granting of environmental licenses and other environmental permits or concessions by the competent environmental authorities. Required environmental permits, licenses or concessions may take time and/or be difficult to obtain and may not be issued on the terms required by the Company. Operating without the required environmental permits may result in the imposition of fines or penalties as well as criminal charges against the Company for violations of applicable laws or regulations.

**Regulatory Risks**

Successful execution of the Company's business is contingent, in part, upon compliance with regulatory requirements enacted by governmental authorities and obtaining all regulatory approvals, where necessary, for the operation of its business.

The Company will incur ongoing costs and obligations related to regulatory compliance. Failure to comply with regulations may result in additional costs for corrective measures, penalties, or in restrictions on the Company's operations. In addition, changes in regulations, more vigorous enforcement thereof, or other unanticipated events could require extensive changes to the Company's operations, increased compliance costs, or give rise to material liabilities, which could have a material adverse effect on the business, financial condition, and operating results of the Company.

**Regulatory or Agency Proceedings, Investigations, and Audits**

The Company's business requires compliance with many laws and regulations. Failure to comply with these laws and regulations could subject the Company to regulatory or agency proceedings or investigations and could also lead to damage awards, fines and penalties. Santacruz may become involved in a number of government or agency proceedings, investigations, and audits. The outcome of any regulatory or agency proceedings, investigations, audits, and other contingencies could harm the Company's reputation, require the Company to take, or refrain from taking, actions that could harm its operations or require Santacruz to pay substantial amounts of money, harming its financial condition. There can be no assurance that any pending or future regulatory or agency proceedings, investigations, and audits will not result in substantial costs or a diversion of management's attention and resources or have a material adverse impact on the Company's business, financial condition, and results of operation.

**Price Volatility of Publicly Traded Securities**

In recent years, the securities markets in Canada and the United States have experienced a high level of price and volume volatility and the market prices of securities of many companies have experienced wide fluctuations in price which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. There can be no assurance that continual fluctuations in price or volume will not occur. It may be anticipated that any quoted market for the Common Shares of the Company will be subject to market trends generally, notwithstanding any potential success or challenges of the Company in creating revenues, cash flows or earnings.

**Economic Conditions for Mining**

The market price for precious metal commodities is historically volatile. During periods of decreased precious metal prices, the mining and minerals sectors in general are affected negatively and may impact the Company's market capitalization. Any sudden or rapid destabilization of global economic conditions may impact the Company's ability to obtain equity or debt financing in the future on terms favorable to the Company or at all. In such an event, the Company's operations and financial condition may be adversely affected.

**Market Risk for Securities**

The market price for the Common Shares could be subject to wide fluctuations. Factors such as commodity prices, government regulation, interest rates, share price movements of peer companies, and competitors, as well as overall market movements, may have a significant impact on the market price of the Company. The stock market has from time-to-time experienced extreme price and volume fluctuations, which have often been unrelated to the operating performance of particular companies.

**Securities or Industry Research and Reports**

The trading market for the Common Shares could be influenced by the research and reports that industry or securities analysts publish about the Company. If one or more of these analysts cease coverage or fail to regularly publish reports, the Company could lose visibility in the financial markets, which in turn could cause the trading price or volume of its Common Shares to decline. Moreover, if one or more of the analysts downgrade the Company or its Common Shares or if the Company's operating results do not meet their expectations, the trading price of the Common Shares could decline.

**Litigation**

The Company may become party to, litigation from time to time in the ordinary course of business which could adversely affect its business. Should any litigation in which the Company is, or becomes involved be determined against the Company, such a decision could adversely affect the Company's ability to continue operating, could negatively impact the value of the Common Shares, and could use significant resources. Even if Santacruz is involved in litigation and wins, litigation can redirect significant Company resources, including the time and attention of management and available working capital. Litigation may also create a negative perception of the Company's brand.

**Potential Conflicts of Interest**

Certain of the directors and officers of the Company also serve as directors and/or officers of other companies involved in the industries in which the Company operates, and consequently there exists the possibility for such directors and officers to be in a position of conflict. Any decision made by any of such directors and officers will be made in accordance with their duties and obligations to deal fairly and in good faith with a view to the best interests of the Company. Conflicts of interest, if any, will be subject to the procedures and remedies provided under applicable laws and the internal policies and procedures of the Company.

**Legal and Accounting Requirements**

As a publicly listed company, the Company is subject to numerous legal and accounting requirements that do not apply to private companies. The cost of compliance with many of these requirements is material. Failure to comply with these requirements can have numerous adverse consequences including, but not limited to, the Company's inability to file required periodic reports on a timely basis, loss of market confidence, delisting of its securities and/or governmental or private actions against the Company. There can be no assurance that the Company will be able to comply with all of these requirements or that the cost of such compliance will not prove to be a substantial competitive disadvantage vis-à-vis privately held and larger public competitors.

**Accounting Policies and Internal Controls**

The Company prepares its financial reports in accordance with IFRS<sup>®</sup> Accounting Standards. In preparation of its financial reports, management may need to rely upon assumptions, make estimates or use their best judgment in determining the financial condition of the Company. Significant accounting policies are described in more detail in the Company's audited financial statements. In order to have a reasonable level of assurance that financial transactions are properly authorized, assets are safeguarded against unauthorized or improper use, and transactions are properly recorded and reported, the Company has implemented and continues to analyze its internal control systems for financial reporting, as further explained in its audited financial statements. In addition, the U.S. Sarbanes-Oxley Act 2002, as amended (the "U.S. Sarbanes-Oxley Act"), requires that we maintain effective disclosure controls and procedures and internal control over financial reporting. Pursuant to Section 404 of the U.S. Sarbanes-Oxley Act ("Section 404"), we will be required to furnish a report by our management on our internal control over financial reporting ("ICFR"), which, if or when we are no longer an emerging growth company, must be accompanied by an attestation report on ICFR issued by our independent registered public accounting firm.

Although the Company believes its financial reporting and financial statements are prepared with reasonable safeguards to ensure reliability, the Company cannot provide absolute assurance in this regard. If the Company fails to maintain an effective system of internal controls, the Company may not be able to report its financial results accurately or prevent fraud; and in that case, shareholders and investors could lose confidence in the Company's financial reporting, which would harm the Company's business and could negatively impact the price of the Common Shares. In addition, if the Company suffers any future material weaknesses in its internal controls and procedures or fails to maintain the adequacy of its internal controls and procedures, the Company could be the subject of regulatory scrutiny, penalties or litigation, all of which could harm the Company's business and negatively impact the price of the Common Shares.

**Risks Related to Dilution**

The Company may issue additional Common Shares in the future, which may dilute a Shareholder's holdings in the Company. The Company's constating documents permit the issuance of an unlimited number of Common Shares, and Shareholders will have no pre-emptive rights in connection with such further issuance. The directors of the Company have discretion to determine the price and the terms of issue of further issuances. Moreover, additional Common Shares will be issued by the Company in connection with securities granted under the Omnibus Incentive Plan, and upon the exercise of any outstanding common share purchase warrants that may be issued in the future.

**Fraudulent or Illegal Activity by Employees, Contractors, and Consultants**

The Company is exposed to the risk that its employees, independent contractors, and consultants may engage in fraudulent or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to the Company that violates: (i) government regulations; (ii) manufacturing standards; (iii) federal and provincial fraud and abuse laws and regulations; (iv) environmental or health and safety laws, regulations or standards, or (v) laws that require the true, complete, and accurate reporting of financial information or data. It is not always possible for the Company to identify and deter misconduct by its employees and other third parties, and the precautions taken by the Company to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting the Company from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against Santacruz, and it is not successful in defending itself or asserting its rights, those actions could have a significant impact on Santacruz's business, including the imposition of civil, criminal, and administrative penalties, damages, monetary fines, contractual damages, reputational harm, diminished profits, and future earnings, and curtailment of the Company's operations, any of which could have a material adverse effect on the Company's business, financial condition, and results of operations.

**Information Technology Systems and Security Threats**

The Company's operations will depend, in part, on how well it and its suppliers and service providers protect networks, equipment, IT systems, and software against damage from a number of threats, including, but not limited to, cable cuts, damage to physical plants, natural disasters, intentional damage, destruction, fire, power loss, hacking, computer viruses, vandalism, and theft. The Company's operations will also depend on the timely maintenance, upgrades, and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures. Any of these and other events could result in information system failures, delays, and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Company's reputation and results of operations.

There can be no assurance that the Company will not incur such losses in the future. The Company's risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. As a result, cyber security and the continued development and enhancement of controls, processes, and practices designed to protect systems, computers, software, data, and networks from attack, damage, or unauthorized access is a priority. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.

**Financing Risk**

Future exploration, development, mining, and processing of minerals from the Company's properties, or repayment of current or future indebtedness, could require substantial additional financing. No assurances can be given that the Company will be able to raise the additional funding that may be required for such activities, or repayment of indebtedness, should such funding not be fully generated from operations. To meet such funding requirements, we may be required to undertake additional equity financing, which would be dilutive to Shareholders. There is no assurance that such equity or debt financing will be available to the Company or that they would be obtained on terms favourable to us, if at all, which may adversely affect the Company's business and financial position. Failure to obtain sufficient financing may result in delaying or indefinite postponement of exploration, development, or production on any or all of our properties, or even a loss of property interests.

**Tax**

No assurance can be given that the Company's tax positions will not be successfully challenged by tax authorities, new taxation rules will not be enacted, existing rules (including the flow-through share tax incentive program) will not be changed, or existing rules will not be applied in a manner which could result in the Company being subject to additional taxation or liability, or which could otherwise have a material adverse effect on the Company's results from operations and financial condition.

**Natural Disasters, Terrorist Acts, Civil Unrest, and Other Disruptions**

Upon the occurrence of a natural disaster, or upon an incident of war, riot or civil unrest, the impacted country, province, or region may not efficiently and quickly recover from such event, which could have a material adverse effect on the Company, its customers, and/or either of their businesses or operations. Terrorist attacks, public health crises, domestic and global trade disruptions, infrastructure disruptions, civil disobedience or unrest, natural disasters, national emergencies, acts of war, technological attacks and related events can result in volatility and disruption to local and global supply chains, operations, mobility of people and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company, its customers, and/or either of their businesses or operations, which may have a material adverse effect on the Santacruz's reputation, business, financial conditions or operating results.

**Community Relations and Social License to Operate**

Mining companies are increasingly required to operate in a sustainable manner and to provide benefits to affected communities and there are risks associated with the Company failing to acquire and subsequently maintain a "social license" to operate on its mineral properties. "Social license" does not refer to a specific permit or license, but rather is a broad term used to describe community acceptance of a company's plans and activities related to exploration, development or operations on its mineral projects.

The Company places a high priority on, and dedicates considerable efforts and resources toward, its community relationships and responsibilities. Despite its best efforts, there are factors that may affect the Company's efforts to establish and maintain social license at any of its projects, including national or local changes in sentiment toward mining, evolving social concerns, changing economic conditions and challenges, and the influence of third-party opposition toward mining on local support. There can be no guarantee that social license can be earned by the Company or if established, that social license can be maintained in the long term, and without strong community support the ability to secure necessary permits, obtain project financing, and/or move a project into development or operation may be compromised or precluded. Delays in projects attributable to a lack of community support or other community-related disruptions or delays can translate directly into a decrease in the value of a project or into an inability to bring the Company's projects to, or maintain, production. The cost of measures and other issues relating to the sustainable development of mining operations may result in additional operating costs, higher capital expenditures, reputational damage, active community opposition (possibly resulting in delays, disruptions and stoppages), legal suits, regulatory intervention and investor withdrawal.

**United States investors may not be able to obtain enforcement of civil liabilities against us.**

The enforcement by investors of civil liabilities under the United States federal or state securities laws may be affected adversely by the fact that we are governed by the BCBCA, that the majority of our officers and certain of our directors are residents of Canada or otherwise reside outside the United States, and that all, or a substantial portion of their assets are located outside the United States. It may not be possible for investors to effect service of process within the United States on certain of our directors and officers or enforce judgments obtained in the United States courts against certain of our directors and officers based upon the civil liability provisions of United States federal securities laws or the securities laws of any state of the United States.

There is some doubt as to whether a judgment of a United States court based solely upon the civil liability provisions of United States federal or state securities laws would be enforceable in Canada against our directors and officers. There is also doubt as to whether an original action could be brought in Canada against us or our directors and officers to enforce liabilities based solely upon United States federal or state securities laws.

**As a foreign private issuer, we are subject to different U.S. securities laws and rules than a domestic U.S. issuer, which may limit the information publicly available to our U.S. shareholders.**

We are a foreign private issuer under applicable U.S. federal securities laws and, therefore, we are not required to comply with all the periodic disclosure and current reporting requirements of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), and related rules and regulations, as U.S. domestic issuers. As a result, we do not file the same reports that a U.S. domestic issuer files with the SEC, although we are required to file with or furnish to the SEC the continuous disclosure documents that we are required to file in Canada under Canadian securities laws. In addition, as a foreign private issuer, we are exempt from the proxy rules under the Exchange Act. As a Canadian issuer, our insiders are also exempt under the Exchange Act Section 16 requirements applicable to insiders of foreign private issuers.

**We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses to us.**

In order to maintain our current status as a foreign private issuer, a majority of our Common Shares must be either directly or indirectly owned by non-residents of the United States unless we also satisfy one of the additional requirements necessary to preserve this status. We may in the future lose our foreign private issuer status if a majority of the Common Shares are held in the United States and we fail to meet the additional requirements necessary to avoid loss of foreign private issuer status. The regulatory and compliance costs to us under U.S. federal securities laws as a U.S. domestic issuer would be significantly more than the costs we incur as a Canadian foreign private issuer eligible to use the multijurisdictional disclosure system. If we are not a foreign private issuer, we would not be eligible to use the multijurisdictional disclosure system or other foreign issuer forms and would be required to file periodic and current reports and registration statements on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer. We would also lose the ability to rely upon exemptions from Nasdaq Stock Market corporate governance requirements that are available to foreign private issuers.

**The Company has increased costs as a result of being a public company both in Canada listed on the TSXV and in the United States listed on the Nasdaq, requiring its management to devote substantial time to United States public company compliance efforts.**

As a public company in the United States, the Company incurs additional legal, accounting, Nasdaq, reporting and other expenses. The additional demands associated with being a U.S. public company may disrupt regular operations of the Company's business by diverting the attention of some of its senior management team away from revenue-producing activities to additional management and administrative oversight, adversely affecting the Company's ability to attract and complete business opportunities and increasing the difficulty in both retaining professionals and managing and growing its business. Any of these effects could harm the Company's business, results of operations and financial condition.

If the Company's efforts to comply with new United States laws, regulations and standards differ from the activities intended by regulatory or governing bodies, such regulatory bodies or third parties may initiate legal proceedings against the Company and its business may be adversely affected. As a public company in the United States, it is more expensive for the Company to obtain director and officer liability insurance, and it will be required to accept reduced coverage or incur substantially higher costs to continue its coverage. These factors could also make it more difficult for the Company to attract and retain qualified directors and officers.

**MINERAL PROJECTS**

**Bolivar Mine**

Certain portions of the following information are derived from and based on the technical report entitled "*NI 43-101 Technical Report, Feasibility Study, Bolivar Mining Operations*" that has an effective date of January 1, 2024, and was prepared by Richard Goodwin, P.Eng., Garth Kirkham, P. Geo., and Tad Crowie, P.Eng. (the "**Bolivar Report**"), and is based on the assumptions, qualifications and procedures set out therein. For a more detailed overview of the Bolivar Mine, please refer to the Bolivar Report, which is available on SEDAR+ at <u>www.sedarplus.ca</u> and on EDGAR at <u>www.sec.gov</u>.

The disclosure in this Annual Information Form relating to the Bolivar Mine is qualified in its entirety by the full text of the Bolivar Report, which is incorporated by reference in this Annual Information Form. Terms not otherwise defined in this section have the respective meanings given to them in the Bolivar Report.

**Introduction**

JDS was commissioned by Santacruz to prepare the Bolivar Report in accordance with NI- 43-101 and Form 43-101F1, collectively referred to as NI 43-101 for the Bolivar Mine (Bolivar) located in the state of Oruro, Bolivia.

The Bolivar Mine has been active for more than 200 years under various operators producing silver, tin, lead and zinc. The current mine complex consists of an underground mine, 1,100 tonne per day (t/d) concentrator plant, maintenance workshop, shaft-winder, tailings storage facility, water treatment plants, supplies warehouse, main office, Hospital, and camp.

The Bolivar Report is the first declaration of resources and reserves, for the Bolivar base metals underground mining operation since its acquisition by Santacruz. The mine is fully operational at the time of the Bolivar Report's preparation. The effective date of both the resource and the reserve is 1 January 2023, which is approximately 18 months before the report date. Production data for the calendar year 2023 has been included in Section 24 of the Bolivar Report under the heading "Other Relevant Data and Information" to show the depletion and typical replenishment of resources and reserves over a calendar year

**Ownership**

On October 11, 2021, Santacruz entered into the Glencore Share Purchase Agreement with Glencore whereby Santacruz agreed to acquire a portfolio of Bolivian silver assets from Glencore, including the following: (a) a 45% interest in the Bolivar Mine and the Porco Mine, held through an unincorporated joint venture between Glencore's wholly-owned subsidiary Contrato de Asociación Sociedad Minera Illapa S.A. (Illapa) and COMIBOL, a Bolivian state-owned entity; (b) a 100% interest in the Sinchi Wayra S.A. (Sinchi Wayra) business, which includes the producing Caballo Blanco mining complex; (c) the Soracaya Project; and (d) the San Lucas Group (the "**Glencore Transaction**").

On March 18, 2022, Santacruz completed this purchase, including Glencore's interest in the Bolivar Mine.

Santacruz thus owns 100% of the two Bolivian operating companies Illapa and Sinchi Wayra, which in turn own 45% of the Bolivar Mine, 45% of the Porco Mine, and 100% of the Caballo Blanco Mining Complex.

Sinchi Wayra is the operating company for all three active mining operations, including the Bolivar Mine.

**Location**

Bolívar Mine is located in the state of Oruro in Bolivia, and the municipality of Antequera. The complex has UTM WGS-84 coordinates of 727293.087E; 7959437.617N at an elevation of 4,014 masl. Paved roads connect Bolivar to Oruro City (75 km) and the concentrate warehouse and rail station at Poopó (22 km).

**History**

Bolivar Mine has been in operation since the early 19th century under various owners producing silver, tin, lead and zinc. After Nationalization in the 1950's tin was produced by the Bolivian State entity (COMIBOL). The current mine configuration was established in 1993. The project produces lead and zinc concentrates from a dedicated on-site process plant. Bolivar Mine is currently owned by the Bolivian government (COMIBOL) with exclusive mining held pursuant to an unincorporated joint venture (the "**Illapa JV**") between private owner operator Contrato de Asociación Sociedad Minera Illapa S.A. (Illapa). Pursuant to the Illapa JV, Illapa holds a 45% interest in the Bolivar Mine, and the Bolivian Government (COMIBOL) which holds a 55% interest in the Bolivar Mine. Illapa is a wholly owned indirect subsidiary of Santacruz.

Recent efforts over the last five years have been focused on improving safety and productivity standards to compare with any modern operation. Mechanization has moved the mine into less selective "bulk" methods with some increase in the flexibility and productivity of the operation.

**Figure 1-1: Project History**

![](ex99-1_004.jpg)

Source: Glencore (2021)

**Geology and Mineralization**

The Bolivar Mine is located in the Cordillera de los Azanaques, forming the western edge of the Cordillera Oriental, which is detached from the Cordillera de los Frailes, belonging to the group of central mountain ranges. Characterized by undulating plateaus, outstanding mountains parallel to the course of the Andes, with elevations that vary between 3,400 and 4,600 masl. The area is part of the polymetallic belt of the altiplano and the Cordillera Occidental.

It is located in Cenozoic rocks of the middle to upper Silurian, constituted almost entirely by marine sediments of variable depth: from infraneritic, neuritic and bathyal environments.

The Bolivar system is a network epigenetic hydrothermal base metal type veins and faults filled mineralization hosted within a variety of lithologies from volcanic tuffs to sedimentary packages. The main mineral assemblages are composed of sphalerite, marmatite, galena, silver-rich galena and silver sulphosalts. The resources are usually based on multiple structures containing several veins. The typical dimensions of these structures ~500 m in length and ~450 m depth profile with mineralization continuing to be open at depth with vein widths of 0.2 m to 4.0 m.

The occurrence of a mineral deposit is related to two primordial aspects: a hot intrusive body generating mineralizing fluids and a pre-mineral geological structure receiving mineralization.

The non-presence of an intrusive body in close proximity to the deposit suggests that its formation is due to the influence of the Chualla Grande Stock and that the stock is the feeder. The result is higher temperature minerals such as coarse cassiterite accompanied by quartz and tourmaline in close proximity, an intermediate or transitional zone which contains Fe-Sn minerals (Buenos Aires, San Francisco, Venus veins) and an external zone where Bolívar is located with Zn-Pb- Ag-Sn minerals.

The polymetallic mineralization in the Bolivar deposit according to the mineragraphic studies concludes that it would have formed in different phases or mineralization events with a clear telescopic deposition:

● An early phase would comprise the mineral association of quartz – pyrite – sphalerite (of the marmatite type);

● Sphalerite (brown) – jamesonite – boulangerite – cassicrite (of the needle tin type) – stannine – galena – franckeite They would correspond to the intermediate phase of mineralization; and

● Finally, the carbonates (siderite) and quartz of the second generation would correspond to the late phase.

The composition and events of the mineralization indicate that the deposit was formed from hydrothermal solutions under intermediate temperature conditions of 250º - 300ºC, and that it classifies as a hydrothermal deposit of the meso- to epithermal type.

**Mineral Processing and Metallurgical Testwork**

The processing plant at the Bolivar Mine has been operating since 1993. The recoveries used in the Bolivar Report are derived from the results of the plant operation over the period of August 2020 to July 2021.

There are two concentrates produced at the Bolivar mill: a lead concentrate and a zinc concentrate. While both concentrates pay for the metal they are named for and silver, the lead concentrate does not pay for zinc contained and the zinc concentrate does not pay for lead contained, so these recoveries are not included when summarizing the total recoveries.

The results from this analysis can be found in Table 1-1.

**Table 1-1: Recovery and Concentrate Grade Estimates**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;<br>**Parameter** | &nbsp;&nbsp;&nbsp;<br>**Unit** | **Concentrates** | **Concentrates** | **Concentrates** | **Concentrates** |
| &nbsp;&nbsp;&nbsp;&nbsp;<br>**Parameter** | &nbsp;&nbsp;&nbsp;<br>**Unit** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Lead Concentrate** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Lead Concentrate** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Zinc Concentrate** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Zinc Concentrate** |
| &nbsp;&nbsp;&nbsp;&nbsp;<br>**Parameter** | &nbsp;&nbsp;&nbsp;<br>**Unit** | **Company Feed** | **Toll Feed** | **Company Feed** | **Toll Feed** |
| &nbsp;&nbsp;Zn Recovery | % | N/A | N/A | 92 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;86.091 + 0.3218\*(Zinc<br> Feed Grade) |
| &nbsp;&nbsp;Pb Recovery | % | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;59.56 +<br> 17.33\*(Lead Feed Grade) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32.15 +<br> 17.69\*(Lead Feed Grade) | N/A | N/A |
| &nbsp;&nbsp;Ag Recovery | % | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;36.133 +<br> 0.0604\*(Silver Feed Grade) | 30 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;57.516 -<br> 0.0662\*(Silver Feed Grade) | 36 |
| &nbsp;&nbsp;**Concentrate Grade** | &nbsp;&nbsp;**Concentrate Grade** | &nbsp;&nbsp;**Concentrate Grade** | &nbsp;&nbsp;**Concentrate Grade** | &nbsp;&nbsp;**Concentrate Grade** | &nbsp;&nbsp;**Concentrate Grade** |
| &nbsp;&nbsp;Zn | &nbsp;&nbsp;% | 12 | 11 | 53 | 44 |
| &nbsp;&nbsp;Pb | &nbsp;&nbsp;% | 32 | 20 | 0.91 | 1.25 |
| &nbsp;&nbsp;Ag | &nbsp;&nbsp;g/t | 5900 | 5500 | 630 | 775 |

---

**Mineral Resource Estimate**

The Bolivar Mine is an "advanced property" and has been in continuous production since 1993. Glencore and subsequently Santacruz Silver has performed exploration and resource expansion drilling of surface and underground drillholes at the Bolivar Mine since 2000 totaling 49,173.5 m. The 145 drillholes and 23,059 underground channels in the database were supplied in electronic format by Santacruz. This included collars, downhole surveys, lithology data and assay data (i.e., Ag g/t, Pb%, Zn%, Fe%, Sn%).

The geological and lithological solid domain models were supplied by Santacruz in both Datamine<sup>TM</sup> and LeapFrog<sup>TM</sup> which are both industry-leading software systems. The QP imported the multiple vein domains into a similar system called MineSight<sup>TM</sup> to verify solids volumes and ensure matching of the solids domains against the drillhole and sample database. Results confirmed location and extent of volumes are appropriate to resource estimation purposes.

Resource block models were supplied in Datamine<sup>TM</sup> format which is an industry recognized software system used for resource estimation. These models were then imported to MineSight<sup>TM</sup> for verification of the resource estimation. In addition, independent estimations were run using the verified sample data and vein domains employing inverse distance estimations to ensure reasonableness and verify the resources independently. Results illustrated good agreement between the original and verification models.

The mineral resources were estimated in conformity with CIM's "Estimation of Mineral Resources and Mineral Reserves Best Practices Guidelines" (December 2019) and are reported in accordance with NI 43-101 guidelines.

Mineral resources are classified under the categories of measured, indicated and inferred according to CIM guidelines. The author evaluated the resource in order to ensure that it meets the condition of "reasonable prospects of eventual economic extraction" as suggested under NI 43-101. The criteria considered were confidence, continuity and economic cut-off in addition to considering constraining the resources within an underground mining volumes.

Using a cut-off grade of 10.6% ZnEq, the Bolivar Mine resources are presented in Table 1-2.

**Table 1-2: Base-Case Total Mineral Resources at 10.6% ZnEq Cut-Off**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Total Bolivar 2023 Mineral Resources** | **Total Bolivar 2023 Mineral Resources** | **Total Bolivar 2023 Mineral Resources** | **Total Bolivar 2023 Mineral Resources** | **Total Bolivar 2023 Mineral Resources** | **Total Bolivar 2023 Mineral Resources** |
| **Mine** | **Category** | **Tonnes ('000)** | **Zn (%)** | **Pb (%)** | **Ag (g/t)** |
| **Bolivar** | Measured | 855 | 12.78 | 1.37 | 327 |
| **Bolivar** | Indicated | 677 | 12.24 | 1.25 | 295 |
| **Bolivar** | **Total M+I** | **1532** | **12.54** | **1.32** | **313** |
| **Bolivar** | **Inferred** | **4202** | **10.35** | **1.00** | **403** |

---

Notes:

1) The current Resource Estimate was prepared by Garth Kirkham, P.Geo., of Kirkham Geosystems Ltd.;

2) All mineral resources have been estimated in accordance with CIM definitions, as required under NI 43-101;

3) The Mineral Resource Estimate was prepared using a 10.6% zinc equivalent cut-off grade. Cut-off grades were derived from $25.20/oz silver, $1.38/lb zinc and $1.20/lb lead, and process recoveries of 91% for zinc, 70% for lead, and 89.7% for silver. This cut-off grade was based on current smelter agreements and total OPEX costs of $120.22/t based on 2022 actual costs plus capital costs of $48.68/t, with process recoveries of 91.0% for zinc, 70.0% for lead, and 89.7% for silver. All prices are stated in $USD;

4) An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration; and

5) Mineral resources are not mineral reserves until they have demonstrated economic viability. Mineral resource estimates do not account for a resource's mineability, selectivity, mining loss, or dilution. All figures are rounded to reflect the relative accuracy of the estimate and therefore numbers may not appear to add precisely

**Mineral Reserve Estimate**

The January 1, 2023 reserve estimate represents the validation of Santacruz's internally- generated mineral reserve estimate by QP Goodwin. All work on the reserve by the Santacruz mine design team and the validation exercises were done in Deswik<sup>TM</sup>. The following process was used for this work:

● An NSR calculation and cut-off grade (COG) was developed by the QP using data provided by Santacruz;

● The reserve estimation methodology was reviewed, checked, and approved by the QP;

● Mine technical staff prepared a Life of Mine Plan (LOM) for the deposits using the NSR and COG provided by the QP. The LOM plan was prepared specifically for this reserve estimation and does not include inferred resources; and

● All LOM models were downloaded and reviewed by the QP for conformance to the methodology, proper application of the NSR cut-off grade, and correct application of agreed upon dilution and recovery factors.

The QP is satisfied that this exercise resulted in a valid reserve determination. The Mineral Reserve Estimate for Bolivar Mine is shown in Table 1-3.

**Table 1-3: Mineral Reserve Estimate for Bolivar Mine (January 1, 2023)**

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Mine** | **Category** | **Tonnes** | **Zn (%)** | **Pb (%)** | **Ag (g/t)** |
| **Central** | Proven | 653000 | 11.37 | 1.16 | 311 |
| **Central** | Probable | 420000 | 9.57 | 0.84 | 237 |
| **Central** | **Total** | **1073000** | **10.66** | **1.04** | **282** |
| **Rosario** | Proven | 89000 | 5.40 | 2.34 | 215 |
| **Rosario** | Probable | 74000 | 5.27 | 1.64 | 209 |
| **Rosario** | **Total** | **164000** | **5.34** | **2.03** | **212** |
| **Total Bolivar** | Proven | 742000 | 10.65 | 1.31 | 299 |
| **Total Bolivar** | Probable | 495000 | 8.92 | 0.97 | 233 |
| **Total Bolivar** | **Total** | **1237000** | **9.96** | **1.17** | **273** |

---

**Mining**

The property consists of two mining areas:

● Mina Central – is the extension of the historic mining area and extends down to the minus 430 level (430 meters (m) below primary surface access). Multiple parallel and intersecting vein structures are mined, and this area accounts for approximately 75% of the total mine production; and

● Mina Rosario – is a parallel structure recently defined which is accessed and serviced separately and accounts for approximately 25% of the total mine production.

Sublevel Open Stoping is the stoping method employed at the mine with selective use of unconsolidated waste from development as backfill. Each stoping block is prepared by driving an upper and lower gallery along strike and in the vein approximately 50 m vertically apart. These main galleries are driven 4.0 m x 4.0 m in dimension. Sublevels are driven with a smaller cross section of 3.0 m x 3.5 m approximately 15 m vertically apart with a 5 m sill pillar as shown in Figure 1-2. Production drilling is with up-holes from the sublevels, and a drift is also driven right below the sill pillar for transporting backfill.

**Figure-1-2: Sub Level Stoping Scheme**

Source: Santacruz (2022)

**Figure 1-3: Long Section of Typical Sub Level Stoping Operation**

Depending on the dip, the sublevel stoping heights are approximately 12 m, except for the second sublevel, which has a height of 9 m due to the backfill drift. Break raises are driven conventionally, and the flexibility of the method allows for vertical pillars if needed to adjust for low grade areas, or to subdivide stoping blocks to provide production flexibility.

The mine employs the following mining equipment:

Seven Resemin Muki FF single boom jumbo rigs with a power of 75 HP that drill between 2.4 and 3.0 m long holes. They are generally used for secondary development (horizontal vein developments) to prepare sublevels whose nominal dimensions are 3.0 m x 3.5 m. Occasionally they are used in small primary development headings;

● Two Resemin Troidón XP drill Jumbos with a power of 100 HP that can drill between 3.0 and 3.5 m. These are used only for large primary development headings (3.5 m x 3.5 m or 4.0 m x 4.5 m) for mine infrastructure such as: ascending and descending ramps, cuts, counter galleries, etc.;

● Two electrohydraulic rockbolters (one each in Central and Rosario Zones) to install support with steel mesh and Hydrabolt bolts of the back and ribs of primary development headings. These units have a power of 75 HP with a drilling capacity of 3.0 m;

● Four Resemin Raptor 44 long hole drills are used for drilling long holes using the "Sub Level Stoping" method. Due to the drilling and cleaning cycles, there is generally a drilling shift during each day, with monthly drilling performance of 1,200 m;

● Eleven scooptrams ranging in size from 2.0 to 5.9 yd3 bucket capacity; and

● Ten haulage trucks, ranging in size from 10 to 20 t.

Key production results for 2022 are shown in Table 1-4.

**Table 1-4: Production 2022**

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| | | | |
|:---|:---|:---|:---|
| | **Central Zone** | **Rosario Zone** | **Total** |
| Production (t) | 231479 | 37180 | 268659 |
| Waste rock (t) |  |  | 135200 |
| Backfill Hauled (t) |  |  | 171000 |
| Zinc (%) | 7.38 | 4.99 | 7.05 |
| Lead (%) | 0.61 | 0.89 | 0.65 |
| Silver (g/t) | 229 | 177 | 222 |
| Primary Devt Horizontal (m) | 2947 | 925 | 3872 |
| Primary Devt Vertical (m) | 159 | 69 | 228 |
| Secondary Devt Horizontal (m) | 2784 | 643 | 3427 |
| Secondary Devt Vertical (m) | 254 | 86 | 341 |

---

**Recovery Methods**

The Bolivar Mill has been in continuous production since 1993. The mill receives feed from two sources; the company mining operation and toll milling purchased through San Lucas. The mill processes the two types of feed separately which allows for an analysis of processing for both types of feed.

The mill uses a crushing, grinding, and flotation flowsheet to recover a lead concentrate and a separate zinc concentrate. Both concentrates are sold to Glencore via overseas shipping through Antafagasta, Chile. The mill flowsheet can be found in Figure 1-4.

The mill generally separates company and toll feed into different days, but there are a few days where the feed is processed on the same day, with a shutdown in between to separate the two feeds.

The company feed grades are determined on a daily basis by collecting and assaying samples of the process taken at the cyclone overflow, concentrates and final tailings. Each month, the production is reconciled to the measured feed tonnage using the concentrates sold and the final tailings to calculate the feed grade. The toll feed is received from San Lucas, often in 1 t to 2 t lots, where it is weighed and sampled. The material is combined on a toll feed stockpile to be fed to the mill. The toll feed is reconciled in the same method as with the company feed to determine reconciled recoveries.

The mill utilizes different reagent strategies for the toll and company feed sources, primarily due to the presence of pyrrhotite which is found in the toll feed but generally not found in the company feed.

The processing plant targets 15 to 20% of the feed to be toll feed.

The plant flowsheet for the Bolivar mill is a typical sequential flotation circuit for lead and zinc (Figure 1-4). The ore is crushed in preparation for feed to the grinding circuit. The grinding circuit utilizes a SAG/Ball mill combination to produce a product size of 100 µm for the flotation circuit.

The flotation circuit starts with the lead recovery circuit. In this circuit a rougher concentrate is produced, which is then cleaned without regrinding, in a column flotation cell. The lead rougher and cleaner tails are combined and fed to the zinc circuit. The zinc circuit consists of rougher flotation and three stages of cleaning to produce a zinc concentrate. The zinc circuit tailings are deposited in the tailings pond. Both of the concentrates are filtered for shipping to the smelter. The lead concentrate is bagged for shipping, while the zinc concentrate is shipped bulk in trucks. The products are transported by truck to the train loading facility that is approximately 10 km from the mine for haulage to Antofagasta, Chile.

The expected availability for the mill is 93.8% and the utilization is 96.3% for an expected operating time of 90.3%.

**Figure 1-4: Bolivar Mill Flowsheet**

Source: Glencore (2021)

The metallurgical assumptions for recoveries and concentrate grades can be found in Table 1-5.

There are two tailings storage facilities at the Bolivar Mine. The original tailings storage has been decommissioned. The operational tailings dam underwent a lift to extend the capacity in 2024. Both tailings dams are inspected regularly and maintained to the standards set out by the Canadian Dam Association guidelines. Both dams are under the supervision of engineers from Wood Engineering and recently an external audit was conducted by Knight Piésold Consulting.

**Table 1-5: Recovery and Concentrate Grades**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp; <br>**Parameter** | &nbsp;&nbsp;&nbsp; <br>**Unit** | **Concentrates** | **Concentrates** | **Concentrates** | **Concentrates** |
| &nbsp;&nbsp;&nbsp;&nbsp; <br>**Parameter** | &nbsp;&nbsp;&nbsp; <br>**Unit** | **Lead Concentrate** | **Lead Concentrate** | **Zinc Concentrate** | **Zinc Concentrate** |
| &nbsp;&nbsp;&nbsp;&nbsp; <br>**Parameter** | &nbsp;&nbsp;&nbsp; <br>**Unit** | **Company** **Feed** | **Toll Feed** | **Company** **Feed** | **Toll Feed** |
| Zn Recovery | % | N/A | N/A | 92 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;86.091 + 0.3218\*(Zinc<br> Feed Grade) |
| Pb Recovery | % | &nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;59.56 +<br> 17.33\*(Lead Feed Grade) | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32.15 +<br> 17.69\*(Lead Feed Grade) | N/A | N/A |
| Ag Recovery | % | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;36.133 +<br> 0.0604\*(Silver Feed Grade) | 30 | &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;57.516 -<br> 0.0662\*(Silver Feed Grade) | 36 |
| **Concentrate Grade** | **Concentrate Grade** | **Concentrate Grade** | **Concentrate Grade** | **Concentrate Grade** | **Concentrate Grade** |
| Zn | % | 12 | 11 | 53 | 44 |
| Pb | % | 32 | 20 | 0.91 | 1.25 |
| Ag | g/t | 5900 | 5500 | 630 | 775 |

---

**Infrastructure**

The Bolivar operation is essentially part of a townsite, housing the workers and their families. It has two camps, numerous residences, a hospital, and a school. Workers live in the town or in nearby Antequera. As such, the mine does not provide personnel transport.

The infrastructure is depicted in the following three site plans showing:

● The Industrial Complex (Figure 1-5);

● The Industrial Complex and Townsite (Figure 1-6); and

● The General Area (Figure 1-7).

The industrial site is located on the northeastern edge of the townsite. It is fenced from the rest of the community and is guarded by security to control access. It contains the processing plant, mine offices, multiple maintenance buildings, the assay lab, mine services, multiple warehouses, and administration building. The industrial complex is located close to both mine portals to minimize the haulage distance to the crusher and processing plant.

The Santa Rita hospital is located in the south-east corner of the town, which provides services to the operation and community. This is augmented by a first aid station inside the industrial complex near the mine portal.

A dining hall is maintained for technical and administrative staff, which provides three catered meals per day year-round. Most workers eat at their own homes in town.

The site is connected to grid power supplied by the ENDE company to both the industrial complex and community.

Drinking water is provided by a dammed reservoir, which is monitored and controlled by environmental staff. The water is treated and distributed to the offices and homes of the town site over a three-hour period each day. Water storage tanks are employed by all users for 24-hour access to potable water. The current reservoir is the second such structure which replaced an older dammed reservoir that is now decommissioned.

A sewage network is provided and shared by offices and homes in the community.

The industrial waste dump is located 3.2 km from the industrial site, which is also monitored by the environmental department.

A mine rescue office is maintained in the townsite to respond to emergency situations. Firefighting and other safety equipment is located throughout the industrial complex and townsite.

**Figure 1-5: Industrial Complex**

Source: Santacruz (2023)

**Figure 1-6: Industrial Complex and Townsite**

![](ex99-1_009.jpg)

Source: Santacruz (2023)

**Figure 1-7: General Area**

Source: Santacruz (2023)

Bolivar Operations uses power for mining and processing operations. Power is supplied by the National Grid. Approximately 38 million kWh of power was consumed in 2022, representing an average draw of approximately 4.35 MW. This equates to 141 kWh/t mined or 117 kWh/t processed (including toll milling).

**Environment and Permitting**

<u>Environmental Considerations</u>

Responsible environmental management is a critical part of Santacruz's license to operate and our responsible, compliant operation of Bolivian Assets has continued for the last 30 years. Environmental compliance with national laws and regulations is the basis of Santacruz's environmental management system and is governed by a framework of oversight by the relevant Environmental Authority. Its environmental commitments are reported to the authorities annually in an Environmental Monitoring Report, which summarizes environmental management of its operations under applicable laws and regulations.

<u>Waste and Water Management</u>

Waste management is an important part of Santacruz's Comprehensive Environmental Management, which includes a waste management plan to classify, handle, and store waste separately for proper disposal or treatment. Waste management complies with Environmental Law No. 1333, its Regulations on Solid Waste Management, and its supplementary regulations, focusing primarily on the sectoral requirements of the Environmental Regulation for Mining Activities for waste rock and tailings.

*Solid Waste*

 

Bolivar Mine has one active Tailing storage Facility (Queaqueani) and one inactive (Antiguo). Both are managed in compliance with the guidelines of the Canadian Dam Association (CDA) and the "Global Industry Standard on Tailings Management" issued by the UNEP (United Nations Environment Programme), ICMM (International Council on Mining and Metals), and PRI (Principles for Responsible Investment) in August 2020. This program includes third party Verification Assessments (Dam Safety Assurance Assessment). In response to findings from these assessments, and to mitigate risks of failure, risk management tools have been developed to improve management systems for the active TSF. For the inactive facility, monitoring and maintenance have been improved and follow good practice.

The "Queaqueani" tailings storage facility started operations in April 2007. This facility was designed by Canadian engineering firm AMEC and is located 3.5 km to the north of the operation. Hydraulic tails of 25-29% solids are beached along the upstream side of the dam crest and water is reclaimed from the southwest sector of the reservoir and pumped via HDPE pipelines back to the water treatment plant.

The Queaqueani Dam is a 33.5 m high, downstream-constructed dam. The current crest level is El. 3994.8 m (Stage IV-A raise was completed in December 2019). The next dam raise (Stage IV-B to El. 3997.8 m) was completed in 2023. There exists capacity to contain all tailings to be generated by processing the stated reserves.

*Water Management*

 

Water management has been identified as the most critical environmental area. Water is a shared resource of high social, environmental, and economic value, which is also a critical component of Santacruz's mining and metallurgical activities. Mining operations are located in the Bolivian Highlands, in areas with low precipitation, high evapotranspiration, and threats of drought.

Bolivar produces an excess of water from the underground mine. A total of approximately 170 l/s is pumped from the mine and is treated in separate plants for two different uses: one for potable water at the mine and surrounding communities, the other for industrial use in the mine and makeup water for the process plant (much of the water used for processing is reclaimed from the tailing facility). The discharge parameters as set out in Water Pollution Regulations Law No. 1333, include pH, iron, zinc, lead, and suspended solids, which are typical in the water treated from the mine. The balance of water is discharged to the Pampitas River.

**Figure 1-8: Water Treatment Process**

Source: Sustainability Report, Sinchi Wayra (2022)

**Figure 1-9: Bolivar Mine Water Balance**

Source: Sustainability Report, Sinchi Wayra (2022)

<u>Permitting</u>

Santacruz Silver operates the Bolivar Mine as a joint venture with the Bolivian Government (COMIBOL). The structure of the contract with COMIBOL is a "Partnership Contract governing Bolivar and Porco Mines (CA-MBP), and its purpose is to develop and implement a mining operation for the treatment of the existing mineralogical reserves and resources in the Bolívar and Porco Mines, by the exploitation, preparation, beneficiation and sale of mineral concentrates. Contrato de Asociación Sociedad Minera Illapa S.A. is authorized as operator and responsible of executing on behalf of COMIBOL, all the operations and activities of the association contract. The shares of CA-MBP are 55% for COMIBOL and 45% for Contrato de Asociación Sociedad Minera Illapa S.A." This renewable agreement expires in 2028.

Mining Contracts that grant the right to the subsoil mining resource are granted by the Mining Administrative Jurisdictional Authority (AJAM) over the ATE mining areas, and a contract is granted for each area or contiguous group of areas. Recent changes to the laws and government personnel have pushed Santacruz contract updates into a transitionary period waiting for final signatures and approvals. Santacruz holds Special Transitory Authorizations for each contract area which are officially designated "Mining Administrative Contracts for Adaptation". As of the effective date, approximately half of the applications have been transitioned, and the remainder fall under Article 187 of Law No. 535 on Mining and Metallurgy, which states:

*<u>ARTICLE 187</u>. (CONTINUITY OF MINING ACTIVITIES). Holders of Special Transitory Authorizations to be adapted or in the process of adaptation will continue their mining activities, with all the effects of their acquired or pre- constituted rights until the conclusion of the adaptation procedure.*

 

 

Santacruz has fully complied with this administrative procedure and is waiting for the Mining Administrative Authority to issue the relevant documents. It should be noted that this public entity has a considerable delay in the issuance of these documents.

Environmental Licenses have been formally granted to allow operation for all mining activity, by the Ministry of Environment and Water. The following table shows the licenses held by Santacruz:

**Table 1-6: Environmental Licenses Held by Santacruz**

---

| | |
|:---|:---|
| **Operation** | **License** |
| Bolívar | 040603-02-da-0324/14 |
| Porco | 051203-02-da-0031/14 |
| Caballo Blanco – Colquechaquita Mine | 050101-02-da-131/11 |
| Caballo Blanco – Mina Reserva and Tres Amigos | 050101-02-da-561/11 |
| Caballo Blanco – Don Diego Concentrator Plant | 050302-02-da-003/2024 |
| Caballo Blanco – San Lorenzo Mine | 050101-02-da-005/06 |
| Comco | 050101-02-da-006/09 |
| Soracaya | 050801-02-CD-C3-002/2017 |

---

Source: Santacruz (2024)

<u>Community Relations</u>

Santacruz mining projects are mostly well-established operations with a long history and a developed infrastructure, which provide direct benefits to employees and supporting businesses. However, the mines are located in rural to semirural areas in which the surrounding mostly agricultural communities can benefit from each operation only indirectly or through company outreach. Santacruz supports these communities by addressing services that are lacking, and helping to create value with economic development programs, and other forms of support.

A key player connected with all Bolivian Mines and surrounding areas are the mining cooperatives which are organized independent mining entities, some quite capable and organized with their own equipment. Recognized by the government as a valid economic activity for local development, they conduct their activities in abandoned mines or expropriating active mines, which can pose risks to business. The relationship is not completely one-sided as the Cooperatives sell mineralized material to process their product, thus mechanisms are in place to face possible subjugations, protect mine employees and the communities.

More importantly, proactive solutions and agreements to avoid conflict and coexist peacefully with the different cooperatives are in place. As much as possible, with cooperatives as toll processors at Santacruz Process Plants, compliance with occupational health and safety, human rights, and good work practice is sought.

Bolívar has a formal agreement (known as Actas de Reunión) with the neighboring communities. These agreements are recognized and managed by their Ayllus and include different plans and projects to help the communities with their economic development, infrastructure, access to water, education, and health and assist the communities by sponsoring their traditional festivities and sports.

Antequera is the largest community in the area of influence and immediately adjacent to the Bolivar operation. The communities neighboring Bolívar Mine are the homes of Santacruz's workers, contractors and family members. Most of them reside in the population of Antequera, from where they establish their relationship with the operation, which is itself adjacent to town.

**Figure 1-10: Bolivar Surrounding Communities**

Source: Sustainability Report, Sinchi Wayra (2022 *Mine Closure)*

 

 

**Figure 1-11: Bolivar Community Investment**

![](ex99-1_014.jpg)

Source: Sustainability Report, Sinchi Wayra (2022 *Mine Closure)*

 

<u>Mine Closure</u>

Closure Planning for Operations has social, economic, workforce, and environmental impacts, so conceptual closure plans are shared with communities. Santacruz's goal is to recover areas by establishing a healthy ecosystem capable of sustaining productive land use, ensuring the best possible environmental conditions, including physical, chemical, biological, and ecosystem aspects, at closure. Environmental superintendents are responsible for monitoring the environmental closure planning, and periodic reviews of these plans are conducted, including surveys of areas and activities to adjust financial provisions for closure.

Land Use and Rehabilitation - environmental challenges related to biodiversity protection, soil restoration, and land use, are addressed through dialogue with stakeholders, including local communities and relevant authorities. Our comprehensive environmental management focuses on minimizing disturbed areas. In 2022, Santacruz managed a total of 6,600 hectares of land covered by Temporary Special Authorizations (ATEs) granted by the Mining Administrative Jurisdiction Authority (AJAM), under leasing contracts with the Government through COMIBOL. However, Santacruz's processing activities, services, and related infrastructure (industrial area) currently occupy only 400.5 hectares of land, including areas of previous mining operations and other areas with environmental closure located within the properties Santacruz manage.

In 2022, Santacruz continued with the reforestation plan in the Queaqueani Dam area, in accordance with an agreement with the community of the same name, and significant progress was made in the progressive closure of the old tailings facilities at the Don Diego Concentrator Plant.

**Capital and Operating Cost Estimates**

<u>Capital Costs</u>

The Bolivar Mine has been in continuous operation for many years. There will be, as the reserve is expanded and developed, the need for step changes in mine access, production or haulage methods, which may require large capital outlays. These will be financially justified as needed. However, the capital needs for continued operation to exploit the remaining reserves is limited to Primary mine development, Capital equipment rebuilds and replacements, and Tailing Storage Facility expansions. Average annual capital has been and is projected to be in the 11 to 12 million USD range. It is anticipated that expansion work to the TSF will be required in 2023 ($2.5 million).

The historic total capital requirement for all the Bolivian operations is shown in Table 1-7. Bolivar's projected capital requirements for 2023 to 2027 is shown on Table 1-8.

**Table 1-7: Actual Combined Capital Requirement for All Bolivian Operations, 2017 to 2022 ($M)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2017** | **2018** | **2019** | **2020** | **2021** | **2022** |
| Bolivar | 8.8 | 13.7 | 13.7 | 6.3 | 11.3 | 10.2 |
| Porco | 3 | 8.8 | 8.4 | 3.6 | 5.3 | 3.1 |
| Reserva | 1.3 | 2.4 | 2.1 | 2 | 4.3 | 3.5 |
| Tres Amigos | 2.1 | 2.6 | 1.5 | 1.8 | 2.2 | 3 |
| Don Diego | 0.9 | 6.9 | 1.4 | 0.9 | 1.1 | 1.2 |
| Colquechaquita | 1.2 | 2 | 1.4 | 1 | 3 | 2.5 |
| La Paz | 3.3 | 0.6 | 0.3 | 0.4 | 0.2 | 0.7 |
| Soracaya | 0.5 | 2.1 | 0.2 | 0.1 |  |  |
| San Lucas | 0.8 | 0 | 0 | 0.1 | 0.4 |  |
| **Total** | **21.8** | **39.0** | **28.5** | **16.3** | **27.8** | **24.3** |

---

**Table 1-8: Projected Capital Requirement for all Bolivar Operations, 2023 to 2027 ($M)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **2023** | **2024** | **2025** | **2026** | **2027** |
| Engineering/Admin | 0.0 | 0.0 |  | 0.1 |  |
| Safety/Environmental | 2.8 | 0.2 | 2.6 | 2.6 | 0.4 |
| Mobile Equipment/Maintenance | 2.7 | 4.4 | 4.1 | 2.7 | 1.2 |
| Plant | 0.6 | 0.6 | 0.7 | 0.7 | 0.2 |
| Exploration |  |  | 0.3 | 0.3 | 0.4 |
| Primary development | 5.1 | 6.3 | 6.2 | 6.3 | 4.5 |
| Corporate |  |  |  |  |  |
| **Total** | **11.3** | **11.5** | **14.0** | **12.6** | **6.7** |

---

Recurring exploration and primary development costs have been included in the COG calculations to better anticipate and account for total costs and make the COG more meaningful for reserve estimation and mine planning.

<u>Operating Costs</u>

Costs used for Cut-off Grade analysis were taken from actual costs for 2022. The actual cost of corporate G&A was allocated to each of the businesses.

**Table 1-9: Unit Operating Costs ($/t)**

---

| | |
|:---|:---|
| **Mine** | **Unit Cost, $/t** |
| Mine Operations | 36.29 |
| Mine Maintenance | 28.84 |
| Indirect | 22.32 |
| Plant | 18.28 |
| Warehouse | 0.64 |
| G&A | 13.84 |
| **Total** | **120.22** |

---

Mine operations include direct costs of mining, including labor, energy, materials, and services.

Mine Equipment Maintenance Costs includes maintenance to all equipment related to direct development, exploitation and haulage, as well as service equipment such as pumping, ventilation, winches, etc.

Indirect costs would include Site Management, Technical services, Site Administration, Environmental and Social, Safety and Security.

Plant costs include direct Beneficiation costs as well as plant maintenance, and indirect costs. Warehouse costs refer to Concentrate handling and storage.

General and Administration includes allocated Bolivian corporate costs.

**Economic Analysis**

<u>Result</u>

The Reserve Estimate was generated using actual costs experienced during a stable production period following the change in management after the purchase of the mine by Santacruz Silver (2022 and beginning of 2023). Actual costs were used for mine operating, concentrate overland transport, port costs, and shipping as well as smelting fees, payment terms, and penalty charges. A simplified Cash flow model was built to model the costs and conditions used to generate the Reserve estimates stated in the Bolivar Report.

The Bolivar Mine is part of a multi-operation business. However, the Economic model treats it as a separate financial entity with Bolivian corporate costs allocated for the analysis. As well, the operation is subject to a partnership with the Bolivian Government (COMIBOL), but the financial modelling examines the value of the operation on a 100% basis to support the Reserve statement.

The Bolivar Mine has been in continuous operation for over 200 years and the deposit is a network of relatively narrow veins. These two aspects drive the normal exploitation process of the mine, where inferred resources are converted and exploited in the same budget year. Resources are generally proven-up by drifting and sampling instead of drilling. Therefore, normal budgeting and mine planning includes resources outside of the Reserve estimate.

For the Bolivar Report, only Proven and Probable reserves are included in financial evaluation, so the production schedule represents the depletion of these reserves at average grade and current production rates. The context of the production schedule exploits the Proven and Probable reserves as part of a continuous operation and as such does not include the closure activities.

**Table 1-10: Production Forecast – Mining and Processing**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Unit** | **2023** | **2024** | **2025** | **2026** |
| **Mine Production** | **Mine Production** | **Mine Production** | **Mine Production** | **Mine Production** | **Mine Production** |
| Tonnes Mined | (DMT) | 317300 | 317300 | 317300 | 285082 |
| Tonnes Processed | (DMT) | 317300 | 317300 | 317300 | 285082 |
| **Head Grades** | **Head Grades** | **Head Grades** | **Head Grades** | **Head Grades** | **Head Grades** |
| Zinc | (%) | 9.96 | 9.96 | 9.96 | 9.96 |
| Lead | (%) | 1.17 | 1.17 | 1.17 | 1.17 |
| Silver | g/t | 273 | 273 | 273 | 273 |

---

Metallurgical recoveries and concentrate qualities used in the model are sourced from historic actuals for 2022 based on the head grades actually mined. Projected recoveries are thus estimated to be reasonable to conservative. These parameters will necessarily be conservative considering the higher grades in the production schedule.

**Table 1-11: Production Forecast - Concentrate**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Unit** | **2023** | **2024** | **2025** | **2026** |
| **Concentrates** | **Concentrates** | **Concentrates** | **Concentrates** | **Concentrates** | **Concentrates** |
| Zinc (with 0.5% losses) | (DMT) | 53991 | 53991 | 53991 | 48508 |
| Zn Conc. Grade | (%) | 53 | 53 | 53 | 53 |
| Ag (in Zinc) | g/t | 621 | 621 | 621 | 621 |
| Zn Recovery | (%) | 91 | 91 | 91 | 91 |
| Ag (in Zinc) | (%) | 39 | 39 | 39 | 39 |
| Lead (with 0.5% losses) | (DMT) | 9559 | 9559 | 9559 | 8588 |
| Pb Conc. Grade | (%) | 27 | 27 | 27 | 27 |
| Ag (in lead) | g/t | 4599 | 4599 | 4599 | 4599 |
| Pb Recovery | (%) | 70 | 70 | 70 | 70 |
| Ag (in Lead) | (%) | 51 | 51 | 51 | 51 |
| **Metal Recovery** | **Metal Recovery** | **Metal Recovery** | **Metal Recovery** | **Metal Recovery** | **Metal Recovery** |
| Zinc | (FMT) | 29000 | 29000 | 29000 | 26000 |
| Silver (in Zinc) | (FOT) | 1078000 | 1078000 | 1078000 | 968000 |
| Lead | (FMT) | 3000 | 3000 | 3000 | 2000 |
|  | **Unit** | **2023** | **2024** | **2025** | **2026** |
| Silver (in Lead) | (FOT) | 1413000 | 1413000 | 1413000 | 1270000 |
| Silver (Total) | (FOT) | 2491000 | 2491000 | 2491000 | 2238000 |

---

Notes:

FMT = Fine Metric Tonnes; DMT = Dry Metric Tonnes; FOT = Fine Ounces Troy

That same logic applies to the net revenue generation (Table 1-12) which includes smelter charges and penalty fees.

**Table 1-12: Revenue and Cost Projection ($M)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Unit** | **2023** | **2024** | **2025** | **2026** |
| **Payable Metal Revenue** | **Payable Metal Revenue** | **Payable Metal Revenue** | **Payable Metal Revenue** | **Payable Metal Revenue** | **Payable Metal Revenue** |
| Zinc |  | 73 | 73 | 73 | 66 |
| Metallurgical Deduction |  | 11 | 11 | 11 | 10 |
| Gross Payable Zinc |  | 62 | 62 | 62 | 56 |
| Lead |  | 6 | 6 | 6 | 5 |
| Metallurgical Deduction |  | 1 | 1 | 1 | 1 |
| Gross Payable Lead |  | 5 | 5 | 5 | 5 |
| Silver |  | 52 | 52 | 52 | 47 |
| Metallurgical Deduction in Zinc |  | 9.2 | 9.2 | 9.2 | 8.2 |
| Metallurgical Deduction in Lead |  | 1.5 | 1.5 | 1.5 | 1.3 |
| Gross Payable Silver |  | 41.7 | 42 | 42 | 37 |
| Gross Revenue (Total) |  | 109 | 109 | 109 | 98 |
| **Smelter Charges and Penalties** | **Smelter Charges and Penalties** | **Smelter Charges and Penalties** | **Smelter Charges and Penalties** | **Smelter Charges and Penalties** | **Smelter Charges and Penalties** |
| Treatment charges Zn | (USD/t) | 277 | 277 | 277 | 277 |
| Treatment charges Zn |  | 15 | 15 | 15 | 14 |
| Treatment charges Pb | (USD/t) | 133 | 133 | 133 | 133 |
| Treatment charges Pb |  | 1 | 1 | 1 | 1 |
| Penalties in Zn | (USD/t) | 7 | 7 | 7 | 7 |
| Penalties in Zn |  | 0 | 0 | 0 | 0 |
| Penalties in Lead | (USD/t) | 13 | 13 | 13 | 13 |
| Penalties in Lead |  | 0 | 0 | 0 | 0 |
| Refining Charges in Pb | (USD/FOZ) | 1 | 1 | 1 | 1 |
| Refining Charges in Pb |  | 2 | 2 | 2 | 2 |
| Smelter Fees and Penalties |  | 18 | 18 | 18 | 17 |
|  | **Unit** | **2023** | **2024** | **2025** | **2026** |
| Net Revenue |  | 90 | 90 | 90 | 81 |
| **Operating Costs** |  |  |  |  |  |
| Production Costs |  | 34 | 34 | 34 | 30 |
| **Cost of Sales** | **Cost of Sales** | **Cost of Sales** | **Cost of Sales** | **Cost of Sales** | **Cost of Sales** |
| Rail Freight Zn |  | 6 | 6 | 6 | 5 |
| Rail Freight Pb |  | 1 | 1 | 1 | 1 |
| Port Expenses Zn |  | 2 | 2 | 2 | 2 |
| Port Expenses Pb |  | 0 | 0 | 0 | 0 |
| Rollback Fee Zn |  | 5 | 5 | 5 | 4 |
| Rollback Fee Pb |  | 1 | 1 | 1 | 1 |
| Concentrate Freight and Port Costs |  | 14 | 14 | 14 | 13 |
| Mine Royalty |  | 6 | 6 | 6 | 5 |
| Communities and Unions |  | 2 | 2 | 2 | 2 |
| Selling Costs |  | 23 | 23 | 23 | 21 |
| **Total Cost of Sales** |  | **57** | **57** | **57** | **51** |

---

Depreciation is a product of previous operation and annual capital expenditure incurred for the exploitation of the reserve tonnage. Capital is limited to that required to support mining, processing, and tailing storage for the reserve. Corporate G&A is that part of the in-country costs allocated to the Bolivar Mine.

**Table 1-13: Cashflow Projection ($M)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **2023** | **2024** | **2025** | **2026** |
| **Income Statement** | **Income Statement** | **Income Statement** | **Income Statement** | **Income Statement** |
| Net Revenue | 90 | 90 | 90 | 81 |
| Production Costs | (34) | (34) | (34) | (30) |
| Selling Costs | (23) | (23) | (23) | (21) |
| Depreciation | (11) | (10) | (9) | (12) |
| **Gross Profit** | **22** | **23** | **24** | **18** |
| Corporate G&A | (4) | (4) | (4) | (4) |
| **Operating profit** | 17 | 19 | 20 | 14 |
| **EBIT** | 17 | 19 | 20 | 14 |
| Income Tax Expense (CIT) | (6.5) | (7.0) | (7.4) | (5.1) |
| **Net Gain/(Loss) for the Year** | **11** | **12** | **12** | **8** |
|  | **2023** | **2024** | **2025** | **2026** |
| **Cashflow Statement** | **Cashflow Statement** | **Cashflow Statement** | **Cashflow Statement** | **Cashflow Statement** |
| **Cash from Operations Activities** |  |  |  |  |
| Net Income | 11 | 12 | 12 | 8 |
| Depreciation | 11 | 10 | 9 | 12 |
| **Subtotal** | 22 | 22 | 21 | 21 |
| **Cash from Investing Activities** |  |  |  |  |
| Sustaining Capital Expenditure | (11) | (12) | (13) | - |
| **Subtotal** | **(11)** | **(12)** | **(13)** | **-** |
| **Cash Balance** | (11) | (12) | (13) | - |
| Beginning | - | 11 | 21 | 30 |
| Change in Cash | 11 | 10 | 9 | 21 |
| **Ending** | **11** | **21** | **30** | **51** |

---

Income Tax is 37.5% of the EBIT. As seen, the operations generate a positive cash flow after tax upon exploitation of the stated reserve at the metal prices used to generate the reserve.

<u>Sensitivities</u>

A univariate sensitivity analysis was performed to examine which factors most affect the Bolivar Mine economics when acting independently of all other cost and revenue factors. Each variable evaluated was tested using the same percentage range of variation, from -20% to +20%, although some variables may experience significantly larger or smaller percentage fluctuations over the LOM. For instance, the metal prices were evaluated at a ±20% range to the base case, while the capex and all other variables remained constant. This may not be truly representative of market scenarios, as metal prices may not fluctuate in a similar trend. The variables examined in this analysis are those commonly considered in similar studies – their selection for examination does not reflect any particular uncertainty.

Notwithstanding the above noted limitations to the sensitivity analysis, which are common to studies of this sort, the analysis revealed that the Bolivar Mine is most sensitive to metal pricing. The Bolivar Mine showed the least sensitivity to capital costs. Figure 1-12 shows the results of the sensitivity analysis.

**Figure 1-12: Univariate Sensitivities**

![](ex99-1_015.jpg)

**Risks, Opportunities and Recommendations**

<u>Risks</u>

The Bolivar Mine is subject to all of the risks normally associated with an operating mine, and some unique to its situation. These include:

● The current political and socio-economic climate in Bolivia poses risks and uncertainties that could delay or even stop development as reported within the Fraser Institute Annual Report 2022 where Bolivia ranks very low in many non-technical metrics. Bolivia has been ranked consistently low for the past five years and ranks in the lower quartile on all metrics that gauge risk and uncertainty. It is difficult to gauge or qualify the level or extents of the risks however, all companies working in Bolivia must continue to be aware of the potential risks and develop mitigation strategies. A significant risk related to the Santacruz Bolivian mineral assets and in particular the mineral resources and mineral reserves is the significant artisanal activity that continues to exist. This activity is not only a socio-economic risk but also affects access to resources and reserves along with potential sterilization of mineral resources;

● Geological interpretations may be subjective and may result in the location and extent of some of the mineralized structure although as the Bolivar Mine is comprised of well constrained veins, this risk is minimal;

● As vein thicknesses are narrow, resources may be sensitive to dilution although the relative high grades that exist at the Bolivar Mine are successful at mitigating such risks to date;

● Varying resource classification methods and criteria may vary as more data is considered;

● There is no guarantee that further drilling will result in additional resources or increased classification;

● Lower commodity prices could change size and grade of the potential targets;

● Further work may disprove previous models and therefore result in condemnation of targets and potential negative economic outcomes;

● Ability to replace mined reserves on an annual basis; and

● Maintenance of Permits.

As the mine continues to expand to depth, the following aspects of mine operations will be challenged:

● Worker travel time (reduced time at the face);

● Dewatering inflow quantities, infrastructure and costs. The Central Mine already experiences large seasonal influxes of water, that sometimes affect production. This problem will be exacerbated by continued mining to depth;

● Ventilation system needs and costs; and

● Material handling.

As is shown on Figure 22-1 of the Bolivar Report, the greatest risk to the economic results in this study is from changes to metal prices.

The operation of the mining cooperatives, as described in Section 4.3.4.1, poses a risk to functionality of the Bolivar Operation. To date, Santacruz has been careful to culture a peaceful coexistence with the cooperatives and they have not operated in the core areas that Bolivar conducts mining operations. There is always a risk of this changing, and that their activities will escalate or relocate to more impactful areas.

<u>Opportunities</u>

The Bolivar Mine opportunities include:

● A systematic exploration program could provide an excellent opportunity for successfully uncovering new discoveries;

● An increased understanding and derivation of alternative theories may result in further discovery and expansion for the Bolivar Mine;

● A hydrogeological study could help the operation to better characterize and understand water inflows, aiding design work and planning to reduce the impact of major seasonal inflows;

● Higher commodity prices will change size and grade of the potential targets; and

● Potential for expansion and classification upgrade of resources as mining activities progress.

The principal opportunity to the mine is to improve the grade to the mill by implementing a mine dilution control program. As is typical with all narrow width mining, dilution is very sensitive to the mined widths of veins, which must be kept at minimum to accommodate equipment widths. Often, however, veins are over-mined to ensure complete recovery of the ore. This practice significantly increases dilution due to overbreak of the hanging wall and footwall.

<u>Recommendations</u>

To advance the Bolivar Mine and further evaluate the potential additional veins and increase resources thereby displacing depletion due to ongoing mining activities, the following is recommended:

● Regional exploration for identification of new veins;

● Incorporate structural interpretations to assist regional understanding;

● Analysis of thickness and grade-thickness profiles for resource targeting and predictive dilution study;

● Investigate geo-metallurgical characteristics;

● Hydrogeological study and modelling should be done to better understand water inflows and minimize their impact on production;

● Some Surface for near surface targets along with underground drilling for resource delineation and extension; and

● Tracking of Cooperativa progress to mitigate safety and resource risk.

The operation should conduct a thorough test stoping experiment to ensure the most economic balance between incomplete recovery and excessive dilution.

Underground operations that use three x 8 hour shifts typically lose much worker productivity due to excessive travel and break time over such a short shift. The current operation has an effective time of 5.5 hours per worker on an 8-hour shift. Consideration should be given to test a longer shift, say a schedule of 4 x 10 hours per week with three days off. With the same 2.5 hours of travel and break time, the effective time would increase to 7.5 hours per shift, resulting in an increase from 68% to 75% shift effectiveness or actual working time. The workers are apt to find that the longer days are harder, but that the three days off provide more rest on the balance of the week.

These recommendations have not been costed, as they represent changes to current practices that can be funded by existing operating budgets.

**Porco Mine**

Certain portions of the following information are derived from and based on the technical report entitled "*NI 43-101 Technical Report, Feasibility Study, Porco Mining Operations*" that has an effective date of January 1, 2024, and was prepared by Richard Goodwin, P.Eng., Garth Kirkham, P. Geo., and Tad Crowie, P.Eng. (the "**Porco Report**"), and is based on the assumptions, qualifications and procedures set out therein. For a more detailed overview of the Porco Mine, please refer to the Porco Report, which is available on SEDAR+ at <u>www.sedarplus.ca</u> and on EDGAR at <u>www.sec.gov</u>.

The disclosure in this Annual Information Form relating to the Porco Mine is qualified in its entirety by the full text of the Porco Report, which is incorporated by reference in this Annual Information Form. Terms not otherwise defined in this section have the respective meanings given to them in the Porco Report.

**Introduction**

JDS was commissioned by Santacruz Silver Mining Ltd. (Santacruz) to prepare a Technical Report in accordance with NI 43-101 for the Porco Project (Porco or the Project or the Mine) located in the Porco Municipality of the Antonio Quijarro Province, Bolivia.

The Porco Mine has been active for nearly 500 years and is currently producing Zinc/Silver and Lead/Silver concentrates. The complex consists of an underground mine, concentrator plant, maintenance workshop, tailing storage facility, water treatment plant, supplies warehouse, main office, two hospitals and Yancaviri Camp. Located 50 km southwest of Potosí City in Antonio Quijarro province, the mine is comprised of two underground mining sectors: Central and Hundimiento.

The Porco Report is the first declaration of resources and reserves, for the Porco base metals underground mining operation since its acquisition by Santacruz. The mine is fully operational at the time of the Porco Report's preparation. The effective date of both the resource and the reserve is January 1, 2023, which is approximately 18 months before the report date. Production data for the calendar year 2023 has been included in Section 24 of the Porco Report under the heading "Other Relevant Data and Information" to show the depletion and typical replenishment of resources and reserves over a calendar year.

**Ownership**

On October 11, 2021, Santacruz entered into the Glencore Share Purchase Agreement with Glencore whereby Santacruz agreed to acquire a portfolio of Bolivian silver assets from Glencore, including the following: (a) a 45% interest in the Bolivar Mine and the Porco Mine, held through an unincorporated joint venture between Glencore's wholly-owned subsidiary Contrato de Asociación Sociedad Minera Illapa S.A. (Illapa) and COMIBOL, a Bolivian state-owned entity; (b) a 100% interest in the Sinchi Wayra S.A. (Sinchi Wayra) business, which includes the producing Caballo Blanco mining complex; (c) the Soracaya Project; and (d) the San Lucas Group.

On March 18, 2022, Santacruz completed this purchase, including Glencore's interest in the Porco Mine.

Santacruz thus owns 100% of the two Bolivian operating companies Illapa and Sinchi Wayra, which in turn own 45% of the Bolivar Mine, 45% of the Porco Mine, and 100% of the Caballo Blanco mining complex.

Sinchi Wayra is the operating company for all three active mining operations, including the Porco mine.

The Porco Report is the first declaration of resources and reserves, for the Porco base metals underground (UG) mining operation since its acquisition by Santacruz.

**History**

Evidence of silver mining at Porco goes back to pre-Columbian times. Porco was a silver source for the Inca, later the Spanish, and others through the late 19<sup>th</sup> century. As the world silver market began to collapse in the 1880's and early 1890's, a major shift to tin mining began to meet the increased demand of the industrialized world. Wealthy tin barons in Bolivia held much influence in national politics until they were marginalized by the nationalization of the three largest tin mining companies following the 1952 revolution. Bolivian miners played a critical part in the country's organized labor movement from the 1940s to the 1980s and continue to be an important stakeholder.

Porco became a resource of newly formed Bolivian Mining Corporation (COMIBOL), under whose management it operated until leased to private "Iris Mines" through subsidiary Compania Minera del Sur (COMSUR) in 1962. Emergency economic measures by the government in response to the international tin market crash in 1985 included massive layoffs of miners.

Porco Mine operates under the management of Sinchi Wayra S.A. (formerly COMSUR S.A.), under a joint venture agreement with the Bolivian government (COMIBOL) named Contrato de Asociación Sociedad Minera Illapa S.A. (Illapa) and (COMIBOL) entered this Joint Venture Agreement (the "**Illapa JV**") on December 4, 2014, by virtue of Public Deed N° 1356/2014. The duration of the Illapa JV is 15 years, with the possibility of extending the term for the same duration. Under the Illapa JV, ownership is 55% COMIBOL and 45% Illapa. In the event of any disagreement, the Illapa JV has an arbitration clause with seat in La Paz, Bolivia, under UNCITRAL Rules.

On October 11, 2021, Santacruz entered into the Glencore Share Purchase Agreement with Glencore whereby Santacruz agreed to acquire a portfolio of Bolivian silver assets from Glencore. The Bolivian Assets include: (a) Glencore's 45% interest in the Bolivar Mine and the Porco Mine, held through an unincorporated joint venture between Glencore's wholly-owned subsidiary Illapa and COMIBOL, a Bolivian state-owned entity; (b) a 100% interest in the Sinchi Wayra business, which includes the producing Caballo Blanco mining complex; (c) the Soracaya Project; and (d) the San Lucas Group.

On March 18, 2022, Santacruz completed this purchase, including Glencore's interest in the Caballo Blanco mining complex. The Caballo Blanco Mining Complex has continued to operate since that date under the management of Santacruz.

Sale of concentrates are subject to an Off-Take Agreement with Glencore International AG as buyer, under Contract N°180-13-14212-P, and Contract N°062-13-14190-P, both entered into in 2013, with all their addendums and amendments. These agreements are "evergreen" meaning that they are in effect through the life of mine.

**Figure 1-1: Project History**

![](ex99-1_016.jpg)

Source: Glencore (2021)

**Geology and Mineralization**

The Bolivar, Porco and Caballo Blanco deposits are located in the central part of the Eastern Cordillera, a thick sequence of Paleozoic marine siliciclastic and argillaceous sedimentary rocks deposited on the western margin of Gondwana and deformed in a fold-thrust belt. There were two major tectonic cycles in the Paleozoic: The Lower Paleozoic Famatinian cycle (the Tacsarian and Cordilleran cycles of Bolivia), and the Upper Paleozoic Gondwana cycle (Subandean cycle of Bolivia).

The Porco silver-zinc-tin deposit is located 35 km southwest of the Cerro Rico de Potosí deposit on the southeastern edge of the Los Frailes volcanic field. It was the first silver deposit discovered in Bolivia, with exploitation dating to pre-colonial times. The geology has been described by Sugaki et al. (1983), Cunningham et al. (1993, 1994a, b) and Jiménez et al. (1998).

The deposit is hosted by a north-south-elongated caldera that is 5.0 km x 3.0 km and formed at 12.0 ± 0.4 Ma with the eruption of the crystal-rich dacitic Porco Tuff. Well-defined topographic walls of the caldera cut Ordovician phyllites and Cretaceous sandstones. The 12.1 ± 0.4 Ma Apo Porco stock (4,886 masl) occurs on the southern margin of the caldera. Mineralization is associated with the younger 8.6 ± 0.3 Ma Huayna Porco stock (4,528 masl) in the center of the caldera. Radial dykes, alteration and metals are zoned around the stock. To the north, the Porco Tuff is overlain by the ignimbrites of the Los Frailes Formation dated at 6 to 9 Ma.

Mineralization occurs in NNE to NE-trending veins that cut the Porco Tuff about 1 km east of the Huayna Porco stock. The deposit is zoned around the stock with cassiterite proximal to the stock and base metals, mainly sphalerite and galena, further away. The upper parts of the veins are silver-rich with pyrargyrite, acanthite and stephanite. The main structure is the San Antonio vein which strikes N10º - 30ºE and dips between 70º and 85º to the east. It is 300 m in vertical extent and 1.2 m to 2.0 m in width. To the south, the vein branches into the Oriente, Misericordia, and Santos veins, whose lengths vary between 500 m to 1,500 m. The main ore minerals are pyrite, sphalerite, galena, argentiferous galena, native silver, chalcopyrite, and arsenopyrite in a gangue of quartz. Other important structures are the Muestra Grande vein on Huayna Porco Hill, where the grade reached 2,300 g/t Ag (Sugaki et al., 1983), and the Rajo Zúñiga vein, which strikes N30ºE and dips 75º-80ºE. The latter vein, with widths between 1.0 m and 1.5 m, was exploited in a 100 m x 20 m open pit. This altered dacite-hosted vein is accompanied by associated veinlets and disseminations in the wall rock and consists of cassiterite, wolframite, galena, silver sulphosalts, and pyrite.

**Metallurgical Testing and Mineral Processing**

The processing plant at the Porco Mine has been operating since 1992. The recoveries used in the Porco Report are derived from the results of the plant operation over the period of August 2020 to July 2021. Porco mill: a lead concentrate and a zinc concentrate. While both concentrates pay for the metal they are named for and for silver, a lead concentrate does not pay for zinc contained and the zinc concentrate does not pay for lead contained, so these recoveries are not included when summarizing the total recoveries.

The results from this analysis can be found in Table 1-1.

**Table 1-1: Recovery and Concentrate Grade Estimates**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Concentrates** | **Concentrates** | **Concentrates** | **Concentrates** |
| | | **Lead Concentrate** | **Lead Concentrate** | **Zinc Concentrate** | **Zinc Concentrate** |
| <br>**Parameter** | <br>**Unit** | **Company Feed** | **Toll Feed** | **Company Feed** | **Toll Feed** |
| Zn Recovery | % | N/A | N/A | 93 | 86 |
| Pb Recovery | % | 12.46\*(Lead feed grade %) + 68.98 | 8.28\*(Lead feed grade %) + 63.58 | N/A | N/A |
| Ag Recovery | % | &nbsp;&nbsp;&nbsp;&nbsp;0.919 x (Silver Feed Grade) +<br> 37.743 | 32 | -0.0957 x (Silver Feed Grade) +<br> 47.874 | 50 |
| <br>**Parameter** | <br>**Unit** | **Concentrates** | **Concentrates** | **Concentrates** | **Concentrates** |
| <br>**Parameter** | <br>**Unit** | **Lead Concentrate** | **Lead Concentrate** | **Zinc Concentrate** | **Zinc Concentrate** |
| <br>**Parameter** | <br>**Unit** | **Company Feed** | **Toll Feed** | **Company Feed** | **Toll Feed** |
| **Concentrate Grade** | **Concentrate Grade** | **Concentrate Grade** | **Concentrate Grade** | **Concentrate Grade** | **Concentrate Grade** |
| Zn | % | 12 | 12 | 50 | 50 |
| Pb | % | 51 | 56 | 0.39 | 0.55 |
| Ag | g/t | 6480 | 2900 | 273 | 310 |

---

**Mineral Resource Estimate**

The Porco Mine is an "advanced property" and is a well-established, active mining operation. Glencore and subsequently Santacruz Silver has performed exploration and resource expansion drilling of 203 surface and underground drillholes at the Porco project since 2000 totalling 55,804.3 m. The 205 drillholes and 30,348 underground channels in the database were supplied in electronic format by Santacruz. This included collars, downhole surveys, lithology data and assay data (i.e., Ag g/t, Pb%, Zn%, Fe%).

Verification of the Porco drillhole and underground sample assay databases are primarily focused on silver, lead and zinc in addition to iron, arsenic, sulphur and tin. Sample databases were supplied in Excel<sup>TM</sup> format and in LeapFrog<sup>TM</sup>. Checks against source data and assay certificates showed agreement. Statistical analyses used to investigate and identify errors were performed and resulted in minor issues. These have been corrected and it is recommended that a continued program of random "spot checking" the database against assay certificates be employed.

During the 2023 site visit, an extensive independent sampling verification plan was implemented with a total of 80 samples collected across from the Bolivar, Porco and Caballo Blanco operations. The Don Diego laboratory is an NB/ISO/IEC 17025:2018 accredited laboratory which performs all assay analyses for the mining and processing operations for Sinchi Wayra including Porco. The Don Diego laboratory in owned and operated by the Issuer, Santacruz.

Results of the verification samples indicates that the regression predictions perfectly fit the data meaning that the check sampling program successfully verified and validated the data and although, these results are not a complete audit of the laboratory, they do verify that the assay results are suitable for resource estimation purposes.

The geological and lithological solid domain models were supplied by Santacruz in both Datamine<sup>TM</sup> and LeapFrog<sup>TM</sup> which are both industry-leading software systems. The QP imported the multiple vein domains into a similar system called MineSight<sup>TM</sup> to verify solids volumes and ensure matching of the solids domains against the drillhole and sample database. Results confirmed location and extent of volumes are appropriate to resource estimation purposes.

Resource block models were supplied in Datamine<sup>TM</sup> format which is an industry recognized software system used for resource estimation. These models were then imported to MineSight<sup>TM</sup> for verification of the resource estimation. In addition, independent estimations were run using the verified sample data and vein domains employing inverse distance estimations to ensure reasonableness and verify the resources independently. Results illustrated good agreement between the original and verification models. Verification of the SG regression analysis was also performed by comparing measured versus calculated density values.

The mineral resources were estimated in conformity with CIM's "Estimation of Mineral Resources and Mineral Reserves Best Practices Guidelines" (December 2019) and are reported in accordance with NI 43-101 guidelines. The Qualified Person evaluated the resource in order to ensure that it meets the condition of "reasonable prospects of eventual economic extraction" as suggested under NI 43-101. The criteria considered were confidence, continuity and economic cut-off. The resource listed below is considered to have "reasonable prospects of eventual economic extraction".

Table 1-2 shows the Mineral Resource Statement for the Porco deposit. This table illustrates the mineral resources defined within the Hundimiento and Central areas.

**Table 1-2: Base-Case Total Mineral Resources at 11.2% ZnEq Cut-off**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Total Porco 2023 Mineral Resources** | **Total Porco 2023 Mineral Resources** | **Total Porco 2023 Mineral Resources** | **Total Porco 2023 Mineral Resources** | **Total Porco 2023 Mineral Resources** | **Total Porco 2023 Mineral Resources** |
| **Mine** | **Category** | **Tonnes ('000)** | **Zn (%)** | **Pb (%)** | **Ag (g/t)** |
| **Porco** | Measured | 566 | 17.17 | 0.88 | 202 |
| **Porco** | Indicated | 253 | 16.38 | 1.02 | 166 |
| **Porco** | Total M+I | 819 | 16.92 | 0.92 | 191 |
| **Porco** | Inferred | 1007 | 15.16 | 0.92 | 117 |

---

Notes:

1) The current Resource Estimate was prepared by Garth Kirkham, P.Geo., of Kirkham Geosystems Ltd.

2) All mineral resources have been estimated in accordance with CIM definitions, as required under NI 43-101.

3) The Mineral Resource Estimate was prepared using a 11.2% zinc equivalent cut-off grade. Cut-off grades were derived from $25.20/oz silver, $1.38/lb zinc and $1.20/lb lead, and process recoveries of 91% for zinc, 70% for lead, and 89.7% for silver. This cut-off grade was based on current smelter agreements and total OPEX costs of $120.22/t based on 2022 actual costs plus capital costs of $48.68/t, with process recoveries of 91.0% for zinc, 70.0% for lead, and 89.7% for silver. All prices are stated in $USD.

4) An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

5) Mineral resources are not mineral reserves until they have demonstrated economic viability. Mineral resource estimates do not account for a resource's mineability, selectivity, mining loss, or dilution. All figures are rounded to reflect the relative accuracy of the estimate and therefore numbers may not appear to add precisely.

**Mineral Reserve Estimate**

The January 1, 2023 reserve estimate represents the validation of Santacruz's internally-generated mineral reserve estimate by QP Goodwin. All work on the reserve by the Santacruz mine design team and the validation exercises were done in DeswikTM. The following process was used for this work:

● an NSR calculation and cut-off grade (COG) was developed by the QP using data provided by Santacruz;

● the reserve estimation methodology was reviewed, checked, and approved by the QP;

● mine technical staff prepared a Life of Mine Plan (LOM) for the deposits using the NSR and COG provided by the QP. The LOM plan was prepared specifically for this reserve estimation and does not include inferred resources; and

● all LOM models were downloaded and reviewed by the QP for conformance to the methodology, proper application of the NSR cut-off grade, and correct application of agreed upon dilution and recovery factors.

The QP is satisfied that this exercise resulted in a valid reserve determination. The Mineral Reserve Estimate for Porco Mine is shown in Table 1-3.

**Table 1-3: Mineral Reserve Estimate for Porco Mine (January 1, 2023)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Mine** | **Category** | **Tonnes** | **Zn (%)** | **Pb (%)** | **Ag (g/t)** |
| **Hundimiento** | Proven | 95647 | 10.35 | 0.73 | 208 |
| **Hundimiento** | Probable | 48381 | 11.99 | 0.94 | 192 |
| **Hundimiento** | Total | 144028 | 10.90 | 0.80 | 203 |
| **Central** | Proven | 66202 | 15.67 | 0.61 | 143 |
| **Central** | Probable | 108943 | 13.30 | 0.69 | 120 |
| **Central** | Total | 175145 | 14.19 | 0.66 | 129 |
| **Total Porco** | Proven | 161849 | 12.53 | 0.68 | 181 |
| **Total Porco** | Probable | 157323 | 12.90 | 0.77 | 142 |
| **Total Porco** | Total | 319172 | 12.71 | 0.72 | 162 |

---

**Mining**

The active production originates from two main areas; Hundimiento and Central zones. Each mineralized zone employs one of two mining methods based on vein and surrounding ground characteristics. The Porco deposit consists of multiple, relatively thin high-grade veins. The mining methods used vary according to the continuity, dip, and width of these veins. Current mining methods employed include sublevel longhole stoping with backfill, shrinkage stoping

● "Hundimiento" is the more modern section of the mine and is developed mostly with trackless methods using an access ramp to move men and materials between levels. The mineralized zones are predominantly wider and steeper dipping thus, stoping utilizes mechanized sub level stoping with backfill. Some shrinkage stoping is also done in this area where applicable. All waste rock stays in the mine; and

● "Central" utilizes conventional shrinkage mining exclusively. Veins are generally thin and high grade and the wall rock competent. Mineralized material is hauled via rail on each active level to the shaft for hoisting to surface. Levels are spaced at a nominal 45 m and level connections are via manway raises and the main shaft. All waste rock stays in the mine.

Currently each mining area provides roughly 50% of the total mine production.

Then Long hole method of stoping which is used in the Hundimiento zone uses mechanized and trackless equipment to prepare each stoping block (Figure 1-2). It begins with driving two main levels 45 m vertically apart with a section of 3.0 m x 3.5 m with their respective counter galleries and entrances every 40 m (section 3.0 m x 3.0 m).

**Figure 1-2: Typical Sublevel Stoping Layout**

![](ex99-1_017.jpg)

Source: Sinchi Wayra (2022)

Shrinkage is stoping method used in the Central zone with smaller stope dimensions to allow rapid mining of smaller stopes and less mineral inventory stored in the stope (Figure 1-3). Dimensions of each panel are 15 m long and 20 m high.

**Figure 1-3: Typical Long Section of Shrinkage Stope**

![](ex99-1_018.jpg)

Source: Sinchi Wayra (2022)

Shrinkage is used in veins with dips greater than 45° and with widths less than one meter and geomechanical characteristics of the rock mass of regular quality in relation to the hanging and footwalls of the vein.

The mine employs the following mining equipment:

● two Resemin Muki FF single boom jumbo rigs with a power of 75 HP that drill between 2.40 and 3.0 m long holes. They are generally used for secondary development (horizontal vein developments) to prepare sublevels whose nominal dimensions are 3.0 m x 3.5 m;

● two Resemin Small Bolter 77 units to install rockbolts and mesh. These units have a power of 75 HP with a drilling capacity of 3.0 m;

● two Resemin Raptor Mini DH drills for drilling long holes using the "Sub Level Stoping" method. These have a drill range of 15 m;

● six scooptrams ranging in size from 1 to 2 yd3 bucket capacity; and

● Three Dux DT12 8 t trucks and two Trident 6 t trucks.

Total Mine Production in 2022 is shown in Table 1-4.

**Table 1-4: Total Mine Production in 2022**

---

| | |
|:---|:---|
| | **Total** |
| Production (tonnes) | 181153 |
| Waste rock (tonnes) | 45710 |
| Backfill Hauled (tonnes) |  |
| Zinc (%) | 7.10 |
| Lead (%) | 0.62 |
| Silver (g/t) | 118 |
| Primary Devt Horizontal (m) | 1621 |
| Primary Devt Vertical (m) | 335 |
| Secondary Devt Horizontal (m) | 4796 |
| Secondary Devt Vertical (m) | 1643 |

---

Source: Santacruz (2023)

Total Manpower at the mine site including Mine, Plant, Maintenance, Services, and General and administrative in 2022 totaled 618 people consisting of 358 direct employees and 260 contractors. In the breakout table below, the contractors fill mostly the services roles.

**Table 1-5: List of Mine Personnel**

---

| | |
|:---|:---|
| **Mine** | **243** |
| Plant | 44 |
| Engineering and Maintenance | 38 |
| General & Administrative | 33 |
| Contractors | 260 |
| **Total** | **618** |

---

Mining in the upper areas, and adjacent to active mining operations, is carried out by "Cooperativas". These groups are independent miners with which Illapa has informal agreements allowing them to mine certain areas of the deposit. Ore mined under this agreement is processed at the Porco plant on a toll basis. In 2013, it was agreed that Contrato de Asociación Sociedad Minera Illapa S.A. would exploit the levels lower than elevations 4,213 and 4,225, in the central zone. However, members of the Cooperatives regularly violate the agreement and access active mining areas below these agreed boundaries, which is both a safety and production issue. As well, environmental licenses and controls are not in place for Cooperatives and little or nothing is done to regulate the environment in their work areas.

The production from cooperative mined areas is separate from that planned and exploited by Illapa. The Cooperative system is one method to reduce illegal activity and have some positive influence on operating standards and control over areas being mined, however the impacts of blocked mine access, unauthorized entry, and activities in active mining areas remain significant.

**Recovery Methods**

The Porco Mill, which has two sources of feed (company feed and toll feed), has been in production since 1992. The mill processes the company and toll feeds separately.

The mill uses a crushing, grinding, and flotation flowsheet to recover a lead concentrate and a zinc concentrate. Both concentrates are sold to Glencore by overseas shipment through Antafagasta Chile. The zinc concentrate is shipped as a bulk product. The lead concentrate, due to local laws, is bagged prior to shipping.

The mill generally separates company and toll feed into different days, but there are a few days where the feed is processed on the same day, with a shutdown in between to separate them.

The feed grades for the company feed are measured as is typical for a processing plant, by taking samples from the process at the cyclone overflow and performing a reconciliation each month based on concentrate produced and tailings samples. The toll ore has extra sampling as part of the contract with the local minors. The ore is received by San Lucas, often in 1-2 t lots, where it is weighed and sampled. The ore is combined on a toll feed stockpile to be fed to the mill. The toll feed follows the same sampling and reconciliation procedure as the company ore.

The plant flowsheet for the Porco mill, which can be seen in Figure 1-4, is a typical differential flotation circuit to produce lead and zinc concentrates.

The ore is crushed in preparation for feed to the grinding circuit. The grinding circuit utilizes a SAG/Ball mill combination to grind the feed to a P80 of 100 µm.

The flotation circuit recovers both lead and zinc to a bulk concentrate. The bulk concentrate then undergoes cleaner flotation to remove a lead concentrate. The tailings from the lead cleaning circuit becomes the zinc concentrate. Both of the concentrates are filtered for shipping to the smelter. The lead concentrate is bagged for shipping, while the zinc concentrate is shipped bulk in trucks.

**Figure 1-4: Porco Mill Flowsheet**

![](ex99-1_019.jpg)

Source: Glencore (2021)

**Infrastructure**

The industrial complex for the Porco operation comprises both mine portals, the processing plant, and all services to support mining and processing, as detailed on Figure 1-5. This includes:

● Various technical, administrative offices, and mine operations office;

● Maintenance facilities for all surface and underground equipment;

● Surface stockpiles;

● Warehousing facilities for mine and processing supplies, including reagents;

● A dining hall for technical and administrative staff;

● A first aid station;

● Fuel storage and a refilling station;

● A one million liter water storage tank;

● An explosives magazine;

● Water treatment; and

● Mine services, such as a mine dry, power, water supply, and compressed air.

The industrial site is gated and has a security force.

**Figure 1-5: Industrial Complex of the Porco Mining Operation**

![](ex99-1_020.jpg)

Source: Santacruz (2023)

The Yancaviri camp area is located approximately 5 km from the industrial area of the Porco Mine operation and approximately 2 km from the town of Agua de Castilla (Figure 1-6).

The camp provides housing for technical staff of the operation and visitors. It is equipped with a cookhouse and dining hall, gymnasium and basketball court (Figure 1-7).

The camp site also houses the concentrate storage facility and the railway loadout for concentrate shipment.

The Yancaviri is also gated with a security force.

**Figure 1-6: Yancaviri Camp Site, Porco, and Agua de Castilla Townsites.**

![](ex99-1_021.jpg)

Source: Santacruz (2023)

**Figure 1-7: Details of Yancaviri Camp Facilities**

![](ex99-1_022.jpg)

Source: Santacruz (2023)

**Environment and Permitting**

<u>Environmental Considerations</u>

Responsible environmental management is a critical part of Santacruz's license to operate and our responsible, compliant operation of Bolivian Assets has continued for the last 30 years. Environmental compliance with national laws and regulations is the basis of Santacruz's environmental management system and is governed by a framework of oversight by the relevant Environmental Authority. Its environmental commitments are reported to the authorities annually in an Environmental Monitoring Report, which summarizes environmental management of its operations under applicable laws and regulations.

<u>Waste and Water Management</u>

Waste management is an important part of Santacruz's Comprehensive Environmental Management, which includes a waste management plan to classify, handle, and store waste separately for proper disposal or treatment. Waste management complies with Environmental Law No. 1333, its Regulations on Solid Waste Management, and its supplementary regulations, focusing primarily on the sectoral requirements of the Environmental Regulation for Mining Activities for waste rock and tailings.

*Solid Waste*

 

There are a total of 9 tailings dams at the Porco mine. Eight of the tailings dams have been decommissioned. All of the tailings facilities are inspected regularly and maintained to the standards set out by the Canadian Dam Association guidelines. Dams are under the supervision of engineers from AMEC (now Wood Engineering) and regular external audits are conducted by a third-party engineering firm.

The active Tailings Storage Facility (dam "D") began operations on March 3, 1998. Initially designed by AGRA Earth & Environmental Ltda. For the first two phases., and AMEC for the current active expansion. The facility meets current international standards. The impoundment is of downstream construction and the dam lined with 60 mil HDPE. A system of well and piezometers are in place to monitor the facility's performance. Construction of Phase VI begun in 2018 was completed in 2019 and included recommended work to reinforce areas of the foundation. Another expansion was completed in 2021, and construction of the next expansion was completed in 2025.

Tailings are discharged along the inside face of the dam at 25-29% solids, forming a tailings beach for additional support, and keeping the water away from the dam. The water reclaim system consists of a barge mounted pump system to form a closed loop with the process plant. The site is zero discharge. There exists capacity to contain all tailings to be generated by processing the stated reserves.

*Water Management*

 

Water management has been identified as the most critical environmental area. Water is a shared resource of high social, environmental, and economic value, which is also a critical component of Santacruz's mining and metallurgical activities. Mining operations are located in the Bolivian Highlands, in areas with low precipitation, high evapotranspiration, and threats of drought.

Porco Mine is a zero-discharge operation. The mine produces about 35 liters/s excess water, which combined with that precipitation captured in the Tailings Storage Facility makes up 85% of the fresh water supply and is the major source for Industrial make-up water. Treated discharge is reused for drilling and dust suppression water underground and the process plant uses mine water combined with reclaim from the Tailings Storage Facility. Porco Mine has permits in place for maximum water needed, however limits the use of fresh makeup water from the Jalsuri spring to potable needs at campsite and offices, and to prepare certain reagents.

**Figure 1-8: Porco Mine Water Balance**

Source: Sustainability Report, Sinchi Wayra (2022)

<u>Permitting</u>

Santacruz Silver operates the Porco mine as a joint venture with the Bolivian Government (COMIBOL).The structure of the contract with COMIBOL is a "Partnership Contract governing Bolivar and Porco Mines (CA-MBP), and its purpose is to develop and implement a mining operation for the treatment of the existing mineralogical reserves and resources in the Bolívar and Porco Mines, by the exploitation, preparation, beneficiation and sale of mineral concentrates. Contrato de Asociación Sociedad Minera Illapa S.A. is authorized as operator and responsible of executing on behalf of COMIBOL, all the operations and activities of the association contract. The shares of CA-MBP are 55% for COMIBOL and 45% for Contrato de Asociación Sociedad Minera Illapa S.A." This renewable agreement expires in 2028.

Mining Contracts that grant the right to the subsoil mining resource are granted by the Mining Administrative Jurisdictional Authority (AJAM) over the ATE mining areas, and a contract is granted for each area or contiguous group of areas. Recent changes to the laws and government personnel have pushed Santacruz contract updates into a transitionary period waiting for final signatures and approvals. Santacruz holds Special Transitory Authorizations for each contract area which are officially designated "Mining Administrative Contracts for Adaptation". As of the effective date, approximately half of the applications have been transitioned, and the remainder fall under Article 187 of Law No. 535 on Mining and Metallurgy, which states:

*<u>ARTICLE 187</u>. (CONTINUITY OF MINING ACTIVITIES). Holders of Special Transitory Authorizations to be adapted or in the process of adaptation will continue their mining activities, with all the effects of their acquired or pre- constituted rights until the conclusion of the adaptation procedure.*

 

Santacruz has fully complied with this administrative procedure and is waiting for the Mining Administrative Authority to issue the relevant documents. It should be noted that this public entity has a considerable delay in the issuance of these documents.

Environmental Licenses have been formally granted to allow operation for all mining activity, by the Ministry of Environment and Water. The following table shows the licenses held by Santacruz:

**Table 1-6: Environmental Licenses Held by Santacruz**

---

| | |
|:---|:---|
| **Operation** | **License** |
| Bolívar | 040603-02-da-0324/14 |
| Porco | 051203-02-da-0031/14 |
| Caballo Blanco – Colquechaquita Mine | 050101-02-da-131/11 |
| Caballo Blanco – Mina Reserva and Tres Amigos | 050101-02-da-561/11 |
| Caballo Blanco – Don Diego Concentrator Plant | 050302-02-da-003/2024 |
| Caballo Blanco – San Lorenzo Mine | 050101-02-da-005/06 |
| Comco | 050101-02-da-006/09 |
| Soracaya | 050801-02-CD-C3-002/2017 |
| Aroifilla Thermoelectric Plant | 050101-04-da-007/2023 |
| Yocalla Hydroelectric Plant | 050103-05-da-006/2023 |

---

<u>Community Relations</u>

Santacruz mining projects are mostly well-established operations with a long history and a developed infrastructure, which provide direct benefits to employees and supporting businesses. However, the mines are located in rural to semirural areas in which the surrounding mostly agricultural communities can benefit from each operation only indirectly or through company outreach. Santacruz supports these communities by addressing services that are lacking, and helping to create value with economic development programs, and other forms of support.

A key player connected with all Bolivian Mines and surrounding areas are the mining cooperatives which are organized independent mining entities, some quite capable and organized with their own equipment. Recognized by the government as a valid economic activity for local development, they conduct their activities in abandoned mines or expropriating active mines, which can pose risks to business. The relationship is not completely one-sided as the Cooperatives sell mineralized material to process their product, thus mechanisms are in place to face possible subjugations, protect mine employees and the communities.

The Porco operation has dealt and continues to deal with both mining cooperatives and illegal miners, particularly those working in and around the Santacruz operation. Some of these cooperatives are legitimate entities under agreement with Santacruz to exploit the near surface areas of the Porco deposit. Therefor cooperatives share mine access with Santacruz workers. From 2013, it was agreed that Contrato de Asociación Sociedad Minera Illapa S.A. would exploit the levels lower than levels 4,213 and 4,225, in the central area and Hundimiento zone, respectively. However, members of the cooperatives regularly violate the agreement and access active Santacruz areas, which at times can endanger the safety of Santacruz personnel and infrastructure.

Much effort has been spent to successfully control this risk, with agreements put in place with large cooperatives to purchase their mineral. However, the influx of illegal miners who are less likely to negotiate is a constant risk to safe and productive operations.

*Porco*

 

Porco is a completely self-contained industrial center which supports the two main processes of mineral exploitation and concentration. There also exist on site, management, maintenance, transportation and sales support. Porco has been a mining area since colonial times, and mining is its main source of income. It is inhabited by civilians with outside sources of income, cooperative miners, and Santacruz workers with their families. The company works closely with the local populations, the most important being Porco and Agua de Castilla, as well as other smaller, satellite communities. Two cooperatives also work at, and adjacent to, Santacruz operations.

**Figure 1-9: Porco Surrounding Communities**

Source: Sustainability Report, Sinchi Wayra (2022)

**Figure 1-10: Porco Community Investment**

Source: Sustainability Report, Sinchi Wayra (2022)

<u>Mine Closure</u>

Closure Planning for Operations has social, economic, workforce, and environmental impacts, so conceptual closure plans are shared with communities. Santacruz's goal is to recover areas by establishing a healthy ecosystem capable of sustaining productive land use, ensuring the best possible environmental conditions, including physical, chemical, biological, and ecosystem aspects, at closure. Environmental superintendents are responsible for monitoring the environmental closure planning, and periodic reviews of these plans are conducted, including surveys of areas and activities to adjust financial provisions for closure.

Land Use and Rehabilitation - environmental challenges related to biodiversity protection, soil restoration, and land use, are addressed through dialogue with stakeholders, including local communities and relevant authorities. Our comprehensive environmental management focuses on minimizing disturbed areas. In 2022, Santacruz managed a total of 6,600 hectares of land covered by Temporary Special Authorizations (ATEs) granted by the Mining Administrative Jurisdiction Authority (AJAM), under leasing contracts with the Government through COMIBOL. However, Santacruz's processing activities, services, and related infrastructure (industrial area) currently occupy only 400.5 hectares of land, including areas of previous mining operations and other areas with environmental closure located within the properties Santacruz manage.

In 2022, Santacruz continued with the reforestation plan in the Queaqueani Dam area, in accordance with an agreement with the community of the same name, and significant progress was made in the progressive closure of the old tailings facilities at the Don Diego Concentrator Plant.

**Capital and Operating Cost Estimates**

<u>Capital Costs</u>

The Porco Mine has been in continuous operation for many years. There will be, as the reserve is expanded and developed, the need for step changes in mine access, production or haulage methods, that may require large capital outlays. These will be financially justified as needed. However, the capital needs for continued operation to exploit the remaining reserves is limited to Primary mine development, Capital equipment rebuilds and replacements, and Tailing Storage Facility expansions. Average annual capital has been and is projected to be in the 4 to 5 million USD range. The historic total capital requirement for all the Bolivian operations is shown in Table 1-7. Porco's projected capital requirements for 2023 to 2027 is shown on Table 1-8.

**Table 1-7: Actual Combined Capital Requirement for All Bolivian Operations, 2017 to 2022 ($M)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2017** | **2018** | **2019** | **2020** | **2021** | **2022** |
| Bolivar | 8.8 | 13.7 | 13.7 | 6.3 | 11.3 | 10.2 |
| **Porco** | **3.0** | **8.8** | **8.4** | **3.6** | **5.3** | **3.1** |
| Reserva | 1.3 | 2.4 | 2.1 | 2 | 4.3 | 3.5 |
|  | **2017** | **2018** | **2019** | **2020** | **2021** | **2022** |
| Tres Amigos | 2.1 | 2.6 | 1.5 | 1.8 | 2.2 | 3 |
| Don Diego | 0.9 | 6.9 | 1.4 | 0.9 | 1.1 | 1.2 |
| Colquechaquita | 1.2 | 2 | 1.4 | 1 | 3 | 2.5 |
| La Paz | 3.3 | 0.6 | 0.3 | 0.4 | 0.2 | 0.7 |
| Soracaya | 0.5 | 2.1 | 0.2 | 0.1 |  |  |
| San Lucas | 0.8 | 0 | 0 | 0.1 | 0.4 |  |
| **Total** | **21.8** | **39.0** | **28.5** | **16.3** | **27.8** | **24.3** |

---

**Table 1-8: Projected Capital Requirement for Porco Operations, 2023 to 2027 ($M)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **2023** | **2024** | **2025** | **2026** | **2027** |
| Engineering/Admin |  |  | 0.1 | 0.0 |  |
| Safety/Environmental |  |  | 0.2 | 2.0 |  |
| Mobile Equipment/Maintenance |  |  | 0.9 | 1.8 | 1.2 |
| Plant | 0.3 | 0.5 | 0.3 | 0.3 | 0.2 |
| Exploration |  | 0.0 | 0.4 | 0.2 | 0.2 |
| Primary Development |  |  | 1.4 | 1.7 | 2.4 |
| **Total** |  | **2.9** | **6.4** | **4.1** | **2.5** |

---

Recurring exploration and primary development costs have been included in the COG calculations to better anticipate and account for total costs and make the COG more meaningful for reserve estimation and mine planning.

<u>Operating Costs</u>

Costs used for Cut-off grade analysis were taken from actual costs for 2022. The actual cost of corporate G&A was allocated to each of the businesses.

**Table 1-9: Unit Operating Costs ($/t)**

---

| | |
|:---|:---|
| **Mine** | **94.68** |
| Mine Operations | 16.06 |
| Mine Maintenance | 58.85 |
| Indirect | 19.78 |
| Plant | 15.04 |
| Warehouse | 1.94 |
| G&A | 13.36 |
| **Total** | **125.02** |

---

Source: Santacruz (2023)

Mine operations include direct costs of mining, including labor, energy, materials, and services.

Mine Equipment Maintenance Costs includes maintenance to all equipment related to direct development, exploitation and haulage, as well as service equipment such as pumping, ventilation, winches, etc.

Indirect costs would include Site Management, Technical services, Site Administration, Environmental and Social, Safety and Security.

Plant costs include direct Beneficiation costs as well as plant maintenance, and indirect costs. Warehouse costs refer to Concentrate handling and storage.

General and Administration includes allocated Bolivian corporate costs.

**Economic Analysis**

<u>Result</u>

The Reserve Estimate was generated using actual costs experienced during a stable production period following the change in management after the purchase of the mine by Santacruz Silver (2022 and beginning of 2023). Actual costs were used for mine operating, concentrate overland transport, port costs, and shipping as well as smelting fees, payment terms, and penalty charges. A simplified Cash flow model was built to model the costs and conditions used to generate the Reserve estimates stated in the Porco Report.

The Porco Mine is part of a multi-operation business. However, the Economic model treats it as a separate financial entity with Bolivian corporate costs allocated for the analysis. As well, the operation is subject to a partnership with the Bolivian Government (COMIBOL), but the financial modelling examines the value of the operation on a 100% basis to support the Reserve statement.

The Porco Mine has been in continuous operation for over 500 years and the deposit is a network of relatively narrow veins. These two aspects drive the normal exploitation process of the mine, where inferred resources are converted and exploited in the same budget year. Resources are generally proven-up by drifting and sampling instead of drilling. Therefor normal budgeting and mine planning includes resources outside of the Reserve estimate.

For the current exercise in the Porco Report, only Proven and Probable reserves are included in financial evaluation, so the production schedule represents the depletion of these reserves at average grade and current production rates. The context of the production schedule exploits the Proven and Probable reserves as part of a continuous operation and as such does not include the closure activities.

**Table 1-10: Production Forecast – Mining and Processing**

---

| | | | |
|:---|:---|:---|:---|
| | **Unit** | **2023** | **2024** |
| **Mine Production** | **Mine Production** | **Mine Production** | **Mine Production** |
| Tonnes Mined | (DMT) | 197400 | 121772 |
| Tonnes Processed | (DMT) | 197400 | 121772 |
| **Head Grades** | **Head Grades** | **Head Grades** | **Head Grades** |
| Zinc | (%) | 12.71 | 12.71 |
| Lead | (%) | 0.72 | 0.72 |
| Silver | gr/t | 162 | 162 |

---

Metallurgical recoveries and concentrate qualities are actual for the times and head grades that were actually mined. These parameters will necessarily be conservative considering the higher grades in the production schedule.

**Table 1-11: Production Forecast - Concentrate**

---

| | | | |
|:---|:---|:---|:---|
| | **Unit** | **2023** | **2024** |
| **Concentrates** | **Concentrates** | **Concentrates** | **Concentrates** |
| Zinc | (DMT) | 46279 | 28548 |
| Zn Conc. Grade | (%) | 51 | 51 |
| Ag (in Zinc) | gr/t | 266 | 266 |
| Zn Recovery | (%) | 94 | 94 |
| Ag (in Zinc) | (%) | 38 | 38 |
| Lead | (DMT) | 1984 | 2444 |
| Pb Conc. Grade | (%) | 54 | 27 |
| Ag (in lead) | gr/t | 8069 | 4049 |
|  | **Unit** | **2023** | **2024** |
| Pb Recovery | (%) | 76 | 76 |
| Ag (in Lead) | (%) | 50 | 50 |
| **Metal Recovery** | **Metal Recovery** | **Metal Recovery** | **Metal Recovery** |
| Zinc | (FMT) | 24000 | 15000 |
| Silver (in Zinc) | (FOT) | 395000 | 244000 |
| Lead | (FMT) | 1000 | 1000 |
| Silver (in Lead) | (FOT) | 515000 | 318000 |
| Silver (Total) | (FOT) | 910000 | 562000 |

---

Notes:

FMT = Fine Metric Tonnes; DMT = Dry Metric Tonnes; FOT = Fine Ounces Troy

That same logic follows to the net revenue generation (Table 1-12) which includes smelter charges and penalty fees.

**Table 1-12: Revenue and Cost Projection ($M)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **Unit** | **2023** | **2024** |
| **Payable Metal Revenue** | **Payable Metal Revenue** | **Payable Metal Revenue** | **Payable Metal Revenue** | **Payable Metal Revenue** |
| Zinc | Zinc |  | 60 | 37 |
| Metallurgical Deduction | Metallurgical Deduction |  | 9 | 6 |
| Gross Payable Zinc | Gross Payable Zinc |  | 50 | 31 |
| Lead | Lead |  | 2 | 1 |
| Metallurgical Deduction | Metallurgical Deduction |  | 0 | 0 |
| Gross Payable Lead | Gross Payable Lead |  | 2 | 1 |
| Silver | Silver |  | 19 | 12 |
| Metallurgical Deduction in Zinc | Metallurgical Deduction in Zinc |  | 5 | 4 |
| Metallurgical Deduction in Lead | Metallurgical Deduction in Lead |  | 1 | 0 |
| Gross Payable Silver | Gross Payable Silver |  | 14 | 8 |
| Gross Revenue (Total) | Gross Revenue (Total) |  | 67 | 40 |
| **Smelter Charges and Penalties** | **Smelter Charges and Penalties** | **Smelter Charges and Penalties** | **Smelter Charges and Penalties** | **Smelter Charges and Penalties** |
| Treatment charges Zn | Treatment charges Zn | (USD/t) | 230 | 277 |
| Treatment charges Zn | Treatment charges Zn |  | 11 | 8 |
| Treatment charges Pb | Treatment charges Pb | (USD/t) | 130 | 133 |
| Treatment charges Pb | Treatment charges Pb |  | 0 | 0 |
| Penalties in Zn | Penalties in Zn | (USD/t) | 3 | 7 |
| Penalties in Zn | Penalties in Zn |  | 0 | 0 |
|  | **Unit** | **Unit** | **2023** | **2024** |
| Penalties in Lead | (USD/t) | (USD/t) | 0 | 13 |
| Penalties in Lead |  |  | 0 | 0 |
| Refining Charges in Pb | (USD/FOZ) | (USD/FOZ) | 1 | 1 |
| Refining Charges in Pb |  |  | 1 | 0 |
| Smelter Fees and Penalties |  |  | 12 | 9 |
| Net Revenue |  |  | 55 | 31 |
| **Operating Costs** | **Operating Costs** | **Operating Costs** | **Operating Costs** | **Operating Costs** |
| Production Costs |  |  | 22 | 14 |
| Cost of Sales |  |  |  |  |
| Rail Freight Zn |  |  |  | 3 |
| Rail Freight Pb |  |  |  | 0 |
| Port Expenses Zn |  |  | 2 | 1 |
| Port Expenses Pb |  |  |  | 0 |
| Rollback Fee Zn |  |  | 4 | 2 |
| Rollback Fee Pb |  |  | 0 | 0 |
| Concentrate Freight and Port Costs | Concentrate Freight and Port Costs | Concentrate Freight and Port Costs | 7 | 7 |
| Mine Royalty |  |  | 4 | 3 |
| Communities and Unions |  |  | 1 | 2 |
| **Total Cost of Sales** |  |  | **34** | **25** |

---

Depreciation is a product of previous operation and annual capital expenditure incurred for the exploitation of the reserve tonnage. Capital is limited to that required to support mining, processing, and tailing storage for the reserve. Corporate G&A is that part of the in-country costs allocated to the Porco mine.

**Table 1-13: Cashflow Projection ($M)**

---

| | | |
|:---|:---|:---|
| | **2023** | **2024** |
| **Income Statement** | **Income Statement** | **Income Statement** |
| Net Revenue | 55 | 31 |
| Production Costs | (22) | (14) |
| Selling Costs | (12) | (12) |
| Depreciation | (2) | (3) |
| **Gross Profit** | 20 | 3 |
| Corporate G&A | (2) | (1) |
| Corporate Administrative Expenses | (2) | (1) |
|  | **2023** | **2024** |
| **Operating Profit** | 18 | 2 |
| **EBIT** | 18 | 2 |
| Income Tax Expense (CIT) | (6.6) | (0.7) |
| **Net Gain/(Loss) for the Year** | 11 | 1 |
| **Cashflow Statement** | **Cashflow Statement** | **Cashflow Statement** |
| **Cash from Operations Activities** |  |  |
| Net Income | 11 | 1 |
| Depreciation | 2 | 3 |
| **Subtotal** | 13 | 4 |
| **Cash from Investing Activities** |  |  |
| Sustaining Capital Expenditure | (2) | - |
| **Subtotal** | (2) | - |
| **Cash Balance** |  |  |
| Beginning | - | 10 |
| Change in Cash | 10 | 4 |
| **Ending** | **10** | **14** |

---

Income Tax is 37.5% of the EBIT. As seen, the operations generate a positive cash flow after tax upon exploitation of the stated reserve at the metal prices used to generate the reserve.

<u>Sensitivities</u>

A univariate sensitivity analysis was performed to examine which factors most affect the Porco Mine economics when acting independently of all other cost and revenue factors. Each variable evaluated was tested using the same percentage range of variation, from -20% to +20%, although some variables may experience significantly larger or smaller percentage fluctuations over the LOM. For instance, the metal prices were evaluated at a ±20% range to the base case, while the capex and all other variables remained constant. This may not be truly representative of market scenarios, as metal prices may not fluctuate in a similar trend. The variables examined in this analysis are those commonly considered in similar studies – their selection for examination does not reflect any particular uncertainty.

Notwithstanding the above noted limitations to the sensitivity analysis, which are common to studies of this sort, the analysis revealed that Porco Mine is most sensitive to metal pricing. The Porco Mine showed the least sensitivity to capital costs. Figure 1-11 shows the results of the sensitivity analysis.

**Figure 1-11: Univariate Sensitivities**

![](ex99-1_026.jpg)

**Observations, Risks, Opportunities and Recommendations**

<u>Observations</u>

The Porco Mine consists of two separate mining zones that essentially function as separate mines, the Hundimiento and Central, that feed ore to a single processing plant on site to produce zinc and lead concentrates. Sinchi Wayra S.A. owns and operates all facets of the Porco business, which is in turn owned by Santacruz.

The QPs found that Porco is a well-managed operation that should be capable of sustaining profitable operations for many years to come in the same fashion as it has operated for the past several years.

The reserves were found to be estimated correctly using industry-standard techniques and procedures and industry-standard software by diligent and competent professionals.

The mine has an ample provision of skilled workers. Typical and reasonable ore control systems were in place, but it is possible that the results could be improved with a closer attention to appropriate mining widths, minimizing them wherever possible to minimize dilution.

The single greatest challenge to the operation is the incessant trespassing of illegal miners into the active mining operations. This results in damage of mine equipment (often disrupting the ventilation system), disruption to scheduling, loss of revenue, and poses a real threat to the safety of the workers. How this situation can be ameliorated or prevented is beyond the scope of this document and the cultural awareness of the authors. However, it should be noted that this situation is ongoing and, as such, all production and economic results contained in the Porco Report are inclusive of this threat and impediment.

This threat also forces the mine to minimize its resources and reserves. Both require development for expansion, and while a typical mine provides adequate development ahead of production. A typical mine provides adequate development ahead of production for ore definition and proper scheduling. However, the Porco Mine minimizes open development to provide less opportunity for the illegal miners to access and illegally extract its ore. As a result, the operation runs very "hand to mouth" with respect to both access development and resources / reserves. This is demonstrated by the forward planning; 37% of the 2023 schedule was based on inferred resources.

It is difficult to estimate the ability of the mining fleet to execute the mine plan, as industry- standard availability and utilization factors are not tracked by unit or even unit type.

The processing facility at the Porco Mine appears to be well run and in good condition.

<u>Risks</u>

The following Risks were identified for the Porco Mine:

● Geological interpretations may be subjective and may result in the location and extent of some of the mineralized structure although as the Porco mine is comprised of well constrained veins, this risk is minimal;

● As vein thicknesses are narrow, resources may be sensitive to dilution although the relative high grades that exist at the Porco mine are successful mitigating such risks to date;

● Varying resource classification methods and criteria may vary as more data is considered;

● There is no guarantee that further drilling will result in additional resources or increased classification;

● Lower commodity prices will change size and grade of the potential targets;

● Further work may disprove previous models and therefore result in condemnation of targets and potential negative economic outcomes;

● The single greatest risk to the Porco Mine is the activity that is prevalent throughout the region related to Cooperativas and artisanal miners may cause issues for access and for reasonable prospects of eventual economic extraction and may condemn or reduce resources and reserves in those areas and can drastically impact mine planning and scheduling;

● The current political and socio-economic climate in Bolivia poses risks and uncertainties that could delay or even stop development as reported within the Fraser Institute Annual Report 2022 where Bolivia ranks very low in many non-technical metrics. Bolivia has been ranked consistently low for the past five years and ranks in the lower quartile on all metrics that gauge risk and uncertainty. It is difficult to gauge or qualify the level or extents of the risks however, all companies working in Bolivia must continue to be aware of the potential risks and develop mitigation strategies. A significant risk related to the Santacruz Bolivian mineral assets and in particular the mineral resources and mineral reserves is the significant artisanal activity that continues to exist. This activity is not only a socio-economic risk but also affects access to resources and reserves along with potential sterilization of mineral resources;

● Lower commodity pricing will change the size and grade of potential targets;

● Ability to replace mined reserves on an annual basis; and

● Maintenance of permitting.

● As the mines continues to expand to depth, the following aspects of mine operations will be challenged:

● Worker travel time (reduced time at the face);

● Dewatering inflow quantities, infrastructure and costs; and

● Ventilation system needs and costs.

As the ore is conveyed by shaft for both mines, and most of the remaining reserve at depth, this could be very impactful on future operations. The shaft will ultimately require extension to depth or trackless equipment will be required to haul the ore to the shaft bottom.

<u>Opportunities</u>

Project opportunities include:

● A systematic exploration program could provide an excellent opportunity for successfully uncovering new discoveries;

● An increased understanding and derivation of alternative theories may result in further discovery and expansion for the Porco Mine;

● A hydrogeological study could help the operation to better characterize and understand water inflows, aiding design work and planning to reduce the impact of major seasonal inflows;

● Higher commodity prices will change size and grade of the potential targets; and

● Potential for expansion and classification upgrade of resources as mining activities progress.

The primary opportunity to the mine is to somehow contain or eliminate the illegal miner situation. This would allow for more predictable scheduling and operations, the ability to expand the resources and reserves, reduce operating costs, and improve the safety of all personnel.

The grade to the mill could be improved the grade to the mill by incorporating a mine dilution control program. As is typical with all narrow width mining, dilution is very sensitive to the mined widths of veins, which must be kept at minimum to accommodate equipment widths. Often, however, veins are over-mined to ensure complete recovery of the ore. This practice significantly increases dilution due to overbreak of the hangingwall and footwall.

<u>Recommendations</u>

To advance the Porco Mine and further evaluate the potential additional veins and increase resources thereby displacing depletion due to ongoing mining activities, the following is recommended:

● Regional exploration for identification of new veins;

● Incorporate structural interpretations to assist regional understanding;

● Analysis of thickness and grade-thickness profiles for resource targeting and predictive dilution study;

● Investigate geo-metallurgical characteristics; and

● Hydrogeological study and modelling should be done to better understand water inflows and minimize their impact on production.

Some surface or near surface targets along with underground drilling for resource delineation and extension. As is typical with all narrow width mining, dilution is very sensitive to the mined widths of veins. Often veins are over-mined to ensure complete recovery, but this practice comes with significantly increased dilution due to overbreak of the hangingwall and footwall. The operation should conduct a thorough test stoping experiment to ensure the most economic balance between incomplete recovery and excessive dilution.

Availability and utilization factors should be tracked, calculated, and reported for all mining equipment. This information should be used as a management tool to determine which units should be rebuilt or replaced and to avoid or minimize usage of the units with the highest operating costs.

The activities of both Cooperativas and illegal miners must continue to be monitored and action taken to understand and, to whatever extent is possible, control their activities to mitigate safety concerns for the workers reduction to the resources and/or reserves, to avoid disruption of the mine plan.

These recommendations have not been costed, as they represent changes to current practices that can be funded by existing operating budgets.

**Caballo Blanco**

Certain portions of the following information are derived from and based on the technical report entitled "*NI 43-101 Technical Report Caballo Mining Operations, near Potosi Bolivia*" that has an effective date of January 1, 2024, and was prepared by Richard Goodwin, P.Eng., Garth Kirkham, P. Geo., and Tad Crowie, P.Eng. (the "**Caballo Blanco Report**"), and is based on the assumptions, qualifications and procedures set out therein. For a more detailed overview of the Caballo Blanco Mine, please refer to the Caballo Blanco Report, which is available on SEDAR+ at <u>www.sedarplus.ca</u> and on EDGAR at <u>www.sec.gov</u>.

The disclosure in this Annual Information Form relating to the Caballo Blanco Mine is qualified in its entirety by the full text of the Caballo Blanco Report, which is incorporated by reference in this Annual Information Form. Terms not otherwise defined in this section have the respective meanings given to them in the Caballo Blanco Report.

**Introduction**

JDS was commissioned by Santacruz Silver Mining Ltd. (Santacruz) to carry out a Technical Report for the Caballo Blanco operation (Caballo Blanco or CB) located in the state of Potosi, Bolivia.

Caballo Blanco has three operating mines: the Reserva, Colquechaquita, and Tres Amigos. All mined ore feeds the Don Diego processing plant.

The Caballo Blanco Report is the first declaration of resources and reserves, for the Caballo Blanco base metals underground mining operation since its acquisition by Santacruz The mine is fully operational at the time of the Caballo Blanco Report preparation. The effective date of both the resource and the reserve is January 1, 2023, which is approximately 18 months before the report date. Production data for the calendar year 2023 has been included in Section 24 of the Caballo Blanco Report under the heading "Other Relevant Data and Information" to show the depletion and typical replenishment of resources and reserves over a calendar year.

**Ownership**

On October 11, 2021, Santacruz entered into the Glencore Share Purchase Agreement with Glencore whereby Santacruz agreed to acquire a portfolio of Bolivian silver assets from Glencore, including the following: (a) a 45% interest in the Bolivar Mine and the Porco Mine, held through an unincorporated joint venture between Glencore's wholly-owned subsidiary Contrato de Asociación Sociedad Minera Illapa S.A. (Illapa) and COMIBOL, a Bolivian state-owned entity; (b) a 100% interest in the Sinchi Wayra S.A. (Sinchi Wayra) business, which includes the producing Caballo Blanco mining complex; (c) the Soracaya Project; and (d) the San Lucas Group.

On March 18, 2022, Santacruz completed this purchase, including Glencore's interest in the Caballo Blanco mining complex.

Santacruz thus owns 100% of the two Bolivian operating companies Illapa and Sinchi Wayra, which in turn own 45% of the Bolivar Mine, 45% of the Porco Mine, and 100% of the Caballo Blanco mining complex.

Sinchi Wayra is the operating company for all three active mining operations, including the Caballo mining complex.

**Location**

The Caballo Blanco project consists of three separate mines and one process plant operating as one to produce Zinc and Lead concentrates. An Important part of the supporting infrastructure includes two off-site power plants that produce supplemental electric power to the mines. The mines are relatively close together and located as follows:

Reserva and Tres Amigos Mines are located 31 km southeast of the city of Potosi, in the Canton Concepcion of the first section of the Tomas Frias Province of the Department of Potosi, at an average elevation of 4,536 masl, at UTM coordinates WGS-84: 218764E and 7814967N.

Colquechaquita Mine is located 30 km southeast of the city of Potosi, in the Canton Concepcion of the first section of the Tomas Frias Province of the Department of Potosi, at an average elevation of 4,520 masl, at UTM coordinates WGS-84: 219915E and 7819380N.

The Don Diego Process plant is located about 23 km Northeast of the city of Potosi, in the Don Diego Canton, Municipality of Chaqui, Cornelio Saavedra Province, of the Department of Potosi. At an elevation of 3,550 masl at UTM coordinates WGS-84: 228933E and 7841150N.

There is a 60 km drive from the mines to the Don Diego Processing plant.

The Mines and Process plant have easy access to Potosi City which is a large industrial, mining, and population center. Road access to the Reserva mine from Potosi is 23 km south via the Potosi-Tarija interdepartmental paved highway towards Kuchu Ingenio, then 8 km East on gravel road. Road access to the Colquechaquita mine from Potosi is 16 km south via the Potosi-Tarija interdepartmental paved highway towards Kuchu Ingenio, for approximately 16 km, then 11 km East on gravel access road.

Don Diego plant also has site access to a rail spur for direct transport of concentrates to the preferred Port of Antofagasta Chile, or alternative ports of Arica, Chile, and Matarani, Peru.

**History**

Caballo Blanco is a result of business consolidation over time.

The Don Diego Plant began processing in 1977 and was originally acquired by the precursor of Sinchi Wayra S.A. (Sinchi Wayra); Compania Minera del Sur (COMSUR) in 1976. COMSUR purchased the specific mining interests from small private owners and operators loosely organized into cooperativas. The Colquechaquita mine began operating in 1977, passing to COMSUR in 1991, later changing its name to SINCHI WAYRA S.A. Sinchi Wayra took over the Reserva/TresAmigos mines in 2010. Tres Amigos obtained its environmental licenses to operate in 2005 by Sociedad Minero Metalúrgica Reserva Ltda. for its two sections of Exploitation Reserva and Tres Amigos, with a small-scale mining operation. Glencore became involved in 2005 with the purchase of COMSUR and effecting the name change to Sinchi Wayra.

Sinchi Wayra S.A. owns and operates all facets of the Caballo Blanco business; The Don Diego processing plant and Colquechaquita mine since their acquisition by Glencore in 2005, and Reserva and Tres Amigos mines from their acquisition in 2010. Glencore immediately began to develop the deposits with a higher degree of mechanization. The Power plants, Aroifilla thermal power plant, and the Yocalla hydro-electric plant which provide supplementary electric power are also owned and operated by Sinchi Wayra and are included under the management of Caballo Blanco Project.

On October 11, 2021, Santacruz entered into the Glencore Share Purchase Agreement with Glencore whereby Santacruz agreed to acquire a portfolio of Bolivian silver assets from Glencore. The Assets include: (a) Glencore's 45% interest in the Bolivar Mine and the Porco Mine, held through an unincorporated joint venture between Glencore's wholly-owned subsidiary Illapa and COMIBOL, a Bolivian state-owned entity; (b) a 100% interest in the Sinchi Wayra business, which includes the producing Caballo Blanco Mining Complex; (c) the Soracaya Project; and (d) the San Lucas Group.

On March 18, 2022, Santacruz completed this purchase, including Glencore's interest in the Caballo Blanco mining complex. The Caballo Blanco mining complex has continued to operate since that date under the management of Santacruz.

**Figure 1-1: Project History**

Source: Glencore (2021)

**Geology and Mineralization**

The Bolivar, Porco and Caballo Blanco deposits are located in the central part of the Eastern Cordillera, a thick sequence of Paleozoic marine siliciclastic and argillaceous sedimentary rocks deposited on the western margin of Gondwana and deformed in a fold-thrust belt. There were two major tectonic cycles in the Paleozoic: The Lower Paleozoic Famatinian cycle (the Tacsarian and Cordilleran cycles of Bolivia), and the Upper Paleozoic Gondwana cycle (Subandean cycle of Bolivia).

The Caballo Blanco zinc, silver, lead mine, situated south of Potosi, is located in the Jayaquila – Victoria corridor, a 5-7 km north-south structural zone with three sectors, from north to south, the Colquchaquita, Reserva, and Tres Amigos mines. They are not described in the published literature. They are hosted by volcanic rocks of the Kari-Kari volcanic complex, with dimensions of 32 km north-south and 12 km wide, located on the SE side of the Los Frailes felsic volcanic field that covers an area of 8,500 square kilometre (km<sup>2</sup>) at altitudes of 4,000 - 5,200 masl. The history started with intrusion of small granitoids at about 25 Ma at Kumurana, at the southern end of the Kari massif, and Azanaques. These were followed by the formation of Kari at about 20 Ma that is interpreted to be a resurgent caldera with welded ignimbrite fill. Ash flows, domes and stocks formed in the Cebadillas episode at 17-10 Ma, including the Cerro Rico dome with Ag-Sn mineralization at 13.8 Ma (Zartman & Cunningham, 1995; Cunningham et al., 1996; Rice et al., 2005). Huge volume felsic ash flows were erupted to form the Livicucho and Condor Nasa ignimbrites at 8-7 Ma and the main Los Frailes ignimbrites at 3.5-1.5 Ma. The final stages were the eruption of large resurgent rhyolitic domes at 4-1 Ma, and the Nuevo Mundo volcanic province at <1 Ma. (Francis et al., 1981; Schneider, 1985, 1987; Schneider & Halls, 1985; Kato, 2013; Kato et al., 2014; Kay et al., 2018).

The rocks of the Kari complex are felsic, peraluminous, and rich in garnet, cordierite and tourmaline (Schneider, 1987).

Mineralization in its generality is characterized by being housed in Philonian structures divided into three domain orientations:

&nbsp;&nbsp;&nbsp;&nbsp;1. Oriented
 at N 10° to 20° E, are Colquechaquita (Karina, Viviana, Camila), and some veins of
 Tres Amigos (Catalina, Milagros Este and Central);

&nbsp;&nbsp;&nbsp;&nbsp;2. Oriented
 N 10° to 30° W°; Reserve veins (Rosario, Wendy, Juanita and Blanquita), in Tres
 Amigos there is also within this system the vein (Ramo Catalina); and

&nbsp;&nbsp;&nbsp;&nbsp;3. Corresponding
 to veins of the Porvenir sector where they have an N-S orientation, corresponding to Reserva
 (Veta Rosita) and in Tres Amigos (Milagros veins).

General mineralogy is composed of quartz-pyrite-chalcopyrite and marmatite, sphalerite, galena, boulangerite (Tres Amigos) as primary minerals; as accessory minerals we have siderite, calcite and ankerite at the trace level.

The mineralogy is quartz, pyrite, chalcopyrite, marmatite, sphalerite, galena and boulangerite with minor siderite, calcite and ankerite.

**Mineral Processing and Metallurgical Testwork**

The metallurgical assumptions for recoveries and concentrate grades can be found in Table 1-1.

While both the lead and the zinc concentrates pay for the metal they are named for and for silver, a lead concentrate does not pay for zinc contained and the zinc concentrate does not pay for lead contained. The recoveries included in the Caballo Blanco Report only include recovery to concentrates in which they can be paid.

**Table 1-1: Recovery and Concentrate Grade Estimates**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Parameter** | <br>**Unit** | **Concentrates** | **Concentrates** | **Concentrates** | **Concentrates** |
| <br>**Parameter** | <br>**Unit** | **Lead Concentrate** | **Lead Concentrate** | **Zinc Concentrate** | **Zinc Concentrate** |
| <br>**Parameter** | <br>**Unit** | **Company Feed** | **Toll Feed** | **Company Feed** | **Toll Feed** |
| Zn Recovery | % | N/A | N/A | 94 | 1.0753\*(zinc feed grade) + 83.221 |
| <br> Pb Recovery | % | 3.65\*(lead feed grade %) + 75.69 | 13.149\*(lead feed grade) + 39.576 | <br> N/A | <br> N/A |
| <br> Ag Recovery | % | &nbsp;&nbsp;&nbsp;0.0459\*(silver feed grade)<br> +67.256 | -0.0398\*(silver feed) + 42.791 | -0.0225 x (silver feed grade) + 20.655 | 0.0246\*(silver feed grade) + 42.991 |
| **Concentrate Grade** | **Concentrate Grade** | **Concentrate Grade** | **Concentrate Grade** | **Concentrate Grade** | **Concentrate Grade** |
| Zn | % | 3.5 | 9 | 51 | 48 |
| Pb | % | 61 | 45 | 1.4 | 1.4 |
| Ag | g/t | 6460 | 4050 | 280 | 440 |

---

**Mineral Resource Estimate**

The Caballo Blanco Project is an "advanced property" and has been in continuous production since 1993. Glencore and subsequently Santacruz Silver has performed exploration and resource expansion drilling of surface and underground drillholes at the Caballo Blanco since 2010 totalling 39,562.55 m. The 128 drillholes and 19,644 underground channels in the database were supplied in electronic format by Santacruz. This included collars, downhole surveys, lithology data and assay data (i.e., Ag g/t, Pb%, Zn%, Fe%, Sn%).

Verification of the Caballo Blanco drillhole and underground sample assay databases are primarily focused on silver, lead and zinc in addition to iron, arsenic, sulphur and tin. Sample databases were supplied in Excel<sup>TM</sup> format and in LeapFrog<sup>TM</sup>. Checks against source data and assay certificates showed agreement. Statistical analyses used to investigate and identify errors were performed and resulted in minor issues. These have been corrected and it is recommended that a continued program of random "spot checking" the database against assay certificates be employed.

During the 2023 site visit, an extensive independent sampling verification plan was implemented with a total of 80 samples collected across from the Bolivar, Porco and Caballo Blanco operations. The Don Diego laboratory is an NB/ISO/IEC 17025:2018 accredited laboratory which performs all assay analyses for the mining and processing operations for Sinchi Wayra including Caballo Blanco. The Don Diego laboratory in owned and operated by the Issuer, Santacruz.

Results of the verification samples indicates that the regression predictions perfectly fit the data meaning that the check sampling program successfully verified and validated the data and although, these results are not a complete audit of the laboratory, they do verify that the assay results are suitable for resource estimation purposes.

The geological and lithological solid domain models were supplied by Santacruz in both Datamine<sup>TM</sup> and LeapFrog<sup>TM</sup> which are both industry-leading software systems. The QP imported the multiple vein domains into a similar system called MineSight<sup>TM</sup> to verify solids volumes and ensure matching of the solids domains against the drillhole and sample database. Results confirmed location and extent of volumes are appropriate to resource estimation purposes.

Resource block models were supplied in Datamine<sup>TM</sup> format which is an industry recognized software system used for resource estimation. These models were then imported to MineSight<sup>TM</sup> for verification of the resource estimation. In addition, independent estimations were run using the verified sample data and vein domains employing inverse distance estimations to ensure reasonableness and verify the resources independently. Results illustrated good agreement between the original and verification models. Verification of the SG regression analysis was also performed by comparing measured versus calculated density values.

The Qualified Person evaluated the resource in order to ensure that it meets the condition of "reasonable prospects of eventual economic extraction" as suggested under NI 43-101. The criteria considered were confidence, continuity and economic cut-off. The resource listed below is considered to have "reasonable prospects of eventual economic extraction".

Table 1-2 shows the Mineral Resource Statement for the Caballo Blanco deposit.

**Table 1-2: Base-Case Total Mineral Resources at 10.0% ZnEq Cut-off**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Total Caballo Blanco 2023 Mineral Resources** | **Total Caballo Blanco 2023 Mineral Resources** | **Total Caballo Blanco 2023 Mineral Resources** | **Total Caballo Blanco 2023 Mineral Resources** | **Total Caballo Blanco 2023 Mineral Resources** | **Total Caballo Blanco 2023 Mineral Resources** |
| **Mine** | **Category** | **Tonnes ('000)** | **Zn (%)** | **Pb (%)** | **Ag (g/t)** |
| &nbsp;&nbsp;<br>**Caballo Blanco** | Measured | 726 | 15.96 | 3.03 | 321 |
| &nbsp;&nbsp;<br>**Caballo Blanco** | Indicated | 502 | 14.32 | 2.86 | 269 |
| &nbsp;&nbsp;<br>**Caballo Blanco** | **Total M+I** | **1227** | **15.29** | **2.96** | **300** |
| &nbsp;&nbsp;<br>**Caballo Blanco** | **Inferred** | **2217** | **13.28** | **2.12** | **199** |

---

Notes:

1) The current Resource Estimate was prepared by Garth Kirkham, P.Geo., of Kirkham Geosystems Ltd.

2) All mineral resources have been estimated in accordance with CIM definitions, as required under NI 43-101.

3) The Mineral Resource Estimate was prepared using a 10.0% zinc equivalent cut-off grade. Cut-off grades were derived from $25.20/oz silver, $1.38/lb zinc and $1.20/lb lead, and process recoveries of 92.1% for zinc, 77.2% for lead, and 90.8% for silver. This cut-off grade was based on current smelter agreements and total OPEX costs of $106.94/t based on 2022 actual costs plus capital costs of $42.33/t. All prices are stated in $USD.

4) An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

5) Mineral resources are not mineral reserves until they have demonstrated economic viability. Mineral resource estimates do not account for a resource's mineability, selectivity, mining loss, or dilution. All figures are rounded to reflect the relative accuracy of the estimate and therefore numbers may not appear to add precisely.

**Mineral Reserve Estimate**

The January 1, 2023 reserve estimate represents the validation of Santacruz's internally- generated mineral reserve estimate by QP Goodwin. All work on the reserve by the Santacruz mine design team and the validation exercises were done in Deswik<sup>TM</sup>. The following process was used for this work:

● An NSR calculation and cut-off grade (COG) was developed by the QP using data provided by Santacruz;

● The reserve estimation methodology was reviewed, checked, and approved by the QP;

● Mine technical staff prepared a Life of Mine Plan (LOM) for the deposits using the NSR and COG provided by the QP. The LOM plan was prepared specifically for this reserve estimation and does not include inferred resources; and

● All LOM models were downloaded and reviewed by the QP for conformance to the methodology, proper application of the NSR cut-off grade, and correct application of agreed upon dilution and recovery factors.

The QP is satisfied that this exercise resulted in a valid reserve determination. The Mineral Reserve Estimate for Caballo Blanco is shown in Table 1-3.

**Table 1-3: Mineral Reserve Estimate for Caballo Blanco (January 1, 2023)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Mine** | **Category** | **Tonnes** | **Zn (%)** | **Pb (%)** | **Ag (g/t)** |
| **Colquechaquita** | Proven | 207000 | 10.49 | 2.16 | 174 |
| **Colquechaquita** | Probable | 212000 | 8.68 | 2.77 | 187 |
| **Colquechaquita** | **Total** | **420000** | **9.57** | **2.47** | **181** |
| **Reserva** | Proven | 168000 | 9.21 | 1.34 | 110 |
| **Reserva** | Probable | 177000 | 8.74 | 1.08 | 93 |
| **Reserva** | **Total** | **345000** | **8.97** | **1.21** | **101** |
| **Tres Amigos** | Proven | 194000 | 9.88 | 1.95 | 355 |
| **Tres Amigos** | Probable | 75000 | 6.16 | 1.73 | 272 |
| **Tres Amigos** | **Total** | **269000** | **8.84** | **1.89** | **332** |
| **Total Caballo Blanco** | Proven | 569000 | 9.90 | 1.85 | 217 |
| **Total Caballo Blanco** | Probable | 465000 | 8.30 | 1.96 | 165 |
| **Total Caballo Blanco** | **Total** | **1034000** | **9.18** | **1.90** | **193** |

---

**Mining**

The Caballo Blanco Mine has been in operation for 20 years. Although the mine is managed as a single business, it is actually composed of three different mines on the same mineralized trend: Reserva, Tres Amigos and Colquechaquita.

Although development to connect the mines is in process, there still exists some autonomy in how each are operated. The application of mining methods has thus been an adaptation of mining equipment technologies, evaluation and monitoring tools to the specific mineralized zones. The last decade of operations under the guidance of Glencore, the mine has seen a move to more mechanized methods to improve safety performance and mine productivity.

The three mining operations follow steeply dipping veins striking predominantly North/South. Veins vary in width from 0.2 to 2.5 m, the wider and more consistent veins being mined using more productive longhole methods.

*Reserva*

 

Reserva mine is the youngest and most modern of the three mines. Mine production is about 275 t/d. A long section of the Reserva mine is shown in Figure 1-2.

All mining is done with sublevel longhole methods and trackless development. In principle, the AVOCA method being used has all the productivity advantages of longhole stoping and allows for concurrent backfill to continuously support the relatively weak hanging wall. Backfill for stoping is generated from development mining. The method is demonstrated in Figure 1-3.

**Figure 1-2: Long Section Reserva Mine**

![](ex99-1_028.jpg)

Source: Glencore (2021)

**Figure 1-3: Avoca Mining at Reserva Mine**

![](ex99-1_029.jpg)

Source: Glencore (2021)

*Colquechaquita Mine*

 

Colquechaquita mine has been in production since 1991 using tracked development, and stoping by conventional shrinkage and cut and fill methods. The mine produces about 230 tonnes (t) of mineralized material per day. A long section of the Colquechaquita Mine is shown in Figure 1-4.

The transition to mechanized mining is in process but still in the early stages. Approximately 50% production continues to be generated from conventional methods. The southern portion of the mine is moving to trackless development. However, equipment brought into the mine must be disassembled and moved in the shaft which is time consuming and labor intensive.

**Figure 1-4: Long Section Colquechaquita Mine**

Source: Glencore (2021)

*Tres Amigos Mine*

 

Tres Amigos, shown in Figure 1-5, remains a conventional tracked mine using mostly a modified shrinkage stoping method, as shown in Figure 1-6.

The mineralized zones are narrow and high-grade making them well suited to these more selective stoping methods. However, higher productivity trackless mechanized methods are used for primary development and ramps. Stoping takes place generally above the -200 level and mineralized material production averages approximately 300 t/d. Mineralized material is hauled by rail either to the main Catalina shaft for hoisting to surface or hauled directly to surface using trucks.

**Figure 1-5: Isometric of the Tres Amigos Mine**

Source: Glencore (2021)

**Figure 1-6: Shrinkage Mining as Practiced at Tres Amigos**

Source: Glencore (2021)

*Mine Equipment*

 

The mine employs the following mining equipment:

● Five Resemin Muki FF single boom jumbo rigs with a power of 75 HP that drill between 2.40 and 3.0 m long holes. They are generally used for secondary development (horizontal vein developments) to prepare sublevels whose nominal dimensions are 3.0 m x 3.5 m. Occasionally they are used in small primary development headings;

● Two Atlas Copco Boomer single boom jumbo rigs with a power of 75 HP that drill between 3.7 and 4.0 m long holes. They are generally used for primary development headings;

● Two Resemin Small Bolter 77 units to install rockbolts and mesh. These units have a power of 75 HP with a drilling capacity of 3.0 m;

● Three Resemin long hole drills are used for drilling long holes using the "Sub Level Stoping" method. These have a drill range of 15 to 20 m;

● Thirteen scooptrams ranging in size from 0.54 to 4.5 cubic meter (m<sup>3</sup>) bucket capacity; and

● Six Dux Volquete 12 t haulage trucks.

Key production data from 2022 are shown by mine on Table 1-4.

**Table 1-4: Key Production Data from 2022**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | <br>**Reserva Mine** | **Tres Amigos Mine** | **Colquechaquita Mine** | <br>**Total** |
| Production (tonnes) | 81938 | 118633 | 77504 | 278074 |
| Waste rock moved (tonnes) | 52563 | 71551 | 30863 | 154977 |
| Backfill Hauled (tonnes) |  |  |  |  |
| Zinc (%) | 6.90 | 6.40 | 6.39 | 6.55 |
| Lead (%) | 0.99 | 2.13 | 1.24 | 1.55 |
| Silver (g/t) | 95 | 284 | 103 | 178.21 |
| Primary Devt Horizontal (m) | 1834 | 1353 | 1044 | 4232 |
| Primary Devt Vertical (m) | 207 | 228 | 415 | 851 |
| Secondary Devt Horizontal (m) | 1426 | 3282 | 1320 | 6028 |
| Secondary Devt Vertical (m) | 191 | 549 | 403 | 1142 |

---

**Recovery Methods**

The plant flowsheet for the Don Diego mill is a typical sequential flotation circuit for lead and zinc. The feed is crushed in preparation for the grinding circuit. The grinding circuit utilizes a SAG/Ball mill combination to produce a product size P80 of 100 µm for the flotation circuit.

The flotation circuit starts with the lead recovery circuit. In this circuit a rougher concentrate is produced, which is then cleaned without regrinding, in column flotation cells. The lead rougher tailings and cleaner tailings are combined and fed to the zinc circuit. The zinc circuit consists of rougher flotation and one stage of cleaning to produce a zinc concentrate. The zinc circuit tailings are deposited in the tailings pond. Both of the concentrates are filtered for shipping to the smelter. The lead concentrate is bagged for shipping, while the zinc concentrate is shipped bulk in trucks.

**Figure 1-7: Don Diego Mill Flowsheet**

![](ex99-1_033.jpg)

Source: Glencore (2021)

**Infrastructure**

Each of the three mining complexes that form the Caballo Blanco Project is supported by its own infrastructure, as detailed by mine in this section.

*Mina Reserva*

 

The Mina Reserva operation is surrounded by a facilities fence, inside of which are the following facilities:

● Various technical, administrative offices, and mine operations office;

● A maintenance facility for all surface and underground equipment;

● A mud dam for settling solids from the mine water;

● Warehousing facilities;

● A worker camp;

● A dining hall for technical and administrative staff;

● A first aid station;

● Water treatment; and

● Mine services, such as power, water supply, and compressed air.

The existing infrastructure for Mina Reserva is shown in Figure 1-8. Key facilities are identified by number on the drawing.

**Figure 1-8: Infrastructure for Mina Reserva**

![](ex99-1_034.jpg)

Source: Santacruz (2023)

*Mina Tres Amigos*

 

The Mina Tres Amigos operation is also surrounded by a perimeter fence and similarly equipped with all mine services, including, inside of which are the following facilities:

● Various technical, administrative offices, and mine operations office;

● A maintenance facility for all surface and underground equipment;

● A mud dam for settling solids from the mine water;

● Warehousing facilities;

● A worker camp;

● A dining hall for technical and administrative staff;

● A first aid station;

● Water treatment;

● Mine services, such as power, water supply, and compressed air; and

● The Catalina headframe atop the mine shaft.

The existing infrastructure for Mina Reserva is shown in Figure 1-9. Key facilities are identified by number on the drawing.

**Figure 1-9: Infrastructure for Mina Tres Amigos**

![](ex99-1_035.jpg)

Source: Santacruz (2023)

*Mina Colquechaquita*

 

The Mina Colquechaquita operation is also surrounded by a perimeter fence and similarly equipped with all mine services, including, inside of which are the following facilities:

● Various technical, administrative offices, and mine operations office;

● A maintenance facility for all surface and underground equipment;

● A mud dam for settling solids from the mine water;

● Warehousing facilities;

● A worker camp;

● A dining hall for technical and administrative staff;

● A first aid station;

● Water treatment; and

● Mine services, such as power, water supply, and compressed air.

The existing infrastructure for Mina Reserva is shown in Figure 1-8. Key facilities are identified by number on the drawing.

**Figure 1-10: Infrastructure for Mina Colquechaquita**

![](ex99-1_036.jpg)

Source: Santacruz (2023)

**Environment and Permitting**

<u>Environmental Considerations</u>

Responsible environmental management is a critical part of Santacruz's license to operate and our responsible, compliant operation of Bolivian Assets has continued for the last 30 years. Environmental compliance with national laws and regulations is the basis of Santacruz's environmental management system and is governed by a framework of oversight by the relevant Environmental Authority. Its environmental commitments are reported to the authorities annually in an Environmental Monitoring Report, which summarizes environmental management of its operations under applicable laws and regulations.

<u>Waste and Water Management</u>

Waste management is an important part of Santacruz's Comprehensive Environmental Management, which includes a waste management plan to classify, handle, and store waste separately for proper disposal or treatment. Waste management complies with Environmental Law No. 1333, its Regulations on Solid Waste Management, and its supplementary regulations, focusing primarily on the sectoral requirements of the Environmental Regulation for Mining Activities for waste rock and tailings.

*Solid Waste*

 

The Don Diego process plant is distal from the mines which feed it. The process plant along with the Tailings Storage Facility are located about 23 km Northeast of the city of Potosi, in the Don Diego Canton, Municipality of Chaqui, Cornelio Saavedra Province, of the Department of Potosi. At an elevation of 3,550 masl at UTM coordinates WGS-84: 228933E and 7841150N. There is a 60 km drive from the mines to the Don Diego Processing plant.

The Chilimocko tailings storage facility at Don Diego is inspected regularly and maintained to the standards set out by the Canadian Dam Association guidelines. The dam is under the supervision of engineers from AMEC (now Wood Engineering) and recently an external audit was conducted by Knight Piésold Consulting. The Chilimocko Dam is 55 m high, downstream-constructed dam. The Stage IV raise was completed in 2019 and current crest elevation is 3,625 m. Construction for the next expansion concluded in 2025.

The company also monitors and manages 4 inactive tailings facilities (1, 2, 3 & Yanakasa) at the Don Diego location.

Yana Khasa is a 40 m high, upstream-constructed dam, which contains 2.2 Mm<sup>3</sup> of tailings. Recent activities at the site include Repositioning piezometers, cleaning of the standpipe piezometers to improve groundwater monitoring, and Installation of fences to protect instrumentation; and Dikes 1, 2, and 3 are, upstream constructed dams which contain a total of 0.4 Mm<sup>3</sup> of tailings. Recent activities at the sites include cleaning of the standpipe piezometers to improve groundwater monitoring and Installation of fences to protect the instrumentation.

Although mine waste rock is preferentially stored underground or used as backfill, each of the mines has a permitted and designed waste rock storage area designed for stability, as well as the prevention of acid rock drainage and metal leaching. Sludge from the water treatment plants is deposited in lined ponds adjacent to the treatment plants. Given the mines' proximity to the City of Potosi, Domestic and Medical waste disposal are managed through the Municipal Garbage Collection Service. Industrial waste such as scrap metal, used Oil, tires, etc. is temporarily stored at each mining unit and collected by companies specialized in recycling.

*Water Management*

 

Each of the mines produces enough water to treat and reuse for industrial use on site. Excess treated water is discharged to the environment at regulated quality standards. Annually, a total of 2.5 Mm<sup>3</sup> of mine water is treated and 2.4 Mm<sup>3</sup> discharged from two water treatment plants.

Given the remote location of the process plant, which is usually the largest water consumer, each mine treats and discharges excess water to the environment. These discharges are regulated for quality and quantity by the environmental license. End uses include consumption by neighboring communities and agricultural/industrial use by llama ranchers and mining cooperatives downstream. Caballo Blanco supplies two thousand cubic meters of treated water per year to the local sanitary administration (AAPOS) to support industrial activities and discharges the remaining treated water to the Jayaquila and Mocaña rivers. Caballo Blanco is able to meet discharge requirements with aeration, pH adjustment and clarification by settling.

Don Diego process plant maximizes the recirculation of water from its tailing storage facility and draws makeup water from permitted surface sources.

**Figure 1-11: Caballo Blanco Mine Water Balance**

![](ex99-1_037.jpg)

Source: Sustainability Report, Sinchi Wayra (2022)

<u>Permitting</u>

Mining Contracts that grant the right to the subsoil mining resource are granted by the Mining Administrative Jurisdictional Authority (AJAM) over the ATE mining areas, and a contract is granted for each area or contiguous group of areas. Recent changes to the laws and government personnel have pushed Santacruz contract updates into a transitionary period waiting for final signatures and approvals. Santacruz holds Special Transitory Authorizations for each contract area which are officially designated "Mining Administrative Contracts for Adaptation". As of the effective date, approximately half of the applications have been transitioned, and the remainder fall under Article 187 of Law No. 535 on Mining and Metallurgy, which states:

*<u>ARTICLE 187</u>. (CONTINUITY OF MINING ACTIVITIES). Holders of Special Transitory Authorizations to be adapted or in the process of adaptation will continue their mining activities, with all the effects of their acquired or pre- constituted rights until the conclusion of the adaptation procedure.*

 

 

Santacruz has fully complied with this administrative procedure and is waiting for the Mining Administrative Authority to issue the relevant documents. It should be noted that this public entity has a considerable delay in the issuance of these documents.

Environmental Licenses have been formally granted to allow operation for all mining activity, by the Ministry of Environment and Water. The following table shows the licenses held by Santacruz.

**Table 1-5: Environmental Licenses Held by Santacruz**

---

| | |
|:---|:---|
| **Operation** | **License** |
| Bolívar | 040603-02-da-0324/14 |
| Porco | 051203-02-da-0031/14 |
| Caballo Blanco – Colquechaquita Mine | 050101-02-da-131/11 |
| Caballo Blanco – Mina Reserva and Tres Amigos | 050101-02-da-561/11 |
| Caballo Blanco – Don Diego Concentrator Plant | 050302-02-da-003/2024 |
| Caballo Blanco – San Lorenzo Mine | 050101-02-da-005/06 |
| Comco | 050101-02-da-006/09 |
| Soracaya | 050801-02-CD-C3-002/2017 |
| Aroifilla Thermoelectric Plant | 050101-04-da-007/2023 |
| Yocalla Hydroelectric Plant | 050103-05-da-006/2023 |

---

<u>Community Relations</u>

Santacruz mining projects are mostly well-established operations with a long history and a developed infrastructure, which provide direct benefits to employees and supporting businesses. However, the mines are located in rural to semirural areas in which the surrounding mostly agricultural communities can benefit from each operation only indirectly or through company outreach. Santacruz supports these communities by addressing services that are lacking, and helping to create value with economic development programs, and other forms of support.

*Caballo Blanco*

 

Caballo Blanco comprises a business unit with mines spread across several kilometers on the same mineralized trend and an offsite process plant and tailing facility, all proximal to the city of Potosí. Unlike Bolívar and Porco, Caballo Blanco does not have an adjacent campsite. Most employees live in the communities surrounding the city of Potosí. The mines are named Colquechaquita, Reserva, and Tres Amigos. The Don Diego Plant is located 60km away by road; other supporting units are central administrative offices in Potosí, the Thermal Power Plant in Aroifilla, and the Hydroelectric Power Plant in Yocalla. Operations at Caballo Blanco are not yet consolidated and require independent management and support. Mine operations, maintenance, planning, safety and environment, groups are separate for each mine.

Since Caballo Blanco covers a wide area, it affects many small communities. Consequently, at Caballo Blanco a large area is monitored including 13 small communities which include a population of more than 500 families or around 2,500 community members. Several mining cooperatives are also involved.

In the area of Colquechaquita, Reserva and Tres Amigos, the communities are scattered and sparsely populated, but host the settlement of cooperative miners downstream from our mining operations. Additionally, camelids are bred near the wetlands of the Jayaquilla River and Mocaña Mayu.

Adjacent to the Concentrator Plant is the settlement of Don Diego, where several Santacruz employees live. There are also other more distant and less populated communities.

Santacruz's community investment programs are aimed mostly at communities directly influenced by the operations. Community investments are designed to maximize positive impact, recognizing that each community has unique requirements and living conditions; therefore, Santacruz prioritizes based on number of beneficiaries, vulnerability, long-term sustainability, and urgency of need.

**Figure 1-12: Caballo Blanco Surrounding Communities**

![](ex99-1_038.jpg)

Source: Sustainability Report, Sinchi Wayra (2022)

**Figure 1-13: Caballo Blanco Community Investment**

![](ex99-1_039.jpg)

Source: Sustainability Report, Sinchi Wayra (2022)

<u>Mine Closure</u>

Closure Planning for Operations has social, economic, workforce, and environmental impacts, so conceptual closure plans are shared with communities. Santacruz's goal is to recover areas by establishing a healthy ecosystem capable of sustaining productive land use, ensuring the best possible environmental conditions, including physical, chemical, biological, and ecosystem aspects, at closure. Environmental superintendents are responsible for monitoring the environmental closure planning, and periodic reviews of these plans are conducted, including surveys of areas and activities to adjust financial provisions for closure.

Land Use and Rehabilitation - environmental challenges related to biodiversity protection, soil restoration, and land use, are addressed through dialogue with stakeholders, including local communities and relevant authorities. Our comprehensive environmental management focuses on minimizing disturbed areas. In 2022, Santacruz managed a total of 6,600 hectares of land covered by Temporary Special Authorizations (ATEs) granted by the Mining Administrative Jurisdiction Authority (AJAM), under leasing contracts with the Government through COMIBOL. However, Santacruz's processing activities, services, and related infrastructure (industrial area) currently occupy only 400.5 hectares of land, including areas of previous mining operations and other areas with environmental closure located within the properties Santacruz manage.

In 2022, Santacruz continued with the reforestation plan in the Queaqueani Dam area, in accordance with an agreement with the community of the same name, and significant progress was made in the progressive closure of the old tailings facilities at the Don Diego Concentrator Plant.

**Capital and Operating Cost Estimates**

<u>Capital Costs</u>

The Caballo Blanco mine has been in continuous operation for many years. There will be, as the reserve is expanded and developed, the need for step changes in mine access, production or haulage methods, that may require large capital outlays. These will be financially justified as needed. However, the capital needs for continued operation to exploit the remaining reserves is limited to Primary mine development, Capital equipment rebuilds and replacements, and Tailing Storage Facility expansions. Average annual capital has been and is projected to be in the 11 to 12 $M range.

The historic total capital requirement for all the Bolivian operations is shown in Table 1-6, with Caballo Blanco requirements bolded and italicized. Caballo Blanco's projected capital requirements for 2023 to 2027 is shown in Table 1-7.

**Table 1-6: Actual Combined Capital Requirement for All Bolivian Operations, 2017 to 2022 ($M)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2017** | **2018** | **2019** | **2020** | **2021** | **2022** |
| **Bolivar** | **8.8** | **13.7** | **13.7** | **6.3** | **11.3** | **10.2** |
| Porco | 3.0 | 8.8 | 8.4 | 3.6 | 5.3 | 3.1 |
| **Reserva** | **1.3** | **2.4** | **2.1** | **2.0** | **4.3** | **3.5** |
| **Tres Amigos** | **2.1** | **2.6** | **1.5** | **1.8** | **2.2** | **3.0** |
| **Don Diego** | **0.9** | **6.9** | **1.4** | **0.9** | **1.1** | **1.2** |
| **Colquechaquita** | **1.2** | **2.0** | **1.4** | **1.0** | **3.0** | **2.5** |
| La Paz | 3.3 | 0.6 | 0.3 | 0.4 | 0.2 | 0.7 |
| Soracaya | 0.5 | 2.1 | 0.2 | 0.1 |  |  |
| San Lucas | 0.8 | 0.0 | 0.0 | 0.1 | 0.4 |  |
| **Total** | **21.8** | **39.0** | **28.5** | **16.3** | **27.8** | **24.3** |

---

Source: Santacruz (2023)

**Table 1-7: Projected Capital Requirement for all Caballo Operations, 2021 to 2027 ($M)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2023** | **2024** | **2025** | **2026** | **2027** | **2028** |
| Engineering/Admin | 0.0 | 0.0 |  |  |  |  |
| Safety/Environmental | 0.8 | 3.0 | 2.1 | 2.0 | 0.1 |  |
| Mobile Equipment/Maint | 1.6 | 3.7 | 2.6 | 3.8 | 2.1 | 1.8 |
| Plant | 0.4 | 0.7 | 0.7 | 0.7 | 0.5 | 0.5 |
|  | **2023** | **2024** | **2025** | **2026** | **2027** | **2028** |
| Exploration | 0.4 | 0.3 | 1.5 | 1.4 | 1.3 | 0.7 |
| Primary development | 6.5 | 6.0 | 6.8 | 5.6 | 4.4 | 2.4 |
| Corporate |  |  |  |  |  |  |
| **Total** | **9.8** | **13.7** | **13.7** | **13.5** | **8.3** | **5.4** |

---

Source: Santacruz (2023)

Recurring exploration and primary development costs have been included in the COG calculations to better anticipate and account for total costs and make the COG more meaningful for reserve estimation and mine planning.

<u>Operating Costs</u>

Costs used for cut-off grade analysis were taken from actual costs for 2022. The actual cost of corporate G&A was allocated to each of the businesses.

**Table 1-8: Unit Operating Costs ($/t)**

---

| | |
|:---|:---|
| **Mine** | **75.66** |
| Mine operations | 42.13 |
| Mine maintenance | 19.19 |
| Indirect | 14.34 |
| Plant | 17.10 |
| Warehouse | 0.89 |
| G&A | 13.28 |
| **Total** | **106.94** |

---

Source: Santacruz (2023)

Mine operations include direct costs of mining, including labor, energy, materials, and services.

Mine Equipment Maintenance Costs includes maintenance to all equipment related to direct development, exploitation and haulage, as well as service equipment such as pumping, ventilation, winches, etc.

Indirect costs would include Site Management, Technical services, Site Administration, Environmental and Social, Safety and Security.

Plant costs include direct Beneficiation costs as well as plant maintenance, and indirect costs. Warehouse costs refer to Concentrate handling and storage.

General and Administration includes allocated Bolivian corporate costs.

**Economic Analysis**

<u>Result</u>

The Reserve Estimate was generated using actual costs experienced during a stable production period following the change in management after the purchase of the mine by Santacruz Silver (2022 and beginning of 2023). Actual costs were used for mine operating, concentrate overland transport, port costs, and shipping as well as smelting fees, payment terms, and penalty charges. A simplified Cash flow model was built to model the costs and conditions used to generate the Reserve estimates stated in the Caballo Blanco Report.

The Caballo Blanco mine is part of a multi-operation business. However, the Economic model treats it as a separate financial entity with Bolivian corporate costs allocated for the analysis. As well, the operation is comprised of three mines which feed one offsite Process plant. The financial modelling examines the value of the consolidated operation on a 100% basis to support the Reserve statement.

The Caballo Blanco mines have been in continuous operation for several decades and the deposits are a network of relatively narrow veins. These two aspects drive the normal exploitation process of the mine, where inferred resources are converted and exploited in the same budget year. Resources are generally proven-up by drifting and sampling instead of drilling. Therefor normal budgeting and mine planning includes resources outside of the Reserve estimate.

For the current exercise in the Caballo Blanco Report, only Proven and Probable reserves are included in financial evaluation, so the production schedule represents the depletion of these reserves at average grade and current production rates. The context of the production schedule exploits the Proven and Probable reserves as part of a continuous operation and as such does not include the closure activities.

**Table 1-9: Production Forecast – Mining and Processing**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Unit** | **2023** | **2024** | **2025** | **2026** |
| **Mine Production** | **Mine Production** | **Mine Production** | **Mine Production** | **Mine Production** | **Mine Production** |
| **Tonnes Mined** | (DMT) | 300000 | 300000 | 300000 | 133512 |
| **Tonnes Processed** | (DMT) | 300000 | 300000 | 300000 | 133512 |
| **Head Grades** | **Head Grades** | **Head Grades** | **Head Grades** | **Head Grades** | **Head Grades** |
| Zinc | (%) | 9.18 | 9.18 | 9.18 | 9.18 |
|  | **Unit** | **2023** | **2024** | **2025** | **2026** |
| Lead | (%) | 1.90 | 1.90 | 1.90 | 1.90 |
| Silver | g/t | 193 | 193 | 193 | 193 |

---

Notes:

FMT = Fine Metric Tonnes; DMT = Dry Metric Tonnes; FOT = Fine Ounces Troy

Source: Santacruz (2023)

Metallurgical recoveries and concentrate qualities are actual for the times and head grades that were actually mined. These parameters will necessarily be conservative considering the higher grades in the production schedule.

**Table 1-10: Production Forecast - Concentrate**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Unit** | **2023** | **2024** | **2025** | **2026** |
| **Concentrates** | **Concentrates** | **Concentrates** | **Concentrates** | **Concentrates** | **Concentrates** |
| Zinc | (DMT) | 50298 | 50298 | 50298 | 22384 |
| Zn Conc. Grade | (%) | 50 | 50 | 50 | 50 |
| Ag (in Zinc) | g/t | 218 | 218 | 218 | 218 |
| Zn Recovery | (%) | 92 | 92 | 92 | 92 |
| Ag (in Zinc) | (%) | 19 | 19 | 19 | 19 |
| Lead | (DMT) | 7531 | 7531 | 7531 | 3352 |
| Pb Conc. Grade | (%) | 58 | 58 | 58 | 58 |
| Ag (in lead) | g/t | 5482 | 5482 | 5482 | 5482 |
| Pb Recovery | (%) | 77 | 77 | 77 | 77 |
| Ag (in Lead) | (%) | 72 | 72 | 72 | 72 |
| **Metal Recovery** | **Metal Recovery** | **Metal Recovery** | **Metal Recovery** | **Metal Recovery** | **Metal Recovery** |
| Zinc | (FMT) | 25356 | 25356 | 25356 | 11284 |
| Silver (in Zinc) | (FOT) | 352759 | 352759 | 352759 | 156992 |
| Lead | (FMT) | 4402 | 4402 | 4402 | 1959 |
| Silver (in Lead) | (FOT) | 1330079 | 1330079 | 1330079 | 591938 |
| Silver (Total) | (FOT) | 1682838 | 1682838 | 1682838 | 748930 |

---

Notes:

FMT = Fine Metric Tonnes; DMT = Dry Metric Tonnes; FOT = Fine Ounces Troy

Source: Santacruz (2023)

That same logic follows to the net revenue generation (Table 1-11) which includes smelter charges and penalty fees.

**Table 1-11: Revenue and Cost Projection ($M)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Unit** | **2023** | **2024** | **2025** | **2026** |
| **Payable Metal Revenue** | **Payable Metal Revenue** | **Payable Metal Revenue** | **Payable Metal Revenue** | **Payable Metal Revenue** | **Payable Metal Revenue** |
| Zinc |  | 64 | 64 | 64 | 29 |
| Metallurgical Deduction |  | 10 | 10 | 10 | 5 |
| **Gross Payable Zinc** |  | 54 | 54 | 54 | 24 |
| Lead |  | 10 | 10 | 10 | 4 |
| Metallurgical Deduction |  | - | - | - | - |
| **Gross Payable Lead** |  | 9 | 9 | 9 | 4 |
| Silver |  | 35 | 35 | 35 | 16 |
| Metallurgical Deduction in Zinc | Metallurgical Deduction in Zinc | 4 | 4 | 4 | 4 |
| Metallurgical Deduction in Lead | Metallurgical Deduction in Lead | 1 | 1 | 1 | 1 |
| **Gross Payable Silver** |  | 30 | 30 | 30 | 13 |
| **Gross Revenue (Total)** |  | 93 | 93 | 93 | 41 |
| **Smelter Charges and Penalties** | **Smelter Charges and Penalties** | **Smelter Charges and Penalties** | **Smelter Charges and Penalties** | **Smelter Charges and Penalties** | **Smelter Charges and Penalties** |
| Treatment charges Zn | (USD/t) | 277 | 277 | 277 | 277 |
| Treatment charges Zn |  | 14 | 14 | 14 | 6 |
| Treatment charges Pb | (USD/t) | 133 | 133 | 133 | 133 |
| Treatment charges Pb |  | 1 | 1 | 1 | - |
| Penalties in Zn | (USD/t) | 3 | 3 | 3 | 3 |
| Penalties in Zn |  | - | - | - | - |
| Penalties in Lead | (USD/t) | 71 | 71 | 71 | 71 |
| Penalties in Lead |  | 1 | 1 | 1 | - |
| Refining Charges in Pb | (USD/FOZ) | 1 | 1 | 1 | 1 |
| Refining Charges in Pb |  | 2 | 2 | 2 | 1 |
| **Smelter Fees and Penalties** | **Smelter Fees and Penalties** | **15** | 17 | 17 | 17 |
| **Net Revenue** |  | 277 | 277 | 277 | 277 |
| **Operating Costs** | **Operating Costs** | **Operating Costs** | **Operating Costs** | **Operating Costs** | **Operating Costs** |
| **Production Costs** |  | 30 | 30 | 30 | 14 |
| **Cost of Sales** |  |  |  |  |  |
| Rail Freight Zn |  | - | - | - | - |
| Rail Freight Pb |  | - | - | - | - |
| Port Expenses Zn |  | 2 | 2 | 2 | 1 |
|  | **Unit** | **2023** | **2024** | **2025** | **2026** |
| Port Expenses Pb |  | - | - | - | - |
| Rollback Fee Zn |  | 5 | 5 | 5 | 2 |
| Rollback Fee Pb |  | 1 | 1 | 1 | - |
| **Concentrate Freight and Port Costs** | **Concentrate Freight and Port Costs** | **8** | 8 | 8 | 8 |
| **Mine Royalty** |  | 6 | 6 | 6 | 3 |
| **Communities and Unions** |  | 2 | 2 | 2 | 1 |
| **Selling Costs** |  | 16 | 16 | 16 | 7 |
| **Total Cost of Sales** |  | 46 | 46 | 46 | 21 |

---

Source: Santacruz (2023)

Depreciation is a product of previous operation and annual capital expenditure incurred for the exploitation of the reserve tonnage. Capital is limited to that required to support mining, processing, and tailing storage for the reserve. Corporate G&A is that part of the in-country costs allocated to the Caballo Blanco mine.

**Table 1-12: Cashflow Projection ($M)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **2023** | **2024** | **2025** | **2026** |
| **Income Statement** | **Income Statement** | **Income Statement** | **Income Statement** | **Income Statement** | **Income Statement** |
| Net Revenue | Net Revenue | 76 | 76 | 76 | 34 |
| Production Costs | Production Costs | -30 | -30 | -30 | -14 |
| Selling Costs | Selling Costs | -16 | -16 | -16 | -7 |
| Depreciation | Depreciation | -10 | -9 | -9 | -11 |
| **Gross Profit** | **Gross Profit** | 19 | 20 | 21 | 2 |
| Corporate G&A | Corporate G&A | -3 | -4 | -4 | -2 |
| **Operating profit** | **Operating profit** | 16 | 16 | 17 | 0 |
| **EBIT** | **EBIT** | 16 | 16 | 17 | 0 |
| Income Tax Expense (CIT) | Income Tax Expense (CIT) | -6 | -6 | -6 | 0 |
| **Net Gain/(Loss) for the year** | **Net Gain/(Loss) for the year** | 10 | 10 | 10 | 0 |
| **Cashflow Statement** | **Cashflow Statement** | **Cashflow Statement** | **Cashflow Statement** | **Cashflow Statement** | **Cashflow Statement** |
| **Cash from Operations Activities** | **Cash from Operations Activities** |  |  |  |  |
| Net Income | Net Income | 10 | 10 | 10 | 0 |
| Depreciation | Depreciation | 10 | 9 | 9 | 11 |
| **Subtotal** | **Subtotal** | 20 | 19 | 19 | 11 |
| **Cash from Investing Activities** | **Cash from Investing Activities** |  |  |  |  |
|  | **2023** | **2023** | **2024** | **2025** | **2026** |
| Sustaining Capital Expenditure | -9 | -9 | -13 | -7 | 0 |
| **Subtotal** | -9 | -9 | -13 | -7 | 0 |
| **Cash Balance** |  |  |  |  |  |
| Beginning | 0 | 0 | 11 | 17 | 29 |
| Change in Cash | 11 | 11 | 6 | 12 | 11 |
| **Ending** | **11** | **11** | **17** | **29** | **40** |

---

Source: Santacruz (2023)

Income tax is 37.5% of the EBIT. As seen, the operations generate a positive cash flow after tax upon exploitation of the stated reserve at the metal prices used to generate the reserve.

<u>Sensitivities</u>

A univariate sensitivity analysis was performed to examine which factors most affect the Caballo Blanco Mining Complex economics when acting independently of all other cost and revenue factors. Each variable evaluated was tested using the same percentage range of variation, from -20% to +20%, although some variables may experience significantly larger or smaller percentage fluctuations over the LOM. For instance, the metal prices were evaluated at a ±20% range to the base case, while the capex and all other variables remained constant. This may not be truly representative of market scenarios, as metal prices may not fluctuate in a similar trend. The variables examined in this analysis are those commonly considered in similar studies – their selection for examination does not reflect any particular uncertainty.

Notwithstanding the above noted limitations to the sensitivity analysis, which are common to studies of this sort, the analysis revealed that the Caballo Blanco Mining Complex is most sensitive to metal pricing. The Caballo Blanco Mining Complex showed the least sensitivity to capital costs. Figure 1-14 shows the results of the sensitivity analysis.

**Figure 1-14: Univariate Sensitivities**

**Observations, Risks, Opportunities and Recommendations**

<u>Observations</u>

The Caballo Blanco Project is located in the Cordillera de los Azanaques, forming the western edge of the Cordillera Oriental, which is detached from the Cordillera de los Frailes, belonging to the group of central mountain ranges. Characterized by the essence of undulating plateaus, outstanding mountains parallel to the course of the Andes, with elevations that vary between 3,400 and 4,600 masl. The area is part of the polymetallic belt of the altiplano and the Cordillera Occidental.

The most important ore deposits of the Eastern Cordillera are polymetallic hydrothermal deposits mined principally for Sn, W, Ag and Zn, with sub-product Pb, Cu, Bi, Au and Sb. They are related to stocks, domes and volcanic rocks of Middle and Late Miocene age (22 to 4 Ma). Mineralization occurs in veins, fracture swarms, disseminations and breccias. The deposits of the Eastern Cordillera are epithermal vein and disseminated systems of Au, Ag, Pb, Sb, as that have been telescoped on to higher temperature mesothermal Sn-W veins and, in some cases, porphyry Sn deposits. The telescoping is a characteristic of these deposits and is the result of collapse of the hydrothermal systems, with lower temperature fluids overprinting higher temperature mineralization. The systems show a fluid evolution from a high temperature, low sulphidation state to intermediate sulphidation epithermal and high sulphidation epithermal.

The Caballo Blanco Project is an "advanced property" and has been in continuous production since 1993.

The QPs found that Caballo Blanco is a well-managed operation that should be capable of sustaining profitable operations for many years to come in the same fashion as it has operated for the past several years.

The reserves were found to be estimated correctly using industry-standard techniques and procedures and industry-standard software by diligent and competent professionals.

The mine has an ample provision of skilled workers. Typical and reasonable ore control systems were in place, but it is possible that the results could be improved with a closer attention to appropriate mining widths, minimizing them wherever possible to minimize dilution.

The availability and utilization statistics show that the mines are well equipped, but these statistics can sometimes be misleading depending on how the factors are calculated. Mine supervision sited equipment reliability as an impediment to achieving targets.

The processing plant appears to be well run as evidenced by a lack of spillage. The metallurgical team has a good understanding of the processing variable that determine how material will respond to the Don Diego processing facility.

<u>Risks</u>

Many risks exist which are common to most mining projects including operating and capital cost escalation, permitting and environmental compliance, unforeseen schedule delays, changes in regulatory requirements, ability to raise financing and metal price. Many of these ever-present risks can be mitigated with adequate engineering, planning and pro-active management. The most significant risks to this project and its continued development are related socio-economic and geo-political factors.

The Caballo Blanco Mining Complex is also subject to site-specific risks, including the following:

● The activity that is prevalent throughout the region related to Cooperativas and artisanal miners may cause issues for access and for reasonable prospects of eventual economic extraction and may condemn or reduce resources and reserves in those areas. The Caballo Blanco mines are relatively isolated and not flanked by camps or towns. Attention to community relations has developed strong mutually beneficial working relationships with many of the local population and mining cooperatives which has created a sustained period of stable political and socio-economic cooperation. However, changes in this relationship and instability would pose a significant risk to continued operation of the mines in addition to risks related to tenure and ownership;

● The current political and socio-economic climate in Bolivia poses risks and uncertainties that could delay or even stop development as reported within the Fraser Institute Annual Report 2022 where Bolivia ranks very low in many non-technical metrics. Bolivia has been ranked consistently low for the past five years and ranks in the lower quartile on all metrics that gauge risk and uncertainty. It is difficult to gauge or qualify the level or extents of the risks however, all companies working in Bolivia must continue to be aware of the potential risks and develop mitigation strategies. A significant risk related to the Santacruz Bolivian mineral assets and in particular the mineral resources and mineral reserves is the significant artisanal activity that continues to exist. This activity is not only a socio-economic risk but also affects access to resources and reserves along with potential sterilization of mineral resources;

● Geological interpretations may be subjective and may result in the location and extent of some of the mineralized structure although as the Caballo Blanco mines are comprised of well constrained veins, this risk is minimal;

● As vein thicknesses are narrow, resources may be sensitive to dilution although the relative high grades that exist at the Caballo Blanco mines are successful mitigating such risks to date;

● Varying resource classification methods and criteria may vary as more data is considered;

● There is no guarantee that further drilling will result in additional resources or increased classification;

● Further work may disprove previous models and therefore result in condemnation of targets and potential negative economic outcomes;

● Lower commodity prices could change the size and grade of the potential targets;

● Ability to replace mined reserves on an annual basis; and

● Maintenance of permitting.

As the mines continues to expand to depth, the following aspects of mine operations will be challenged:

● Worker travel time (reduced time at the face);

● Dewatering inflow quantities, infrastructure and costs; and

● Ventilation system needs and costs.

This will be particularly felt in Colquechaquita, as it is a shaft access mine with most of its remaining reserve at depth. The shaft will ultimately require extension to depth or trackless equipment will be required to haul the ore to the shaft bottom.

Supply and delivery of backfill was observed to be behind schedule which could have been caused by low development production, haulage bottlenecks, etc. The outcome, however, increases risk of hanging wall failure in the stopes and ore dilution from over-mucking; and

The process plant is not located on site, so ore transport costs can be significant and factors such as dilution have a greater impact on mineralized material value

As is shown on Figure 1-14, the greatest risk to the economic results in this study is from changes to metal prices.

<u>Opportunities</u>

Caballo Blanco Mining Complex opportunities include:

● The primary opportunity for the mine is to improve the grade to the mill by incorporating a mine dilution control program. As is typical with all narrow width mining, dilution is very sensitive to the mined widths of veins, which must be kept at minimum to accommodate equipment widths. Often, however, veins are over-mined to ensure complete recovery of the ore. This practice significantly increases dilution due to overbreak of the hangingwall and footwall;

● The mines would all benefit from more diamond drilling, particularly the Tres Amigos with is long strike length and little lateral development;

● A systematic exploration program could provide an excellent opportunity for successfully uncovering new discoveries;

● An increased understanding and derivation of alternative theories may result in further discovery and expansion for the Caballo Blanco Mining Complex;

● A hydrogeological study could help the operation to better characterize and understand water inflows, aiding design work and planning to reduce the impact of major seasonal inflows;

● Higher commodity prices could change size and grade of the potential targets;

● Potential for expansion and classification upgrade of resources as mining activities progress; and

● Caballo Blanco group of mines is firmly established as a producing property but has yet to be consolidated into a fully integrated mine. Each mine is independently managed and operated and there are very few, if any, shared services. All three mines are on the same mineralized trend and consolidation is a possibility.

<u>Recommendations</u>

To advance the Caballo Blanco mining operation and further evaluate the potential additional veins and increase resources thereby displacing depletion due to ongoing mining activities, the following is recommended:

● Regional exploration for identification of new veins;

● Incorporate structural interpretations to assist regional understanding;

● QA/QC program review and improvement;

● Investigate source of anomalous lead values experienced with the field blanks;

● Incorporation of externally certified blanks and standards into the QA/QC program;

● Insertion of QA/QC samples throughout at a rate of 1 in 20 for blanks, standards and duplicates;

● Analysis of thickness and grade-thickness profiles for resource targeting and predictive dilution study;

● Hydrogeological study and modelling should be done to better understand water inflows and minimize their impact on production;

● Plan and execute a resource expansion program including drilling and underground sampling to fully identify and upgrade resources proximal to active mining areas for inclusion in the 2- year mine plan. This is important so that existing mine development can be fully utilized, and reductions in mine development requirements and rate of vertical descent realized;

● Resource drilling to justify more integrated mine development is also important for stable long-term production and growth. Moving the properties toward a more integrated operation can add value to the project;

● Extensive surface drilling for near surface targets along with underground drilling for resource delineation and extension;

● As is typical with all narrow width mining, dilution is very sensitive to the mined widths of veins. Good work is being done on identifying and qualifying specific stope dilution. Analysis and incorporation of findings into the stope planning and mine operations is an opportunity to increase project value; Often veins are over-mined to ensure complete recovery, but this practice comes with significantly increased dilution due to overbreak of the hangingwall and footwall. The operation should conduct a thorough test stoping experiment to ensure the most economic balance between incomplete recovery and excessive dilution;

● Underground operations that use three x 8 hour shifts typically lose much worker productivity due to excessive travel and break time over such a short shift. The current operation has an effective time of 5.5 hours per worker on an 8-hour shift. Consideration should be given to test a longer shift, say a schedule of 4 x 10 hours per week with three days off. With the same

● 2.5 hours of travel and break time, the effective time would increase to 7.5 hours per shift, resulting in an increase from 68% to 75% shift effectiveness or actual working time. The workers are apt to find that the longer days are harder, but that the three days off provide more rest on the balance of the week;

● The methodology for calculating equipment and utilization factors should be reviewed and adjusted if necessary. If equipment availability is, in fact, impeding production as was reported by supervision, it is not currently reflected in these statistics;

● Devote attention to optimizing material transport. Transport of waste rock is critical to stope productivity and stability with the mining methods being used, thus its supply and transport are critical to mine production;

● The possibility for ore sorting should be evaluated. As the mines each have a considerable haulage distance for run-of-mine ore, reducing the quantity to reduce haulage costs could be economically beneficial. On site crushing may be required to conduct sorting, however, offsetting or exceeding the savings it would provide to the trucking costs;

● At Don Diego Plant, the period analyzed from August 2020 to July 2021 exhibited more downtime than planned. Investigate opportunities to raise Process Plant throughput and reduce downtime to improve project economics;

● Metallurgical testwork to investigate opportunities to increase recoveries, through grinding, reagent dosage or newer flotation technologies;

● Investigate geo-metallurgical characteristics of the feed;

● The operation should continue to maintain diligent accounting centers to determine each mine's profitability and, if necessary, shift resources or assets to maximize profits; and

● Continue open communication and fair business practices with mining cooperatives and surrounding communities to minimize risk of asset subjugation.

These recommendations have not been costed, as they represent changes to current practices that can be funded by existing operating budgets.

**Zimapan Property**

The following information regarding the Zimapan Property is derived from and based on the summary section of the technical report entitled "*NI 43-101 Technical Report, Zimapan Mine, Hidalgo State, Mexico*" that has an effective date of December 31, 2025, and was prepared by Paul Thornton, P. Eng., Garth Kirkham, P. Geo., and Tad Crowie, P. Eng. (the "**Zimapan Report**"), and is based on the assumptions, qualifications and procedures set out therein. For a more detailed overview of the Zimapan Property, please refer to the Zimapan Report, which is available on SEDAR+ at <u>www.sedarplus.ca</u> and on EDGAR at <u>www.sec.gov</u>.

The disclosure in this Annual Information Form relating to the Zimapan Mine is qualified in its entirety by the full text of the Zimapan Report, which is incorporated by reference in this Annual Information Form. Terms not otherwise defined in this section have the respective meanings given to them in the Zimapan Report.

***Introduction***

JDS Energy & Mining Inc. (JDS) was commissioned by Santacruz to prepare a Technical Report in accordance with the Canadian Securities Administrators' National Instrument 43-101 and Form 43-101F1, collectively referred to as National Instrument (NI) 43-101 for the Zimapan Mine Project (Zimapan or the Project) operated by Carrizal Mining S.A. de C.V. located in the state of Hidalgo, Mexico.

The Zimapan mining district was discovered by Spanish miners in 1575. From 1632 to 1920, more than 18 mines were put into production, including the El Monte and Carrizal mines. Peñoles operated the mine from 1964 until leasing to Santacruz in August 2009. From 2011 to 2020, Santacruz completed ~30 km of underground drilling and mined ~5.9 M tonnes of mineralized material from the El Monte and Carrizal mines.

The mine is fully operational at the time of the Zimapan Report's preparation.

**Project Description**

The Zimapan property is located in the municipality of Zimapan, Hidalgo state, Mexico. The Property is situated 241 road-km north of Mexico City and seven km northwest from the town of Zimapan. The Property consists of 34 mining concessions covering an area of 5,138.76 ha that is centered at longitude 99°25'2.5" W and latitude 20°47'6.5" N (WGS 84) on the 1:250,000 topographic map sheets F14-11 and F14-C58. Included in these concessions are the Carrizal mine, El Monte mine, and the El Monte mineral processing plant ("**El Monte plant**") (together the "**Zimapan Mine**").

***Location, Access and Ownership***

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The Zimapan property is located in the municipality of Zimapan and is approximately seven km northwest from the town of Zimapan in Hidalgo state, Mexico. Travel to Zimapan from Mexico City is approximately 241 road-km via federal highway 85D and No. 85 through Pachuca. An alternative route from Queretaro City is approximately 141 road-km via federal highway 45 to El Paraiso, federal highway 100 to Ezequiel Montes, and federal highway 120 to Zimapan. Both Mexico City and Queretero City receive international flights daily.

The El Monte mine can be access from Zimapan by paved road by traveling east along Venusliano Carranza-Zimapan road and merging onto federal highway 85. At kilometer 9.9 from Zimapan, a turn-off to a 15.5-kilometer dirt access road leads west to the El Monte mine and El Monte plant. The Carrizal mine can be accessed from Zimapan by paved road by traveling west along Avenda Jorge Preisser Teran road for approximately 4.1 km where it transitions to a dirt road for the remaining 12.4 km to the Carrizal mine entrance. The Carrizal and El Monte mines are connected by a 7.4-kilometer-long underground access tunnel (Lomo de Toro – San Francisco Tunnel).

**History, Exploration and Drilling**

Information provided in General History is primarily extracted from Simons and Mapes (1956), and Suter (2016). The author of the Zimapan Report has not completed sufficient work to verify this information.

In 1575, Zimapan was founded by Spanish miners who were extracting silver, lead, and other metals from mines located in the Sierra El Monte and Barranca Toliman, near the present day Carrizal mine. The discovery of the Lomo del Toro is attributed to Don Lorenzo de Labra in 1632. Silver and lead production continued in the Zimapan mining district until the Mexican war of independence of 1810. Mining activity was interrupted during the war and resumed in 1870. Between 1890 and 1901, interest in the Lomo de Toro mine was revived and the La Luz mine was developed. Mining activity was again suspended in 1910 due to the Mexican Revolution.

In 1913, mines in the El Monte area resumed operation under the ownership of the Hidalgo Copper Mining and Smelting Company. According to Simons and Maples (1956) 1,742 tons of mineralized rock averaging 21 percent lead and 806 grams per ton of silver was smelted in 1913.

By 1920, approximately 18 mines operated in the district. The Compania Fundidora y Minera de Zimapan operated the Rosario, Santa Gorgonia, La Candelaria, San Geronimo, Poder de Dios, and Las Animas mines. The Hidalgo Copper Mining and Smelting Co. operated the Nevada and Purisima mines. The Preisser family operated the San Francisco and Los Balcones mines. Mineralized material was either roasted in furnaces on-site to extract silver-lead alloys or shipped off-site for processing elsewhere.

In 1929, the San Pascual and La Cruz mines were operated by Compania Minera Mexicana and the Preciosa Sangre and San Jose Maravillas deposits were operated by Negociacion Minera La Aurora. The Lomo de Toro mine resumed production with the reopening of existing workings.

In 1945, new oxide bodies were discovered in the Lomo de Toro mine and an access road to the Carrizal area was built.

In 1948, Fresnillo began exploitation of oxide and sulfide mineralization in the Monte area and continued mining activities from the Monte mine.

In 1949, operators chose to ship raw materials to San Luis Potosi and Zacatecas for smelting rather than smelting in the Zimapan area. Raw materials were shipped by truck to the railhead at Huichapan, located 88 km from Zimapan. Compania Minera La Llave operated the only smelter in the Zimapan area at that time. While raw materials were transported by truck from the Carrizal mining area to Zimapan, raw materials from the El Monte mining area was moved 10.5 km to Zimapan by donkey.

In 1957, a road to the Monte mine was built, stimulating production to reach an average of 2,500 tons per month according to Simons and Maples (1956).

In 1964, Penoles acquired 51% of Fresnillo and 51% of Compania Zimapan. Through Fresnillo, Penoles became the underlying owner of the property and mining operation. In subsequent years Compania Zimapan assigned its concession rights to Fresnillo.

In 1972, the San Francisco mineral processing facility was constructed (the El Monte plant).

In 2004, Fresnillo entered into a mining and exploitation agreement with Compania Minera Nuevo Monte, S.A. de C.V. for an initial term of 60 months: through which the latter acquired the exclusive right to exploit from the Property and operate the El Monte plant.

In 2007, Fresnillo assigned all concession rights and agreements to Minera Cedros.

In 2009, Compania Minera Nuevo Monte suspended operations and cancelled its agreement with Minero Cedros. Carrizal Mining entered into a Lease Agreement with Minera Cedros on August 18, 2009.

Between January 1, 2011, and December 31, 2025, Carrizal Mining completed approximately 75,995.78 m of underground core drilling – including 32,562.7 m completed at the El Monte mine and 43,433.08 m completed at the Carrizal mine. Drilling produced 36.5-millimeter core from BQ size holes and 35.3-millimeter core from TT-46 size holes. Carrizal Mining workers carried out drilling and utilized underground drilling equipment owned by Carrizal Mining. Summary tables detailing the m drilled for each zone at each mine area are provided in Table 6-1 through Table 6-4. Approximately 51% of the total m drilled have been dedicated to the Escondida, Dike Concordia, Dike 1493, Dike 1600, Horizontes, Santa Fe and Juan Pablo mineral zones.

**Geology and Mineralization**

The Zimapán Project is situated along the western margin of the Sierra Madre Oriental physiographic province in central Mexico, within a region characterized by a long and complex history of sedimentation, deformation, magmatism, and hydrothermal mineralization. The regional geological framework comprises thick sequences of Mesozoic platform and basinal sedimentary rocks, principally limestones and calcareous shales, which unconformably overlie Paleozoic and Precambrian basement. These strata were subsequently subjected to compressional tectonics associated with the Laramide orogeny, resulting in a structurally complex setting defined by folding, thrusting, faulting, and uplift.

Mineralization at Zimapán is spatially and genetically associated with intrusive activity of probable Pliocene age, consisting of quartz monzonitic to monzonitic stocks and related quartz-feldspar porphyry dikes. These intrusions acted as heat and fluid sources, driving hydrothermal systems responsible for the development of high-temperature carbonate replacement deposits ("CRD" systems). The mineralizing fluids exploited favourable stratigraphic horizons and structural conduits, producing replacement-style mineralization within reactive carbonate host rocks.

The principal mineralization styles are mantos and chimneys, which are preferentially developed within the "Horizontes" horizon of the La Negra member of the Lower Cretaceous Tamaulipas Formation. These horizons represent chemically favourable, permeable stratigraphic units that facilitate lateral and vertical fluid flow. Mantos typically form as stratabound, laterally extensive replacement bodies, whereas chimneys represent more vertically developed, structurally controlled feeder zones.

At the deposit scale, mineralization is hosted within limestones and calcareous shales of the Las Trancas, Tamaulipas, and Soyatal formations. The Carrizal Mine comprises at least six discrete mineralized zones, while the El Monte Mine contains eight recognized zones, reflecting a combination of stratigraphic control, structural complexity, and proximity to intrusive centres. The distribution, geometry, and continuity of these zones are governed by the interplay of lithological contrasts, fault structures, and intrusive contacts.

The mineral assemblage is characteristic of high-temperature polymetallic CRD systems and consists predominantly of semi-massive to massive sulfides. The principal economic minerals include argentite (silver), galena (lead), sphalerite (zinc), and chalcopyrite (copper), with variable gangue assemblages. Mineralization grades and metal zonation patterns are consistent with proximity to intrusive sources, with higher-temperature assemblages and copper enrichment generally observed nearer to intrusive contacts, transitioning outward to lead-zinc-silver dominant zones.

Overall, the Zimapán Project represents a classic polymetallic carbonate replacement system developed within a structurally complex and stratigraphically favourable carbonate platform setting. The combination of well-developed mantos and chimney systems, multiple mineralized horizons, and clear genetic linkage to intrusive activity provides a robust geological framework for ongoing exploration and potential resource delineation, subject to verification through modern data acquisition and estimation methodologies in accordance with current reporting standards.

 **

***Metallurgical Testing and Mineral Processing***

 **

The San Francisco Processing Plant has a long history of operation which has contributed to the current processing strategy. A significant geometallurgical testwork program was run in 2023 under the guidance of JDS Energy and Mining.

The geometallurgical program developed guidance on ore zones that were compatible for being processed together vs ore zones which should be processed separately. The program also developed expected recoveries from each of zones tested to assist with future mine planning.

The recovery expectations for the mill were developed by reviewing the operating data from the latest years of operation prior to this report, 2023 and 2024. It was decided to base the recoveries on the 2024 operating data due to improvements that were made in the San Fransico Processing Plant and material blending strategies developed from the geometallurgical testwork.

A summary of the expected recoveries and concentrate grades can be found in table 1-1 of the Zimapan Report.

Table 1-1: Estimated Metallurgical Recoveries, Concentrate Grades and Mineral Processing Factors.

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| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;**Parameter** | **Unit** | **Concentrates** | **Concentrates** | **Concentrates** |
| &nbsp;&nbsp;**Parameter** | **Unit** | **Lead Concentrate** | **Copper Concentrate** | **Zinc Concentrate** |
| &nbsp;&nbsp;Cu Recovery | % | 11.4 | 43.1 | 27.8 |
| &nbsp;&nbsp;Zn Recovery | % | 1.4 | 1.3 | 78.0 |
| &nbsp;&nbsp;Pb Recovery | % | 85.2 | 3.1 | 3.3 |
| &nbsp;&nbsp;Ag Recovery | % | 54.0 | 13.7 | 7.8 |
| &nbsp;&nbsp;Cu | % | 2.52 | 19.88 | 1.96 |
| &nbsp;&nbsp;Zn | % | 2.72 | 5.03 | 46.83 |
| &nbsp;&nbsp;Pb | % | 49.30 | 3.75 | 0.60 |
| &nbsp;&nbsp;Ag | g/t | 2237 | 1783 | 155 |

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\* Variable with Cu concentrate pull factor.

 **

***Mining***

 **

There are two operational mines on the property:

The Carrizal Mine which produces approximately half of the total mine production and is connected to the Monte Mine and San Francisco concentrator by a 7 km Underground trackless haulage drift; and

The Monte Mine which also produces about half of the total mine production and lies along the main haulage drift more proximal to the San Franciso concentrator.

The Carrizal has been subdivided into four zones: Lomo de Toro, Socavón La Cuña, Cuerpo 960 (mining in Carrizal below 960 m elevation), and the historic Carrizal Mine.

All feed the San Francisco processing plant.

In general, the Carrizal mine consists of both remnant mineralized zones and pillars which are being recovered, as well as extensions of historically mined zones. Mining is more selective and conventional with jackleg drills and small Load Haul Dump (LHD) machines. The grades at Carrizal are marginally higher than Monte. Monte mine is comprised of mostly large bulk mineable mineralized zones and utilizes more Sub Level Open Stoping. The grade is generally lower at Monte mine, as are the unit costs.

Metallurgically, a blend of feeds from multiple sources is required to achieve increased recoveries and acceptable quality concentrates, so the operation of both zones simultaneously is a requirement.

Mining methods are selected for each mineralized block using the following criteria and methodology:

Rock stability and quality analyses are carried out by the rock mechanics department;

Analysis of mineral quality, contents and mineral value, and Cut-Off-Grade are carried out by the Geology department; and

Analysis of the preparation cost vs mineral value are carried out by the Planning and Engineering department (cost-benefit).

Selection of the proper mining methods are closely linked to and often dictated by Geotechnical conditions of each mineralized zone. Sublevel open stoping, as well as cut and fill are the primary methods in use at Monte and Carrizal.

***Recovery Methods***

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The San Francisco Processing Plant uses conventional crushing, grinding and flotation to produce 3 concentrates: Lead, Zinc, and Copper. The plant can handle 2,500 tonnes per day of fresh feed, which is a blend of material from the Monte Mine, Carrizal Mine, and Limo De Toro Mine.

Feed from the separate mining areas is stockpiled separately at the mill facility. Blending is achieved by a loader combining stockpile material in the crusher feed hopper.

The San Francisco Processing Plant flowsheet follows a typical lead, copper, and zinc flotation circuit with a crushing circuit to reduce the mill feed size to a P80 of 3/8 inch. The feed is then ground in one of three primary ball mills to a feed size P80 of approximately 110 µm.

The feed is then conditioned in a conditioning tank and subjected to a lead copper bulk flotation. The lead/copper flotation tails reports to the zinc rougher circuit.

The lead/copper rougher concentrate is upgraded in a cleaner flotation circuit and then run through a lead-copper differential flotation circuit where the copper is depressed and the lead is floated to a final lead concentrate. The zinc rougher concentrate is cleaned in the zinc cleaner flotation circuit.

Each of the 3 concentrates reports to a separate concentrate thickener and filtration circuit. Each of the three concentrates are sold in bulk to smelters.

The flowsheet can be seen in Figure 13-1 of the Zimapan Report.

![](ex99-1_041.jpg)

***Infrastructure***

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Facilities for the Project are located at the Carrizal Mine, the San Francisco Processing plant, and in the town of Zimapan.

There are no facilities located at the Monte Mine.

Although each mine has small offices for local technical, safety, and supervisory teams, the main administrative, warehousing, and technical support facility is the La Llave camp located in Zimapan.

<u>Carrizal and Monte Mines</u>

Each mine is independently operated and has their own support infrastructure. Each has their own ramp entry and independent ventilation systems, with some benefits derived from the connecting haulage way which doubles as a ventilation conduit and pipeway for drilling and process water as needed.

Grid power is available at each portal and each mine has dedicated substations. Compressed air is supplied to each mine from surface compressors located at each portal.

Figure 1-4 of the Zimapan Report shows the location of facilities servicing the Carrizal Mine.

Figure 1-4: Site Layout, Carrizal Mine Facilities.

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Source: Carrizal (2023)

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***San Francisco Processing Plant***

The San Francisco processing plant accepts feed via truck from both mines. It comprises crushing, grinding, flotation, and concentrate dewatering circuits as well as a preparation and assay laboratory and mine offices. The plant is situated at the southern and upstream end of a series of nine tailings storage facilities, eight of which have been decommissioned and the current active facility (No. 9), at the northern extent of the valley. The location of the tailings storage facilities is shown in Figure 1-5 of the Zimapan Report relative to the El Monte underground workings, Portal, and San Francisco Plant.

Figure 1-5: Site Layout, Monte Mine, San Francisco Processing Plant and Tailings Pond.

![](ex99-1_043.jpg)

Source: Carrizal (2023)

A site layout drawing of the plant is provided in Figure 1-6 of the Zimapan Report.

Plant process water supply is a combination of groundwater sourced from the Monte Underground workings, and workings from an adjacent operator, as well as reclaim from the Tailings Storage Facility. Approximately 80% of process water is recovered for reuse.

Figure 1 6: Site Layout for San Francisco Processing Plant.

![](ex99-1_044.jpg)

***Capital and Operating Cost Estimates***

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<u>Capital Costs</u>

The Zimapan Operation has been in continuous operation for many years. There will be, as the reserve is expanded and developed, the need for step changes in mine access, production or haulage methods, that may require large capital outlays. These will be financially justified as needed. However, the capital needs for continued operation to exploit the remaining reserves is limited to Primary mine development, Capital equipment rebuilds and replacements, and Tailing Storage Facility expansions.

The actual capital expenditure for 2024 and the projected budget for the next five years is shown in Table 1-6 of the Zimapan Report.

Table 1-6: Capital Cost Requirements.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Actual | Budget | Projection | Projection | Projection | Projection |
| | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 |
| Long-term infrastructure | &nbsp;&nbsp;&nbsp;&nbsp;4563411 | &nbsp;&nbsp;&nbsp;&nbsp;6299849 | 3045922 | 1522961 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;380740 | &nbsp;&nbsp;&nbsp;&nbsp;38074 |
| Overhaul | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;893879 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;481239 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;481239 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;240619 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;120310 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- |
| Exploration BDD | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;110182 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;559836 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;627017 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;702259 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;807597 | 928737 |
| Eq Mine-Plant Investment | &nbsp;&nbsp;&nbsp;&nbsp;5911019 | &nbsp;&nbsp;&nbsp;&nbsp;5319207 | 3441901 | 1332200 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;210568 | &nbsp;&nbsp;&nbsp;&nbsp;25167 |
| TOTAL | 11478491 | 12660131 | 7596079 | 3798039 | 1519216 | 991978 |

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Source: Santacruz (2024)

Recurring exploration and primary development costs have been included in the COG calculations to better anticipate and account for total costs and make the COG more meaningful for reserve estimation and mine planning.

<u>Operating Costs</u>

Costs used for Cut-Off-Grade analysis were taken from actual costs from 2024, as shown in Table 1-8 of the Zimapan Report. This most recent cost history was deemed the most accurate and stable period and which best represented the true costs of the operation. The Zimapan operation was acquired by Santacruz Silver in 2021, so it was decided to use actual costs incurred while the mines were under current ownership.

Table 1-8: Operating Costs for 2024.

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Tonnes | Tonnes | Mining and Processing Costs | Mining and Processing Costs | Mining and Processing Costs | Mining and Processing Costs | Mining and Processing Costs | Mining and Processing Costs | Mining and Processing Costs | Total |
| Mine | Mined | Milled | Mining | Mine<br> Mtce | Plant | Plant<br> Mtce | Utility<br> Vehicles | GA &<br> Services | Subtotal $| Opex<br> $/t |
| Carrizal | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;314514 | &nbsp;&nbsp;&nbsp;&nbsp;305079 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9077040 | &nbsp;&nbsp;&nbsp;&nbsp;2571658 | &nbsp;&nbsp;&nbsp;&nbsp;2747744 | &nbsp;&nbsp;&nbsp;&nbsp;1519142 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;122768 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3802897 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19841249 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;65.04 |
| Monte | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;417267 | &nbsp;&nbsp;&nbsp;&nbsp;404749 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7701801 | &nbsp;&nbsp;&nbsp;&nbsp;3234546 | &nbsp;&nbsp;&nbsp;&nbsp;3645447 | &nbsp;&nbsp;&nbsp;&nbsp;2015454 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;162877 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5045323 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21805448 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;53.87 |
| Lomo de Toro | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;67348 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;65327 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2093477 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;550677 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;588383 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;325299 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26289 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;814326 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4398451 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;67.33 |
| Socavón La Cuña | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;64298 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;62369 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1690111 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;525737 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;561736 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;310566 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25098 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;777446 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3890694 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;62.38 |
| Cuerpo 960 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19719 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19127 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;511568 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;161235 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;172275 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;95245 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7697 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;238429 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1186449 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;62.03 |
| **Total** | **883146** | **856651** | **21073997** | **7043853** | **7715585** | **4265706** | **344729** | **10678421** | **51122291** | **59.68** |

---

Source: Santacruz (2024)

Mine operations include direct costs of mining, including labor, energy, materials, and services.

Mine Equipment Maintenance Costs includes maintenance to all equipment related to direct development, exploitation and haulage, as well as service equipment such as pumping, ventilation, winches, etc.

Plant and Plant maintenance costs include direct costs as well as indirect costs.

General and Administration includes Concentrate haulage, Site Management, Technical services, Site Administration, Environmental and Social, Safety and Security.

***Conclusions***

 ****

The following observations were made:

● Ground conditions are quite competent in the longhole mining areas, allowing for large unsupported stopes.

● Mining operations are well run, as evidenced by good housekeeping practices in the mine and maintenance areas.

● The mines have multiple active workplaces, allowing for flexible operations.

<u>Risks</u>

The operation operates very close to break-even grades at all times with a mine plan that is not well informed by data. Mine planning is done with very little geologic information. Drifts and ramps are driven towards projections of lens extensions to depth rather than to drilled targets.

Modern planning tools, particularly modern mine-planning software, need to be brought to the operation to assist in the preparation of a sound mine plan. While the current system works, it is subject to human error and must be replaced with industry-standard practices.

The desire for longevity of operations impels the mine management to dilute the mined zones for maximum recovery. This is often done at a net operating loss.

It is understood that LHD's may occasionally operate inside the open stopes without remote operations. This practice was not observed by JDS on the site visit. The stopes should be treated as non-entry to personnel.

Surface access to the Carrizal Mine for personnel and ore haulage is provided by a very narrow and steep road that is heavily travelled. Two-way traffic meets regularly, requiring vehicles to back up and park on the roadside on switch backs to allow other vehicles to pass. This is a very precarious procedure that should be better controlled, both for safety and efficiency.

Ventilation is in general quite poor throughout the mines, with a high level of particulates resulting from the low flow volumes.

<u>Opportunities</u>

Zimapan operations has the opportunity to extend mining to depth in both mines. This will require a comprehensive plan that is based on diamond drilling future mining zones and effective planning using industry-standard software and tools.

 **

***Recommendations***

 **

JDS recommends the following actions:

● The drill pattern used in the longhole stopes should be reassessed to reduce drilling and blasting costs. An intense program to optimize blasting should be initiated. This would reduce external dilution and the associated costs (mucking, truck haulage, processing, tailings disposal) significantly. This could be done by increasing drill ring and drill hole spacing, reducing the drillhole diameter, or some combination of both changes;

● The access road to Monte should either be controlled by radio or long delay traffic lights making the most dangerous portions one-way for a intermittent durations. This would enhance safety but also make haulage travel more efficient;

● A leaky feeder system for radio communication or similar infrastructure should be installed to underground. This would improve emergency response time and simplify underground traffic control;

● All mucking past the stope brow should be remote controlled. The percentage of remote mucking can sometimes be reduced by shaping the blasts to feed the ore to a drawpoint with a final blast of short upholes at the draw point. This concept should be evaluated for application in the mines;

● The ventilation system must be improved. This will reduce heat in the mine, improve occupational health outcomes, and allow for faster re-entry times after blasting;

● Earlier and better geologic information must be gathered to optimize mine planning. This should include a diamond drill program prior to mining each zone and in-fill drilling to improve definition of mineralized zones.

 ****

**DIVIDENDS AND DISTRIBUTIONS**

No dividends have been declared on the Common Shares in the three most recently completed financial years and the Company does not contemplate that any dividends will be paid on any Common Shares in the immediate future, as it is anticipated that all available funds will be invested to finance the growth of Santacruz's business.

The Board of Directors will determine if, and when, dividends will be declared and paid in the future from funds properly applicable to the payment of dividends based on Santacruz's financial position at the relevant time. Any decision to pay dividends on any shares of the Company will be made by the Board on the basis of the Company's earnings, financial requirements and other factors existing at such future time, including, but not limited to, commodity prices, production levels, capital expenditure requirements, debt service requirements, if any, operating costs, royalty burdens, foreign exchange rates and the satisfaction of the liquidity and solvency tests imposed by the BCBCA for the declaration and payment of dividends.

**DESCRIPTION OF CAPITAL STRUCTURE**

**Common Shares**

The Company is authorized to issue an unlimited number of Common Shares. As at the date of this AIF, there are 92,490,699 Common Shares issued and outstanding.

Holders of Common Shares are entitled to receive notice of and to attend and vote at all meetings of the Shareholders of Santacruz, except meetings at which only holders of a specified class of shares are entitled to vote, and each Common Share confers the right to one vote in person or by proxy at such meetings of the Shareholders of Santacruz. The holders of Common Shares, subject to the prior special rights, if any, of any other class of shares of Santacruz are entitled to receive such dividends in any financial year as the Board may determine from time to time at its discretion from funds legally available for the payment of dividends.

There are no special rights or restrictions of any nature attached to any of the Common Shares. The Common Shares do not carry any pre-emptive, subscription, redemption, or conversion rights, nor do they contain any sinking or purchase fund provisions. In the event of the liquidation, dissolution or winding-up of Santacruz, whether voluntary or involuntary, the holders of Common Shares are entitled to receive, subject to the prior rights, if any, of the holders of any other class of shares of the Company, the remaining property and assets of Santacruz.

**MARKET FOR SECURITIES**

**Trading Price and Volume**

The Common Shares are listed and traded on the TSXV under the trading symbol "SCZ", and on the Nasdaq under the trading symbol "SCZMD" and on the Frankfurt Exchange under the symbol "1SZ".

The following table sets forth the reported high and low prices and monthly trading volumes of the Common Shares for the fiscal year ended December 31, 2025, as quoted on the TSXV, as applicable:

---

| | | | |
|:---|:---|:---|:---|
| **Period** | **High Trading Price** | **Low Trading Price** | **Volume (#) <sup>(1)</sup>** |
| December 2025 | 15.32 | 10.04 | 24767288 |
| November 2025 | 10.08 | 6.86 | 32921383 |
| October 2025 | 11.40 | 7.24 | 36326476 |
| September 2025 | 11.80 | 7.28 | 37833345 |
| August 2025 | 7.16 | 4.48 | 17508750 |
| July 2025 | 5.88 | 4.16 | 19536571 |
| June 2025 | 4.52 | 2.84 | 21041030 |
| May 2025 | 3.00 | 1.86 | 10708276 |
| April 2025 | 2.24 | 1.50 | 26125184 |
| March 2025 | 2.32 | 1.44 | 15527883 |
| February 2025 | 1.64 | 1.40 | 9593386 |
| January 2025 | 1.54 | 1.1 | 5370827 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Numbers
 presented on a post-consolidation basis. On December 10, 2025, the Company completed the
 Share Consolidation.

**Prior Sales**

During the year ended December 31, 2025, the Company issued the following securities which are outstanding and convertible into Common Shares but are not listed or quoted on a marketplace:

---

| | | | |
|:---|:---|:---|:---|
| **Date of Issue** | **Type of Securities** | **Number of Securities<sup>(1)</sup>** | **Issue or Exercise Price per Security (CAD$)** |
| June 26, 2025 | Option | 825000 | $4.40 |
| June 26, 2025 | RSU | 238750 | $3.92 |
| June 26, 2025 | PSU | 125000 | $3.92 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Numbers
 presented on a post-consolidation basis. On December 10, 2025, the Company completed the
 Share Consolidation.

**ESCROWED SECURITIES AND SECURITIES SUBJECT TO RESTRICTION ON TRANSFER**

As at the date of this Annual Information Form, to the knowledge of the Company, there are no securities which remain subject to any escrow agreement or subject to a contractual restriction on transfer.

**DIRECTORS AND OFFICERS**

**Name, Occupation and Security Holding**

The following table sets forth information with respect to the directors and executive officers of the Company, including their respective provinces or states and countries of residence, their position(s) with the Company, their principal occupations for the last five years, the dates on which they first became directors or officers of the Company and the number of Common Shares beneficially owned, directly or indirectly, or over which control or direction is exercised, by such persons or such persons' respective associates or affiliates.

The directors hold office until the next annual meeting of the Company or until they otherwise cease to hold office in accordance with the Company's Articles. The term of office of the executive officers expires at the discretion of the Board.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name, Province/State and Country of Residence** | <br>**Position with the Company** | <br>**Principal Occupation During the Past Five Years** | **Period as Director and/or Officer** | **Number of Common**<br>**Shares Held<sup>(7)(8)</sup>** |
| **Arturo Préstamo Elizondo** <sup>(3)</sup> <br>Monterrey, Nuevo Leon, Mexico | Chief Executive Officer, Executive Chairman and a Director | Chief Executive Officer from May 2024 to present; Interim CEO from August 2023 to May 2024; Executive Chairman from May 2020 to present; Interim CFO of the Company from July 2020 to January 2023. President and CEO of the Company from April 2012 to May 2020. | Director since April 12, 2012 | 18155683 |
| **Federico Villaseñor** <sup>(1)(2)(4)</sup><br>Guanajuato, Guanajuato, Mexico | Director | Director of Business Development for Goldcorp Mexico, a subsidiary of Goldcorp Inc. from February 2007 to February 2014. Following retirement in 2014, Federico has continued to act as a consultant for various mining companies. | Director since April 8, 2024 | 428334 |
| **Larry Okada**<sup>(1)(2)(3)(4)</sup><br>Burnaby, British Columbia, Canada | Director | Business consultant. Former Chief Financial Officer of Africo Resources Ltd. from January 2010 to July 2017. | Director since April 28, 2015 | 801916 <sup>(5)</sup> |
| **Barry Girling** <sup>(1)(2)(4)</sup><br>Vancouver, British Columbia, Canada<br>| Director | President of RJG Capital Corporation, a private company providing administrative, financial and regulatory/shareholder services to junior public companies since 1993. | Director since October 17, 2018 | 525358 <sup>(6)</sup> |
| **Bruce Wolfson**<br>Tennessee, U.S. | Director | Adjunct professor at Columbia University and Vanderbilt University. General Counsel and Chief Compliance Officer of Jaguar Growth Partners, LLC from 2015 to 2021. | Director since November 17, 2025 | 0 |
| **Andres Bedregal** <br>La Paz, Bolivia | Chief Financial Officer | Before becoming CFO of Santacruz Silver Mining Ltd. he has also served as Chief Financial Officer of Sinchi Wayra S.A. Previously, he held senior leadership roles at BISA SAFI S.A., including Chief Executive Officer, Chief Financial Officer, and Innovation & Development Officer. | Officer since October 15, 2024 | 0 |
| **Eduardo Torrecillas**<br>La Paz, Bolivia | Chief Operations Officer | Before becoming Chief Operating Officer, he was Executive Chairman and President of Santacruz's Bolivian operations since 2022. He previously spent 12 years at Minera San Cristóbal S.A., holding key leadership roles | Officer since March 3, 2025 | 0 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Member
 of the Audit Committee.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Member
 of the Compensation Committee.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Member
 of the Corporate Governance and Nominating Committee.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Member
 of the Health, Safety and Environment Committee.

&nbsp;&nbsp;&nbsp;&nbsp;(5) Of
 these Common Shares, 413,583 Common Shares are held indirectly in the name of Larry M Okada
 Inc., a private company wholly-owned by Larry Okada.

&nbsp;&nbsp;&nbsp;&nbsp;(6) Of
 these Common Shares, 70,000 Common Shares are held indirectly in the name of RJG Capital
 Corporation, a private company wholly-owned by Barry Girling., and 2,000 Common Shares are
 held by Justin Girling, a family member of Barry Girling.

&nbsp;&nbsp;&nbsp;&nbsp;(7) Common
 Shares beneficially owned, directly or indirectly, or over which control or direction is
 exercised, as at March 31, 2026 based upon information furnished to the Company by individual
 directors.

&nbsp;&nbsp;&nbsp;&nbsp;(8) On
 December 10, 2025, the Company completed the Share Consolidation.

The following directors of the Company hold directorships in other reporting issuers as set out below:

---

| |
|:---|
| **Name of Director** |
| **Larry M. Okada** Neo Battery Materials Ltd. <sup>(1)</sup> |
| **Federico Villaseñor** Starcore International Mines Ltd. <sup>(1)</sup> |
| **W. Barry Girling** Highcliff Metals Corp. <sup>(1)</sup> Silver One Resources Inc. <sup>(1)</sup> |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Listed
 on the TSX Venture Exchange.

The information as to location of residence and principal occupation has been furnished by the respective directors and officers individually, and the information as to capital ownership, not being within the knowledge of the Company, has been furnished by the respective directors individually as at the date of this AIF, and corroborated by the reported information on the SEDI website at <u>www.sedi.ca</u>, wherever possible.

**Aggregate Ownership of Securities**

As at the date of this Annual Information Form, the current directors and officers of Santacruz, as a group, beneficially owned, or controlled or directed, directly or indirectly, an aggregate of 22,321,977 Common Shares, representing approximately 24% of the issued and outstanding Common Shares. The information as to the number of Common Shares beneficially owned, or controlled or directed, not being within the knowledge of the Company, has been furnished by the respective directors and officers of the Company individually.

**Cease Trade Orders, Bankruptcies, Penalties or Sanctions**

Except as disclosed herein, no director or executive officer of the Company:

&nbsp;&nbsp;&nbsp;&nbsp;a) is,
 as at the date of this Annual Information Form, or was within 10 years before the date of
 this Annual Information Form, a director, chief executive officer or chief financial officer
 of any company (including the Company), that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) was
 subject, while the director was acting in the capacity as director, CEO or CFO of such company,
 to a cease trade or similar order or an order that denied the relevant company access to
 any exemption under securities legislation, that was in effect for a period of more than
 30 consecutive days; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) was
 subject to a cease trade or similar order or an order that denied the relevant company access
 to any exemption under securities legislation, that was in effect for a period of more than
 30 consecutive days, that was issued after the director ceased to be a director, CEO or CFO
 but which resulted from an event that occurred while the director was acting in the capacity
 as director, CEO or CFO of such company;

&nbsp;&nbsp;&nbsp;&nbsp;b) is,
 as at the date of this Information Circular, or has been within 10 years before the date
 of the Information Circular, a director or executive officer of any company (including the
 Company) that, while that person was acting in that capacity, or within a year of that person
 ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating
 to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement
 or compromise with creditors or had a receiver, receiver manager or trustee appointed to
 hold its assets; or

&nbsp;&nbsp;&nbsp;&nbsp;c) has,
 within the 10 years before the date of this Information Circular, become bankrupt, made a
 proposal under any legislation relating to bankruptcy or insolvency, or become subject to
 or instituted any proceedings, arrangement or compromise with creditors, or had a receiver,
 receiver manager or trustee appointed to hold the assets of the director; or

&nbsp;&nbsp;&nbsp;&nbsp;d) has
 been subject to any penalties or sanctions imposed by a court relating to securities legislation
 or by a securities regulatory authority or has entered into a settlement agreement with a
 securities regulatory authority; or

&nbsp;&nbsp;&nbsp;&nbsp;e) has
 been subject to any other penalties or sanctions imposed by a court or regulatory body that
 would likely be considered important to a reasonable securityholder in deciding whether to
 vote for a proposed director.

The Company was subject to a management cease trade order issued by the British Columbia Securities Commission and Ontario Securities Commission on June 2, 2025 for failure to file interim financial statements and management's discussion and analysis for the period ended March 31, 2025. The cease trade order was revoked on June 12, 2025 by the British Columbia Securities Commission and Ontario Securities Commission. Arturo Préstamo Elizondo served as Executive Chairman, Chief Executive Officer and a director of the Company, and Federico Villaseñor, Roland Löhner, Larry Okada, and Barry Girling served as directors of the Company while the cease trade order was in place.

The Company was subject to a management cease trade order issued by the British Columbia Securities Commission and Ontario Securities Commission on May 1, 2025 for failure to file annual audited financial statements, annual management's discussion and analysis and certification of annual filings for the year ended December 31, 2024. The cease trade order was revoked on May 29, 2025 by the British Columbia Securities Commission and Ontario Securities Commission. Arturo Préstamo Elizondo served as Executive Chairman, Chief Executive Officer and a director of the Company, and Federico Villaseñor, Roland Löhner, Larry Okada, and Barry Girling served as directors of the Company while the cease trade order was in place.

The Company was subject to a cease trade order issued by the British Columbia Securities Commission and Ontario Securities Commission on May 8, 2023 for failure to file annual audited financial statements, annual management's discussion and analysis and certification of annual filings for the year ended December 31, 2022. The cease trade order was revoked on June 9, 2023 by the British Columbia Securities Commission and Ontario Securities Commission. Arturo Préstamo Elizondo served as Executive Chairman and a director of the Company, and Federico Villaseñor, Roland Löhner, Larry Okada, and Barry Girling served as directors of the Company while the cease trade order was in place.

Mr. Barry Girling was a director of Zinc One Resources Inc. ("**Zinc One**"), a company listed on the TSXV. On September 16, 2020, while Mr. Girling was a director of Zinc One, the British Columbia Securities Commission issued a cease trade order against Zinc One for failure to file its annual audited financial statements and related management discussion and analysis for the year ended February 29, 2020. The annual filings were made and the cease trade order was revoked on December 15, 2020.

**Conflicts of Interest**

The directors of the Company are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interests that they may have in any project or opportunity of the Company. If a conflict of interest arises at a meeting of the Board of Directors, any director in a conflict is required to disclose his or her interest and abstain from voting on such matter.

Except as disclosed in this AIF, to the best of the Company's knowledge, there are no known existing or potential conflicts of interest among the Company, its promoters, directors and officers or other members of management of the Company or of any proposed promoter, director, officer or other member of management as a result of their outside business interests, except that certain of the directors and officers serve as directors and officers of other companies, and therefore it is possible that a conflict may arise between their duties to the Company and their duties as a director or officer of such other companies.

Related party transactions during each reporting period are detailed in the Company's management discussion & analysis for the relevant period.

**AUDIT COMMITTEE INFORMATION**

As of the date of this AIF, the Audit Committee consists of Mr. Larry Okada, Mr. Barry Girling and Mr. Federico Villaseñor, all of whom are "financially literate" within the meaning of NI 52-110. Each director has an understanding of the accounting principles used to prepare Santacruz's financial statements; experience in preparing, auditing, analyzing, or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the issuer's financial statements; or experience actively supervising individuals engaged in such activities, and experience as to the general application of relevant accounting principles; and an understanding of the internal controls and procedures necessary for financial reporting.

The Audit Committee has the primary function of assisting the Board of Directors in fulfilling its financial oversight responsibilities by reviewing the integrity of Santacruz's financial statements, financial disclosures, and internal controls over financial reporting; monitoring the system of internal control; monitoring Santacruz's compliance with legal and regulatory requirements, selecting the external auditor for shareholder approval; reviewing the qualifications, independence and performance of the external auditor; and, when applicable, reviewing the qualifications, independence and performance of Santacruz's internal auditors. The Audit Committee has specific responsibilities relating to Santacruz's financial reports; the external auditor; the internal audit function; internal controls; regulatory reports and returns; legal or compliance matters that have a material impact on Santacruz; fraud risk assessment; and Santacruz's whistleblowing procedures. In fulfilling its responsibilities, the Audit Committee meets regularly with the external auditor and key management members.

**The Audit Committee's Charter**

The full text of the Audit Committee Charter is disclosed in Schedule "A" – Audit Committee Charter.

**Composition of the Audit Committee** 

The Committee will be comprised of at least three directors as determined by the Board, the majority of whom will not be officers, employees, or control persons of the Company or of an affiliate of the Company.

At least one member of the Committee will have Canadian financial reporting skills and experience with audit engagements for public companies. All members of the Committee will be financially literate. For the purposes of this Audit Committee Charter (the "**Charter**"), the definition of "financially literate" is the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can presumably be expected to be raised by the Company's financial statements.

The members of the Committee will be elected by the Board from time to time. Unless a chairperson of the Committee (the "**Chair**") is elected by the full Board, the members of the Committee may designate a Chair by a majority vote of the full Committee membership. The Chair must have Canadian financial reporting skills and experience with audit engagements for public companies.

All three Audit Committee Members are independent based on the tests for independence set forth in NI 52-110.

**Relevant Education and Experience of Audit Committee Members**

**Larry Okada**

Larry Okada is the Chair of the Audit Committee. Mr. Okada is financially literate and familiar with public company financial statements and the accounting principles used in reading and preparing financial statements. He graduated from the University of British Columbia with a BA after which he articled to become a CPA, CA in Canada followed by a CPA in the United States.

**Barry Girling**

Barry Girling is currently an independent business consultant. He obtained a Bachelor of Commerce, Finance from the University of British Columbia in 1990. Mr. Girling has provided consulting services to a number of public companies for over 25 years as well as being a director or officer of many client companies. Through his education and work experience, Mr. Girling has an understanding of public company financial statements and related disclosure.

**Federico Villaseñor**

Federico Villaseñor holds a B.Sc in Mining and Metallurgy from the University of Guanajuato, a M.S. of Mineral Economics from Columbia University and a Finance Degree from The Instituto Tecnológico Autónomo de Mexico. His career has spanned 40 years in the mining industry and he is financially literate and familiar with public company financial statements and the accounting principles used in reading and preparing financial statements.

**Reliance on Certain Exemptions**

At no time since the commencement of the Company's most recently completed financial year has the Company relied on the exemption in Section 2.4 of NI 52-110 (*De Minimis Non-audit Services*), an exemption in subsections 6.1.1(4), (5) or (6) of NI 52-110 or an exemption from NI 52-110, in whole or in part, granted under Part 8 of NI 52-110.

**Audit Committee Oversight**

At no time since the commencement of the Company's most recently completed financial year was a recommendation of the Committee to nominate or compensate an external auditor not adopted by the Board.

**Pre-Approval Policies and Procedures**

The Audit Committee has adopted specific policies and procedures for the engagement of non-audit services as described in the Company's Audit Committee Charter under the heading "Duties and Responsibilities" (see Schedule "A" attached hereto).

**External Auditor Service Fees (By Category)**

The aggregate fees billed by the Company's external auditors during the last two fiscal years for audit fees are as follows:

---

| | | |
|:---|:---|:---|
| **Financial Year Ending** | **Audit Fees<sup>(1)</sup>** | **Audit Related Fees<sup>(2)</sup>** |
| December 31, 2025<sup>(5)</sup> | US$980,000 | C$50,000 Nil |
| December 31, 2024<sup>(5)</sup> | C$1,544,736 | C$19,390 Nil |

---

(1) Includes
 the aggregate fees billed by the issuer's external auditor in each of the last two
 fiscal years for audit fees.

(2) Includes
 the aggregate fees billed in each of the last two fiscal years for assurance and related
 services by the issuer's external auditor that are reasonably related to the performance
 of the audit or review of the issuer's financial statements and are not reported under
 "Audit Fees".

(3) Includes
 the aggregate fees billed in each of the last two fiscal years for professional services
 rendered by the issuer's external auditor for tax compliance, tax advice, and tax planning.

(4) Includes
 the aggregate fees billed in each of the last two fiscal years for products and services
 provided by the issuer's external auditor, other than the services reported under "Audit
 Fees", "Audit Related Fees" and "Tax Fees".

(5) On
 September 3, 2025, the Company filed a change of auditor notice, announcing that Deloitte
 would resign as the auditor of the Company effective August 21, 2025. The Company appointed
 Davidson & Co. as the successor auditor commencing September 1, 2025. Fees for 2025 are fees to Davidson & Co. and the fees for 2024 are fees to Deloitte.

**Exemption for Venture Issuers**

Pursuant to Section 6.1 of NI 52-110, the Company is exempt from the requirements of Part 3 (*Composition of the Audit Committee*) and Part 5 (*Reporting Obligations*) of NI 52-110.

**PROMOTERS**

The Company does not currently have any promoters nor has it had any promoters during the past two most recently completed financial years.

**LEGAL PROCEEDINGS AND REGULATORY ACTIONS**

The Company may become party to litigation or other adversary proceedings, with or without merit, in a number of jurisdictions. The cost of defending such claims may take away from management time and effort and if determined adversely to the Company, may have a material and adverse effect on its cash flows, results of operation and financial condition.

The Company or its properties are not currently, and were not during the Company's most recently completed financial year, party to or the subject of any other legal proceedings, subject to any regulatory penalties or sanctions, nor did the Company enter into any settlement agreements relating to securities legislation or with a securities regulatory authority. The Company is also not aware of any legal proceedings being contemplated, in each case where the proceeding involves a claim for damages with an amount involved, exclusive of interest and costs, that exceeds 10% of the current assets of the Company.

**TRANSFER AGENT, REGISTRARS AND AUDITORS**

The Company's transfer agent and registrar is Computershare Investor Services Inc. located at its offices in Vancouver, British Columbia.

On September 3, 2025, the Company filed a change of auditor notice, announcing that Deloitte would resign as the auditor of the Company effective August 21, 2025. Deloitte were the auditor of the Company for the year ended December 31, 2024 and as of May 28, 2025, and throughout the period covered by the financial statements of the Company on which they reported, Deloitte were independent of the Company within the meaning of the rules of professional conduct of the Chartered Professional Accountants of British Columbia. The Company appointed Davidson & Co. as the successor auditor commencing September 1, 2025.

The consolidated annual financial statements of the Company for the years ended December 31, 2025 have been audited by Davidson & Co. The Company's auditors have advised that they are independent of the Company in accordance with the Chartered Professional Accountants of British Columbia Code of Professional Conduct.

**INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS**

Except as disclosed herein, none of the following persons or companies had any material interest, direct or indirect, in any transaction within the three most recently completed financial years of the Company or during the current financial year, that has materially affected or is reasonably expected to materially affect the Company:

&nbsp;&nbsp;&nbsp;&nbsp;a) a
 director or executive officer of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;b) a
 person or company that beneficially owns, or controls or directs, directly or indirectly,
 more than 10% of any class or series of the Company's outstanding voting securities;
 and

&nbsp;&nbsp;&nbsp;&nbsp;c) an
 associate or affiliate of any of the persons or companies referred to in paragraphs (a) or
 (b) above.

**MATERIAL CONTRACTS**

The Company is not a party to any material contracts entered into within the most recently completed financial year, or before the most recently completed financial year but that are still in effect, other than the Glencore Definitive Agreements.

**INTERESTS OF EXPERTS**

**Names of Experts**

Garth Kirkham, P. Geo., who by reason of education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, fulfills the requirements of a "qualified person" as defined in NI 43-101, and who is Independent of the issuer applying all of the tests in Section 1.5 of NI 43-101CP, has reviewed and approved various scientific and technical information relating to the Company's mineral projects in this AIF and the Company's other continuous disclosure filings.

Other than as disclosed above, and excluding the Company's auditors, no other person or company is named as having prepared or certified a report, valuation, statement or opinion described or included in a filing, or referred to in a filing, made under National Instrument 51-102 – *Continuous Disclosure Obligations* by the Company during, or relating to, the Company's most recently completed financial year and whose profession or business gives authority to the report, valuation, statement or opinion made by the person or company.

**Interests of Experts**

Based on information provided by the experts named under "Names of Experts" above, and other than as disclosed in this AIF, the registered or beneficial interest, direct or indirect, in any securities or other property of the Company or of one of the Company's associates or affiliates of each of the above experts, represents less than one per cent of the Company's outstanding securities. In addition, none of the above experts is or is expected to be elected, appointed or employed as a director, officer or employee of the Company or of any associate or affiliate of the Company.

**ADDITIONAL INFORMATION**

Financial information about the Company is provided in the Company's financial statements and Management's Discussion and Analysis for the years ended December 31, 2025, and 2024, and additional information relating to the Company is available on SEDAR+, under the Company's profile, at <u>http://www.sedarplus.ca</u> and on EDGAR at www.sec.gov.

Additional information, including directors' and officers' remuneration and indebtedness, principal holders of the Company's securities, and securities authorized for issuance under the Company's equity compensation plans, as applicable, is contained in the Company's information circular for its most recent annual general meeting.

**SCHEDULE "A" – AUDIT COMMITTEE CHARTER**

**The Audit Committee's Charter**

*Purpose*

 

The primary function of the Audit Committee (the "**Committee**") is to assist the Company's Board in fulfilling its financial oversight responsibilities by reviewing the financial reports and other financial information provided by the Company to regulatory authorities and shareholders, the Company's systems of internal controls regarding finance and accounting and the Company's auditing, accounting, and financial reporting processes. Consistent with this function, the Committee will encourage continuous improvement of, and should foster adherence to, the Company's policies, procedures and practices at all levels. The Committee's primary duties and responsibilities are to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Serve
 as an independent and objective party to monitor the Company's financial reporting
 and internal control systems and review the Company's financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Review
 and appraise the performance of the Company's external auditors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Provide
 an open avenue of communication among the Company's auditors, financial and senior
 management, and the Board.

*Composition of the Audit Committee*

 

The Committee will be comprised of at least three directors as determined by the Board, the majority of whom will not be officers, employees, or control persons of the Company or of an affiliate of the Company.

At least one member of the Committee will have Canadian financial reporting skills and experience with audit engagements for public companies. All members of the Committee will be financially literate. For the purposes of this Audit Committee Charter (the "**Charter**"), the definition of "financially literate" is the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can presumably be expected to be raised by the Company's financial statements.

The members of the Committee will be elected by the Board from time to time. Unless a chairperson of the Committee (the "**Chair**") is elected by the full Board, the members of the Committee may designate a Chair by a majority vote of the full Committee membership. The Chair must have Canadian financial reporting skills and experience with audit engagements for public companies.

*Meetings*

 

The Committee will meet at least once per financial quarter, or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee will meet at least annually with the Chief Financial Officer and the external auditors in separate sessions.

*Responsibilities and Duties*

 

To fulfill its responsibilities and duties, the Committee will:

<u>Documents/Reports Review</u>

(a) Review
 and update this Charter annually.

(b) Review
 the Company's financial statements, management's discussion and analysis and
 any annual and interim earnings press releases before the Company publicly discloses this
 information and any reports or other financial information (including quarterly financial
 statements), which are submitted to any governmental body, or to the public, including any
 certification, report, opinion, or review rendered by the external auditors.

<u>External Auditors</u>

(a) Review
 annually, the performance of the external auditors who will be ultimately accountable to
 the Board and the Committee as representatives of the shareholders of the Company.

(b) Obtain
 annually, a formal written statement of external auditors setting forth all relationships
 between the external auditors and the Company, in accordance with any applicable regulatory
 requirements.

(c) Review
 and discuss with the external auditors any disclosed relationships or services that may impact
 the objectivity and independence of the external auditors.

(d) Take,
 or recommend that the full Board take, appropriate action to oversee the independence of
 the external auditors.

(e) Recommend
 to the Board the selection and, where applicable, the replacement of the external auditors
 nominated annually for shareholder approval.

(f) At
 least annually, consult with the external auditors, without the presence of management, about
 the quality of the Company's accounting principles, internal controls and the completeness
 and accuracy of the Company's financial statements, and discuss any event or matter
 which suggests the possibility of fraud, illegal acts or deficiencies in internal controls.

(g) Review
 and approve the Company's hiring policies regarding partners, employees and former
 partners and employees of the present and former external auditors of the Company.

(h) Review
 with management and the external auditors the audit plan for the year-end financial statements
 and intended template for such statements.

(i) Review
 and pre-approve all audit and audit-related services and the fees and other compensation
 related thereto, and any non-audit services, provided by the Company's external auditors.
 The pre-approval requirement is waived with respect to the provision of non-audit services
 if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the
 aggregate amount of all such non-audit services provided to the Company constitutes not more
 than five percent of the total amount of fees paid by the Company to its external auditors
 during the fiscal year in which the non-audit services are provided;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) such
 services were not recognized by the Company at the time of the engagement to be non-audit
 services; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) such
 services are promptly brought to the attention of the Committee by the Company and approved
 prior to the completion of the audit by the Committee or by one or more members of the Committee
 who are members of the Board to whom authority to grant such approvals has been delegated
 by the Committee.

Provided the pre-approval of the non-audit services is presented to the Committee's first scheduled meeting following such approval, such authority may be delegated by the Committee to one or more independent members of the Committee.

Financial Reporting Processes

(a) Review
 the draft financial statements and management's discussion and analysis with respect
 to each reporting period and provide a recommendation to the Board with respect to the approval
 of the financial statements and management's discussion and analysis.

(b) Prior
 to approving the annual financial statements, review the results of management's evaluation
 of the effectiveness of the Company's internal controls over financial reporting and
 disclosure controls and procedures as at the date of the Company's annual financial
 statements.

(c) In
 consultation with the external auditors, review with management the integrity of the Company's
 financial reporting process, both internal and external.

(d) Consider
 the external auditor's judgments about the quality and appropriateness of the Company's
 accounting principles as applied in its financial reporting.

(e) Consider
 and approve, if appropriate, changes to the Company's auditing and accounting principles
 and practices as suggested by the external auditors and management.

(f) Review
 significant judgments made by management in the preparation of the financial statements and
 the view of the external auditors as to appropriateness of such judgments.

(g) Following
 completion of the annual audit, review separately with management and the external auditors
 any significant difficulties encountered during the course of the audit, including any restrictions
 on the scope of work or access to required information.

(h) Review
 any significant disagreement among management and the external auditors in connection with
 the preparation of the financial statements.

(i) Review
 with the external auditors and management the extent to which changes and improvements in
 financial or accounting practices have been implemented.

(j) Review
 any complaints or concerns about any questionable accounting, internal accounting controls
 or auditing matters.

(k) Review
 certification process.

(l) Establish
 a procedure for the confidential, anonymous submission by employees of the Company of concerns
 regarding questionable accounting or auditing matters.

Other

Review any related-party transactions.

## Exhibit 99.2

**Exhibit 99.2**

![](ex99-2_001.jpg)

**MANAGEMENT'S DISCUSSION AND ANALYSIS**

**FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024**

480 - 1140 West Pender Street, Vancouver, BC, V6E 4G1

<u>www.santacruzsilver.com</u>

**Table of Contents**

---

| | |
|:---|:---|
| **Company Overview** | **4** |
| **Management Business Overview and Outlook** | **5** |
| **2025 Annual Highlights** | **6** |
| **Selected Annual and Quarterly Production Results** | **7** |
| **Bolivar Mine Operating Results** | **11** |
| **Porco Mine Operating Results** | **13** |
| **Caballo Blanco Group Operating Results** | **14** |
| **San Lucas Group Operating Results** | **15** |
| **Zimapan Mine** | **16** |
| **Other Properties** | **17** |
| **Qualified Person and Technical Disclosures** | **17** |
| **Overview of Financial Results** | **18** |
| &nbsp;&nbsp;&nbsp;Quarters ended December 31, 2025 and 2024 | 18 |
| &nbsp;&nbsp;&nbsp;Year ended December 31, 2025 and 2024 | 19 |
| &nbsp;&nbsp;&nbsp;Summary of Quarterly Results | 20 |
| **Liquidity, Capital Resources and Contractual Obligations** | **21** |
| **Off-balance Sheet Arrangements** | **23** |
| **Transactions with Related Parties** | **23** |
| **Subsequent Events** | **23** |
| **Material Accounting Estimates and Judgments** | **24** |
| **Accounting Policies Including Changes in Accounting Policies and Initial Adoption** | **24** |
| **Financial Instruments and Other Instruments** | **25** |
| **Outstanding Share Data** | **28** |
| **Internal Controls over Financial Reporting and Disclosure Controls and Procedures** | **28** |
| **Non-GAAP Measures** | **29** |
| **Cautionary Note Regarding Forward-looking Information** | **35** |
| **Risk Factors** | **46** |
| **Additional Information** | **52** |

---

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION**

This Management's Discussion and Analysis of results of operations and financial condition ("MD&A") should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2025 and the notes thereto of Santacruz Silver Mining Ltd. ("the Company" or "Santacruz") which have been prepared in accordance with IFRS Accounting Standards ("IFRS<sup>®</sup>"), as issued by the International Accounting Standards Board ("IASB").

All dollar amounts are expressed in thousands of US dollars unless otherwise indicated. Unless otherwise noted, references to "C$" are to thousands of Canadian dollars, references to "MXN" are to thousands of Mexican pesos and references to "BOB" are to thousands of Bolivian bolivianos.

Certain amounts shown in this MD&A may not add exactly to total amounts due to rounding differences. Throughout this MD&A, the terms first quarter, second quarter, third quarter, fourth quarter and year to date are respectively used interchangeably with the terms Q1, Q2, Q3, Q4 and YTD.

This MD&A contains "forward-looking information" within the meaning of applicable Canadian securities regulation and should be read in conjunction with the "Risk Factors" and "Cautionary Note Regarding Forward-looking Information" section in this MD&A.

All information contained in this MD&A is current and has been approved by the Board of Directors of the Company as of March 27, 2026.

**Company Overview**

Santacruz was incorporated pursuant to the Business Corporations Act of British Columbia on January 24, 2011. The Company's registered office is located at 1111 West Hastings Street, 15<sup>th</sup> Floor, Vancouver, British Columbia, Canada V6E 2J3. The Company is listed for trading on the TSX Venture Exchange (''TSX-V'') and the Nasdaq Capital Market ("NASDAQ") under the symbol ''SCZ''.

The Company is engaged in the operation, acquisition, exploration and development of mineral properties in Latin America, with a primary focus on silver and zinc, but also including lead and copper. As at December 31, 2025, the Company had acquired ownership including mining concession rights to the following mineral properties:

**Bolivia:**

● Sinchi
 Wayra ("Sinchi Wayra"), which consists of the following mineral properties and
 businesses located in Bolivia:

○ the Caballo Blanco Group which includes the Tres Amigos and Colquechaquita mines (the "Caballo Blanco Group" or "Caballo Blanco") and the Don Diego processing plant (the "Don Diego Processing Plant" or "Don Diego"), which processes production from the Caballo Blanco Group as well as toll milling from the San Lucas feed sourcing business;

○ the San Lucas Group which includes the San Lucas feed sourcing and trading business and the Reserva mine (the "San Lucas Group" or "San Lucas"); and

○ the Soracaya exploration project (the "Soracaya Project" or "Soracaya").

● Illapa
 ("Illapa"), with its operations held under a net operating cash flow interest
 agreement with Corporación Minera de Bolivia ("COMIBOL") a Bolivian state-owned
 entity comprising:

○ the Bolivar mine (the "Bolivar Mine" or "Bolivar") and process plant complex; and

○ the Porco mine (the "Porco Mine" or "Porco") and process plant complex.

**Mexico:**

○ The Zimapan mine (the "Zimapan Mine" or "Zimapan") and processing plant located in Hidalgo, Mexico.

Management has assessed the nature of its interest in the Illapa business and determined it to be a joint operation. The Company records its 45% interest in the assets, liabilities, revenues and expenses of the Illapa business in its consolidated financial statements. The Company is solely responsible for certain specific transactions made by the Illapa business, and for these transactions, the assets, liabilities, revenues and expenses are recognized at 100% in the Company's Financial Statements and result in balances payable to or owed from COMIBOL for its share of the joint operation. The Company reports its segment information on a 100% basis with respect to Bolivar and Porco together with an elimination column representing COMIBOL's 55% interest (refer to Note 22 of the audited consolidated financial statements).

In this MD&A, The Company reports 100% of production and sales from the Bolívar and Porco operations. Under the Association Agreement, ILLAPA S.A. is the designated operator and holds exclusive, comprehensive responsibility for all technical, financial, labor, legal, and commercial aspects of the operations. The Agreement grants ILLAPA full control over the mining production chain, including the exclusive right to commercialize concentrates in both domestic and international markets and to manage all related commercial processes.

COMIBOL's entitlement under the Agreement is not a direct share of production, but rather a 55% participation in net cash flow. Accordingly, management believes that reporting production on a 100% gross basis appropriately reflects the operational substance of the arrangement, while COMIBOL's interest is more accurately represented as an economic participation in net cash flow rather than a direct operational interest in the underlying production.

Since the Company is the operator of the Bolivar and Porco mines, management evaluates the performance of each operation by reviewing production on a 100% basis. Since the information of 100% production results is used to make decisions about allocating resources and assessing performance, this MD&A is prepared under the same basis.

In this MD&A, operational information for Bolivar and Porco is presented at 100%. Readers of this MD&A are cautioned that although in the operating section of this MD&A the Company reports 100% of the production and sales information, the Company records 45% of the assets, liabilities, revenues and expenses in its consolidated financial statements. In contrast to the operational information, all financial information presented in this MD&A is reported showing 45% of the assets, liabilities, revenues and expenses which coincides with the information presented in the audited consolidated financial statements.

**Company Overview (continued)**

From the acquisition of the Bolivian operations through to December 2024, the Company has used the official fixed rate of 6.96 BOB/USD to record transactions denominated in BOB. Commencing January 1, 2025, the Company has been recording transactions denominated in Bolivian Bolivianos using a spot rate determined by an estimation technique instead of the official rate. The Company believes this methodology for calculating the foreign exchange from BOB to USD is a more accurate representation of the current economic conditions in Bolivia. The average rate determined by using the new valuation technique for the year ended December 31, 2025 was 11.92 BOB/USD. All monetary assets and liabilities outstanding as at December 31, 2025 have been revalued using a spot rate of 8.36 BOB/USD.

**Management Business Overview and Outlook**

**2026 Bolivian Operating Priorities:**

The Company's Bolivian operations will remain focused on operational stability, cost discipline and plant performance in 2026. At Bolívar, management continues to advance the recovery of the areas affected by the localized flooding event encountered in 2025. Progress to date has been encouraging, and the affected areas are expected to recover gradually through 2026, with a return to full production anticipated during the year. At Porco, the Company's smallest and predominantly zinc-oriented mining operation, the priority for 2026 will be to maintain operating stability and support revenue generation through continued focus on zinc production. At Caballo Blanco, the Company's most efficient operation, management's objective is to preserve, sustain and further deepen the operating efficiencies achieved to date. San Lucas will continue to play a strategic role in keeping plants utilized through third-party ore supply, supporting fixed-cost absorption, cost efficiency and meaningful revenue contribution. Across the Bolivian platform, the Company's strategy remains centered on optimizing mining costs, improving plant recoveries and maintaining the flexibility of its integrated operating base.

**2026 Mexican Operating Priorities:**

In Mexico, the Company's principal operating focus in 2026 will be on improving metallurgical recoveries and concentrate quality at Zimapán. As the Company's highest-volume operation, Zimapán has a direct impact on consolidated revenue and operating performance, making recoveries and concentrate quality key priorities. Capital has already been invested toward these objectives, and management expects those initiatives to continue supporting operating improvement through 2026. The Company will also maintain its focus on cost discipline, process optimization and the continued strengthening of operating integration across the broader portfolio in support of more consistent production and financial performance.

**Final Settlement of Base Purchase Price Obligation:**

On September 5, 2025 the Company made the final installment payment to Glencore extinguishing the Base Purchase Price obligation for the acquisition of the Company's Bolivian operations. The Company paid a total of $40,000 exercising the accelerated payment option which settled the $80,000 liability in full leaving only the Contingent Value Rights (CVR) & additional payments obligation outstanding. The CVR and additional payment obligations will only become payable should the spot price of zinc exceed a base price of $3,850 per tonne and is subject to a valuation cap, since the beginning of the agreement no payments have been made because the price of zinc has not exceeded the base price. The CVR and Additional Payments are effective until the earlier of December 31, 2032 or the date that the valuation cap is reached.

**2025 Annual Highlights**

---

| | | | |
|:---|:---|:---|:---|
| | **22025** | **2024** | **Change**<br> **'25 vs '24** |
| **Operational** |  |  |  |
| Material Processed (tonnes milled) | 1945261 | 1955904 | (1%) |
| Silver Equivalent Produced (ounces) <sup>(1)</sup> | 14399019 | 16173293 | (11%) |
| Silver Ounces Produced | 5598680 | 6718380 | (17%) |
| Zinc Tonnes Produced | 87295 | 94399 | (8%) |
| Lead Tonnes Produced | 11094 | 11820 | (6%) |
| Copper Tonnes Produced | 1126 | 1057 | 7% |
| Silver Equivalent Sold (payable ounces) <sup>(2)</sup> | 10934731 | 14089723 | (22%) |
| Cash Cost of Production per Tonne <sup>(3)</sup> | 95.80 | 101.35 | (5%) |
| Cash Cost per Silver Equivalent Ounce Sold ($/oz) <sup>(3)</sup> | 24.93 | 21.90 | 14% |
| All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold ($/oz) <sup>(3)</sup> | 30.81 | 26.09 | 18% |
| Average Realized Price per Ounce of Silver Equivalent Sold ($/oz) <sup>(2) (3) (4)</sup> | 39.00 | 28.74 | 36% |
| **Financial** |  |  |  |
| Revenues | 326382 | 282987 | 15% |
| Gross Profit | 109400 | 57226 | 91% |
| Net Income | 42222 | 164484 | (74%) |
| Net Earnings Per Share - Basic ($/share) | 0.47 | 0.49 | (4%) |
| Adjusted EBITDA <sup>(3)</sup> | 104584 | 52625 | 99% |
| Cash | 44267 | 35721 | 24% |
| Working Capital | 63688 | 46296 | 38% |

---

**2025 Annual Production Summary - By Mine** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Bolivar <sup>(5)</sup>** | **Porco <sup>(5)</sup>** | **Caballo**<br> **Blanco Group** | **San**<br> **Lucas Group** | **Zimapan** | **Total** |
| Material Processed (tonnes milled) | 232448 | 197231 | 234709 | 387805 | 893067 | 1945261 |
| Silver Equivalent Produced (ounces) <sup>(1)</sup> | 2374121 | 1377234 | 2782260 | 3881319 | 3984086 | 14399019 |
| Silver Ounces Produced | 1059846 | 400486 | 1192022 | 1308128 | 1638198 | 5598680 |
| Zinc Tonnes Produced | 14367 | 10675 | 16063 | 27419 | 18771 | 87295 |
| Lead Tonnes Produced | 674 | 504 | 2573 | 2264 | 5080 | 11094 |
| Copper Tonnes Produced | N/A | N/A | N/A | N/A | 1126 | 1126 |
| Average head grades per mine: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (g/t) | 158 | 77 | 170 | 127 | 78 | 109 |
| &nbsp;&nbsp;&nbsp;Zinc (%) | 6.73 | 5.77 | 7.28 | 7.89 | 2.74 | 5.10 |
| &nbsp;&nbsp;&nbsp;Lead (%) | 0.41 | 0.36 | 1.34 | 0.91 | 0.73 | 0.76 |
| &nbsp;&nbsp;&nbsp;Copper (%) | N/A | N/A | N/A | N/A | 0.26 | 0.26 |
| Metal recovery per mine: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (%) | 90 | 82 | 93 | 83 | 73 | 80 |
| &nbsp;&nbsp;&nbsp;Zinc (%) | 92 | 94 | 94 | 90 | 77 | 85 |
| &nbsp;&nbsp;&nbsp;Lead (%) | 71 | 70 | 82 | 64 | 78 | 74 |
| &nbsp;&nbsp;&nbsp;Copper (%) | N/A | N/A | N/A | N/A | 49 | 49 |
| Silver Equivalent Sold (payable ounces) <sup>(2)</sup> | 1983106 | 1006027 | 2035431 | 2939466 | 2970701 | 10934731 |

---

Notes for both tables above:

<sup>(1)</sup> Silver Equivalent Produced (ounces) have been calculated using prices of $31.41/oz, $2,775.53/ton, $2,085.90/ton and $9,762.69/ton for silver, zinc, lead and copper respectively applied to the metal production divided by the silver price as stated here.

<sup>(2)</sup> Silver Equivalent Sold (payable ounces) have been calculated using the Average Realized Price per Ounce of Silver Equivalent Sold stated in the table above, applied to the payable metal content of the concentrates sold from Bolivar, Porco, the Caballo Blanco Group, San Lucas Group and Zimapan.

<sup>(3)</sup> The Company reports non-GAAP measures, which include Cash Cost of Production per Tonne, Cash Cost per Silver Equivalent Ounce Sold, All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold, Average Realized Price per Ounce of Silver Equivalent Sold, and Adjusted EBITDA. These measures are widely used in the mining industry as a benchmark for performance but do not have a standardized meaning and may differ from methods used by other companies with similar descriptions. See ''Non-GAAP Measures'' section below for definitions.

<sup>(4)</sup> Average Realized Price per Ounce of Silver Equivalent Sold is prior to all treatment, smelting and refining charges.

<sup>(5)</sup> Bolivar and Porco are presented at 100% whereas the Company records 45% of revenues and expenses in its consolidated financial statements.

**Selected Annual and Quarterly Production Results**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **2025 Q4** | **2025 Q3** | **2025 Q2** | **2025 Q1** | **2025 YTD** | **2024 YTD** | **Change**<br> **Q4 vs Q3** | **Change**<br> **'25 vs '24**  |
| **Material Processed (tonnes milled)** | | | | | | | | |
| Bolivar <sup>(4)</sup> | 63267 | 52023 | 54803 | 62356 | 232448 | 284634 | 22% | (18%) |
| Porco <sup>(4)</sup> | 51416 | 49161 | 49152 | 47501 | 197231 | 204585 | 5% | (4%) |
| Caballo Blanco Group | 63067 | 62221 | 57773 | 51648 | 234709 | 275273 | 1% | (15%) |
| San Lucas Group | 105587 | 100550 | 94973 | 86695 | 387805 | 341649 | 5% | 14% |
| Zimapan | 222703 | 222629 | 224162 | 223573 | 893067 | 849764 | (0%) | 5% |
| **Total** | **506040** | **486584** | **480863** | **471773** | **1945261** | **1955905** | **4%** | **(1%)** |
| **Silver Equivalent Produced (ounces)** <sup>(1)</sup> |  |  |  |  |  |  |  |  |
| Bolivar <sup>(4)</sup> | 565694 | 420612 | 601516 | 786299 | 2374121 | 3630036 | 34% | (35%) |
| Porco <sup>(4)</sup> | 330176 | 318694 | 360841 | 367523 | 1377234 | 1762341 | 4% | (22%) |
| Caballo Blanco Group | 730108 | 707465 | 685479 | 659208 | 2782260 | 3018705 | 3% | (8%) |
| San Lucas Group | 1095945 | 986403 | 940457 | 858514 | 3881319 | 3949992 | 11% | (2%) |
| Zimapan | 1017096 | 991643 | 958761 | 1016585 | 3984086 | 3812220 | 3% | 5% |
| **Total** | **3739019** | **3424817** | **3547054** | **3688129** | **14399019** | **16173293** | **9%** | **(11%)** |
| **Silver Ounces Produced** |  |  |  |  |  |  |  |  |
| Bolivar <sup>(4)</sup> | 202193 | 132146 | 304468 | 421040 | 1059846 | 1828098 | 53% | (42%) |
| Porco <sup>(4)</sup> | 82047 | 92001 | 105901 | 120537 | 400486 | 645250 | (11%) | (38%) |
| Caballo Blanco Group | 289446 | 294524 | 294786 | 313266 | 1192022 | 1220757 | (2%) | (2%) |
| San Lucas Group | 366600 | 326873 | 319634 | 295021 | 1308128 | 1344242 | 12% | (3%) |
| Zimapan | 403321 | 396385 | 398292 | 440199 | 1638198 | 1680033 | 2% | (2%) |
| **Total** | **1343607** | **1241929** | **1423081** | **1590063** | **5598680** | **6718380** | **8%** | **(17%)** |
| **Zinc Tonnes Produced** |  |  |  |  |  |  |  |  |
| Bolivar <sup>(4)</sup> | 3973 | 3186 | 3225 | 3983 | 14367 | 19395 | 25% | (26%) |
| Porco <sup>(4)</sup> | 2727 | 2488 | 2786 | 2674 | 10675 | 12044 | 10% | (11%) |
| Caballo Blanco Group | 4409 | 4131 | 3974 | 3549 | 16063 | 18606 | 7% | (14%) |
| San Lucas Group | 7729 | 7032 | 6643 | 6015 | 27419 | 28042 | 10% | (2%) |
| Zimapan | 5008 | 4744 | 4520 | 4498 | 18771 | 16311 | 6% | 15% |
| **Total** | **23846** | **21581** | **21148** | **20719** | **87295** | **94399** | **10%** | **(8%)** |
| **Lead Tonnes Produced** |  |  |  |  |  |  |  |  |
| Bolivar <sup>(4)</sup> | 187 | 104 | 182 | 201 | 674 | 1326 | 80% | (49%) |
| Porco <sup>(4)</sup> | 108 | 103 | 132 | 161 | 504 | 795 | 5% | (37%) |
| Caballo Blanco Group | 769 | 722 | 595 | 486 | 2573 | 2316 | 7% | 11% |
| San Lucas Group | 699 | 575 | 509 | 481 | 2264 | 1924 | 22% | 18% |
| Zimapan | 1237 | 1099 | 1355 | 1389 | 5080 | 5458 | 13% | (7%) |
| **Total** | **3000** | **2603** | **2773** | **2718** | **11094** | **11820** | **15%** | **(6%)** |
| **Copper Tonnes Produced** |  |  |  |  |  |  |  |  |
| Zimapan | 287 | 331 | 229 | 279 | 1126 | 1057 | (13%) | 7% |
| **Total** | **287** | **331** | **229** | **279** | **1126** | **1057** | **(13%)** | **7%** |
| **Silver Equivalent Sold (payable ounces)** <sup>(2)</sup> |  |  |  |  |  |  |  |  |
| Bolivar <sup>(4)</sup> | 378140 | 281420 | 586851 | 736696 | 1983106 | 3298649 | 34% | (40%) |
| Porco <sup>(4)</sup> | 155338 | 242697 | 254284 | 353708 | 1006027 | 1540699 | (36%) | (35%) |
| Caballo Blanco Group | 392362 | 530408 | 596038 | 516624 | 2035431 | 2600400 | (26%) | (22%) |
| San Lucas Group | 833017 | 719714 | 774550 | 612185 | 2939466 | 3163910 | 16% | (7%) |
| Zimapan | 649079 | 699865 | 781413 | 840343 | 2970701 | 3486063 | (7%) | (15%) |
| **Total** | **2407936** | **2474104** | **2993136** | **3059556** | **10934731** | **14089722** | **(3%)** | **(22%)** |

---

**Selected Annual and Quarterly Production Results (continued**)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **2025 Q4** | **2025 Q3** | **2025 Q2** | **2025 Q1** | **2025 YTD<sup>(5)</sup>** | **2024 YTD**<sup>(5)</sup> | **Change**<br> **Q4 vs Q3** | **Change**<br> **'25 vs '24**  |
| **Cash Cost of Production per Tonne** <sup>(3)</sup> | | | | | | | | |
| Bolivar <sup>(4)</sup> | 121.15 | 139.93 | 94.96 | 81.19 | 108.46 | 122.34 | (13%) | (11%) |
| Porco <sup>(4)</sup> | 91.01 | 90.27 | 66.26 | 69.14 | 79.39 | 105.81 | 1% | (25%) |
| Caballo Blanco Group <sup>(4)</sup> | 78.83 | 69.44 | 54.70 | 56.27 | 65.44 | 98.87 | 14% | (34%) |
| San Lucas Group | 288.52 | 191.05 | 130.84 | 101.64 | 182.85 | 184.43 | 51% | (1%) |
| Zimapan | 71.44 | 60.47 | 68.52 | 64.75 | 66.30 | 60.64 | 18% | 9% |
| **Total** | **125.86** | **100.11** | **81.95** | **73.22** | **95.80** | **101.35** | **26%** | **(5%)** |
| <br> **Cash Cost per Silver Equivalent Ounce Sold** <sup>(3)</sup> |  |  |  |  |  |  |  |  |
| Bolivar <sup>(4)</sup> | 31.34 | 34.51 | 14.86 | 13.50 | 20.29 | 18.72 | (9%) | 8% |
| Porco <sup>(4)</sup> | 39.78 | 29.76 | 19.78 | 16.60 | 24.16 | 23.77 | 34% | 2% |
| Caballo Blanco Group <sup>(4)</sup> | 26.45 | 18.32 | 10.85 | 12.66 | 16.26 | 21.09 | 44% | (23%) |
| San Lucas Group | 39.75 | 34.40 | 21.37 | 17.34 | 28.93 | 24.81 | 16% | 17% |
| Zimapan | 42.17 | 27.74 | 27.56 | 25.70 | 30.27 | 22.04 | 52% | 37% |
| **Total** | **36.92** | **28.62** | **19.48** | **17.84** | **24.93** | **21.90** | **29%** | **14%** |
| <br> **All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold <sup>(3)</sup>** |  |  |  |  |  |  |  |  |
| Bolivar <sup>(4)</sup> | 47.88 | 50.89 | 17.55 | 16.79 | 27.78 | 21.54 | (6%) | 29% |
| Porco <sup>(4)</sup> | 49.52 | 36.30 | 22.35 | 19.63 | 28.95 | 27.54 | 36% | 5% |
| Caballo Blanco Group <sup>(4)</sup> | 37.65 | 22.34 | 13.87 | 14.78 | 20.89 | 24.58 | 69% | (15%) |
| San Lucas Group | 44.80 | 38.57 | 23.69 | 19.16 | 32.37 | 26.72 | 16% | 21% |
| Zimapan | 50.52 | 34.50 | 32.35 | 34.32 | 37.39 | 26.10 | 46% | 43% |
| **Total** | **46.42** | **35.62** | **22.95** | **22.34** | **30.81** | **26.09** | **30%** | **18%** |

---

 

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| Underground development (m) | 11558 | 12634 | 11531 | 10135 | 45858 | 41970 | (9%) | 9% |
| Core Drilling (m) | 7313 | 8631 | 4689 | 3179 | 23812 | 17631 | (15%) | 35% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Silver
 Equivalent Produced (ounces) have been calculated using prices of $31.41/oz, $2,775.53/ton,
 $2,085.90/ton and $9,762.69/ton for silver, zinc, lead and copper respectively applied to
 the metal production divided by the silver price as stated here.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Silver
 Equivalent Sold (payable ounces) have been calculated using the Average Realized Price per
 Ounce of Silver Equivalent Sold in the Non-GAAP Measures section, applied to the payable
 metal content of the concentrates sold from Bolivar, Porco, the Caballo Blanco Group, San
 Lucas and Zimapan.

&nbsp;&nbsp;&nbsp;&nbsp;(3) The
 Company reports non-GAAP measures, which include Cash Cost of Production per Tonne, Cash
 Cost per Silver Equivalent Ounce Sold, All-in Sustaining Cash Cost per Silver Equivalent
 Ounce Sold and Average Realized Price per Ounce of Silver Equivalent Sold. These measures
 are widely used in the mining industry as a benchmark for performance, but do not have a
 standardized meaning and may differ from methods used by other companies with similar descriptions.
 See ''Non-GAAP Measures'' section below for definitions.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Bolivar
 and Porco are presented at 100% whereas the Company records 45% of revenues and expenses
 in its consolidated financial statements.

**Selected Annual and Quarterly Production Results (continued**)

For the year ended 2025, the Company processed 1,945,261 tonnes of ore, producing 14,399,019 silver equivalent (AgEq) ounces. This total includes 5,598,680 ounces of silver and 87,295 tonnes of zinc. In the fourth quarter of 2025 the Company reported 3,739,019 silver equivalent ounces produced. The complete annual and Q4 2025 production results were released in a news release dated January 26, 2026.

The silver equivalent ounces produced figures reported in 2025 and 2024 have been calculated using the Company's 2025 budgeted metal prices of $31.41/oz for silver, $2,776/ton for zinc, $2,086/ton for lead, and $9,763/ton for copper. Given the significant increase in silver prices during the fourth quarter of 2025, the Company has performed a supplemental calculation of AgEq ounces produced using the actual Q4 2025 average market prices of $54.83/oz for silver, $3,165/ton for zinc, $1,971/ton for lead, and $11,100/ton for copper. When using the Q4 actual market prices, the supplemental AgEq ounces produced is 2,886,206 AgEq ounces. The decreased AgEq ounces produced is caused by silver price's outperformance relative to the other metals the company produces causing a significantly lower silver-equivalent conversion ratio for those by-products. The supplemental AgEq ounces calculation was provided to give readers additional context to evaluate production metrics and should be considered in conjunction with the Company's primary silver equivalent calculation based on budget metal prices.

**2025 YTD vs 2024 YTD**

For the year ended December 31, 2025, Santacruz processed 1,945,261 tonnes of ore, broadly in line with 2024, while silver equivalent production decreased 11% to 14.4 million ounces. The reduction was driven primarily by the mid-May 2025 water inflow at Bolívar, which restricted access to the Pomabamba and Nané higher-silver-grade areas for a significant portion of the year, materially reducing consolidated silver output. As a result, silver production declined 17% year over year, while zinc production decreased 8%.

Outside of Bolívar, the portfolio remained comparatively stable and continued to demonstrate the benefit of the Company's diversified operating base. San Lucas increased tonnes processed by 14% and continued to support plant utilization and fixed-cost absorption across the group, while Zimapán increased silver equivalent production by 5% on higher zinc output. Caballo Blanco remained a consistent contributor, although year-over-year comparability is affected by the 2024 reclassification of Reserva ore to San Lucas. Overall, the strength of the broader portfolio moderated, but did not fully offset, the impact of the disruption at Bolívar. Management expects a gradual recovery of the affected areas through 2026, with a return to full production anticipated during the year, consistent with the mine plan and based on progress achieved to date.

**Q4 2025 vs Q3 2025**

In Q4 2025, Santacruz processed 506,040 tonnes of ore, 4% more than in Q3 2025, and produced 3,739,019 silver equivalent ounces, up 9% quarter over quarter. The improvement was led by Bolívar, where throughput increased 22% and silver equivalent production increased 34% as access and operating conditions improved in the affected areas. The quarter was also supported by higher silver equivalent production from San Lucas (+11%), Caballo Blanco (+3%), Zimapán (+3%), and Porco (+4%). Consolidated silver production increased 8% quarter over quarter, zinc production increased 10% and lead production increased 15%.

**Cash Cost and All-in Sustaining Cost per Silver Equivalent Ounce Sold**

Cash Cost per Silver Equivalent Ounce Sold and All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold are presented on a silver equivalent ounce sold basis. Accordingly, these measures are affected not only by operating costs, but also by payable ounces sold and the Average Realized Price per Ounce of Silver Equivalent Sold used in the silver equivalent calculation. Period-to-period comparability should therefore be assessed in that context, particularly in periods of meaningful changes in metal prices. In management's view, the margin between the Average Realized Price per Ounce of Silver Equivalent Sold and AISC per Silver Equivalent Ounce Sold provides a more useful indicator of the economic performance of these metrics.

**Selected Annual and Quarterly Production Results (continued**)

**2025 YTD vs 2024 YTD** 

For the year ended December 31, 2025, consolidated cash cost per silver equivalent ounce sold increased from $21.09 in 2024 to $24.93 in 2025 and the consolidated all in sustaining cost (AISC) increased from $26.09 in 2024 to $30.81 in 2025. The year-over-year increase was driven primarily by less silver-equivalent ounces sold in the year due to the operating disruption at Bolívar following the May 2025 water inflow, and higher ore purchase costs at San Lucas under its margin-based sourcing model as metal prices increased. The cash cost of production per tonne significantly favourably decreased from $101.35 to $95.80 in 2025 which demonstrates that the principal driver of the increase in the per-ounce cost came from the production mix and the decrease in AgEq ounces sold due to a lower conversion ratio applied to by-product revenues as opposed to being caused by actual increases in site operating costs per tonne.

From an economic perspective, higher realized prices more than offset the increase in AISC per ounce. Average realized price per ounce of silver equivalent sold increased to $39.00 in 2025 from $28.74 in 2024, compared against an AISC of $30.81 per ounce, which implies a margin of $8.19 per AgEq ounce sold as compared to $2.65/AgEq ounce sold in 2024. Reported AISC is presented on a silver-equivalent ounce sold basis and is sensitive to the changes in metal prices that would affect the AgEq conversion ratio when silver price changes disproportionately relative to the by-product metal prices.

**Q4 2025 vs Q3 2025** 

In Q4 2025, consolidated cash cost per silver equivalent ounce sold increased from $28.62 in Q3 to $36.92 in Q4 and consolidated AISC increased from $35.62 in Q3 to $46.42 in Q4. The increase occurred despite higher production, as silver equivalent ounces sold decreased 3% quarter over quarter and several operations reported higher unit costs. San Lucas and Zimapán were the main contributors to the increase: at San Lucas, ore purchase costs rose in line with higher silver and zinc prices under its margin-based sourcing model, while at Zimapán both cash cost and AISC increased as the operation continued mine development and plant improvement work focused improving recoveries and concentrate quality. Porco and Caballo Blanco also reported higher cost per ounce as less ounces were sold and the operating mix outweighed otherwise stable production.

The Bolívar operation's costs had favourable results, cash cost per silver equivalent ounce sold decreased by 9% and AISC decreased 6% due to improved throughput, grades and recoveries quarter over quarter. Even with the higher consolidated cost profile, Q4 remained economically better than in Q3 as the average realized price per ounce of silver equivalent sold increased to $55.19, compared with AISC of $46.42, implying an average margin of $8.77 per silver equivalent ounce sold versus $4.51 in Q3.

**Bolivar Mine Operating Results**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Bolivar Production Table <sup>(3)</sup>** | **2025 Q4** | <br>**2025 Q3** | <br> **Change**<br> **Q4 vs Q3** | <br>**2025 YTD** | <br>**2024 YTD** | **Change**<br> **'25 YTD**<br> **vs '24 YTD**  |
| Material Processed (tonnes milled) | 63267 | 52023 | 22% | 232448 | 284634 | (18%) |
| Silver Equivalent Produced (ounces) <sup>(1)</sup> | 565694 | 420612 | 34% | 2374121 | 3630036 | (35%) |
| Silver Equivalent Sold (payable ounces) <sup>(2)</sup> | 378140 | 281420 | 34% | 1983106 | 3298649 | (40%) |
| **Production** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (ounces) | 202193 | 132146 | 53% | 1059846 | 1828098 | (42%) |
| &nbsp;&nbsp;&nbsp;Zinc (tonnes) | 3973 | 3186 | 25% | 14367 | 19395 | (26%) |
| &nbsp;&nbsp;&nbsp;Lead (tonnes) | 187 | 104 | 80% | 674 | 1326 | (49%) |
| **Average Grade** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (g/t) | 108 | 89 | 22% | 158 | 218 | (28%) |
| &nbsp;&nbsp;&nbsp;Zinc (%) | 6.75 | 6.61 | 2% | 6.73 | 7.48 | (10%) |
| &nbsp;&nbsp;&nbsp;Lead (%) | 0.40 | 0.31 | 28% | 0.41 | 0.64 | (36%) |
| **Metal Recovery** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (%) | 92 | 89 | 3% | 90 | 92 | (2%) |
| &nbsp;&nbsp;&nbsp;Zinc (%) | 93 | 93 | (0%) | 92 | 91 | 1% |
| &nbsp;&nbsp;&nbsp;Lead (%) | 74 | 64 | 16% | 71 | 73 | (3%) |
| Cash Cost of Production per Tonne ($/t) <sup>(4)</sup> | 121.15 | 139.93 | (13%) | 108.46 | 122.34 | (11%) |
| Cash Cost per Silver Equivalent Ounce Sold ($/oz) <sup>(4)</sup> | 31.34 | 34.51 | (9%) | 20.29 | 18.72 | 8% |
| All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold ($/oz) <sup>(4)</sup> | 47.88 | 50.89 | (6%) | 27.78 | 21.54 | 29% |

---

<sup>(1)</sup> Silver Equivalent Produced (ounces) have been calculated using prices of $31.41/oz, $2,775.53/ton and $2,085.90/ton for silver, zinc and lead respectively applied to the metal production divided by the silver price as stated here.

<sup>(2)</sup> Silver Equivalent Sold (payable ounces) have been calculated using the Average Realized Price per Ounce of Silver Equivalent Sold applied to the payable metal content of the concentrates sold from the Bolivar, Porco, the Caballo Blanco Group, and San Lucas in 2024.

<sup>(3)</sup> Bolivar is presented at 100% whereas the Company records 45% of revenues and expenses in its consolidated financial statements.

<sup>(4)</sup> The Company reports non-GAAP measures, which include Cash Cost of Production per Tonne, Cash Cost per Silver Equivalent Ounce Sold and All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and may differ from methods used by other companies with similar descriptions. See "Non-GAAP Measures" section below for definitions.

The Bolivar Mine has been active for more than 200 years. The current mine complex consists of an underground mine, 1,100 t/d milling facility, tailings storage facility, maintenance workshop, shaft-winder, water treatment plants, supplies warehouse, main office, hospital, and camp.

The Bolivar mine operates in two main areas: the Central Zone, an extension of the original ore deposit that runs deeper, and the Rosario Zone, a parallel area with its own separate entrance.

Currently the mine produces about 19,000 tonnes of ore per month, and 840 meters of combined primary and secondary development each month. At the same time, ore from the San Lucas feed sourcing business is providing production flexibility and allowing the mill to operate efficiently.

The Bolívar mill has operated continuously since 1993, receiving feed from two main sources: the Bolívar Mine, which supplies approximately 70%, and toll feed sourced through the San Lucas feed sourcing business, contributing the remaining 30%. The mill processes each feed type separately, enabling precise analysis and reporting for each. Different reagent strategies are applied to each source due to the presence of pyrrhotite in the San Lucas feed, which is generally absent in the Bolívar mine feed.

**Bolivar Mine Operating Results (continued)**

**2025 YTD vs 2024 YTD**

For the year ended December 31, 2025, Bolívar's results were materially affected by the water inflow event that occurred in mid-May 2025 and restricted access to the Pomabamba and Nané higher-silver-grade areas for a significant portion of the year. Tonnes processed decreased 18% year over year and silver equivalent production decreased 35%, while silver production declined 42%. The annual reduction was driven principally by lower silver head grades, partially offset by relatively stable metallurgical recoveries.

Recovery activities continued through the second half of 2025 and advanced in line with the established recovery plan. Q4 performance improved meaningfully versus Q3, reflecting better access, higher grades and stronger recoveries, and management continues to expect a gradual recovery of the affected areas during 2026 consistent with the mine plan. Progress to date has been encouraging. For 2026, the operational priority at Bolívar is to continue restoring access to the affected zones, recover silver head grades and progressively normalize production sequencing.

**Q4 2025 vs Q3 2025**

In Q4 2025, ore processed at Bolívar increased by 22% compared to Q3 2025, reflecting improved access and operating conditions as recovery activities advanced at the Pomabamba and Nané areas. Silver equivalent production increased by 34%, driven by higher throughput, a 22% increase in silver head grades and a 3% improvement in silver recoveries. Silver production increased by 53% quarter over quarter, while zinc and lead production rose by 25% and 80%, respectively, consistent with improved stope availability and the mining sequence.

Recovery efforts at the affected mining areas continued throughout Q4 2025 and advanced in line with the established recovery plan. While operating conditions improved materially compared to Q3 2025, access to the highest-grade portions of the Pomabamba and Nané veins remained partially restricted during Q4 2025. Notwithstanding these constraints, production from the Pomabamba and Nané veins increased month-over- month during Q4 2025, reflecting improved grades and silver recoveries, as a growing proportion of ore was sourced from these higher-silver-grade structures.

**Porco Mine Operating Results**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Porco Production Table <sup>(3)</sup>** | <br>**2025 Q4** | **2025 Q3** | **Change**<br> **Q4 vs Q3** | **2025 YTD** | **2024 YTD** | **Change**<br> **'25 YTD**<br> **vs '24 YTD**  |
| Material Processed (tonnes milled) | 51416 | 49161 | 5% | 197231 | 204585 | (4%) |
| Silver Equivalent Produced (ounces) <sup>(1)</sup> | 330176 | 318694 | 4% | 1377234 | 1762341 | (22%) |
| Silver Equivalent Sold (payable ounces) <sup>(2)</sup> | 155338 | 242697 | (36%) | 1006027 | 1540699 | (35%) |
| **Production** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (ounces) | 82047 | 92001 | (11%) | 400486 | 645250 | (38%) |
| &nbsp;&nbsp;&nbsp;Zinc (tonnes) | 2727 | 2488 | 10% | 10675 | 12044 | (11%) |
| &nbsp;&nbsp;&nbsp;Lead (tonnes) | 108 | 103 | 5% | 504 | 795 | (37%) |
| **Average Grade** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (g/t) | 61 | 71 | (14%) | 77 | 117 | (34%) |
| &nbsp;&nbsp;&nbsp;Zinc (%) | 5.66 | 5.43 | 4% | 5.77 | 6.28 | (8%) |
| &nbsp;&nbsp;&nbsp;Lead (%) | 0.28 | 0.30 | (6%) | 0.36 | 0.51 | (29%) |
| **Metal Recovery** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (%) | 81 | 82 | (1%) | 82 | 84 | (2%) |
| &nbsp;&nbsp;&nbsp;Zinc (%) | 94 | 93 | 1% | 94 | 94 | (0%) |
| &nbsp;&nbsp;&nbsp;Lead (%) | 74 | 69 | 7% | 70 | 76 | (8%) |
| Cash Cost of Production per Tonne ($/t) <sup>(4)</sup> | 91.01 | 90.27 | 1% | 79.39 | 105.81 | (25%) |
| Cash Cost per Silver Equivalent Ounce Sold ($/oz) <sup>(4)</sup> | 39.78 | 29.76 | 34% | 24.16 | 23.77 | 2% |
| All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold ($/oz) <sup>(4)</sup> | <br> 49.52 | <br> 36.30 | 36% | 28.95 | 27.54 | 5% |

---

 

<sup>(1)</sup> Silver Equivalent Produced (ounces) have been calculated using prices of $31.41/oz, $2,775.53/ton and $2,085.90/ton for silver, zinc and lead respectively applied to the metal production divided by the silver price as stated here

<sup>(2)</sup> Silver Equivalent Sold (payable ounces) have been calculated using the Average Realized Price per Ounce of Silver Equivalent Sold applied to the payable metal content of the concentrates sold from the Bolivar, Porco, the Caballo Blanco Group, and San Lucas in 2024.

<sup>(3)</sup> Porco is presented at 100% whereas the Company records 45% of revenues and expenses in its consolidated financial statements.

<sup>(4)</sup> The Company reports non-GAAP measures, which include Cash Cost of Production per Tonne, Cash Cost per Silver Equivalent Ounce Sold and All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and may differ from methods used by other companies with similar descriptions. See "Non-GAAP Measures" section below for definitions

The Porco Mine has been in operation for nearly 500 years. The complex consists of an underground mine, milling facility, maintenance workshop, tailing storage facility, water treatment plant, supplies warehouse, main office, two hospitals and Yancaviri Camp.

The mine produces approximately 17,000 tonnes of ore, and on average realizes 600 meters of total development per month. The mine is comprised of two production areas. Hundimiento uses long hole mechanized mining methods to exploit the deeper extension of the primary vein complex, and the Central zone which is conventionally mined using more selective shrinkage stoping. The milling facility is sourced by the mine feed (approximately 60%), and the toll feed from the San Lucas feed sourcing business (40%).

**2025 YTD vs 2024 YTD**

For the year ended December 31, 2025, Porco processed 197,231 tonnes, 4% below 2024, and produced 1.38 million silver equivalent ounces, 22% lower year over year. Silver production declined 38%, reflecting lower silver head grades as mine sequencing continued to prioritize zinc zones, while zinc production decreased 11% and zinc recoveries remained stable at 94%. The annual operating profile is consistent with Porco's role as the Company's smallest mine and a predominantly zinc-oriented operation.

For 2026, management's focus at Porco is on zinc production and operating stability. The objective is to maintain consistent throughput and metallurgical performance in the zinc-dominant areas in order to support steadier revenue generation and reduce quarterly volatility.

**Porco Mine Operating Results (continued)**

**Q4 2025 vs Q3 2025**

Porco reported a 10% increase in zinc production compared to the previous quarter, driven by higher head grades and stable throughput. Zinc recoveries remained strong at 94%, reflecting consistent metallurgical performance. Silver production declined as mining continued to focus on zinc-rich zones, consistent with the mine plan and Porco's role as a predominantly zinc-producing underground operation.

**Caballo Blanco Group Operating Results**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Caballo Blanco Group Production Table** | <br>**2025 Q4** | **2025 Q3** | **Change**<br> **Q4 vs Q3** | **2025 YTD** | **2024 YTD** | **Change**<br> **'25 YTD**<br> **vs '24 YTD**  |
| Material Processed (tonnes milled) | 63067 | 62221 | 1% | 234709 | 275273 | (15%) |
| Silver Equivalent Produced (ounces) <sup>(1)</sup> | 730108 | 707465 | 3% | 2782260 | 3018705 | (8%) |
| Silver Equivalent Sold (payable ounces) <sup>(2)</sup> | 392362 | 530408 | (26%) | 2035431 | 2600400 | (22%) |
| **Production** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (ounces) | 289446 | 294524 | (2%) | 1192022 | 1220757 | (2%) |
| &nbsp;&nbsp;&nbsp;Zinc (tonnes) | 4409 | 4131 | 7% | 16063 | 18606 | (14%) |
| &nbsp;&nbsp;&nbsp;Lead (tonnes) | 769 | 722 | 7% | 2573 | 2316 | 11% |
| **Average Grade** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (g/t) | 156 | 160 | (2%) | 170 | 153 | 11% |
| &nbsp;&nbsp;&nbsp;Zinc (%) | 7.39 | 7.14 | 4% | 7.28 | 7.30 | (0%) |
| &nbsp;&nbsp;&nbsp;Lead (%) | 1.51 | 1.45 | 4% | 1.34 | 1.11 | 21% |
| **Metal Recovery** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (%) | 91 | 92 | (1%) | 93 | 90 | 3% |
| &nbsp;&nbsp;&nbsp;Zinc (%) | 95 | 93 | 2% | 94 | 93 | 2% |
| &nbsp;&nbsp;&nbsp;Lead (%) | 81 | 80 | 1% | 82 | 76 | 8% |
| Cash Cost of Production per Tonne ($/t) <sup>(3)</sup> | 78.83 | 69.44 | 14% | 65.44 | 98.87 | (34%) |
| Cash Cost per Silver Equivalent Ounce Sold ($/oz) <sup>(3)</sup> | 26.45 | 18.32 | 44% | 16.26 | 21.09 | (23%) |
| All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold ($/oz) <sup>(3)</sup> | <br> 37.65 | <br> 22.34 | 69% | 20.89 | 24.58 | (15%) |

---

 

<sup>(1)</sup> Silver Equivalent Produced (ounces) have been calculated using prices of $31.41/oz, $2,775.53/ton and $2,085.90/ton for silver, zinc and lead respectively applied to the metal production divided by the silver price as stated here.

<sup>(2)</sup> Silver Equivalent Sold (payable ounces) have been calculated using the Average Realized Price per Ounce of Silver Equivalent Sold applied to the payable metal content of the concentrates sold from the Bolivar, Porco, the Caballo Blanco Group, and San Lucas in 2024.

(3) The Company reports non-GAAP measures, which include Cash Cost of Production per Tonne, Cash Cost per Silver Equivalent Ounce Sold and All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and may differ from methods used by other companies with similar descriptions. See "Non-GAAP Measures" section below for definitions

Following a thorough examination of the Don Diego milling facility processing performance, Caballo Blanco Group made a strategic adjustment in Q3 to improve metal recovery and concentrate value. Previously, the milling facility handled ore from three mines: Colquechaquita, Tres Amigos, and Reserva. A recent evaluation revealed that processing a blend of ores exclusively from Colquechaquita and Tres Amigos at Don Diego significantly improved silver recovery in the lead concentrate. This enhancement adds greater value to the lead concentrate and generates additional revenue for the Company. The process modification is consistent with our goal of enhancing efficiencies by improving metal recoveries and concentrate value.

Ore from the Reserva mine will now be processed and blended with ore from the San Lucas ore sourcing business to improve overall operating efficiency. The initial results of this adjustment reveal significant gains in silver in lead concentrate recovery, prompting management to adopt this new processing approach as the standard going forward. This revised operational framework will help both Caballo Blanco and San Lucas achieve more consistent recovery performance and maximize the value of its mineral resources.

**Caballo Blanco Group Mine Operating Results (continued)**

**2025 YTD vs 2024 YTD**

For the year ended December 31, 2025, Caballo Blanco processed 234,709 tonnes and produced 2.78 million silver equivalent ounces, decreases of 15% and 8%, respectively, compared with 2024. Silver production was broadly stable year over year (-2%), as higher annual silver head grades and improved recoveries substantially offset lower throughput. Lead production increased 11%, while zinc production decreased 14%. Year-over-year comparability is also affected by the 2024 operating reorganization that redirected Reserva ore to San Lucas beginning in Q3 2024.

Caballo Blanco continued to be the Company's most efficient operation on both a cash cost per silver equivalent ounce sold and AISC basis. For 2026, management's priority is to preserve, sustain and further deepen those efficiencies through disciplined mine sequencing, plant stability and continued focus on metallurgical performance.

**Q4 2025 vs Q3 2025**

Caballo Blanco increased ore processed compared to Q3 2025, resulting in a 3% increase in silver equivalent production. Silver production remained stable, while zinc and lead output increased by 7% each, supported by higher head grades and strong recoveries. Results reflect solid operational performance and continued adherence to the mine plan.

**San Lucas Group Operating Results**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **San Lucas Group Production Table** | <br> **2025 Q4** | **2024 Q3** | **Change**<br> **Q4 vs Q3** | **2025 YTD** | **2024 YTD** | **Change**<br> **'24 YTD**<br> **vs. '23 YTD** |
| Material Processed (tonnes milled) | 105587 | 100550 | 5% | 387805 | 341649 | 14% |
| Silver Equivalent Produced (ounces) <sup>(1)</sup> | 1095945 | 986403 | 11% | 3881319 | 3949992 | (2%) |
| Silver Equivalent Sold (payable ounces) <sup>(2)</sup> | 833017 | 719714 | 16% | 2939466 | 3163910 | (7%) |
| **Production** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (ounces) | 366600 | 326873 | 12% | 1308128 | 1344242 | (3%) |
| &nbsp;&nbsp;&nbsp;Zinc (tonnes) | 7729 | 7032 | 10% | 27419 | 28042 | (2%) |
| &nbsp;&nbsp;&nbsp;Lead (tonnes) | 699 | 575 | 22% | 2264 | 1924 | 18% |
| **Average Grade** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (g/t) | 135 | 126 | 7% | 127 | 147 | (13%) |
| &nbsp;&nbsp;&nbsp;Zinc (%) | 8.20 | 7.86 | 4% | 7.89 | 9.01 | (12%) |
| &nbsp;&nbsp;&nbsp;Lead (%) | 0.97 | 0.90 | 8% | 0.91 | 0.88 | 3% |
| **Metal Recovery** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (%) | 80 | 80 | (0%) | 83 | 83 | (1%) |
| &nbsp;&nbsp;&nbsp;Zinc (%) | 89 | 89 | (0%) | 90 | 91 | (2%) |
| &nbsp;&nbsp;&nbsp;Lead (%) | 68 | 63 | 8% | 64 | 64 | 1% |
| Cash Cost of Production per Tonne ($/t) <sup>(3)</sup> | 288.52 | 191.05 | 51% | 182.85 | 184.43 | (1%) |
| Cash Cost per Silver Equivalent Ounce Sold ($/oz) <sup>(3)</sup> | 39.75 | 34.40 | 16% | 28.93 | 24.81 | 17% |
| All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold ($/oz) <sup>(3)</sup> | 44.80 | 38.57 | 16% | 32.37 | 26.72 | 21% |

---

 

<sup>(1)</sup> Silver Equivalent Produced (ounces) have been calculated using prices of $31.41/oz, $2,775.53/ton and $2,085.90/ton for silver, zinc and lead respectively applied to the metal production divided by the silver price as stated here.

<sup>(2)</sup> Silver Equivalent Sold (payable ounces) have been calculated using the Average Realized Price per Ounce of Silver Equivalent Sold applied to the payable metal content of the concentrates sold from the Bolivar, Porco, the Caballo Blanco Group, and San Lucas in 2024.

<sup>(3)</sup> The Company reports non-GAAP measures, which include Cash Cost of Production per Tonne, Cash Cost per Silver Equivalent Ounce Sold and All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and may differ from methods used by other companies with similar descriptions. See "Non-GAAP Measures" section below for definitions.

The San Lucas feed sourcing business utilizes the excess production capacity of each of the milling facilities in Bolivia to produce concentrate. Feed is sourced from independent organized mining groups with whom San Lucas has negotiated agreements outlining methodology for valuation and purchase as well as validating the source of the feed and methods used in extraction. Once the ore material is sampled and the purchase is finalized, it is blended and processed. Starting from Q3 2024, the operating results of the Reserva mine are included in the San Lucas results because all ore produced by the Reserva mine is sold to the San Lucas feed sourcing business to achieve optimal recoveries.

Generally, the ore from the San Lucas feed sourcing business is campaigned through each milling facility and kept separate from mine feeds. Across the three milling facilities, the approximate distribution used by San Lucas to process third-party ore is 44% at Porco, 22% at Don Diego, and 34% at Bolívar. The feed volume and grade are variable and challenging to forecast; however, the consistent and fair business structure offered by our San Lucas feed sourcing business appeals to local miners. By working with a medium- to long-term perspective, we enhance the consistency of the ore, and additional agreements are currently being negotiated to increase feed sourced.

**San Lucas Group Operating Results (continued)**

**2025 YTD vs 2024 YTD**

For the year ended December 31, 2025, San Lucas processed 387,805 tonnes, 14% more than in 2024, while silver equivalent production was broadly stable at 3.88 million ounces (-2%). The higher throughput reflects San Lucas's role as a flexible feed sourcing platform for the Company's plants. Silver and zinc production were modestly lower year over year, while lead production increased 18%, supported by feed mix. Annual comparisons are also affected by the inclusion of Reserva ore within San Lucas starting in Q3 2024.

San Lucas continued to play a strategic role in keeping plants fully utilized across the group, supporting fixed-cost absorption and cost efficiency while generating meaningful revenue and attractive margins through its margin-based sourcing model. For 2026, management expects San Lucas to remain an important contributor to mill utilization, commercial flexibility and overall group profitability.

**Q4 2025 vs Q3 2025**

San Lucas continued to play a strategic role in Q4 2025, with ore processed up 5% from the prior quarter. Silver equivalent production increased by 11%, driven by higher throughput and improved head grades, while recoveries remained stable. The operation's flexible, margin-based sourcing model continued to support group-level mill utilization.

**Zimapan Mine**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Zimapan Production Table** | <br>**2025 Q4** | **2025 Q3** | **Change**<br> **Q4 vs Q3** | **2025 YTD** | **2024 YTD** | **Change**<br> **'25 YTD**<br> **vs '24 YTD** |
| Material Processed (tonnes milled) | 222703 | 222629 | (0%) | 893067 | 849764 | 5% |
| Silver Equivalent Produced (ounces) <sup>(1)</sup> | 1017096 | 991643 | 3% | 3984086 | 3812220 | 5% |
| Silver Equivalent Sold (payable ounces) <sup>(2)</sup> | 649079 | 699865 | (7%) | 2970701 | 3486063 | (15%) |
| **Production** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (ounces) | 403321 | 396385 | 2% | 1638198 | 1680033 | (2%) |
| &nbsp;&nbsp;&nbsp;Zinc (tonnes) | 5008 | 4744 | 6% | 18771 | 16311 | 15% |
| &nbsp;&nbsp;&nbsp;Lead (tonnes) | 1237 | 1099 | 13% | 5080 | 5458 | (7%) |
| &nbsp;&nbsp;&nbsp;Copper (tonnes) | 287 | 331 | (13%) | 1126 | 1057 | 7% |
| **Average Grade** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (g/t) | 80 | 77 | 4% | 78 | 82 | (4%) |
| &nbsp;&nbsp;&nbsp;Zinc (%) | 2.89 | 2.90 | (0%) | 2.74 | 2.46 | 11% |
| &nbsp;&nbsp;&nbsp;Lead (%) | 0.72 | 0.67 | 8% | 0.73 | 0.75 | (4%) |
| &nbsp;&nbsp;&nbsp;Copper (%) | 0.26 | 0.29 | (10%) | 0.26 | 0.29 | (11%) |
| **Metal Recovery** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Silver (%) | 70 | 72 | (3%) | 73 | 75 | (4%) |
| &nbsp;&nbsp;&nbsp;Zinc (%) | 78 | 73 | 6% | 77 | 78 | (2%) |
| &nbsp;&nbsp;&nbsp;Lead (%) | 78 | 74 | 5% | 78 | 85 | (8%) |
| &nbsp;&nbsp;&nbsp;Copper (%) | 50 | 52 | (3%) | 49 | 43 | 14% |
| Cash Cost of Production per Tonne ($/t) <sup>(3)</sup> | 71.44 | 60.47 | 18% | 66.30 | 60.64 | 9% |
| Cash Cost per Silver Equivalent Ounce Sold ($/oz) <sup>(3)</sup> | 42.17 | 27.74 | 52% | 30.27 | 22.04 | 37% |
| All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold ($/oz) <sup>(3)</sup> | 50.52 | 34.50 | 46% | 37.38 | 26.10 | 43% |

---

 

<sup>(1)</sup> Silver Equivalent Produced (ounces) have been calculated using prices of $31.41/oz, $2,775.53/ton, $2,085.90/ton and $9,762.69/ton for silver, zinc, lead and copper respectively applied to the metal production divided by the silver price as stated here.

<sup>(2)</sup> Silver Equivalent Sold (payable ounces) have been calculated using the Average Realized Price per Ounce of Silver Equivalent Sold applied to the payable metal content of the concentrates sold from Zimapan in 2024.

<sup>(3)</sup> The Company reports non-GAAP measures, which include Cash Cost of Production per Tonne, Cash Cost per Silver Equivalent Ounce Sold and All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and may differ from methods used by other companies with similar descriptions. See "Non-GAAP Measures" section below for definitions.

The Zimapan operation produces feed from the Carrizal and Monte mines, which are connected by a 7.4-kilometre underground access and haulage tunnel which terminates at the San Francisco process plant. Mining methods used include long hole and cut and fill stoping. The plant processes about 72,000 tonnes per month and produces three concentrates using differential flotation. Tailings Storage Facility and other support facilities are located adjacent and downstream of the plant location.

**Zimapan Mine Operating Results (continued)**

**2025 YTD vs 2024 YTD**

For the year ended December 31, 2025, Zimapán processed 893,067 tonnes, 5% more than in 2024, and produced 3.98 million silver equivalent ounces, 5% higher year over year. The increase was driven mainly by higher zinc production (+15%) on stronger grades, which more than offset a modest decrease in silver production (-2%). Throughput remained stable to higher, confirming Zimapán's role as the Company's highest-volume operation.

Cost performance remained under pressure during the year, with cash cost per silver equivalent ounce sold and AISC increasing relative to 2024, as the operation continued mine development and plant improvement work. For 2026, the principal operating priority at Zimapán is to improve metallurgical recoveries and concentrate quality. Capital has already been allocated toward this objective, which is particularly important at Zimapán given its scale and the direct impact that recoveries and concentrate quality have on revenue.

**Q4 2025 vs Q3 2025**

Zimapán delivered strong results throughput in Q4 2025, with silver equivalent production increasing by 3% from Q3 2025. Zinc production increased by 6%, supported by higher head grades and improved recoveries. Silver production remained stable, reflecting consistent plant performance.

**Other Properties**

Soracaya is an approximately eight-hectare exploration asset located approximately 200 km south south-west of Potosi and 4.4 km from the San Vincente mine (owned by Pan American Silver). Verification of the resource to NI 43-101 standards is currently in progress as well as some claim maintenance work underground.

**Qualified Person and Technical Disclosures**

All scientific and technical disclosure contained in this MD&A was reviewed and approved by Garth Kirkham P.Geo. an independent consultant to the Company, is a qualified person under NI 43-101 and has approved the scientific and technical information contained within this news release.

Production at the Zimapan Mine is not supported by a feasibility study on mineral reserves demonstrating economic or technical viability or any other independent economic study under NI 43-101. Accordingly, there is increased uncertainty and higher economic and technical risks of failure associated with production operations at the Zimapan Mine. Production and economic variables may vary considerably due to the absence of a complete and detailed site analysis according to and in accordance with NI 43- 101. Project failure may adversely impact the Company's future profitability.

**Overview of Financial Results**

**Quarters ended December 31, 2025 and 2024**

---

| | | | |
|:---|:---|:---|:---|
| | **2025 Q4** | <br> **2024 Q4** | **Change**<br> **'25 Q4**<br> **vs '24 Q4** |
| **Revenues** | 102784 | 81669 | 26% |
| **Mine operating costs** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of sales | (65019) | (52557) | 24% |
| &nbsp;&nbsp;&nbsp;Depreciation, depletion and amortization | (5766) | (3863) | 49% |
| &nbsp;&nbsp;&nbsp;Reversal of impairment on MPP&E | 4088 | - | 100% |
| **Gross profit** | **36087** | **25249** | **43%** |
| General and administrative expenses | (6976) | (6095) | 14% |
| Share-based compensation expense | 227 | 27 | 741% |
| **Operating income** | **29338** | **19181** | **53%** |
| Finance costs | (9970) | (523) | 1806% |
| Foreign exchange gain (loss) | (11482) | 2966 | (487%) |
| **Income before tax** | **7886** | **21624** | **(64%)** |
| Income tax expense | (12436) | (8782) | 42% |
| **Net income for the period** | **(4550)** | **12842** | **(135%)** |
| **Other comprehensive income that may be reclassified subsequently to net income or loss:** |  |  |  |
| Unrealized gain (loss) on marketable securities | 42 |  | 100% |
| Currency translation differences | (791) | (2131) | (63%) |
| Comprehensive income (loss) for the period | **(5299)** | **10711** | **(149%)** |
| **Net income (loss) per share:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | (0.05) | 0.14 |  |
| &nbsp;&nbsp;&nbsp;Diluted | (0.05) | 0.14 |  |
| **Weighted average number of common shares:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 91431323 | 88963885 |  |
| &nbsp;&nbsp;&nbsp;Diluted | 93759237 | 89588885 |  |

---

**Revenues** for the quarter ended December 31, 2025 were $102,784, an increase of $21,115 compared to Q4 2024. The increase was primarily due to an increase in the average realized price of silver equivalent sold from $31.77 in Q4 2024 to $55.19 in Q4 2025, offset by a decrease in silver ounces in the current quarter.

**Cost of sales** for the quarter ended December 31, 2025 was $65,019, an increase of $12,462 compared to Q4 2024. The increase was mainly driven by or San Lucas, which operates a margin-based sourcing model, as higher silver and zinc prices in the fourth quarter increased ore purchase costs.

**Depreciation, depletion and amortization** for the quarter ended December 31, 2025 was $5,766, an increase of $1,903 compared with Q4 2024. This movement was primarily due to a greater depletion of mineral properties in Bolivia, arising from the increase to the properties' cost basis from continued development and change to the reclamation obligation estimate.

**General and administrative expenses** for the quarter ended December 31, 2025 were $881 higher compared to Q4 2024, driven by greater inflation and surcharges recognized for outstanding payables to the Mexican tax authority for historical balances that are being settled in 2026.

**Share-based compensation expense** for the quarter ended December 31, 2025 was $200 higher than in Q4 2024 due to greater fair values of underlying equity awards granted between the periods driven by the increase in the Company's share price.

**Overview of Financial Results for the quarters ended December 31, 2025 and 2024 (continued)**

**Finance costs** for the quarter ended December 31, 2025 were $9,970, an increase of $9,447 compared to Q4 2024. The change was primarily attributed to the loss recognized from the quarterly change in fair value of the contingent value rights, driven by increased zinc prices during the quarter and significantly increased forward prices.

**Foreign exchange loss** for the quarter ended December 31, 2025 was $11,482, a decrease of $14,448 from a gain of $2,966 in Q4 2024. The decrease was mainly due to the depreciation of the Boliviano between quarters, resulting in losses from the revaluation of monetary items on the balance sheet.

**Income tax expense** for the quarter ended December 31, 2025 was $12,436, an increase of $3,654 compared to Q4 2024. The increase was mainly due to higher revenues in the quarter compared to Q4 2024 and the recognition of a valuation allowance on certain deferred tax asset balances derived from Bolivian operations and an increase in the tax value of MPP&E balances primarily driven by the appreciation of the Mexican Peso against the US dollar.

**Year ended December 31, 2025 and 2024**

---

| | | | |
|:---|:---|:---|:---|
| | **2025 YTD** | **2024 YTD** | **Change**<br> **'25 YTD**<br> **vs '24 YTD** |
| **Revenues** | 326382 | 282987 | 15% |
| **Mine operating costs** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of sales | (199493) | (206055) | (3%) |
| &nbsp;&nbsp;&nbsp;Depreciation, depletion and amortization | (21577) | (19706) | 9% |
| &nbsp;&nbsp;&nbsp;Reversal of impairment on MPP&E | 4088 | - | 100% |
| **Gross profit** | **109400** | **57226** | **91%** |
| General and administrative expenses | (22305) | (24307) | (8%) |
| Share-based compensation expense | (2042) | (105) | 1845% |
| **Operating income** | **85053** | **32814** | **159%** |
| Gain on adjustment to consideration payable |  | 133255 | (100%) |
| Finance costs | (12368) | (18232) | (32%) |
| Foreign exchange gain | 2015 | 44199 | (95%) |
| **Income before tax** | **74700** | **192036** | **(61%)** |
| Income tax expense | (32478) | (27552) | 18% |
| **Net income for the period** | **42222** | **164484** | **(74%)** |
| **Other comprehensive income that may be reclassified subsequently to net income or loss:** |  |  |  |
| Unrealized gain (loss) on marketable securities | 331 |  | 100% |
| Currency translation differences | (605) | (105) | 476% |
| Comprehensive income for the period | **41948** | **164379** | **(74%)** |
| **Net income (loss) per share:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 0.47 | 1.86 |  |
| &nbsp;&nbsp;&nbsp;Diluted | 0.46 | 1.85 |  |
| **Weighted average number of common shares:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 89849385 | 88438988 |  |
| &nbsp;&nbsp;&nbsp;Diluted | 92197091 | 89063988 |  |

---

**Revenues** for the year ended December 31, 2025 were $326,382, an increase of $43,395 compared to 2024. The increase is driven primarily by an increase in the average realized price per ounce of silver equivalent ounce sold from $28.74 in 2024 to $39.00 in 2025, offset by a decrease in silver ounces in the current year.

**Overview of Financial Results for the year ended December 31, 2025 and 2024 (continued)**

**Cost of sales** for the year ended December 31, 2025 was $199,493, a decrease of $6,562 compared to 2024. The decrease was due to the change in exchange rate effective January 1, 2025, by using the Bank rate instead of the Official rate to record BOB denominated transactions. With the impact of the reduction of the exchange rate, the change between periods was primarily attributed to a decrease in consumables and materials, mining and plant maintenance costs, and mining royalties expense. The impact was offset by increased ore purchase costs at San Lucas from higher silver and zinc prices towards the end of the year and increases in in operating costs in Mexico.

**Depreciation, depletion and amortization** for the year ended December 31, 2025 was $21,577, an increase of $1,871 compared to 2024. This change was primarily due to an increase in mineral properties depletion in Bolivia, consistent with the reasons as described in the quarterly movement above.

**General and administrative expenses** for the year ended December 31, 2025 was $22,305, a decrease of $2,002 compared to 2024. This decrease was mainly attributable to the impact of the change in exchange rate on salaries in Bolivia, offset by greater inflation and surcharges recognized for outstanding payables to the Mexican tax authority for historical balances that are being settled in 2026.

**Share based compensation expense** for the year ended December 31, 2025 was $2,042, an increase of $1,937 compared to 2024 due to greater fair values of underlying equity awards granted between the periods driven by the increase in the Company's share price that occurred during the year.

**Finance costs** for the year ended December 31, 2025 was $12,368, a decrease of $5,864 compared to 2024. The change was mainly due to an increase in other finance income recognized in Bolivia driven by an increase in the interest income generated from VAT receivable balances due to higher inflation adjustment than previous years. These increases were offset by a greater year-over-year change in the fair value of the contingent value rights, consistent with the reasoning for the quarterly movement discussed above.

**Foreign exchange gain** for the year ended December 31, 2025, was $2,015 compared to $44,199 in the year ended December 31, 2024. The decrease was due to changing the exchange rate that is being used to record BOB denominated transactions by using the Bank rate instead of the Official rate.

**Income tax expense** for the year ended December 31, 2025 was $32,478, an increase of $4,926 compared to 2024. The increase is primarily due to the 15% increase in revenues year over year and an increase in the deferred tax liability generated from mineral properties caused by the impairment reversal.

**Summary of Quarterly Results**

The following table presents selected financial information for each of the most recent eight quarters:

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2025** | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | **2024** |
| | **Q4** | **Q3** | **Q2** | **Q1** | **Q4** | **Q3** | **Q2** | **Q1** |
| Revenues | 102784 | 79989 | 73295 | 70314 | 81669 | 78244 | 70485 | 52589 |
| Mine operating costs | 66697 | 59823 | 48007 | 42455 | 56419 | 62522 | 54629 | 52190 |
| Gross profit | 36087 | 20166 | 25288 | 27859 | 25250 | 15722 | 15856 | 399 |
| Operating expenses | (6749) | (7213) | (5306) | (5079) | (6068) | (6592) | (6806) | (4946) |
| Net income (loss) | (4550) | 16344 | 20977 | 9451 | 12842 | 17534 | 1449 | 132659 |
| Net income (loss) per share – basic and diluted <sup>(1)</sup> | <br> (0.05) | 0.05 | <br> 0.06 | 0.03 | 0.06 | 0.05 | 0.00 | 0.38 |

---

 

<sup>(1)</sup> The basic and fully diluted calculations result in the same value due to the anti-dilutive effect of outstanding stock options and warrants for all quarters.

The Company's quarterly results vary based on the silver equivalent ounces sold per period together with the average realized silver price for the period. In Q1 2024 the Company recorded a one-time gain on adjustment to consideration payable of $133,255 after entering into the Term Sheet with Glencore.

**Liquidity, Capital Resources and Contractual Obligations**

**Liquidity**

As at December 31, 2025, the Company had cash & cash equivalents of $44,267 (December 31, 2024 - $35,721). The Company's cash is not exposed to liquidity risk and there is no restriction on the ability of the Company to use these funds to meet its obligations. The Company also has $22,462 of marketable securities, which consist of liquid holdings of US treasury bills and treasury notes that can be readily sold to be converted into cash. The securities are held with Stifel bank which uses a portion of the holdings as collateral for the Standby Letters of Credit that were issued to Banco BISA and Banco Credito de Bolivia (see note 11(a) of the audited consolidated financial statements). Although the securities held can be readily converted to cash, they are restricted to the extent that the amounts serve as collateral. The Standy Letter of credit issued to Banco BISA is for $10,000 and expires on May 26, 2026. The standby letter of credit issued to Banco Credito de Bolivia is for $5,800 and expires on March 26, 2026, and automatically renews each year the amount held as collateral has been classified as non-current.

For the year ended December 31, 2025, the Company reported net income of $42,222 (December 31, 2024 – net income of $164,484). As at December 31, 2025, the Company had working capital of $63,688 (December 31, 2024 - working capital of $46,296).

The Company has a consideration payable balance outstanding for the acquisition of the Sinchi Wayra and Illapa operations which occurred in 2022. The consideration payable consisted of a base purchase price obligation and contingent value rights ("CVR") obligation. The base purchase price obligation was fully paid in the third quarter of 2025, only the contingent value rights remain outstanding. The CVR has not resulted in any payments to date because the price of zinc has not reached the levels that would trigger a payment (greater than $3,850 per tonne).

At December 31, 2025, the Company has non-current loans payable of $1,344 (December 31, 2024 - $3,137), and non-current consideration payable to Glencore of $20,243 (December 31, 2024 - $34,783).

**Credit Facilities and Borrowings**

The Company has a secured credit facility denominated in Bolivian Bolivianos with Banco BISA S.A. of BOB 55,000 ($6,579), which is comprised of a revolving credit facility of BOB 48,800 ($5,837) for the financing of mining operations and working capital with a fixed interest rate between 6.0% and 10.00% per annum.

The Company also has an unsecured revolving credit facility for working capital requirements and a loan guarantee with Banco de Crédito de Bolivia S.A. for a total of BOB 48,020 ($5,744). The credit facility has a weighted average fixed interest rate of 6.0% and 10.00% per annum and the weighted average interest rate on the loan guarantee facility is 2.0%.

On February 20, 2025, the Company completed an offering of BOB 70,000 ($8,373) in promissory notes under its San Lucas Promissory Notes Issuance program. The San Lucas Promissory Notes Issuance program allows the Company to issue up to BOB 140,000 ($16,746) in the Bolivian stock market (Bolsa Boliviana de Valores). The notes are denominated in Bolivian Bolivianos and have a 6.50% interest rate and a maturity date of February 15, 2026 and are unsecured. The notes were fully repaid on February 15, 2026. On August 8, 2025, the Company completed a second offering of BOB 70,000 ($8,373) under the program. The notes under the second offering have an interest rate of 7.00% and a maturity date of June 15, 2026.

On February 14, 2026 the Company obtained an unsecured 6 month working capital term loan for BOB 17,150 ($2,051) with a fixed interest rate of 9.95% with repayment of interest and principal at the end of the term from Banco Mercantil Santa Cruz S.A. On March 17, 2026 obtained an unsecured 6 month working capital term loan for BOB 14,000 ($1,675) with a fixed interest rate of 10% with repayment of interest and principal at the end of the term from Banco Bisa S.A.

On December 30, 2024, the Financial System Supervisory Authority (ASFI) authorized the San Lucas Bonds Program. The San Lucas Bonds program allows the Company to issue up to $40,000 of unsecured bonds in the Bolivian Stock market (Bolsa Boliviana de Valores), the bonds can be denominated in USD or Bolivian Bolivianos. As at March 27, 2026, no bonds have been issued under the program.

**Liquidity, Capital Resources and Contractual Obligations (continued)**

**Cash Flow**

The Company's cash flows from operating, investing, and financing activities during the year ended December 31, 2025, are summarized as follows:

---

| | | |
|:---|:---|:---|
| | **Year ended December 31,** | **Year ended December 31,** |
| | **2025** | **2024** |
| **Cash flow** |  |  |
| Cash generated by operating activities | 79110 | 54432 |
| Cash (used by) provided by investing activities | (92439) | (20922) |
| Cash (used by) provided by financing activities | 21737 | (2546) |
| **Increase in cash** | 8408 | 30964 |
| Effect of exchange rate on cash held in foreign currencies | 138 | (190) |
| Cash, beginning of the period | 35721 | 4947 |
| **Cash, end of period** | **44267** | **35721** |

---

**Operating Activities**

Operating cash flow for the year increased by $24,678 compared to 2024. Higher operating cash flow was primarily driven by a higher average realized price of silver equivalent sold of $39.00 during the year compared to $28.74 in 2024. This was offset by an increase in income taxes paid, and an increase in non-cash working capital. Working capital changes were mainly related to an increase of ending inventory balance, primarily in San Lucas as a result of higher silver prices at the end of the year driving the cost of inventory of the margin operations.

**Investing Activities**

Cash used in investing activities increased by $71,517 compared to 2024. Capital expenditures for the year increased by $8,000 compared to 2024. This increase was mainly attributed to higher expenditures in Mexico, as capital continues to be allocated to Zimapan to improve metallurgical recoveries and concentrate quality.

During the year, the Company began to invest in marketable securities. The securities are held with Stifel which uses a portion of the holdings as collateral for the Standby Letters of Credit that were issued to Banco BISA and Banco Credito de Bolivia. The Company spent $34,262 on the purchases of such marketable securities, net of $12,131 in proceeds from disposals during the year.

The Company used cash of $40,000 to exercise the accelerated payment option and fully settled the base purchase price liability amount outstanding from the acquisition of the Company's Bolivian operations.

**Financing Activities**

For the year ended December 31, 2025, financing activities provided $21,737, compared to the use of $2,546 in 2024. During the year ended December 31, 2025, the Company received $72,956 from the proceeds of loans and repaid $54,939 on those loans and lease liabilities, compared to $59,218 and $62,405 respectively during 2024.

Proceeds from the exercise of stock options were $3,721, compared to $641 in 2024.

**Capital Resources**

The Company's objective when managing capital is to maintain financial flexibility to continue as a going concern while optimizing growth and maximizing returns of investments from shareholders.

The Company monitors its capital structure and based on changes in operations and economic conditions, may from time to time adjust the structure by repurchasing shares, issuing new shares, issuing new debt or retiring existing debt. The Company prepares an annual budget and quarterly forecasts to facilitate the management of its capital requirements. The annual budget is approved by the Company's Board of Directors.

The Company is not subject to any externally imposed capital requirements with the exception of compliance with covenants for the Trafigura Loan Facility and the San Lucas Promissory Notes Issuance program. The Company is fully compliant with all financial covenants stipulated in the agreement.

**Liquidity, Capital Resources and Contractual Obligations (continued)**

**Contractual Obligations**

The expected maturity of the Company's contractual obligations as at December 31, 2025 are outlined below:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **<1 <br> year** | **1 - 2 <br> years** | **2 - 5 <br> years** | **>5 <br> years** | **Total** |
|  | $| $| $| $| $|
| Trade payables and accrued liabilities | 47402 | 7167 |  |  | 54569 |
| Consideration payable - CVR & additional payments | 1697 | 4644 | 13147 | 9035 | 28523 |
| Loans payable | 50642 | 1344 |  |  | 51986 |
| Lease payments | 854 | - | - | - | 854 |
|  | **100595** | **13155** | **13147** | **9035** | **135932** |

---

**Liquidity Outlook**

The Company believes that the cash on hand, combined with expected operating cash flows, will be sufficient to meet operating requirements as they arise for at least the next 12 months. With respect to longer term capital expenditure funding requirements, the Company believes that cash flow from its existing operations, available credit through existing debt facilities and access to debt and capital markets is adequate and will enable the Company to maintain an appropriate overall liquidity position. The Company continues to assess financing alternatives, including equity or debt or a combination of both, to fund future growth.

**Off-balance Sheet Arrangements**

The Company has not entered into any material off-balance sheet arrangement such as guarantee contracts, contingent interests in assets transferred to unconsolidated entities or derivative financial obligations.

**Transactions with Related Parties**

During the three and twelve months ended December 31, 2025 and 2024, the Company incurred the following charges for directors, officers, and other members of key management of the Company, as well as for companies controlled by directors and officers of the Company:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended**<br> **December 31,** | **Three months ended**<br> **December 31,** | **Twelve months ended**<br> **December 31,** | **Twelve months ended**<br> **December 31,** |
| | **2025** | 2024 | **2025** | 2024 |
| Management and consulting fees | **803** | 1818 | **2723** | 2806 |
| Share-based compensation | **(546)** | (52) | **1655** | 61 |
|  | **257** | 1766 | **4378** | 2867 |

---

Of the $803 in management and consulting fees incurred with related parties during the three months ended December 31, 2025, $61 (2024 - $100) was related to directors' fees and $742 (2024 - $1,718) was related to management fees.

Key management includes directors of the Company, the CEO, the CFO, the Executive Chairman, and other members of key management. Other than the amounts disclosed above, there was no other compensation paid or payable to key management for employee services for the reported periods.

**Subsequent Events**

Refer to note 11 of the audited consolidated financial statements for the year ended December 31, 2025 for a description of the subsequent event related to the settlement of the Trafigura loan facility (note 11(b)) & the settlement of promissory notes (note 11(d)) and obtaining two new working capital term loans (note 11(c)) that occurred subsequent to December 31, 2025.

**Material Accounting Estimates and Judgments**

The Company's critical accounting judgements and estimates have been consistently applied with those presented in Note 5 of the audited annual consolidated financial statements for the years ended December 31, 2025 and 2024 and are supplemented by the changes described below:

**Determination of Exchange rate for Bolivian operations**

The Sinchi Wayra and Illapa operations are located in Bolivia and sales revenue from the Bolivian operations is denominated and settled in USD but most operating expenses are denominated in BOB. The functional currency of the Bolivian subsidiaries is USD and has not changed since acquisition. Since the operations were acquired in 2022 through to the end of fiscal 2024, the Company used the official exchange rate published by the Central Bank of Bolivia to record all transactions denominated in BOB: this exchange rate has been fixed at 6.96 BOB/USD since 2009.

The spread between the official exchange rate (the "Official rate") and the Bank rate used to acquire BOB has widened progressively and is no longer a temporary situation. Management expects that the spread will continue due to macroeconomic fundamentals. Recording BOB denominated expenses at the Official rate is no longer appropriate and to better present the economic substance of BOB denominated transactions, management has changed its approach to using a spot rate that is in line with the Bank rate.

As defined in IAS 21 – The effects of changes in foreign exchange rates, the BOB is *exchangeable*. However, because there is no availability of the currency at the Official rate it is more appropriate to determine the spot rate that is the actual exchange rate that is being used to purchase BOB. Management has applied an estimation technique to determine the spot exchange rate used for translating transactions denominated in BOB. This estimated rate (the "Bank rate") is based on the average of weekly quotations obtained from commercial banks which reflects the rate at which an orderly exchange transaction takes place at the measurement date between market participants under the prevailing economic conditions.

The Official rate of 6.96 BOB/USD was used to record transactions denominated in BOB since the acquisition of the Bolivian operations until December 31, 2024. Starting January 1, 2025, the Bank rate has been used to record transactions denominated in BOB. The average Bank rate for the year ended December 31, 2025 was 11.92 BOB/USD. All monetary assets and liabilities outstanding as at December 31, 2025 have been translated using the Bank spot rate of 8.36 BOB/USD. The exchange rate is management's estimate of the USD value of transactions denominated in BOB. Accordingly, comparative figures which were translated using the Official rate have not been restated as the change in estimate is only applied prospectively.

**Accounting Policies Including Changes in Accounting Policies and Initial Adoption**

The company acquired Treasury Bills and Treasury Notes during the year ended December 31, 2025. These instruments are financial assets and will be carried at fair value through other comprehensive income (FVTOCI). The instruments are classified as Marketable Securities in the statement of financial position. The instruments at FVTOCI are initially recognized at fair value plus transaction costs. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTOCI are recognized in other comprehensive income (loss). When the securities mature or are sold the cumulative realized gains and losses are recognized through profit and loss as Finance Costs.

The remainder of the accounting policies applied in the preparation of these consolidated financial statements are consistent with those applied and disclosed in the Company's audited consolidated financial statements for the year ended December 31, 2024, and reflect all the adjustments necessary for fair presentation in accordance with IFRS.

**Financial Instruments and Other Instruments**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **December 31, 2025** | **Amortized cost** | **FVTPL** | **FVTOCI** | **Total** |
|  | $| $| $| $|
| **Financial assets** |  |  |  |  |
| Cash and cash equivalents | 44267 |  |  | 44267 |
| Marketable securities |  |  | 22462 | 22462 |
| Trade and other receivables | 22977 | 20371 | - | 43348 |
|  | **67244** | **20371** | **22462** | **110077** |
| **Financial liabilities** |  |  |  |  |
| Trade payables and accrued liabilities | 54569 |  |  | 54569 |
| Consideration payable |  | 20243 |  | 20243 |
| Loans payable | 51986 |  |  | 51986 |
| Other liabilities | 23598 | - | - | 23598 |
|  | **130153** | **20243** | **-** | **150396** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **December 31, 2024** | **Amortized cost** | **FVTPL** | **FVTOCI** | **Total** |
| **Financial assets** |  |  |  |  |
| Cash and cash equivalents | 35721 |  |  | 35721 |
| Trade and other receivables | 24462 | 17402 | - | 41864 |
|  | **60183** | **17402** | **-** | **77585** |
| **Financial liabilities** |  |  |  |  |
| Trade payables and accrued liabilities | 47389 |  |  | 47389 |
| Consideration payable | 34625 | 10158 |  | 44783 |
| Loans payable | 19569 |  |  | 19569 |
| Other liabilities | 24125 | - | - | 24125 |
|  | **125708** | **10158** | **-** | **135866** |

---

The categories of the fair value hierarchy that reflect the inputs to valuation techniques used to measure fair value are as follows:

● **Level 1:** Quoted prices in active markets for identical assets or liabilities;

● **Level 2:** Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

● **Level 3:** Inputs for the asset or liability based on unobservable market data.

The carrying values of cash, other receivables, and trade payables and accrued liabilities approximate their fair values because of their short-term nature.

Marketable securities consist of US treasury notes and US treasury bills which are held as part of the Company's cash position and liquidity management strategy. The marketable securities are measured at fair value using level 1 inputs, the unrealized gain/loss is recorded as other comprehensive income and once the securities are sold or mature the corresponding gain/loss is recorded as finance income/cost.

The securities are held with Steifel bank which uses a portion of the holdings as collateral for the Standby Letters of Credit that were issued to Banco BISA and Banco Credito de Bolivia (see note 11(a) of the audited consolidated financial statements). Although the securities held can be readily converted to cash they are restricted to the extent that the amounts serve as collateral. The Standy Letter of credit issued to Banco BISA is for $10,000 and expires on May 26, 2026. The standby letter of credit issued to Banco Credito de Bolivia is for $5,800 and expires on March 26, 2026, and automatically renews each year. Since the standby letter of credit to Banco Credito de Bolivia will renew indefinitely, the amount held as collateral has been classified as non-current.

Trade receivables are measured at fair value using Level 2 inputs. The fair value of trade receivables is measured based on inputs other than quoted prices for the underlying commodity prices (silver, lead, zinc, copper) to which the receivable relates as the trade receivables are provisionally priced at the time of sale.

**Financial Instruments and Other Instruments (continued)**

The fair value of the loans payable for disclosure purposes is determined using discounted cash flows based on the expected amounts and timing of future cash flows discounted using a market rate of interest adjusted for appropriate credit risk.

The levels in the fair value hierarchy into which the Company's financial assets and liabilities that are measured and recognized on the consolidated statements of financial position at fair value on a recurring basis were categorized as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| | **Level 1** | **Level 2** | **Level 3** | **Level 1** | **Level 2** | **Level 3** |
|  | $| $| $| $| $| $|
| **Assets** |  |  |  |  |  |  |
| Marketable securities | 22462 |  |  |  |  |  |
| Trade and other receivables | - | 20371 | - | - | 17402 | - |
|  | **22462** | **20371** | **-** | - | **17402** | - |
| **Liabilities** |  |  |  |  |  |  |
| Consideration payable | - | - | 20243 | - | - | 10158 |
|  | **-** | **-** | **20243** | - | - | **10158** |

---

The majority of the Company's trade receivables arose from provisional concentrate sales and are valued using quoted market prices based on the forward London Metal Exchange for silver, zinc and lead and the London Bullion Market Association P.M. fix for silver.

The methodology and assessment of inputs for determining the fair value of financial assets and liabilities as well as the levels of hierarchy for the Company's financial assets and liabilities measured at fair value remains unchanged from that as at December 31, 2024.

The Company has exposure to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives for growth and shareholder returns. The Company's Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework and reviews the Company's policies on an ongoing basis.

***Credit risk***

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company's trade receivables.

The Company has concentrate contracts to sell the zinc and lead concentrates produced by all of the Company's mines and the San Lucas trading business. Concentrate contracts are a common business practice in the mining industry. The terms of the concentrate contracts may require the Company to deliver concentrate that has a value greater than the payment received at the time of delivery, thereby introducing the Company to credit risk of the buyers of concentrates. Should any of these counterparties not honour purchase arrangements, or should any of them become insolvent, the Company may incur losses for products already shipped and be forced to sell its concentrates on the spot market or it may not have a market for its concentrates and therefore its future operating results may be materially adversely impacted. At December 31, 2025, the Company had receivable balances associated with buyers of its concentrates of $20,371 (December 31, 2024 - $17,402). The Company's concentrate is sold to well-known concentrate buyers.

The following financial assets represent the maximum credit risk to the Company:

---

| | | |
|:---|:---|:---|
| | **December 31,** **2025** | **December 31, 2024** |
|  | **$** | $|
| Cash | **44267** | 35721 |
| Marketable securities | **22462** |  |
| Trade and other receivables | **43348** | 41864 |

---

**Financial Instruments and Other Instruments (continued)**

Management constantly monitors and assesses the credit risk resulting from its concentrate sales, trading counterparties and customers. With the exception to the above, the Company believes it is not exposed to significant credit risk.

***Liquidity risk***

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages its liquidity risk by continuously monitoring forecasted and actual cash flows. The Company has in place a rigorous planning and budgeting process to help determine the funds required to support the Company's normal operating requirements on an ongoing basis and its expansion plans. The Company strives to maintain sufficient liquidity to meet its short-term business requirements, taking into account its anticipated cash flows from operations, its holdings of cash and short-term investments, and its committed loan facilities.

In the normal course of business, the Company enters into contracts that give rise to commitments for future minimum payments. The following tables summarize the remaining contractual maturities of the Company's financial liabilities and operating and capital commitments on an undiscounted basis:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **<1 <br> year** | **1 - 2 <br> years** | **2 - 5 <br> years** | **>5 <br> years** | **Total** |
|  | $| $| $| $| $|
| Trade payables and accrued liabilities | 47402 | 7167 |  |  | 54569 |
| Consideration payable - CVR & additional payments | 1697 | 4644 | 13147 | 9035 | 28523 |
| Loans payable | 50642 | 1344 |  |  | 51986 |
| Lease payments | 854 | - | - | - | 854 |
|  | **100595** | **13155** | **13147** | **9035** | **135932** |

---

***Currency risk***

The Company reports its financial statements in USD; however, the Company operates in jurisdictions that utilize other currencies. As a consequence, the financial results of the Company's operations as reported in USD are subject to changes in the value of the USD relative to local currencies. Since the Company's sales are denominated in USD and a portion of the Company's operating costs and capital spending are in local currencies, the Company is negatively impacted by strengthening local currencies relative to the USD and positively impacted by the inverse.

The sensitivity of the Company's net income to changes in the exchange rate between the US dollar and the Bolivian boliviano, the US dollar and the Mexican peso and the US dollar and the Canadian dollar, respectively, would be as follows: a 1% change in the US dollar exchange rate relative to the Bolivian boliviano would change the Company's net income by approximately $540, a 1% change in the US dollar exchange rate relative to the Mexican peso would change the Company's net income by approximately $151, and a 1% change in the US dollar exchange rate relative to the Canadian dollar would change the Company's net income by approximately $(77).

**Financial Instruments and Other Instruments (continued)**

The Company's financial assets and liabilities as at December 31, 2025 are denominated in Canadian dollars, US dollars, Bolivian bolivianos and Mexican pesos and translated to US dollars as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **CAD** | **BOB** | **USD** | **MXN** | **Total** |
|  | $| $| $| $| **$** |
| **Financial assets** |  |  |  |  |  |
| Cash | 2024 | 21 | 41468 | 754 | 44267 |
| Marketable securities |  |  | 22462 |  | 22462 |
| Trade and other receivables | 24 | 21694 | 21532 | 98 | 43348 |
|  | **2048** | **21715** | **85462** | **852** | **110077** |
| **Financial liabilities** |  |  |  |  |  |
| Trade payables and accrued liabilities | 728 | 35040 | 5944 | 12857 | 54569 |
| Consideration payable |  |  | 20243 |  | 20243 |
| Loans payable |  | 49464 | 2522 |  | 51986 |
| Other liabilities | - | 10675 | 10124 | 2799 | 23598 |
|  | **728** | **95179** | **38833** | **15656** | **150396** |
| **Net financial assets (liabilities)** | **1320** | **(73464)** | **46629** | **(14804)** | **(40319)** |

---

***Interest rate risk***

Interest rate risk is the risk that the fair values and future cash flows of the Company will fluctuate because of changes in market interest rates. The Company monitors its exposure to interest rates and has not entered into any derivative contracts to manage this risk. As at December 31, 2025, the Company's exposure to interest rate risk on interest bearing liabilities is limited to its consideration payable, debt facilities and lease liabilities. Based on the Company's interest rate exposure at December 31, 2025, a change of 1% increase or decrease of market interest rate would impact the Company's income or loss by approximately $529.

***Price risk***

Metal price risk is the risk that changes in metal prices will affect the Company's income or the value of its related financial instruments. The Company derives its revenue from the sale of silver, zinc, lead and copper. The Company's sales are directly dependent on metal prices that have shown significant volatility and are beyond the Company's control. Consistent with the Company's mission to provide equity investors with exposure to changes in precious metal prices, the Company's current policy is to not hedge the price of precious metal.

**Outstanding Share Data**

As at the date of this report, the Company has 92,401,115 common shares issued and outstanding, 1,352,289 common shares issuable under stock options, 335,666 common shares issuable under restricted share units, 125,000 common shares issuable under performance share units, 168,750 common shares issuable under deferred share units.

**Internal Controls over Financial Reporting and Disclosure Controls and Procedures**

The Company has disclosure controls and procedures in place to provide reasonable assurance that any information required to be disclosed by the Company under securities legislation is recorded, processed, summarized and reported within the applicable time periods and that required information is gathered and communicated to the Company's management so that decisions can be made about the timely disclosure of that information.

The Company's management is responsible for establishing and maintaining adequate internal controls over financial reporting. Any system of internal controls over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

The Company's management, including the Chief Executive Officer and the Chief Financial Officer, believe that any disclosure controls and procedures or internal controls over financial reporting, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, the Company's management cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent limitations include the realities that judgements in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. The design of any control system is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost- effective control system, misstatements due to error or fraud may occur and not be detected.

**Non-GAAP Measures**

The Company has included certain non-GAAP performance measures throughout this MD&A, including Cash Cost per Silver Equivalent Ounce Sold, Cash Cost of Production per Tonne, All-in Sustaining Cash Cost ("AISC") per Silver Equivalent Ounce Sold, Average Realized Price per Ounce of Silver Equivalent Sold, and Adjusted EBITDA each as defined in this section.

These performance measures are employed by the Company to measure its operating and financial performance internally, to assist in business decision-making, and provide key performance information to senior management. The Company believes that, in addition to conventional measures prepared in accordance with International Financial Reporting Standards ("IFRS® Accounting Standards"), as issued by the International Accounting Standards Board ("IASB"), certain investors and other stakeholders also use these non-GAAP measures as information to evaluate the Company's operating and financial performance. As there are no standardized methods of calculating these non-GAAP measures, the Company's methods may differ from those used by others and, accordingly, the Company's use of these measures may not be directly comparable to similarly titled measures used by others. Accordingly, these non-GAAP measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

**Cash Cost per Silver Equivalent Ounce Sold, All-in Sustaining Cash Cost ("AISC") per Silver Equivalent Ounce Sold, and Cash Cost of Production per Tonne**

The non-GAAP measures of cash cost per silver equivalent ounce sold and cash cost of production per tonne are used by the Company to manage and evaluate operating performance at respective mining operations and are widely reported in the silver mining industry as benchmarks for performance, but do not have a standardized meaning. Cash costs are calculated based on the cash operating costs at the respective mining operations and, in the case of cash cost per silver equivalent ounce sold, also include the third party concentrate treatment, smelting and refining cost.

Management of the Company believes that the Company's ability to control the cash cost per silver equivalent ounce produced and cash cost of production per tonne are two of its key performance drivers impacting both the Company's financial condition and results of operations. Having a low cash cost of production per tonne, when taken in connection with effective management of mining dilution, will improve the cash cost per silver equivalent ounce produced. Having a low-cost base per silver equivalent ounce of production allows the Company to continue operating during times of declining commodity prices and provides more flexibility in responding to changing market conditions. In addition, low-cost operations offer a better opportunity to generate positive cash-flows, which improves the Company's financial condition.

The Company believes these measures provide investors and analysts with useful information about the Company's underlying cash costs of operations and are relevant metrics used to understand the Company's operating profitability and ability to generate cash-flow.

To facilitate a better understanding of these measures as calculated by the Company, the following table provides a detailed reconciliation between the cash cost of production per tonne, cash cost per silver equivalent ounce sold, and the Company's operating expenses as reported in the Company's consolidated statements of income (loss) and comprehensive income (loss) contained in the respective financial statements for the referenced periods.

AISC is a non-GAAP measure and was calculated based on guidance provided by the World Gold Council ("WGC") in September 2013. WGC is not a regulatory industry organization and does not have the authority to develop accounting standards for disclosure requirements. Other mining companies may calculate AISC differently as a result of differences in underlying accounting principles and policies applied, as well as differences in definitions of sustaining versus development capital expenditures.

AISC is a more comprehensive measure than cash cost per ounce for the Company's operating performance by providing greater visibility, comparability and representation of the total costs associated with producing silver from its mining operations.

The Company defines sustaining capital expenditures as, "costs incurred to sustain and maintain existing assets at current productive capacity and constant planned levels of productive output without resulting in an increase in the life of assets, future earnings, or improvements in recovery or grade. Sustaining capital includes costs required to improve/enhance assets to minimum standards for reliability, environmental or safety requirements."

Consolidated AISC includes total production cash costs incurred at the Company's mining operations, which forms the basis of the Company's total cash costs. Additionally, the Company includes sustaining capital expenditures, corporate general and administrative expense, sustaining share-based payments (if any), and reclamation cost accretion. AISC for Bolivia Consolidated and Zimapan do not include certain corporate and non-cash items such as corporate general and administrative expense and sustaining share-based payments.

The Company believes that this measure represents the total sustainable costs of producing silver from current operations and provides the Company and other stakeholders of the Company with additional information of the Company's operational performance and ability to generate cash flows. As the measure seeks to reflect the full cost of silver production from current operations, new project capital and expansionary capital at current operations are not included. Certain other cash expenditures, including tax payments, dividends and financing costs are also not included.

**Non-GAAP Measures** **(continued)**

**Cash Cost per Silver Equivalent Ounce Sold, All-in Sustaining Cash Cost ("AISC") per Silver Equivalent Ounce Sold, and Cash Cost of Production per Tonne (continued)**

The following tables provide a detailed reconciliation of these measures to our operating expenses, as reported in our consolidated financial statements.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended December 31, 2025** | **Three Months Ended December 31, 2025** | **Three Months Ended December 31, 2025** | **Three Months Ended December 31, 2025** | **Three Months Ended December 31, 2025** | **Three Months Ended December 31, 2025** | **Three Months Ended December 31, 2025** |
| | **Bolivar <sup>(1)</sup>** | **Porco <sup>(1)</sup>** | **Caballo**<br> **Blanco Group** | **San**<br> **Lucas Group** | **Zimapan** | **Corporate/ other** | **Total** <sup>(1)</sup> |
| Cost of sales | 11081 | 5706 | 9490 | 30048 | 18074 |  | 74399 |
| Transportation and other selling cost | (1518) | (954) | (1795) | (2637) | (1352) |  | (8256) |
| Royalty | (1397) | (557) | (1700) | (1510) | (166) |  | (5330) |
| Inventory change | (501) | 484 | (1023) | 4563 | (647) | - | 2876 |
| **Cash Cost of Production (A)** | **7665** | **4679** | **4972** | **30464** | **15910** | **-** | **63689** |
| Cost of sales | 11081 | 5706 | 9490 | 30048 | 18074 |  | 74399 |
| Concentrate treatment, smelting and refining cost | 771 | 473 | 889 | 3067 | 9296 | - | 14496 |
| **Cash Cost of Silver Equivalent Sold (B)** | **11852** | **6179** | **10379** | **33115** | **27370** | **-** | **88895** |
| Sustaining capital expenditures | 5003 | 517 | 2851 | 2108 | 3981 |  | 14460 |
| General and administrative expenses | 1062 | 688 | 1301 | 2004 | 1314 | 1099 | 7467 |
| Accretion of decommissioning and restoration provision | 186 | 308 | 243 | 95 | 124 | - | 957 |
| **All-in Sustaining Cash Cost (C)** | **18104** | **7692** | **14774** | **37322** | **32789** | **1099** | **111779** |
| Material processed (tonnes milled) (D) | 63267 | 51416 | 63067 | 105587 | 222703 |  | 506040 |
| Silver Equivalent Sold (payable ounces) (E) | 378140 | 155338 | 392362 | 833017 | 649079 |  | 2407936 |
| **Cash Cost per Silver Equivalent Ounce Sold (B/E)** | **31.34** | **39.78** | **26.45** | **39.75** | **42.17** | **-** | **36.92** |
| **All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold (C/E)** | **47.88** | **49.52** | **37.65** | **44.80** | **50.52** | **-** | **46.42** |
| **Cash Cost of Production per tonne (A/D)** | **121.15** | **91.01** | **78.83** | **288.52** | **71.44** | **-** | **125.86** |

---

<sup>(1)</sup> Information for Bolivar and Porco is presented at 100% and financial information will not tie to the consolidated financial statements as the Company records 45% of Bolivar and Porco.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended December 30, 2024** | **Three Months Ended December 30, 2024** | **Three Months Ended December 30, 2024** | **Three Months Ended December 30, 2024** | **Three Months Ended December 30, 2024** | **Three Months Ended December 30, 2024** | **Three Months Ended December 30, 2024** |
| | <br>**Bolivar <sup>(1)</sup>** | <br>**Porco <sup>(1)</sup>** | **Caballo**<br> **Blanco Group** | **San**<br> **Lucas Group** | **Zimapan** | **Corporate/ other** | **Total**<sup>(1)</sup> |
| Cost of sales | 12390 | 7459 | 8573 | 23069 | 15078 |  | 66569 |
| Transportation and other selling cost | (2017) | (1263) | (1808) | (1881) | (952) |  | (7921) |
| Royalty | (1828) | (844) | (1093) | (873) | (57) |  | (4695) |
| Inventory change | (133) | (122) | (1044) | 1326 | (1533) | - | (1506) |
| **Cash Cost of Production (A)** | **8412** | **5230** | **4628** | **21641** | **12536** | **-** | **52447** |
| Cost of sales | 12390 | 7459 | 8573 | 23069 | 15078 |  | 66569 |
| Concentrate treatment, smelting and refining cost | 2115 | 1129 | 1760 | 910 | 4808 | - | 10722 |
| **Cash Cost of Silver Equivalent Sold (B)** | **14505** | **8588** | **10333** | **23979** | **19886** | **-** | **77291** |
| Sustaining capital expenditures | 2103 | 1765 | 1741 | 2683 | 2966 |  | 11258 |
| General and administrative expenses | 469 | 304 | 359 | 2112 | 143 | 3457 | 6844 |
| Accretion of decommissioning and restoration provision | 168 | 270 | (88) | 222 | 120 | - | 692 |
| **All-in Sustaining Cash Cost (C)** | **17245** | **10927** | **12345** | **28996** | **23115** | **3457** | **96085** |
| Material processed (tonnes milled) (D) | 69411 | 53702 | 60776 | 92369 | 216883 |  | 493141 |
| Silver Equivalent Sold (payable ounces) (E) | 777765 | 345675 | 629937 | 847411 | 852103 |  | 3452891 |
| **Cash Cost per Silver Equivalent Ounce Sold (B/E)** | **18.65** | **24.84** | **16.40** | **28.30** | **23.34** | **-** | **22.38** |
| **All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold (C/E)** | **22.17** | **31.61** | **19.60** | **34.22** | **27.13** | **-** | **27.83** |
| **Cash Cost of Production per tonne (A/D)** | **121.19** | **97.39** | **76.15** | **234.29** | **57.80** | **-** | **106.35** |

---

 

<sup>(1)</sup> Information for Bolivar and Porco is presented at 100% and financial information will not tie to the consolidated financial statements as the Company records 45% of Bolivar and Porco.

**Non-GAAP Measures** **(continued)**

**Cash Cost per Silver Equivalent Ounce Sold, All-in Sustaining Cash Cost ("AISC") per Silver Equivalent Ounce Sold, and Cash Cost of Production per Tonne (continued)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** |
| | **Bolivar <sup>(1)</sup>** | **Porco <sup>(1)</sup>** | **Caballo**<br> **Blanco Group** | **San**<br> **Lucas Group** | **Zimapan** | **Corporate/ other** | **Total** <sup>(1)</sup> |
| Cost of sales | 35738 | 21479 | 28726 | 77288 | 67767 |  | 230999 |
| Transportation and other selling cost | (5460) | (4013) | (6299) | (8216) | (4918) |  | (28906) |
| Royalty | (3369) | (1826) | (4112) | (3349) | (446) |  | (13102) |
| Inventory change | (1699) | 17 | (2956) | 5188 | (3193) | - | (2643) |
| **Cash Cost of Production (A)** | **25211** | **15658** | **15358** | **70911** | **59210** | **-** | **186348** |
| Cost of sales | 35738 | 21479 | 28726 | 77288 | 67767 |  | 230999 |
| Concentrate treatment, smelting and refining cost | 4489 | 2823 | 4373 | 7752 | 22155 | - | 41592 |
| **Cash Cost of Silver Equivalent Sold (B)** | **40227** | **24302** | **33099** | **85040** | **89922** | **-** | **272591** |
| Sustaining capital expenditures | 11184 | 1887 | 5097 | 3895 | 15603 |  | 37666 |
| General and administrative expenses | 3130 | 1998 | 3635 | 5939 | 5045 | 3965 | 23712 |
| Accretion of decommissioning and restoration provision | 556 | 941 | 698 | 286 | 490 | - | 2972 |
| **All-in Sustaining Cash Cost (C)** | **55098** | **29128** | **42529** | **95160** | **111060** | **3965** | **336940** |
| Material processed (tonnes milled) (D) | 232448 | 197231 | 234709 | 387805 | 893067 |  | 1945261 |
| Silver Equivalent Sold (payable ounces) (E) | 1983106 | 1006027 | 2035431 | 2939466 | 2970701 |  | 10934731 |
| **Cash Cost per Silver Equivalent Ounce Sold (B/E)** | **20.29** | **24.16** | **16.26** | **28.93** | **30.27** | **-** | **24.93** |
| **All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold (C/E)** | **27.78** | **28.95** | **20.89** | **32.37** | **37.39** | **-** | **30.81** |
| **Cash Cost of Production per tonne (A/D)** | **108.46** | **79.39** | **65.44** | **182.85** | **66.30** | **-** | **95.80** |

---

 

<sup>(1)</sup> Information for Bolivar and Porco is presented at 100% and financial information will not tie to the consolidated financial statements as the Company records 45% of Bolivar and Porco.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** |
| | <br>**Bolivar <sup>(1)</sup>** | <br>**Porco <sup>(1)</sup>** | **Caballo**<br> **Blanco Group** | **San**<br> **Lucas Group** | **Zimapan** | **Corporate/ other** | **Total**<sup>(1)</sup> |
| Cost of sales | 50842 | 30590 | 45479 | 71537 | 55094 |  | 253541 |
| Transportation and other selling cost | (7714) | (4993) | (7432) | (6012) | (4384) |  | (30536) |
| Royalty | (6032) | (2991) | (4532) | (2926) | (196) |  | (16677) |
| Inventory change | (2273) | (958) | (6298) | 410 | 1018 | - | (8101) |
| **Cash Cost of Production (A)** | **34823** | **21648** | **27216** | **63009** | **51532** | **-** | **198227** |
| Cost of sales | 50842 | 30590 | 45479 | 71537 | 55094 |  | 253541 |
| Concentrate treatment, smelting and refining cost | 10920 | 6040 | 9363 | 6963 | 21744 | - | 55030 |
| **Cash Cost of Silver Equivalent Sold (B)** | **61762** | **36630** | **54842** | **78500** | **76838** | **-** | **308571** |
| Sustaining capital expenditures | 7309 | 3756 | 6588 | 2683 | 9642 |  | 29978 |
| General and administrative expenses | 1362 | 1060 | 2067 | 3131 | 3979 | 14738 | 26337 |
| Accretion of decommissioning and restoration provision | 609 | 992 | 429 | 222 | 524 | - | 2776 |
| **All-in Sustaining Cash Cost (C)** | **71042** | **42438** | **63926** | **84536** | **90983** | **14738** | **367663** |
| Material processed (tonnes milled) (D) | 284634 | 204585 | 275273 | 341649 | 849764 |  | 1955905 |
| Silver Equivalent Sold (payable ounces) (E) | 3298649 | 1540699 | 2600400 | 3163910 | 3486063 |  | 14089722 |
| **Cash Cost per Silver Equivalent Ounce Sold (B/E)** | **18.72** | **23.77** | **21.09** | **24.81** | **22.04** | **-** | **21.90** |
| **All-in Sustaining Cash Cost per Silver Equivalent Ounce Sold (C/E)** | **21.54** | **27.54** | **24,.58** | **26.72** | **26.10** | **-** | **26.09** |
| **Cash Cost of Production per tonne (A/D)** | **122.34** | **105.81** | **98.87** | **184.43** | **60.64** | **-** | **101.35** |

---

 

<sup>(1)</sup> Information for Bolivar and Porco is presented at 100% and financial information will not tie to the consolidated financial statements as the Company records 45% of Bolivar and Porco.

**Non-GAAP Measures** **(continued)**

**Average Realized Price per Ounce of Silver Equivalent Sold**

Revenues are presented as the sum of invoiced revenues related to delivered shipments of zinc, lead and copper concentrates, after having deducted treatment, smelting and refining charges.

The following is an analysis of the gross revenues prior to treatment, smelting and refining charges, and shows deducted treatment, smelting and refining charges to arrive at the net reportable revenue for the period per IFRS. Gross revenues are divided by silver equivalent ounces sold to calculate the average realized price per ounce of silver equivalents sold.

**Consolidated**<sup>(1)</sup> **Average Realized Price per Ounce of Silver Equivalent Sold**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended**<br> **December 31,** | **Three months ended**<br> **December 31,** | **Twelve months ended**<br> **December 31,** | **Twelve months ended**<br> **December 31,** |
| | **2025** | **2024** | **2025** | **2024** |
| Revenues | 118397 | 98968 | 384893 | 349848 |
| Add back: Treatment, smelting and refining charges | 14496 | 10722 | 41592 | 55030 |
| **Gross Revenues** | **132893** | **109690** | **426485** | **404878** |
| Silver Equivalent Sold (ounces) | 2407936 | 3452891 | 10934731 | 14089722 |
| **Average Realized Price per Ounce of Silver Equivalent Sold <sup>(2)</sup>** | **55.19** | **31.77** | **39.00** | **28.74** |
| **Average Market Price per Ounce of Silver per London Silver Fix** | **54.73** | **31.48** | **40.03** | **28.26** |

---

 

<sup>(1)</sup> Information for Bolivar and Porco is presented at 100% and financial information will not tie to the consolidated financial statements as the Company records 45% of Bolivar and Porco.

<sup>(2)</sup> Average Realized Price per Ounce of Silver Equivalent Sold in each reporting period is affected by mark-to-market adjustments and final settlements on concentrate shipments in prior periods. Concentrates sold to third-party smelters are provisionally priced and the price is not settled until a predetermined future date, typically one to four months after delivery to the customer, based on the market price at that time.

**Bolivar**<sup>(1)</sup> **Average Realized Price per Ounce of Silver Equivalent Sold**

 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended**<br> **December 31,** | **Three months ended**<br> **December 31,** | **Twelve months ended**<br> **December 31,** | **Twelve months ended**<br> **December 31,** |
| | **2025** | **2024** | **2025** | **2024** |
| Revenues | 20496 | 22129 | 70969 | 83073 |
| Add back: Treatment, smelting and refining charges | 771 | 2115 | 4489 | 10920 |
| **Gross Revenues** | **21267** | **24244** | **75458** | **93993** |
| Silver Equivalent Sold (ounces) | 378140 | 777765 | 1983106 | 3298649 |
| **Average Realized Price per Ounce of Silver Equivalent Sold <sup>(2)</sup>** | **56.24** | **31.17** | **38.05** | **28.49** |
| **Average Market Price per Ounce of Silver per London Silver Fix** | **54.73** | **31.48** | **40.03** | **28.26** |

---

 

<sup>(1)</sup> Information for Bolivar and Porco is presented at 100% and financial information will not tie to the consolidated financial statements as the Company records 45% of Bolivar and Porco.

<sup>(2)</sup> Average Realized Price per Ounce of Silver Equivalent Sold in each reporting period is affected by mark-to-market adjustments and final settlements on concentrate shipments in prior periods. Concentrates sold to third-party smelters are provisionally priced and the price is not settled until a predetermined future date, typically one to four months after delivery to the customer, based on the market price at that time.

**Porco<sup>(1)</sup> Average Realized Price per Ounce of Silver Equivalent Sold**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended**<br> **December 31,** | **Three months ended**<br> **December 31,** | **Twelve months ended**<br> **December 31,** | **Twelve months ended**<br> **December 31,** |
| | **2025** | **2024** | **2025** | **2024** |
| Revenues | 7890 | 9330 | 35414 | 38498 |
| Add back: Treatment, smelting and refining charges | 473 | 1129 | 2823 | 6040 |
| **Gross Revenues** | **8363** | **10459** | **38237** | **44538** |
| Silver Equivalent Sold (ounces) | 155338 | 345675 | 1006027 | 1540699 |
| **Average Realized Price per Ounce of Silver Equivalent Sold <sup>(2)</sup>** | **53.84** | **30.26** | **38.01** | **28.91** |
| **Average Market Price per Ounce of Silver per London Silver Fix** | **54.73** | **31.48** | **40.03** | **28.26** |

---

 

<sup>(1)</sup> Information for Bolivar and Porco is presented at 100% and financial information will not tie to the consolidated financial statements as the Company records 45% of Bolivar and Porco.

<sup>(2)</sup> Average Realized Price per Ounce of Silver Equivalent Sold in each reporting period is affected by mark-to-market adjustments and final settlements on concentrate shipments in prior periods. Concentrates sold to third-party smelters are provisionally priced and the price is not settled until a predetermined future date, typically one to four months after delivery to the customer, based on the market price at that time.

**Non-GAAP Measures** **(continued)**

**Caballo Blanco Group Average Realized Price per Ounce of Silver Equivalent Sold**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended**<br> **December 31,** | **Three months ended**<br> **December 31,** | **Twelve months ended**<br> **December 31,** | **Twelve months ended**<br> **December 31,** |
| | **2025** | **2024** | **2025** | **2024** |
| Revenues | 21586 | 17590 | 76707 | 65872 |
| Add back: Treatment, smelting and refining charges | 889 | 1760 | 4373 | 9363 |
| **Gross Revenues** | **22475** | **19350** | **81080** | **75235** |
| Silver Equivalent Sold (ounces) | 392362 | 629937 | 2035431 | 2600400 |
| **Average Realized Price per Ounce of Silver Equivalent Sold <sup>(1)</sup>** | **57.28** | **30.72** | **39.83** | **28.93** |
| **Average Market Price per Ounce of Silver per London Silver Fix** | **54.73** | **31.48** | **40.03** | **28.26** |

---

 

<sup>(1)</sup> Average Realized Price per Ounce of Silver Equivalent Sold in each reporting period is affected by mark-to-market adjustments and final settlements on concentrate shipments in prior periods. Concentrates sold to third-party smelters are provisionally priced and the price is not settled until a predetermined future date, typically one to four months after delivery to the customer, based on the market price at that time.

**San Lucas Group Average Realized Price per Ounce of Silver Equivalent Sold**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended**<br> **December 31,** | **Three months ended**<br> **December 31,** | **Twelve months ended**<br> **December 31,** | **Twelve months ended**<br> **December 31,** |
| | **2025** | **2024** | **2025** | **2024** |
| Revenues | 34746 | 25269 | 99364 | 80719 |
| Add back: Treatment, smelting and refining charges | 3067 | 910 | 7752 | 6963 |
| **Gross Revenues** | **37813** | **26179** | **107116** | **87682** |
| Silver Equivalent Sold (ounces) | 833017 | 847411 | 2939466 | 3163910 |
| **Average Realized Price per Ounce of Silver Equivalent Sold <sup>(1)</sup>** | **45.39** | **30.89** | **36.44** | **27.71** |
| **Average Market Price per Ounce of Silver per London Silver Fix** | **54.73** | **31.48** | **40.03** | **28.26** |

---

 

<sup>(1)</sup> Average Realized Price per Ounce of Silver Equivalent Sold in each reporting period is affected by mark-to-market adjustments and final settlements on concentrate shipments in prior periods. Concentrates sold to third-party smelters are provisionally priced and the price is not settled until a predetermined future date, typically one to four months after delivery to the customer, based on the market price at that time.

**Zimapan Mine Average Realized Price per Ounce of Silver Equivalent Sold**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended**<br> **December 31,** | **Three months ended**<br> **December 31,** | **Twelve months ended**<br> **December 31,** | **Twelve months ended**<br> **December 31,** |
| | **2025** | **2024** | **2025** | **2024** |
| Revenues | 33679 | 24650 | 102439 | 81687 |
| Add back: Treatment, smelting and refining charges | 9296 | 4808 | 22155 | 21744 |
| **Gross Revenues** | **42975** | **29458** | **124594** | **103431** |
| Silver Equivalent Sold (ounces) | 649079 | 852103 | 2970701 | 3486063 |
| **Average Realized Price per Ounce of Silver Equivalent Sold <sup>(1)</sup>** | **66.21** | **34.57** | **41.94** | **29.67** |
| **Average Market Price per Ounce of Silver per London Silver Fix** | **54.73** | **31.48** | **40.03** | **28.26** |

---

 

<sup>(1)</sup> Average Realized Price per Ounce of Silver Equivalent Sold in each reporting period is affected by mark-to-market adjustments and final settlements on concentrate shipments in prior periods. Concentrates sold to third-party smelters are provisionally priced and the price is not settled until a predetermined future date, typically one to four months after delivery to the customer, based on the market price at that time.

**Non-GAAP Measures** **(continued)**

**Adjusted EBITDA**

Adjusted EBITDA is a non-GAAP measure in which net income is adjusted for income tax expense, interest income, interest expense, amortization and depletion, and impairment charges, foreign exchange gains or losses, unrealized losses or gains on marketable securities, share-based payments expense, accretion expense, changes in fair value of consideration payable and other non-recurring items. Foreign exchange gains or losses may consist of both realized and unrealized losses.

Under IFRS, entities must reflect in compensation expense the cost of share-based payments. In the Company's circumstances, share-based payments can involve a significant accrual of amounts that will not be settled in cash but are settled by the issuance of shares in exchange.

The Company discloses Adjusted EBITDA to aid in understanding of the results of the Company and is meant to provide further information about the Company's financial results to investors.

The following table provides a reconciliation of Adjusted EBITDA for the three and twelve months ended December 31, 2025 and 2024.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended**<br> **December 31,** | **Three months ended**<br> **December 31,** | **Twelve months ended**<br> **December 31,** | **Twelve months ended**<br> **December 31,** |
| | **2025** | **2024** | **2025** | **2024** |
| **Net income (loss) for the period** | **(4550)** | 12842 | **42222** | 164484 |
| Income tax expense | **12436** | 8782 | **32478** | 27552 |
| Interest (income) | **(418)** | (464) | **(1511)** | (480) |
| Interest expense, carrying and finance charges | **867** | 486 | **2128** | 1488 |
| Reversal of impairment on mineral properties, plant and equipment | **(4088)** |  | **(4088)** |  |
| Depreciation, depletion and amortization | **5766** | 3863 | **21577** | 19706 |
| Foreign exchange (gain) | **11482** | (2966) | **(2015)** | (44199) |
| Share-based compensation expense | **(227)** | (27) | **2042** | 105 |
| Accretion (income) | **419** | (282) | **1091** | 2172 |
| (Gain) on adjustment to consideration payable | **-** |  | **-** | (133255) |
| Loss on remeasurement of cash flows related to CAPEX receivable | **10198** | (2070) | **15460** | 13472 |
| Other finance expense (income) | **(1096)** | 2856 | **(4800)** | 1583 |
| **Adjusted EBITDA** | **30789** | 23020 | **104584** | 52628 |

---

**Cautionary Note Regarding Forward-looking Information**

Certain of the statements and information in this MD&A constitute "forward-looking information" within the meaning of applicable Canadian provincial securities laws relating to the Company and its operations. All statements, other than statements of historical fact, are forward-looking statements. When used in this MD&A, the words, "will", "believes", "expects", "intents", "plans", "forecast", "objective", "guidance", "outlook", "potential", "anticipated", "budget", and other similar words and expressions, identify forward-looking statements or information. These forward-looking statements or information relate to, among other things: future financial or operational performance; the expected timing for release of forecasts for 2025, including our estimated production of silver, zinc, lead and copper, and for our estimated Cash Costs, AISC, capital and exploration, mine operation, general and administrative, care and maintenance expenditures; future anticipated prices for silver, zinc, lead and copper and other metals and assumed foreign exchange rates; the impacts of inflation on the Company and its operations; whether the Company is able to maintain a strong financial condition and have sufficient capital, or have access to capital, to sustain our business and operations; the timing and outcome with respect to the Company's environmental, social and governance activities, and the Company's corporate social responsibility activities and our reporting in respect thereof; the ability of the Company to successfully complete any capital projects, the expected economic or operational results derived from those projects, and the impacts of any such projects on the Company; the potential maximum consideration payable to Glencore pursuant to the Term Sheet; the future results of our exploration activities, anticipated mineral reserves and mineral resources; the costs associated with the Company's decommissioning obligations; the Company's plans and expectations for its properties and operations; and expectations with respect to the future anticipated impact of pandemics on our operations.

These forward-looking statements and information reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant operational, business, economic, competitive, political, regulatory, and social uncertainties and contingencies. These assumptions, include: our ability to implement environmental, social and governance activities; tonnage of ore to be mined and processed; ore grades and recoveries; that the Company will receive all required regulatory approvals to operate; that the market price of zinc may be above certain minimum thresholds for the payment of the CVR Payments and Additional Payments; prices for silver, zinc, lead, copper remaining as estimated; currency exchange rates remaining as estimated; capital, decommissioning and reclamation estimates; our mineral reserve and mineral resource estimates and the assumptions upon which they are based; prices for energy inputs, labour, materials, supplies and services (including transportation); no labour-related disruptions at any of our operations; no unplanned delays or interruptions in scheduled production; protection of our interests against claims and legal proceedings; all necessary permits, licenses and regulatory approvals for our operations are received in a timely manner and can be maintained. The foregoing list of assumptions is not exhaustive.

The Company cautions the reader that forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements or information contained in this MD&A and the Company has made assumptions and estimates based on or related to many of these factors. Such factors include, some of which are described in the "Risks Factors" section of this MD&A without limitation: fluctuations in silver, zinc, lead and copper prices; fluctuations in prices for energy inputs; fluctuations in currency markets (such as the MXN, BOB and CAD versus the USD); risks related to the technological and operational nature of the Company's business; required regulatory approvals; changes in national and local government, legislation, taxation, controls or regulations and political, legal or economic developments in Canada, the United States, Mexico, Bolivia or other countries where the Company may carry on business, some of which might prevent or cause the suspension or discontinuation of mining activities, including the risk of expropriation related to certain of our operations, particularly in Bolivia; risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected geological or structural formations, pressures, cave-ins and flooding); risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom the Company does business; inadequate insurance, or inability to obtain insurance, to cover these risks and hazards; employee relations; relationships with and claims by the local communities and indigenous populations; availability and increasing costs associated with mining inputs and labour;

**Cautionary note regarding forward-looking information (continued)**

the Company's ability to secure our mine sites or maintain access to our mine sites due to criminal activity, violence, or civil and labour unrest; that changes to the market price of zinc may affect the total consideration payable to Glencore pursuant to the omnibus agreement; the speculative nature of mineral exploration and development, including the risk of obtaining or retaining necessary licenses and permits; challenges to, or difficulty in maintaining, the Company's title to properties and continued ownership thereof; diminishing quantities or grades of mineral reserves as properties are mined; global financial conditions; the Company's ability to complete and successfully integrate acquisitions, and to mitigate other business combination risks; the actual results of current exploration activities, conclusions of economic evaluations, and changes in project parameters to deal with unanticipated economic or other factors; increased competition in the mining industry for properties, equipment, qualified personnel, and their costs; having sufficient cash to pay obligations as they come due; the duration and effects of the coronavirus and COVID-19 variants, and any other epidemics or pandemics on our operations and workforce, and their effects on global economies and society. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described, or intended. Investors are cautioned against attributing undue certainty or reliance on forward-looking statements or information. Forward-looking statements and information are designed to help readers understand Management's current views of our near- and longer-term prospects and may not be appropriate for other purposes. The Company does not intend, and does not assume any obligation, to update or revise forward-looking statements or information to reflect changes in assumptions or in circumstances or any other events affecting such statements or information, other than as required by applicable law.

**Risk Factors**

The risk factors described below could materially affect the Company's future operating results and could cause actual events and results to differ materially from those described in forward-looking statements and forward-looking information. Additional risks not presently known to us, or that we currently consider immaterial, may also impair our operations. Readers are strongly encouraged to review the following identified risks in detail.

**Metal and Commodity Price Fluctuations**

The majority of our revenue is derived from the sale of silver, zinc, lead and copper, and therefore fluctuations in the prices of these metals significantly affects our operations and profitability. Our sales are directly dependent on metal prices, and metal prices have historically shown significant volatility and are beyond our control. The Board of Directors continually assesses the Company's strategy towards our metal exposure, depending on market conditions.

The prices of silver and other metals are affected by numerous factors beyond our control, including:

● global and regional levels of supply and demand;

● sales by government holders and other third parties;

● metal stock levels maintained by producers and others;

● increased production due to new mine developments and improved mining and production methods;

● speculative activities;

● inventory carrying costs;

● availability, demand and costs of metal substitutes;

● international economic and political conditions;

● interest rates, inflation and currency values;

● increased demand for silver or other metals for new technologies; and

● reduced demand resulting from obsolescence of technologies and processes utilizing silver and other metals.

In addition to general global economic conditions that can have a severely damaging effect on our business in many ways, declining market prices for metals could materially adversely affect our operations and profitability. A decrease in the market price of silver, zinc, lead and copper and other metals could affect the commercial viability of our mines and production at our mining properties. Lower prices could also adversely affect future exploration and our ability to develop mineral properties and mines which would have a material adverse impact on our financial condition, results of operations and future prospects. There can be no assurance that the market prices will remain at sustainable levels.

**Risk Factors (continued)**

If market prices of silver, zinc, lead and copper remain below levels used in the Company's impairment testing and resource prices for an extended period of time, the Company may need to reassess its long-term price assumptions, and a significant decrease in the long-term price assumptions would be an indicator of potential impairment, requiring the Company to perform an impairment assessment on related assets. Due to the sensitivity of the recoverable amounts to long term metal prices, as well as to other factors including changes to mine plans and cost escalations, any significant change in these key assumptions and inputs could result in impairment charges in future periods.

**Foreign Operations**

The Company's production and revenues are derived from our operations in Mexico and Bolivia. As a result, we are exposed to a number of risks and uncertainties, including:

● expropriation, nationalization, and the cancellation, revocation, renegotiation, or forced modification of existing contracts, permits, licenses, approvals, or title, particularly without adequate compensation;

● changing political and fiscal regimes, sometimes unexpectedly or as a result of precipitous events, and economic and regulatory instability;

● unanticipated adverse changes to constitutional rights and protections, and other laws and policies, including those relating to mineral title, royalties and taxation;

● delays or inability to obtain or maintain necessary permits, licenses or approvals;

● opposition to mine development projects from governments, communities, and other groups, which may include frivolous or vexatious claims, misinformation, and the potential for violence and property damage;

● restrictions on foreign investment;

● limitations on repatriation of operating cash flows, including legal and practical restrictions to transfer funds from and to foreign jurisdictions;

● unreliable or undeveloped infrastructure;

● labour unrest and scarcity;

● human rights violations, which may include Indigenous rights claims;

● inability of governments or governmental bodies to complete, or properly complete, consultation processes and to comply with national and international laws, protocols, standards and/or norms;

● difficulty obtaining key equipment and components for equipment;

● difficulty obtaining consumables and others necessary to operate our mines;

● regulations and restrictions with respect to imports and exports;

● high rates of inflation;

● extreme fluctuations in currency exchange rates and restrictions on foreign exchange, currencies and repatriation;

● inability to obtain fair dispute resolution or judicial determinations because of bias, corruption or abuse of power;

● abuse of power of foreign governments who impose, or threaten to impose, fines, penalties or other similar mechanisms, without regard to the rule of law;

● difficulties enforcing judgments, particularly judgments obtained in Canada or the United States, with respect to assets located outside of those jurisdictions;

● difficulty understanding and complying with the regulatory and legal framework with respect to mineral properties, mines and mining operations, and permitting;

● violence and the prevalence of criminal activity, including organized crime, theft and illegal mining;

● civil unrest, terrorism and hostage taking; government, union and community pressures to maintain unprofitable operations;

● military repression and increased likelihood of international conflicts or aggression; and

● increased public health concerns.

**Risk Factors (continued)**

In 2014, the Bolivian government enacted the New Mining Law. Among other things, the New Mining Law set out a number of new economic and operational requirements relating to state participation in mining projects. Further, the New Mining Law provided that all pre-existing contracts were to migrate to one of several new forms of agreement within a prescribed period of time. As a result, we anticipate that our current Mining Joint Operations Agreement with COMIBOL relating to the Illapa Joint Operation will be subject to such migration and possible renegotiation of key terms. The migration process has been delayed by COMIBOL and has not been completed. The primary effects on the Illapa Joint Operation and our interest therein will not be known until such time as we have, if required to do so, renegotiated the existing contract, and the full impact may only be realized over time. We will take appropriate steps to protect and, if necessary, enforce our rights under our existing agreement with COMIBOL. There is, however, no guarantee that governmental actions, including possible expropriation or additional changes in the law, and the migration of our contract will not impact our involvement in the Illapa Joint Operation in an adverse way and such actions could have a material adverse effect on us and our business.

Criminal activity and violence are also prevalent in some areas that we work in. For example, violence in Mexico is well documented and has, over time, been increasing. Conflicts between the drug cartels and violent confrontations with authorities are not uncommon. Other criminal activity, such as kidnapping and extortion, is also an ongoing concern. Many incidents of crime and violence go unreported and efforts by police and other authorities to reduce criminal activity are challenged by a lack of resources, corruption and the pervasiveness of organized crime. Incidents of criminal activity could occur and might affect our employees and our contractors and their families, as well as the communities in the vicinity of our operations. Such incidents may prevent access to our mines or offices; halt or delay our operations and production; could result in harm to employees, contractors, visitors or community members; increase employee absenteeism; create or increase tension in nearby communities; or otherwise adversely affect our ability to conduct business. We can provide no assurance that possible security incidents will not have a material adverse effect on our future operations.

Although we are unable to determine the impact of these risks on our future financial position or results of operations, many of these risks and uncertainties have the potential to substantially affect our exploration, development and production activities and could therefore have a material adverse impact on our operations and profitability.

**Governmental Regulation**

Our operations, exploration, and development activities are subject to extensive laws and regulations in the jurisdictions in which we conduct our business, including with respect to:

● environmental protection, including greenhouse gas emissions, biodiversity, and water, soil and air quality;

● permitting;

● management and use of toxic substances and explosives;

● management and use of natural resources, including water and energy supplies;

● management of waste and wastewater;

● exploration, development, production, and post-closure reclamation of mines;

● imports and exports;

● transportation;

● price controls;

● taxation;

● mining royalties;

● labour standards, employee profit-sharing, and occupational health and safety, including mine safety regulations

● community and Indigenous rights;

● human rights;

● social matters, including historic and cultural preservation, engagement and consultation, local hiring and procurement, development funds;

● anti-corruption and anti-money laundering; and

● data protection and privacy.

**Risk Factors (continued)**

The costs associated with compliance with these and future laws and regulations can be substantial, and changes to existing laws and regulations (including the imposition of higher taxes and mining royalties) could cause additional expense, capital expenditures, restrictions on or suspensions of our operations and delays in the development of our properties. In addition, the regulatory and legal framework in some jurisdictions in which we operate are outdated, unclear and at times, inconsistent.

A failure to comply with these laws and regulations, including with respect to our past and current operations, and possibly even actions of parties from whom we acquired our mines or properties, could lead to, among other things, the imposition of substantial fines, penalties, sanctions, the revocation of licenses or approvals, expropriation, forced reduction or suspension of operations, and other civil, regulatory or criminal proceedings. Other enforcement actions may include corrective measures requiring capital expenditures, the installation of additional equipment or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of such mining activities and may have civil or criminal fines or penalties imposed upon them for violations of applicable laws or regulations.

As governments continue to struggle with deficits and concerns over the effects of depressed economies, the mining and metals sector has often been identified as a source of revenue. Taxation and royalties are often subject to change and are vulnerable to increases in both poor and good economic times, especially in many resource-rich countries. The addition of new taxes, specifically those aimed at mining companies, could have a material impact on our operations and will directly affect profitability and our financial results. COVID-19 resulted in unprecedented public health measures and massive increases in government spending which caused significant long-term damage to the global and most national economies. The resulting costs to governments, increased fiscal debt, interest rates, and inflation continue to result in further taxation pressures, the impacts of which could impact our financial performance.

In April 2021, the Senate of Mexico approved the amendment of various articles of the Federal Labor Law, Social Security Law, Law of the National Workers' Housing Fund Institute, Federal Fiscal Code, Income Tax Law and the Value Added Tax Law. These new regulations significantly limit the ability of operating companies to subcontract and outsource labour to contractors and to employ related service providers. As a consequence of this new legislation, additional employee profit sharing costs, payroll taxes and benefits costs were imposed on our operations.

**Permits**

We are required to obtain and renew governmental permits for the operation and expansion of existing operations or for the development, construction, and commencement of new operations. Obtaining or renewing the necessary governmental permits can be costly and involve extended timelines. We may not be able to obtain or renew permits that are necessary to our operations, or the cost to obtain or renew permits may exceed our expected recovery from a given property once in production.

Failure to obtain or maintain the necessary permits, or to maintain compliance with any permits, can result in fines, penalties, or suspension or revocation of the permits. Our ability to obtain and renew permits is contingent upon certain variables, some of which are not within our control, including, introduction of new permitting legislation, the interpretation of applicable requirements implemented by the permitting authority, the need for public consultation hearings or approvals, and political or social pressure.

Any unexpected delays, failure to obtain or renew permits, failure to comply with the terms of the permit, or costs associated with the permitting process could impede or prevent the development or operation of a mine, which could have material adverse impacts on our operations and profitability.

**Risk Factors (continued)**

**Mining Risks and Insurance** 

The business of mining is generally subject to numerous risks and hazards, including environmental hazards, industrial accidents, contagious disease hazards, labour disputes, encountering unusual or unexpected geologic formations, cave-ins, flooding and periodic interruptions due to inclement or hazardous weather conditions at its existing locations. Such risks could result in damage to, or destruction of, mineral properties or producing facilities, personal injury, environmental damage, delays in mining, monetary losses and possible legal liability. The Company's insurance will not cover all the potential risks associated with its operations. In addition, although certain risks are insurable, the Company may be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance against environmental risks (including potential for pollution or other hazards as a result of disposal of waste products occurring from exploration and production) is not generally available to the Company or to other companies within the industry on acceptable terms.

The Company carries insurance to protect against certain risks in such amounts as it considers adequate. Risks not insured against include, without limitation, environmental pollution, mine flooding or other hazards against which such companies cannot insure or against which they may elect not to insure. Losses from uninsured events may cause the Company to incur significant costs. The activities of the Company are subject to a number of challenges over which the Company has little or no control, but that may delay production and negatively impact the Company's financial results, including: increases in energy, fuel and/or other production costs; higher insurance premiums; industrial accidents; labour disputes; shortages of skilled labour; contractor availability; unusual or unexpected geological or operating conditions; slope failures; cave-ins of underground workings; and failure of pit walls or dams. If the Company's total production costs per ounce of silver rise above the market price of silver and remain so for any sustained period, the Company may experience losses and may curtail or suspend some or all of its exploration, development and mining activities.

**Operational Risks**

The ownership, operation, and development of a mine or mineral property involves significant risks and hazards which even the combination of experience, knowledge, and careful evaluation may not be able to overcome.

These risks include:

● environmental and health hazards;

● industrial and equipment accidents, explosions and third party accidents;

● the encountering of unusual or unexpected geological formations;

● ground falls and cave-ins;

● flooding;

● labour disruptions;

● mechanical equipment, machinery, and facility performance problems;

● seismic events;

● extreme temperature variations and air quality issues underground; and

● periodic interruptions due to inclement or hazardous weather conditions.

These risks could result in:

● damage to, or destruction of, mineral properties or production facilities;

● personal injury or death;

● environmental damage and liabilities;

● delayed production;

● labour disruptions;

● increased production costs;

● asset write downs;

● abandonment of assets;

● monetary losses;

● civil, regulatory or criminal proceedings, including fines and penalties, relating to health, safety and the environment;

● community unrest, protests, and legal proceedings at local or international levels;

● loss of social acceptance for our activities; and other liabilities.

**Risk Factors (continued)**

Advancements in science and technology and in mine design, methods, equipment, and training have created the possibility of reducing some of these risks, but there can be no assurances that such occurrences will not take place and that they will not negatively impact us, our operations, and our personnel.

Liabilities that we incur may exceed the policy limits of our insurance coverage or may not be insurable, in which case we could incur significant costs that could adversely impact our business, operations, profitability, or value.

**Title to Assets** 

The validity of mining or exploration titles or claims or rights, which constitute most of our property holdings, can be uncertain and may be contested. Our properties may be subject to prior unregistered liens, agreements or transfers, Indigenous land claims, or undetected title defects. In some cases, we do not own or hold rights to the mineral concessions we mine, including some of our mining and exploration titles in Bolivia where the government has title to the concessions and our right to mine is contractual in nature. We have not conducted surveys of all the claims in which we hold direct or indirect interests and therefore, the precise area and location of such claims may be in doubt. No assurance can be given that applicable governments will not revoke or significantly alter the conditions of the applicable exploration and mining titles or claims, or that such exploration and mining titles or claims will not be challenged or impugned by third parties. We may be unable to operate our properties as expected, or to enforce our rights to our properties. Any defects in title to our properties, or the revocation of our rights to mine, could have a material adverse effect on our operations and financial condition.

We operate in countries with developing mining laws, and changes in such laws could materially impact our rights or interests to our properties. We are also subject to expropriation risk in a number of countries in which we operate, including the risk of expropriation or extinguishment of property rights based on a perceived lack of development or advancement. Expropriation, extinguishment of rights and other similar governmental actions would likely have a material adverse effect on our operations and profitability.

In many jurisdictions in which we operate, legal rights applicable to mining concessions are different and separate from legal rights applicable to surface lands. Accordingly, title holders of mining concessions in many jurisdictions must agree with surface landowners on compensation in respect of mining activities conducted on such land. We do not hold title to all of the surface lands at some of our operations and rely on contracts or other similar rights to conduct surface activities.

**Environmental Legislation, Regulations, and Hazards**

We are subject to environmental laws and regulation in the various jurisdictions in which we operate that impose requirements or restrictions on our activities, such as mine development, water management, use of hazardous substances, reclamation, and waste transportation, storage and disposal. Compliance with environmental laws and regulations may require significant costs and may cause material changes or delays in our operations. There is no assurance that we will be in full compliance with environmental legislation at all times. Failure to comply with applicable environmental legislation could lead to adverse consequences, including expropriation, suspension or forced cessation of operations, revocation of or restrictions on permits, fines and other penalties, civil or regulatory proceedings, and, in certain circumstances, criminal proceedings. Furthermore, any such failures could increase costs and extend timelines, requiring additional capital expenditures and remedial actions. These negative consequences could significantly impact our financial condition, operations, and cash flow.

**Risk Factors (continued)**

Future environmental legislation could also require stricter standards and mandate increased enforcement, fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees.

Environmental hazards may exist on our properties which are currently unknown to us. We may be liable for losses associated with such hazards or may be forced to undertake extensive remedial cleanup action or to pay for governmental remedial cleanup actions, even in cases where such hazards have been caused by previous or existing owners or operators of the property, or by the past or present owners of adjacent properties, or by natural conditions. The costs of such cleanup actions may have a material adverse effect on our operations and profitability.

We are subject to environmental reclamation requirements to minimize long-term effects of mining exploitation and exploration disturbance by requiring the operating company to control possible deleterious elements and to re-establish, to some degree, pre-disturbance landforms and vegetation. These environmental reclamation requirements vary depending on the location of the property and the managing governmental agency. We are actively providing for and carrying out reclamation activities on our properties as required.

We operate four tailings storage facilities, we are conducting a third party review of all our tailings facilities. These reviews once concluded might find that the storage facilities design, construction, operation, maintenance, and monitoring activities at the tailings and water storage facilities might require further investments to meet the Canadian Dam Safety Guidelines, TSM Tailings Protocol, and known best practices. The development and update of guidelines and standards, such the Canadian Dam Association Technical Bulletin on Tailings Dam Breach Analyses and the Global Industry Standard for Tailings Management, may change requirements, costs, and ultimate capacity of our tailings facilities. Design of all of our tailings and water storage facilities includes detailed consideration of stability under static and dynamic (pseudostatic) seismic conditions to ensure exceedance of relevant safety factors. While we believe that appropriate steps have been taken to prevent safety incidents, there are inherent risks involved with tailings facilities, including among other things, seismic activity, and the ability of field investigations completed prior to construction to detect weak foundation materials. There can be no assurance that a dam or other tailings facility safety incident will not occur, and such an incident could have a material adverse effect on our operations and profitability of the Company.

In addition to increasing regulatory requirements and operational risks, claims from local communities and NGOs with respect to real or alleged environmental incidents are becoming more common and may impact operations. In the case of legitimate claims, such actions could result in injunctions, suspensions, or other work stoppages, including revocation of permits, or significant fines or awards of damages. In other cases, we may be subject to frivolous or exaggerated claims made in an effort to obstruct or prevent mining operations or to affect our reputation.

**Community Action**

The success of our business is, in many ways, dependent on maintaining positive and respectful relationships with communities in the areas where we work. There is an increasing level of public concern relating to the perceived effects of mining activities, particularly on communities and peoples impacted by such activities. Communities and certain NGO's that oppose resource development have become more vocal and active with respect to the impact of mining activities. Adverse publicity related to extractive industries or specifically to the Company's operations, could have an adverse effect on our reputation, impact our relationships with the communities in which we operate, and ultimately have a material adverse effect on our business, financial condition and results of operations. Some communities and NGOs have taken actions, such as installing road blockades, applying for injunctions for work stoppage, filing lawsuits for damages or to challenge our ownership or use of property, and intervening and participating in lawsuits seeking to cancel or revoke our rights, permits and licenses that are necessary for our operations to continue, which could materially impact our business. These actions relate not only to current activities but are often in respect of past activities by prior owners of mining properties. NGOs may also lobby governments for changes to laws, regulations and policies pertaining to mining, which, if made, could have a material adverse effect on our business, financial condition and results of operations. The manner with which we respond to

**Risk Factors (continued)**

civil disturbances and other activities can give rise to additional risks where those responses are perceived to be inconsistent with international standards, including those with respect to human rights.

Artisanal, or informal, mining is associated with a number of negative impacts, including environmental degradation, forced labour, child labour, human trafficking and funding of conflict. Additionally, effective local government administration is often lacking in the locations where these miners operate informally or illegally. These activities are largely unregulated and work conditions are often unsafe and present health risks to the artisanal miners and local communities, which while unrelated to our operations, may have a material impact on them. Informal miners are active on land adjacent to our Porco operation which create an additional component to risk.

The Company is continuing with the implementation of ESG, standards and internal social contribution designed to enhance our community engagement processes, drive world-class environmental practices and reinforce our commitment to the safety and health of our employees and surrounding communities. As part of these activities, we have implemented response mechanisms which help us manage our social risks by better understanding and responding to community questions or concerns around the perceived or actual impacts of our activities. While we are committed to operating in a responsible manner, there is no assurance that our efforts will be successful at mitigating adverse impacts to our operations, and we may suffer material consequences to our business, including among other things, delays and closures, increased costs, and significant reputational damage.

In Canada, recent jurisprudence has permitted foreign claimants to bring legal actions in relation to alleged human rights violations and tort claims which may have occurred in their home country. This includes the adoption of international customary law principles as actionable torts in Canada. In addition, international bodies, such as the Inter-American Commission and the Inter-American Court of Human Rights, may adopt precautionary measures or make orders for member states in respect of human rights violations that could materially impact our operations.

**Developments Regarding Indigenous Peoples**

Some of our operations are near areas presently or previously inhabited or used by Indigenous peoples or have communities nearby. There are many national and international laws, regulations, conventions, codes and other instruments dealing with the rights of Indigenous peoples that impose obligations on governments and entities. Many of these are complex and interwoven in application, and are integrated and applied differently by governments, communities, Indigenous peoples, and other interest groups. These may include a mandate that government consult with Indigenous peoples in the areas around our projects and mines regarding actions affecting local stakeholders, prior to granting us mining rights, permits or approvals. Applicable conventions, such as the ILO Convention 169 which has been ratified by Bolivia and Mexico, is an example of such an international convention.

The United Nations Declaration on the Rights of Indigenous Peoples ("UNDRIP") was negotiated over a 24- year period with Indigenous peoples, member states and UN experts and was adopted by the UN General Assembly in September 2007. Canada officially endorsed UNDRIP in 2016 and in June 2021, the *United Nations Declaration on the Rights of Indigenous Peoples Act* (the "UNDRIP Act") was enacted into law in Canada to align and harmonize Canadian laws with UNDRIP. The substantive impact of UNDRIP on each member states' obligations to Indigenous peoples, including in Canada, remains uncertain, particularly with respect to the principle of free, prior and informed consent. At minimum, UNDRIP and the UNDRIP Act are likely to result in more robust consultation processes with potentially affected Indigenous peoples where projects trigger their application. Such requirements under UNDRIP and the associated application under Canadian law could impact our operations and our ability to develop new operations.

**Risk Factors (continued)**

New or amended laws, regulations and conventions respecting the rights of Indigenous peoples, including with respect to the acquisition and use of lands, may alter decades old arrangements or agreements made by prior owners of our mines and properties, or even those made by us in more recent years. There can be no guarantee that we have entered into all agreements with Indigenous peoples in accordance with the laws and international standards and norms governing such relationships or that future laws and actions will not have a material adverse effect on our rights or ability to explore or mine, or on our financial position, cash flow, and results of operations. Furthermore, it is not uncommon for Indigenous peoples to challenge agreements or arrangements previously entered into for various reasons. Public opposition, including opposition by NGOs, to mining activities has also increased in recent years, in part due to the perceived effects of those activities on local communities and on Indigenous peoples. There has been an increase in resort to strategic litigation supported by NGOs and other interest groups in reference to laws, regulations and conventions respecting the rights of Indigenous peoples, which if targeted at our operations, could have a material impact on the future operations of our mines.

If we cannot maintain an agreement or positive relationship with Indigenous peoples in respect of our operations, there may be significant disruptions in our operations and activities, we may be subject to legal or administrative proceedings, and we may be precluded from operating, or from continuing to operate, in such areas. There could also be significant harm to our reputation. The risks associated with operating or conducting activities in or near areas presently or previously inhabited by Indigenous peoples could further impact our ability to acquire or advance development projects and complete, or realize benefits from, future acquisitions.

**Natural Disasters, Terrorist Acts, Health Crises including Pandemics, Other Disruptions or Dislocations, whether those effects are Local, Nationwide or Global**

Upon the occurrence of a natural disaster, pandemic or upon an incident of war (for example, the current and ongoing conflict between Russia and Ukraine), riot or civil unrest, the impacted country, and the overall global economy, may not efficiently and quickly recover from such an event, which could have a materially adverse effect on the Company. Terrorist attacks, public health crises including epidemics, pandemics or outbreaks of new infectious diseases or viruses, and related events can result in volatility and disruption to global supply chains, operations, mobility of people, patterns of consumption and service and the financial markets, which could affect interest rates, credit ratings, credit risk, inflation, business, financial conditions, results of operations and other factors relevant to the Company.

**Exploration and Development Risks**

The long-term operation of our business and its profitability is dependent, in part, on the cost and success of our exploration and development programs. Mineral exploration and development is highly speculative and involves significant risks. Few properties that are explored are ultimately developed into producing mines. There is no assurance that our mineral exploration and development programs will result in discoveries of economic quantities of mineralization that are necessary for a property to be brought into commercial production. The commercial viability of a mineral deposit, once discovered, is also dependent upon a number of factors, including, among other things, (i) the particular attributes of the deposit, such as size, grade, and metallurgy; (ii) interpretation of geological data; (iii) feasibility studies; (iv) proximity to infrastructure and availability of labour, power, and water; (v) metal prices; (vi) foreign currency exchange rates; and (vii) government regulations, including regulations relating to development, taxation, royalties, import and export, and environmental protection.

The actual operating results of our projects may differ materially from those we had anticipated due to these and other factors, many of which are beyond our control. There can be no assurance that our acquisition, exploration, and development programs will yield new mineral reserves to replace or expand current mineral reserves, or that they will result in additional production. Unsuccessful exploration or development programs could have a material adverse effect on our operations and profitability.

**Risk Factors (continued)**

**Imprecision in Mineral Reserve and Mineral Resource Estimates**

Our mineral resources are estimates. No assurances can be given that the estimated levels of mineral resources are accurate, or that the estimates will result in material being produced or processed profitably. These estimates are expressions of judgment based on knowledge and experience and are based on assumptions and interpretation of available geological, geochemical and operational data and information. Valid estimates made at a given time may significantly change when new information becomes available. It may take many years from the initial phase of drilling before production occurs, and during that time, the economic feasibility of our projects may change and may ultimately prove unreliable.

Fluctuations in the market price of silver, zinc, lead and copper and other metals, as well as increased capital or production costs or reduced recovery rates, may render our mineral reserves uneconomic to develop for a particular project or result in a reduction of mineral reserves. No assurances can be given that any mineral resource estimate will ultimately be reclassified as proven or probable mineral reserves or that mineralization can be mined or processed profitably. Inferred mineral resources have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. Mineral resource estimates may also be recalculated based on actual production experience. The evaluation of mineral resources is influenced by economic and technological factors, which may change over time. If our mineral resource figures are reduced in the future, this could have an adverse impact on the Company's future cash flows, earnings, results of operations, and financial condition.

**Production and Cost Estimates** 

We prepare estimates of future production and future production costs for our operations. No assurance can be given that production and cost estimates will be achieved. These production and cost estimates are based on many factors and assumptions, including: the accuracy of mineral resource estimates; ground conditions and physical characteristics of ores, such as hardness and the presence or absence of particular metallurgical characteristics; equipment and mechanical availability; labour availability and productivity; access to the mine; facilities and infrastructure; sufficient materials and supplies on hand; and the accuracy of estimated rates and costs of mining and processing, including the cost of human and physical resources required to carry out our activities. Failure to achieve production or cost estimates, or increases in costs, could have an adverse impact on our future cash flows, earnings, results of operations, and financial condition.

Actual production and costs may vary from estimates for a variety of reasons, including actual ore mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics; short-term operating factors relating to the mineral resources**,** such as the need for sequential development of orebodies and the processing of new or different ore grades; and risks and hazards associated with mining. In addition, there can be no assurance that silver recoveries or other metal recoveries in small scale laboratory tests will be duplicated in larger scale tests under on-site conditions or during production, or that the existing known and experienced recoveries will continue. Costs of production may also be affected by a variety of factors, including ore grade metallurgy, labour costs and productivity, costs of supplies and services (such as, for example, fuel and power), general inflationary pressures, and currency exchange rates. Failure to achieve production estimates could have an adverse impact on our future cash flows, earnings, results of operations, and financial condition.

**Infrastructure**

Mining, processing, development, and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power, and water supply are important determinants for capital and operating costs, and sufficient and functional processing equipment and facilities are critical to our operations. The lack of availability or the delay in the availability of any one or more of these items could prevent or delay the development of our projects, result in the failure to achieve the anticipated production volume, and increase the construction costs and ongoing operating costs associated with our projects and operations. Similarly, continued improvements or replacement of existing infrastructure may require high capital investments and involve significant delays. In addition, unusual weather phenomena, sabotage, government, or other interference in the maintenance or provision of such infrastructure could adversely affect our operations and profitability.

**Risk Factors (continued)**

**Replacement of Resources**

The Bolivar, Porco, Caballo Blanco complex, San Lucas Trading Operation and Zimapan mines accounted for all of our production in 2025. Current life-of-mine plans provide for a defined production life for mining at each of our mines. There is no assurance that any of our green field or near mine exploration projects will be successful, and substantial expenditures are required to establish mineral reserves. If our mineral reserves are not replaced either by the development or discovery of additional mineral reserves and/or extension of the life-of-mine at our current operating mines or through the acquisition or development of additional producing mines, this could have an adverse impact on our future cash flows, earnings, results of operations, and financial condition, and this may be compounded by requirements to expend funds for reclamation and decommissioning.

**Trading Activities and Credit Risk** 

The zinc, lead, and copper concentrates produced by us are sold through long-term supply arrangements to metal traders or integrated mining and smelting companies. The terms of the concentrate contracts may require us to deliver concentrate that has a value greater than the payment received at the time of delivery, thereby introducing us to credit risk of the buyers of our concentrates. Should any of these counterparties not honour supply arrangements, or should any of them become insolvent, we may incur losses for products already shipped and be forced to sell our concentrates in the spot market or we may not have a market for our concentrates and therefore our future operating results may be materially adversely impacted.

At December 31, 2025, we had receivable balances associated with buyers of its concentrates of $20,371 (2024 - $17,402).

Supplier advances for products and services yet to be provided are a common practice in some jurisdictions in which we operate. These advances represent a credit risk to us to the extent that suppliers do not deliver products or perform services as expected. As at December 31, 2025, the Company had made $14,055 of supplier advances (2024 - $5,656), which are reflected in "Prepaid expenses and deposits" on the Company's balance sheet.

Management constantly monitors and assesses the credit risk resulting from our concentrate sales and refining arrangements. Furthermore, management carefully considers credit risk when allocating prospective sales and refining business to counterparties. In making allocation decisions, management attempts to avoid unacceptable concentration of credit risk to any single counterparty.

From time to time, we may invest in equity securities of other companies. Just as investing in the Company is inherent with risks such as those set out in this MD&A, by investing in other companies we will be exposed to the risks associated with owning equity securities and those risks inherent in the investee companies.

**Taxation Risks**

In addition to the risks relating to taxation discussed under the heading "Risks Related to Our Business – Governmental Regulation", we are also exposed to other tax related risks. In assessing the probability of realizing income tax assets recognized, we make estimates related to expectations of future taxable income, applicable tax planning opportunities, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. In making its assessments, we give additional weight to positive and negative evidence that can be objectively verified. Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. We consider relevant tax planning opportunities that are within our control, are feasible, and within management's ability to implement. Examination by applicable tax authorities is supported based on individual facts and circumstances of the relevant tax position examined in light of all available evidence.

Where applicable tax laws and regulations are either unclear or subject to ongoing varying interpretations, it is reasonably possible that changes in these estimates can occur that materially affect the amounts of income tax assets recognized. Future changes in tax laws could also limit us from realizing the tax benefits from the deferred tax assets. We reassess unrecognized income tax assets at each reporting period.

**Risk Factors (continued)**

**Exchange Rate Risk**

We report our financial statements in USD; however, we operate in jurisdictions that utilize other currencies. As a consequence, the financial results of our operations, as reported in USD, are subject to changes in the value of the USD relative to local currencies. Since our sales are denominated in USD and a portion of our operating costs and capital spending are in local currencies, we are negatively impacted by strengthening local currencies relative to the USD and positively impacted by the inverse.

Our balance sheet contains various monetary assets and liabilities, some of which are denominated in foreign currencies. Accounting convention dictates that these balances are translated at the end of each period, with resulting adjustments being reflected as foreign exchange gains or losses on our income statement.

**Liquidity Risk**

Liquidity risk is the risk that we will not be able to meet our financial obligations as they come due. The volatility of the metals markets can impact our ability to forecast cash flow from operations. We must maintain sufficient liquidity to meet our short-term business requirements, taking into account our anticipated cash flows from operations, our holdings of cash, and committed loan facilities.

We manage our liquidity risk by continuously monitoring forecasted and actual cash flows. We have in place a rigorous reporting, planning and budgeting process to help determine the funds required to support our normal operating requirements on an ongoing basis and our expansion plans. We continually evaluate and review capital and operating expenditures in order to identify, decrease, and limit all non-essential expenditures.

We are required to use a portion of our cash flow to service principal and interest on debt, which will limit the cash flow available for other business opportunities. We also maintain and enter into intercompany credit arrangements with our subsidiaries in the normal course. Our ability to make scheduled principal payments, pay interest on or refinance our indebtedness depends on our future performance, our cash flows, and applicable interest rates, which directly impacts our costs of financing, and which are subject to economic, financial, competitive and other factors beyond our control. Unexpected delays in production, the suspension of our mining licenses, or other operational problems could impact our ability to service the debt and make necessary capital expenditures when the debt becomes due. If we are unable to generate such cash flow to timely repay any debt outstanding, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets, applicable interest rates, and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations. The Company's board of directors will determine whether to pay cash dividends on its issued and outstanding shares. The declaration of dividends will depend upon the Company's future earnings, its capital requirements, its financial condition and other relevant factors. The Company's board does not intend to declare any dividends on its shares for the foreseeable future. It is anticipated that the Company will retain any earnings to finance the growth of its business and for general corporate purposes.

**Limited Supplies and Supply Chain Disruptions**

Our operations depend on an uninterrupted supply of reagents, production inputs, and other supplies and resources such as skilled personnel. Supply may be interrupted due to a shortage or the scarce nature of inputs, especially with regard to chemical reagents. Supply might also be interrupted due to transportation and logistics associated with the remote location of some of our operations, and government restrictions or regulations which delay importation of necessary items. Any interruptions to the procurement and supply of reagents, production inputs and other supplies, or the availability of skilled personnel, as well as increasing rates of inflation, could have an adverse impact on our future cash flows, earnings, results of operations, and financial condition.

**Risk Factors (continued)**

**Competitive Conditions**

The mining industry is very competitive, particularly with respect to properties that produce, or are capable of producing, silver, zinc, lead, copper and other metals. Mines have limited lives and, as a result, the Company continually seeks to replace and expand mineral reserves through the acquisition of new properties. In addition, there is a limited supply of desirable mineral lands available in areas where we would consider conducting exploration and/or production activities. Because we face strong competition for new properties from other mining companies, some of which have greater financial resources than we do, we may be unable to acquire attractive new mining properties on terms that we consider acceptable.

Competition for resources is intense, particularly affecting the availability of manpower, drill rigs, mining equipment, and production equipment. Competition in the mining business for limited sources of capital could adversely impact our ability to acquire and develop suitable silver mines, silver developmental projects, silver producing companies, or properties having significant exploration potential. As a result, there can be no assurance that our acquisition and exploration programs will yield new mineral reserves to replace or expand current mineral reserves, or that we will be able to maintain production levels in the future.

Our competitive position is largely determined by our costs compared to other producers throughout the world and our ability to maintain our financial integrity through the lows of the metal price cycles. Costs are governed to a large extent by the location, grade, and nature of mineral reserves as well as by operating and management skills. In contrast with diversified mining companies, we focus on silver and zinc production, development, and exploration, and are therefore subject to unique competitive advantages and disadvantages related to the price of silver and zinc and to a lesser extent other base metal by-products. If silver and zinc prices substantially increase, we will be in a relatively stronger competitive position than diversified mining companies that produce, develop, and explore for other minerals in addition to silver and zinc. Conversely, if silver and zinc prices substantially decrease, we may be at a competitive disadvantage to diversified mining companies.

**Employee Recruitment, Retention and Human Error**

Recruiting and retaining qualified personnel is critical to our success. We are dependent on the services of key executives including the Company's Executive Chairman the President of our Bolivian operations and other highly skilled and experienced executives and personnel focused on managing our interests. The number of persons skilled in acquisition, exploration, and development of mining properties is limited and competition for such persons is intense. As our business activity grows, we will require additional key financial, administrative, and mining personnel as well as additional operations staff. There can be no assurance that we will be successful in attracting, training, and retaining qualified personnel as competition for persons with these skill sets increases. If we are not successful in attracting, training, and retaining qualified personnel, the efficiency of our operations could be impaired, which could have an adverse impact on the Company's future cash flows, earnings, results of operations, and financial condition.

Even when efforts to attract and retain qualified personnel and consultants to manage our interests are successful, people are fallible and human error and mistakes could result in significant uninsured losses to us. These could include, but are not limited to, loss or forfeiture of mineral claims or other assets for non-payment of fees or taxes, erroneous or incomplete filings or non-fulfillment of other obligations, significant tax liabilities in connection with any tax planning effort we might undertake or mistakes in interpretation and implementation of tax laws and practices, and legal claims for errors or mistakes by our personnel.

**Risk Factors (continued)**

**Employee Relations**

Our employees and contractors are free to pursue collective bargaining and unions have been established at many of our operations. Although we have reached agreements with our various unions and place significant emphasis on maintaining positive relationships with the unions and employees, we have experienced labour strikes and work stoppages in the past. Should they occur, some labour strikes and work stoppages have the potential to materially affect our operations and thereby adversely impact our future cash flows, earnings, production, and financial conditions.

**Economic Dependence**

We have 2 customers that account for 100% of the concentrate and silver and zinc sales revenue. The loss of certain of these customers or curtailment of purchases by such customers could have a material adverse effect on our results of operations, financial condition, and cash flows.

**General Economic Conditions** 

General economic conditions may adversely affect our growth, profitability and ability to obtain financing. Events in global financial markets in the past several years have had a profound impact on the global economy, particularly with the injection of monetary support and the massive increase in government debt in response to the COVID-19 pandemic since early 2020. Many industries, including the silver and zinc mining industry, have been and continue to be impacted by these market conditions. Some of the key impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, inflation and significant interest rate increases, currency devaluations, high volatility in global equity, commodity, foreign exchange and precious metal markets and a lack of market confidence and liquidity. A continued or worsened slowdown in the financial markets or other economic conditions, including but not limited to, consumer spending, employment rates, business conditions, inflation, fuel and energy costs, consumer debt levels, lack of available credit, the state of the financial markets, interest rates and tax rates, may adversely affect our growth, profitability and ability to obtain financing. A number of issues related to economic conditions could have a material adverse effect on our business, financial condition and results of operations, including:

● inflation, volatility and other pressures in credit markets could impact the cost and availability of financing and our overall liquidity;

● the volatility of silver, zinc, lead, copper and other metal prices would impact our revenues, profits, losses and cash flow;

● recessionary pressures could adversely impact demand for our production;

● volatile energy, commodity and consumables prices and currency exchange rates could impact our production costs;

● Russia's invasion of the Ukraine, the threat of expanded conflict in Europe and the impact on geo-political stability and the global economy; and

● the devaluation and volatility of global stock markets could impact the valuation of our equity and other securities.

**Compliance**

We are subject to complex laws and regulatory regimes that differ in the various jurisdictions in which we operate and are sometimes extra-jurisdictional in application. Ensuring that such laws and regulatory requirements are understood and followed by our personnel is difficult and we may inadvertently fail to comply with such laws and requirements or they may be contravened by our personnel. We have established programs, policies, controls, training, and monitoring to reduce and mitigate risks in certain areas, including anti-corruption compliance. In this respect, we have adopted a Code of Business Conduct and Ethics, developed a training program, implemented internal controls, to identify potential risks, and taken other steps to reduce the risk of non-compliance with applicable anti-corruption laws, including in the United States and Canada. However, there is no guarantee such programs, policies, controls, training or monitoring will prevent violations of the law, particularly by individual employees or agents. Violations of such laws, particularly those relating to corruption, could lead to the imposition of substantial fines, penalties or other civil or criminal prosecution or sanctions, and could severely damage our reputation. Such fines, penalties, and sanctions, and any damage to our reputation, could have a material adverse effect on our business.

**Risk Factors (continued)**

**Climate Change**

There is significant evidence of the effects of climate change on our planet and an intensifying focus on addressing these issues. We recognize that climate change is a global challenge that may have both favorable and adverse effects on our business in a range of possible ways. Mining and processing operations are energy intensive and result in a carbon footprint either directly or through the purchase of fossil-fuel based electricity. As such, we are impacted by current and emerging policy and regulation relating to greenhouse gas emission levels, energy efficiency, and reporting of climate-change related risks. While some of the costs associated with reducing emissions may be offset by increased energy efficiency, technological innovation, or the increased demand for our metals as part of technological innovations, the current regulatory trend may result in additional transition costs at some of our operations. Governments are introducing climate-change legislation and treaties at the international, national, and local levels, and regulations relating to emission levels and energy efficiency are evolving and becoming more rigorous. Current laws and regulatory requirements are not consistent across the jurisdictions in which we operate, and regulatory uncertainty is likely to result in additional complexity and cost in our compliance efforts. Public perception of mining is, in some respects, negative and there is increasing pressure to curtail mining in many jurisdictions as a result, in part, of perceived adverse effects of mining on the environment and on local communities. Concerns around climate change may also affect the market price of our shares as institutional investors and others may divest interests in industries that are thought to have more environmental impacts. While we are committed to operating responsibly and reducing the negative effects of our operations on the environment, our ability to reduce emissions and energy and water usage by increasing efficiency and adopting new innovation is constrained by technological advancement, operational factors, and economics. Adoption of new technologies, the use of renewable energy, and infrastructure and operational changes necessary to reduce water usage may also increase our costs significantly. Concerns over climate-change, and our ability to respond to regulatory requirements and societal pressures, may have significant impacts on our operations and our reputation and may even result in reduced demand for our products.

The physical risks of climate-change could also adversely impact our operations. These risks include, among other things, extreme weather events, resource shortages, changes in rainfall and storm patterns and intensities, water shortages, changing sea levels, and extreme temperatures. Climate-related events such as mudslides, floods, droughts, and fires can have significant impacts, directly and indirectly, on our operations and could result in damage to our facilities, disruptions in accessing our sites with labour and essential materials or in shipping products from our mines, risks to the safety and security of our personnel and to communities, shortages of required supplies such as fuel and chemicals, inability to source enough water to supply our operations, and the temporary or permanent cessation of one or more of our operations. There is no assurance that we will be able to anticipate, respond to, or manage the risks associated with physical climate-change events and impacts, and this may result in material adverse consequences to our business and to our financial results.

**Risk Factors (continued)**

**Information and Cyber Security**

The secure processing, maintenance, and transmission of information and data is critical to our business. Furthermore, we and our third-party service providers collect and store sensitive data in the ordinary course of our business, including personal information of our employees, as well as proprietary and confidential business information relating to ourselves and in some cases, our customers, suppliers, investors and other stakeholders. With the increasing dependence and interdependence on electronic data communication and storage, including the use of cloud-based services and personal devices, we are exposed to evolving technological risks relating to this information and data. These risks include targeted attacks on our systems or on systems of third parties that we rely on, failure or non-availability of a key information technology systems, or a breach of security measures designed to protect our systems. While we employ security measures in respect of our information and data, including implementing systems to monitor and detect potential threats, the performance of periodic audits, and penetration testing, we cannot be certain that we will be successful in securing this information and data and there may be instances where we are exposed to malware, cyber-attacks or other unauthorized access or use of our information and data. Any data breach or other improper or unauthorized access or use of our information could have a material adverse effect on our business and could severely damage our reputation, compromise our network or systems and result in a loss or escape of sensitive information, a misappropriation of assets or incidents of fraud, disrupt our normal operations, and cause us to incur additional time and expense to remediate and improve our information systems. In addition, we could also be subject to legal and regulatory liability in connection with any such cyber-attack or breach, including potential breaches of laws relating to the protection of personal information.

**Stakeholder Confidence**

Our business and operations require us to develop and maintain strong and trusting relationships with key stakeholders, including local communities, Indigenous peoples, governments, unions, and other groups and institutions. Poor management of these relationships, inadequate attention to matters of importance to these stakeholders, and operating in a manner that is perceived as unethical or damaging to the environment or to people could result in an erosion of trust and confidence in us and have negative impacts on our business and our financial and operating results. It can also affect our reputation more broadly, including with shareholders, government bodies, NGOs and other interest groups, the media, and the general public. A loss of trust and confidence and negative public opinion could impact our ability to obtain permits, licenses and other approvals, impede our efforts to find growth opportunities, materially increase our costs and expenses, result in legal claims and challenges, decrease the price of our shares and create negative market sentiment, all of which could have material impacts on our business and profitability. Since 2020, the importance of ESG performance requirements, standards and reporting has increased significantly across all stakeholder groups. While the Company has in place numerous programs and commitments with respect to ESG, there is no assurance that the Company will be able to adequately address all ESG pressures and potential requirements to maintain stakeholder confidence.

**Acquisitions and Integration** 

An element of our business strategy is to make selected acquisitions. We expect to continue to evaluate acquisition opportunities on a regular basis and intend to pursue those opportunities that we believe are in our long-term best interests. The success of our acquisitions will depend upon a number of factors, including the adequacy, completeness, analysis and interpretation of information obtained during due diligence, our ability to effectively manage the integration and operations of entities once we complete an acquisition, and our ability, in some cases, to make improvements or advancements that we anticipated.

**Risk Factors (continued)**

In addition to acquisitions, we might enter into joint venture, option and similar arrangements which, among other things, also require an investment in time and capital, and are subject to risks associated with due diligence matters. We also occasionally make investments in other mining companies, such as our investments in Zacatecas Silver Corp. Such arrangements may depend, in part, on other parties and may be speculative in nature or by means of payment to certain sell/purchase of certain non-strategic assets. There is no guarantee that any of these arrangements will be successful or that we will recover any capital or other investments made in relation thereto.

**Accounting Policies and Internal Controls**

As a publicly listed company, the Company is subject to numerous legal and accounting requirements that do not apply to private companies. The cost of compliance with many of these requirements is material. Failure to comply with these requirements can have numerous adverse consequences including, but not limited to, the Company's inability to file required periodic reports on a timely basis, loss of market confidence, delisting of its securities and/or governmental or private actions against the Company. There can be no assurance that the Company will be able to comply with all of these requirements or that the cost of such compliance will not prove to be a substantial competitive disadvantage vis-à-vis privately held and larger public competitors.

The Company prepares its financial reports in accordance with International Financial Reporting Standards ("IFRS® Accounting Standards"), as issued by the International Accounting Standards Board ("IASB"). In the preparation of its financial reports, management may need to rely upon assumptions, make estimates or use their best judgment in determining the financial condition of the Company. Significant accounting policies are described in more detail in the Company's audited financial statements.

In order to have a reasonable level of assurance that financial transactions are properly authorized, assets are safeguarded against unauthorized or improper use, and transactions are properly recorded and reported, the Company has implemented and continues to analyze its internal control systems for financial reporting.

The restatements of prior period financial statements reflect the company's efforts to ensure the accuracy of its financial reporting. These restatements resulted from identified deficiencies in internal controls over financial reporting. In response, the company has undertaken measures to strengthen its internal control environment, including the hiring of additional staff at its corporate location, improvements to the process of the preparation of the consolidated financial statements and haven taken actions to improve the coordination between the Corporate accounting function and the site accounting teams and continues to monitor and improve its controls to prevent similar issues in the future. The company remains committed to maintaining effective internal controls and transparency in its financial disclosures. Although the Company believes its financial reporting and financial statements are prepared with reasonable safeguards to ensure reliability, the Company cannot provide absolute assurance in this regard.

**Litigation**

The Company is party to, and may become party to, litigation from time to time in the ordinary course of business which could adversely affect its business. Should any litigation in which the Company is, or becomes involved be determined against the Company, such a decision could adversely affect the Company's ability to continue operating, could negatively impact the value of the Common Shares, and could use significant resources. Even if the Company is involved in litigation and wins, litigation can redirect significant Company resources, including the time and attention of management and available working capital. Litigation may also create a negative perception of the Company's brand.

**Additional Information**

Additional information relating to the Company is on SEDAR+ at <u>www.sedarplus.ca</u>.

## Exhibit 99.3

?xml version='1.0' encoding='ASCII'?

**Exhibit 99.3**

![](ex99-3_001.jpg)

**Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars)

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| [Independent Auditor's Report](#sk_001) | 3 |
| [Consolidated Statements of Financial Position](#sk_002) | 10 |
| [Consolidated Statements of Comprehensive Income](#sk_003) | 11 |
| [Consolidated Statements of Cash Flows](#sk_004) | 12 |
| [Consolidated Statements of Changes in Shareholders' Equity (Deficiency)](#sk_005) | 13 |
| [Notes to the Consolidated Financial Statements](#sk_006) | 14 |

---

**INDEPENDENT AUDITOR'S REPORT**

To the Shareholders of

Santacruz Silver Mining Ltd.

***Opinion***

We have audited the accompanying consolidated financial statements of Santacruz Silver Mining Ltd. (the "Company"), which comprise the consolidated statement of financial position as at December 31, 2025, and the consolidated statements of comprehensive income, changes in shareholders' equity (deficiency), and cash flows for the year then ended and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2025, and its financial performance and its cash flows for the year then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards).

***Basis for Opinion***

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our opinion.

***Key Audit Matters***

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current year. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to be communicated in our auditor's report.

 

*Assessment of Impairment and Reversal of Impairment of Mineral properties, plant and equipment assets ("MPPE Assets")*

As described in Note 7 to the consolidated financial statements, the carrying amount of the Company's MPPE Assets was $160,558,000 as of December 31, 2025. As more fully described in Notes 3 and 4 to the consolidated financial statements, management assesses MPPE Assets for indicators of impairment or reversal of impairment at each reporting period. The Company determined there was a reversal of impairment required on the Bolivar mine, included in the Company's MPPE Assets, as the indication of a previously recognized impairment loss for these mines no longer existed and the assessed impairment amount has decreased.

The test for impairment on the Company's MPPE Assets, and reversal of impairment of the Bolivar mine, necessitates the determination of the recoverable amount of the combined components of the cash generating unit ("CGU") to which the MPPE Assets belong. The recoverable amount is the higher of value in use and fair value less costs to sell and requires management judgment and estimation on key external and internal sources of information, such as: changes in the market, economic and legal environment, discounted future after-tax cashflows, costs to sell the MPPE Assets, changes in mineral reserves and resources, and the appropriate discount rate for net present value calculations. For the Bolivar mine, the recoverable amount as at December 31, 2025 exceeded the carrying value, and as a result, a reversal of impairment of $4,088,000 was recorded for the year then ended. For the Company's other MPPE Assets, there was no impairment identified.

The principal considerations for our determination that the assessment of the impairment, and reversal of impairment, of the MPPE Assets is a key audit matter are that potential variances between management's assumptions and estimations, and the market conditions, could have a material effect in the future on the Company's financial position and results of operations. This in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures to evaluate audit evidence relating to the judgments made by management in their assessment of impairment on MPPE Assets, and the reversal of impairment for the Bolivar mine. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures include, among others:

● Evaluating the appropriateness of the discounted cash flow model ("DCF") on the CGUs related to the MPPE Assets, including engaging our internal valuation expert to assess appropriateness of the model.

● Testing the completeness and accuracy of underlying data and significant assumptions of the DCF, including assessment of discount rate, evaluating the consistency with external market and industry data for future commodity prices and foreign exchange rates, recent actual mine production results, operating costs and capital expenditures, and volume throughput of resource and reserve estimates.

● Evaluating the resource and reserves estimation, including obtaining an understanding of the qualification of management's specialists, and engaging an expert to assess whether the Company's estimate was prepared in accordance with appropriate standards.

● Assessing management's determination of no impairment on its MPPE Assets, including the review of key management judgments in addressing potential indications of impairment.

● Assessing management's determination of the CGU carrying amount, ensuring completeness of the net assets incorporated therein.

*Assessment of Joint Arrangement Accounting for the Company's Illapa joint association agreement with Corporación Minera de Bolivia ("COMIBOL")*

As described in Notes 3 and 4 to the consolidated financial statements, the Company has a 100% ownership of Illapa, however its operations are part of a net operating cash flow interest agreement in which the Company has a 45% interest and the remaining 55% interest is held by COMIBOL. As more fully described in Notes 3 and 4 to the consolidated financial statements, the Company will transfer its 45% ownership of all the fixed assets of the joint operation to COMIBOL at the end of the agreement. The consideration that is due to the Company is based on capital expenditures incurred which represents a residual value of the fixed assets. The Company has recognized CAPEX receivables and remeasures the residual value of Illapa's assets in accounting for this contract with COMIBOL.

Determining the value of the CAPEX receivable and residual values of Illapa's assets requires management judgment with respect to timing of payments from COMIBOL and estimate of the fair value of the underlying assets to be transferred to COMIBOL. Since the amount that will ultimately be received by the Company at the end of the agreement will vary depending on the actual capital expenditures made and the actual payable amount according to an appraisal process, each period management will assess its estimation of the amount receivable and residual value of the underlying assets.

The principal considerations for our determination that the assessment of the joint arrangement accounting is a key audit matter are the uncertainties associated with key inputs involved in the estimation models and the potential variances between management's assessments and interpretations of the joint arrangement contract. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate audit evidence relating to the judgments made by management in their assessment of the COMIBOL contract as well as the estimates made in determining the residual value of Illapa's assets and CAPEX receivable. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures include, among others:

● Reviewing and evaluating management's interpretation of the COMIBOL contract in determining ownership of the assets and liabilities subject to the contract.

● Testing the completeness and accuracy of key inputs underlying the calculations of the CAPEX receivable and residual value of fixed assets, including assessing the reasonableness of estimated timeline for repayment.

***Other Matter – Restated Comparative Information***

We draw attention to Notes 1 to the consolidated financial statements, which explains that certain comparative information for the year ended December 31, 2024 has been restated. Our opinion is not modified in respect of this matter.

The consolidated financial statements for the year ended December 31, 2024, excluding the adjustments that were applied to restate certain comparative information, were audited by another auditor who expressed an unmodified opinion on those consolidated financial statements on May 28, 2025.

As part of our audit of the consolidated financial statements for the year ended December 31, 2025, we also audited the adjustments applied to restate certain comparative information presented. In our opinion, such adjustments are appropriate and have been properly applied.

Other than with respect to the adjustments that were applied to restate certain comparative information, we were not engaged to audit, review, or apply any procedures to the financial statements for the year ended December 31, 2024. Accordingly, we do not express an opinion or any other form of assurance on those consolidated financial statements taken as a whole.

***Other Information***

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management's Discussion and Analysis, the Annual Information Form, as well as the Annual Report on Form 40-F.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management's Discussion and Analysis, the Annual Information Form, and the Annual Report on Form 40-F prior to the date of this auditor's report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

***Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements***

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

***Auditor's Responsibilities for the Audit of the Consolidated Financial Statements***

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

● Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

● Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

● Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

● Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Company as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Stephen Hawkshaw.

Vancouver, Canada Chartered Professional Accountants <br>March 31, 2026

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|:---|:---|
| ![](ex99-3_002.jpg) | Deloitte LLP<br> 410 W. Georgia Street<br> Vancouver BC<br> V6B 0S7 Canada<br>Tel: 604-669-4466<br> Fax: 604-685-0395<br> www.deloitte.ca |

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**Independent Auditor's Report**

To the Shareholders and the Board of Directors of

Santacruz Silver Mining Ltd.

Opinion

We have audited, excluding the adjustments that were applied to restate certain comparative information for the share consolidation disclosed in Notes 1, the consolidated financial statements of Santacruz Silver Mining Ltd. (the "Company"), which comprise the consolidated statement of financial position as at December 31, 2024, and the consolidated statements of income (loss) and comprehensive income (loss), changes in shareholders' equity (deficiency) and cash flows for the year ended December 31, 2024, and notes to the consolidated financial statements, including material accounting policy information (collectively referred to as the "financial statements").

In our opinion, the accompanying financial statements, excluding the adjustments that were applied to restate certain comparative information for the share consolidation disclosed in Note 1, present fairly, in all material respects, the financial position of the Company as at December 31, 2024, and its financial performance and its cash flows for the year ended December 31, 2024 in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IASB").

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards ("Canadian GAAS"). Our responsibilities under those standards are further described in the *Auditor's Responsibilities for the Audit of the Financial Statements* section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Information

Management is responsible for the other information. The other information comprises Management's Discussion and Analysis.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this auditor's report. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS Accounting Standards as issued by the IASB, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

● Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

● Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

● Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

● Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

● Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Company as a basis for forming an opinion on the financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor's report is David Macdonald.

/s/ Deloitte LLP

Chartered Professional Accountants

May 28, 2025

Vancouver, Canada

**SANTACRUZ SILVER MINING LTD.**

**Consolidated Statements of Financial Position**

**As at December 31, 2025 and December 31, 2024**

(Expressed in thousands of US dollars)

---

| | | | |
|:---|:---|:---|:---|
| | Note | **December 31, <br> 2025** | December 31,<br> 2024 |
|  |  | **$** | $|
| **ASSETS** |  |  |  |
| **Current** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 5 | **44267** | 35721 |
| &nbsp;&nbsp;&nbsp;Marketable securities | 20 | **16662** |  |
| &nbsp;&nbsp;&nbsp;Trade and other receivables | 6 | **88399** | 99854 |
| &nbsp;&nbsp;&nbsp;Inventories | 7 | **57517** | 32437 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and deposits |  | **14055** | 5656 |
|  |  | **220900** | 173668 |
| Marketable securities | 20 | **5800** |  |
| Trade and other receivables | 6 | **36249** | 30556 |
| Mineral properties, plant and equipment | 8 | **160558** | 144733 |
| Goodwill | 8 | **15466** | 15466 |
| Deferred income tax asset | 18 | **6798** | 9602 |
| **Total assets** |  | **445771** | 374025 |
| **LIABILITIES** |  |  |  |
| **Current** |  |  |  |
| &nbsp;&nbsp;&nbsp;Trade payables and accrued liabilities | 9 | **47402** | 38781 |
| &nbsp;&nbsp;&nbsp;Consideration payable | 10 | **-** | 10000 |
| &nbsp;&nbsp;&nbsp;Loans payable | 11 | **50642** | 16432 |
| &nbsp;&nbsp;&nbsp;Current income taxes payable | 18 | **49470** | 45450 |
| &nbsp;&nbsp;&nbsp;Other liabilities | 12 | **8876** | 16070 |
| &nbsp;&nbsp;&nbsp;Decommissioning and restoration provision | 13 | **822** | 639 |
|  |  | **157212** | 127372 |
| Trade payables and accrued liabilities | 9 | **7167** | 8608 |
| Consideration payable | 10 | **20243** | 34783 |
| Loans payable | 11 | **1344** | 3137 |
| Other liabilities | 12 | **20541** | 22508 |
| Decommissioning and restoration provision | 13 | **35194** | 25037 |
| Deferred income tax liability | 18 | **25012** | 21233 |
| **Total liabilities** |  | **266713** | 242678 |
| **SHAREHOLDERS' EQUITY** |  |  |  |
| Share capital | 14 | **146166** | 139080 |
| Equity reserves | 14 | **6677** | 8274 |
| Retained earnings (deficit) |  | **26215** | (16007) |
| **Total shareholders' equity** |  | **179058** | 131347 |
| **Total liabilities and shareholders' equity** |  | **445771** | 374025 |

---

BALANCE SHEET

**Subsequent event (note 11(b), 11(c), 11(d))** 

Approved and authorized for issue on behalf of the Board of Directors on March 27, 2026:

<u>*"Arturo Préstamo Elizondo"*</u> <u>*"Larry Okada"*</u> <br> Director Director

The accompanying notes are an integral part of the audited consolidated financial statements.

**SANTACRUZ SILVER MINING LTD.**

**Consolidated Statements of Comprehensive Income**

**For the Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars)

---

| | | | |
|:---|:---|:---|:---|
| | Note | **2025** | <br> 2024 |
|  |  | **$** | $|
| Revenues | 22 | **326382** | 282987 |
| Mine operating costs |  |  |  |
| &nbsp;&nbsp;&nbsp;Cost of sales | 15 | **(199493)** | (206055) |
| &nbsp;&nbsp;&nbsp;Depreciation, depletion and amortization | 8 | **(21577)** | (19706) |
| &nbsp;&nbsp;&nbsp;Reversal of impairment on mineral properties, plant and equipment | 8 | **4088** | - |
| **Gross profit** |  | **109400** | 57226 |
| General and administrative expenses | 16 | **(22305)** | (24307) |
| Share-based compensation expense | 14 | **(2042)** | (105) |
| **Operating income** |  | **85053** | 32814 |
| Gain on adjustment to consideration payable | 10 | **-** | 133255 |
| Finance costs | 17 | **(12368)** | (18232) |
| Foreign exchange gain |  | **2015** | 44199 |
| **Income before tax** |  | **74700** | 192036 |
| Income tax expense | 18 | **(32478)** | (27552) |
| **Net income for the year** |  | **42222** | 164484 |
| Other comprehensive income that may be reclassified subsequently to net income or loss: |  |  |  |
| Unrealized gain on marketable securities |  | **331** |  |
| Currency translation differences |  | **(605)** | (105) |
| **Comprehensive income for the year** |  | **41948** | 164379 |
| **Net income per share:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 23 | **$0.47** | $1.86 |
| &nbsp;&nbsp;&nbsp;Diluted | 23 | **$0.46** | $1.85 |
| **Weighted average number of common shares:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 23 | **89849385** | 88438988 |
| &nbsp;&nbsp;&nbsp;Diluted | 23 | **92197091** | 89063988 |

---

The accompanying notes are an integral part of the audited consolidated financial statements.

 

 

**SANTACRUZ SILVER MINING LTD.**

**Consolidated Statements of Cash Flows**

**For the Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars)

**CASH FLOW STATEMENT**

---

| | | | |
|:---|:---|:---|:---|
| | Note | **2025** | 2024 |
|  |  | **$** | $|
| **Operating activities:** |  |  |  |
| Net income for the year |  | **42222** | 164484 |
| Items not affecting cash: |  |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation, depletion and amortization | 8 | **21577** | 19706 |
| &nbsp;&nbsp;&nbsp;Reversal of impairment on mineral properties, plant and equipment | 8 | **(4088)** |  |
| &nbsp;&nbsp;&nbsp;Gain on adjustment to consideration payable | 10 | **-** | (133255) |
| &nbsp;&nbsp;&nbsp;Finance costs | 17 | **22209** | 18113 |
| &nbsp;&nbsp;&nbsp;Share-based compensation expense | 14 | **2042** | 105 |
| &nbsp;&nbsp;&nbsp;Foreign exchange (gain) loss |  | **13480** | (955) |
| &nbsp;&nbsp;&nbsp;Income tax expense | 18 | **32478** | 27552 |
| **Operating cash flows before non-cash working capital** |  | **129920** | 95750 |
| Changes in non-cash working capital: |  |  |  |
| &nbsp;&nbsp;&nbsp;Trade and other receivables | 6 | **3891** | (20736) |
| &nbsp;&nbsp;&nbsp;Inventories | 7 | **(25080)** | 851 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and deposits |  | **(8399)** | (120) |
| &nbsp;&nbsp;&nbsp;Trade payables and accrued liabilities | 9 | **10159** | (7923) |
| &nbsp;&nbsp;&nbsp;Current income taxes payable | 18 | **(21875)** | (3971) |
| &nbsp;&nbsp;&nbsp;Other liabilities | 12 | **(9377)** | (8981) |
| &nbsp;&nbsp;&nbsp;Decommissioning and restoration provision | 13 | **(129)** | (438) |
| **Net cash generated by operating activities** |  | **79110** | 54432 |
| **Investing activities:** |  |  |  |
| Expenditures on mineral properties, plant and equipment | 8 | **(30619)** | (22619) |
| Proceeds on disposition of mineral properties, plant and equipment | 8 | **311** | 1697 |
| Purchases of marketable securities | 20 | **(34262)** |  |
| Disposition of marketable securities | 20 | **12131** |  |
| Payment of base purchase price obligation | 10 | **(40000)** | - |
| **Net cash used in investing activities** |  | **(92439)** | (20922) |
| **Financing activities:** |  |  |  |
| Proceeds from exercise of options | 14 | **3721** | 641 |
| Proceeds from loans payable | 11 | **72956** | 59218 |
| Repayments of loans payable | 11 | **(51574)** | (59459) |
| Lease payments on plant and equipment | 12 | **(3366)** | (2946) |
| **Net cash generated by (used in) financing activities** |  | **21737** | (2546) |
| Effect of exchange rate on changes in cash |  | **138** | (190) |
| Net change in cash and cash equivalents |  | **8546** | 30774 |
| Cash and cash equivalents – beginning of year |  | **35721** | 4947 |
| **Cash and cash equivalents – end of year** |  | **44267** | 35721 |
| <br> **Cash paid during the year for:** |  |  |  |
| Interest expense |  | **1033** | 1383 |
| Income taxes |  | **33095** | 23356 |
| <br> Supplemental cash flow information (Note 24) |  |  |  |

---

The accompanying notes are an integral part of the audited consolidated financial statements.

**SANTACRUZ SILVER MINING LTD.**

**Consolidated Statements of** **Changes in Shareholders' Equity (Deficiency)**

**For Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Share Capital** | **Share Capital** | **Equity Reserves** | **Equity Reserves** | **Equity Reserves** | **Equity Reserves** | | |
| | **Shares** | **Amount** | **Share-based compensation reserve** | **Contributed<br> surplus** | **Accumulated<br> other<br> comprehensive<br> loss** | **Total equity<br> reserves** |<br>**Retained<br> earnings<br> (deficit)** |<br>**Total <br> shareholders'<br> equity <br> (deficiency)** |
|  | # | $| $| $| $| $ | $ | $ |
| **Balance, December 31, 2023** | 87747785 | 138014 | 13410 | (1872) | (2839) | 8699 | (180491) | (33778) |
| Shares issued from exercise of options | 1216100 | 1066 | (425) |  |  | (425) | - | 641 |
| Share-based compensation expense |  |  | 105 |  |  | 105 | - | 105 |
| Comprehensive income |  |  |  |  | (105) | (105) | 164484 | 164379 |
| Expiration of warrants | - | - | (3821) | 3821 | - | - | - | - |
| **Balance, December 31, 2024** | **88963885** | **139080** | **9269** | **1949** | **(2944)** | **8274** | **(16007)** | **131347** |
| **Balance, December 31, 2024** | **88963885** | 139080 | 9269 | 1949 | (2944) | 8274 | (16007) | 131347 |
| Shares issued from exercise of options | 2649909 | 6639 | (2918) |  |  | (2918) | - | 3721 |
| Shares issued from vesting of RSUs | 148334 | 297 | (297) |  |  | (297) | - | - |
| Shares issued from vesting of PSUs | 200000 | 150 | (150) |  |  | (150) | - | - |
| Share-based compensation expense |  |  | 2042 |  |  | 2042 | - | 2042 |
| Comprehensive income | - | - | - | - | (274) | (274) | 42222 | 41948 |
| **Balance, December 31, 2025** | **91962128** | **146166** | **7946** | **1949** | **(3218)** | **6677** | **26215** | **179058** |

---

The accompanying notes are an integral part of the audited consolidated financial statements.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

**1.** **NATURE OF OPERATIONS**

Santacruz Silver Mining Ltd. (the "Company" or "Santacruz") was incorporated pursuant to the Business Corporations Act of British Columbia on January 24, 2011. The Company's registered office is located at 1111 West Hastings Street, 15<sup>th</sup> Floor, Vancouver, British Columbia, Canada V6E 2J3. The Company is listed for trading on the TSX Venture Exchange ("TSX-V") under the symbol "SCZ" and on the Nasdaq Capital Market ("NASDAQ") under the symbol "SCZM".

The Company is engaged in the operation, acquisition, exploration and development of mineral properties in Latin America, with a primary focus on silver and zinc, but also including lead and copper. As at December 31, 2025, the Company had interests in, including mining concession rights, to the following:

● Sinchi Wayra S.A. ("Sinchi Wayra"), Sociedad Minero Metalurgico Reserva Ltda. and Sociedad Minera Illapa S.A. ("Illapa") which consist of the following mineral properties and businesses located in Bolivia: the producing Tres Amigos and Colquechaquita mines, collectively the "Caballo Blanco Group"; the producing Bolivar and Porco mines held under a net operating cash flow interest agreement with Corporación Minera de Bolivia ("COMIBOL"), a Bolivian state-owned entity; the Soracaya exploration project ("Soracaya Project"); the Reserva mine and the San Lucas ore sourcing and trading business ("San Lucas Group");

● The producing Zimapan mine located in Mexico held by Compañía Minera Zilar Mendi SA de C.V ("Zilar Mendi").

On December 10, 2025 the Company consolidated its issued and outstanding common shares on the basis of one post-consolidated common share for every four pre-consolidated common shares. The number of issued and outstanding shares, options, warrants, DSUs, RSUs and PSUs, and any per share amounts in these financial statements have been retrospectively restated in notes 11, 14, and 23 for all periods presented unless otherwise stated.

**2.** **BASIS OF PRESENTATION**

These consolidated financial statements have been prepared in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board ("IASB"). These consolidated financial statements have been prepared on a historical cost basis except for certain items that are measured at fair value including marketable securities. All dollar amounts presented are in thousands of United States dollars unless otherwise specified.

These consolidated financial statements incorporate the financial statements of the Company and its controlled subsidiaries. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances, transactions, income and expenses are eliminated on consolidation.

References made throughout the consolidated financial statements to "US dollar" or "USD" are to United States dollars, "C$" or "CAD" are to Canadian dollars, "MXN" are to Mexican pesos, "BOB" are to Bolivian bolivianos. All references are in thousands, unless otherwise noted.

**3.** **MATERIAL ACCOUNTING POLICIES**

**a)** **Basis of consolidation** 

These consolidated financial statements include the accounts of the Company and its subsidiaries. Subsidiaries are entities controlled by the Company. Control exists when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The Company controls an investee if the Company has all of the following:

● Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee);

● Exposure, or rights, to variable returns from its involvement with the investee; and

● The ability to use its power over the investee to affect its returns.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

**3. MATERIAL ACCOUNTING POLICIES (continued)**

Generally, there is a presumption that a majority of voting rights results in control. When the Company owns less than a majority of the voting, or similar rights of an investee, it considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

● The contractual arrangement(s) with the other vote holders of the investee;

● Rights arising from other contractual arrangements;

● The Group's voting rights and potential voting rights

The relevant activities are those which significantly affect the subsidiary's returns. The ability to approve the operating and capital budget of a subsidiary and the ability to appoint key management personnel are decisions that demonstrate that the Company has the existing rights to direct the relevant activities of a subsidiary.

The Company re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary.

All intercompany transactions and balances are eliminated on consolidation.

These consolidated financial statements incorporate the accounts of the Company and the following subsidiaries:

SCHEDULE OF COMPANY SUBSIDIARIES

---

| | | | |
|:---|:---|:---|:---|
| **Name of entity** | **Country of incorporation** | **Percentage** <br> **ownership** | **Principal activity** |
| Santacruz Silver Mining Ltd. | Canada | 100% | Holding company and head office function |
| Carrizal Holdings Ltd. | Canada | 100% | Holding company |
| Compañía Minera Zilar Mendi SA de C.V. <sup>(1)</sup> | Mexico | 100% | Mine operations |
| PCG Mining, S.A. de C.V. | Mexico | 100% | Holding company |
| Laikra Limited | Bermuda | 100% | Holding company |
| Apamera Limited | Bermuda | 100% | Holding company |
| Lewron Metals Ltd. | Bermuda | 100% | Holding company |
| Kempsey S.A. | Panama | 100% | Holding company |
| Shattuck Trading Co. Inc. | Panama | 100% | Holding company |
| Iris Mines and Metals S.A. | Panama | 100% | Holding company |
| Sociedad Minera Illapa S.A. <sup>(2)</sup> | Bolivia | 100% | Mine operations |
| Sinchi Wayra S.A. | Bolivia | 100% | Mine operations |
| Sociedad Minero Metalurgico Reserva Ltda. | Bolivia | 100% | Mine operations |
| Empresa Minera San Lucas S.A. | Bolivia | 100% | Ore trading house |
| Compañia Minera Concepción S.A. | Bolivia | 100% | Ore trading house |
| Compañia Minera Colquiri S.A. | Bolivia | 100% | Inactive |
| Complejo Metalurgico Vinto S.A. | Bolivia | 100% | Inactive |

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(1) On
 November 10, 2025, Carrizal Mining S.A de C.V changed its name to Compañía
 Minera Zilar Mendi SA de C.V.

(2) Sociedad
 Minera Illapa S.A. is the operator of the Illapa Joint Operation which includes the Bolivar
 and Porco mines.

**b)** **Basis of measurement** 

The consolidated financial statements have been prepared using the historical cost basis, except for certain financial assets and liabilities that are measured at fair values at the end of each reporting period.

**c)** **Functional and presentation currency** 

The consolidated financial statements are presented in United States dollars. The functional currency is the US dollar, which is the currency of the primary economic environment in which an entity operates.

Assets and liabilities of the subsidiaries that have a functional currency other than the US dollars are translated into US dollars at the exchange rate in effect on the consolidated statements of financial position date and revenues and expenses are translated at the average rate over the reporting period. Gains and losses from these translations are recognized in other comprehensive income.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

**3. MATERIAL ACCOUNTING POLICIES (continued)**

Transactions in foreign currencies are initially recorded in the functional currency at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange at each financial position date. Foreign exchange gains or losses on translation to the functional currency of an entity are recorded in profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.

**d)** **Business combinations** 

A business combination is an acquisition of assets and liabilities that constitute a business. A business is an integrated set of activities and assets that consist of inputs and processes, including operational processes that, when applied to those inputs, have the ability to create outputs that provide a return to the Company and its shareholders. A business also includes those assets and liabilities that do not necessarily have all the inputs and processes required to produce outputs, but can be integrated with the inputs and processes of the Company to create outputs.

When acquiring a set of activities or assets in the exploration and development stage, which may not have outputs, the Company considers other factors to determine whether the set of activities or assets is a business.

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is allocated to the identifiable assets acquired, liabilities and contingent liabilities assumed based on the acquisition-date fair value.

Any contingent consideration to be transferred will be recognized at fair value at the acquisition date. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9 Financial Instruments, is measured at fair value with the changes in fair value recognized in the consolidated statement of comprehensive income in accordance with IFRS 9. Other contingent consideration that is not within the scope of IFRS 9 is measured at fair value at each reporting date with changes in fair value recognized in profit or loss.

The excess of the cost of acquisition over the fair value of the Company's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets acquired, the difference, or gain, is recognized directly in the consolidated statement of comprehensive income. The results of businesses acquired during the period are included in the financial statements from the date of acquisition.

Acquisition related costs, other than costs to issue debt or equity securities of the acquirer, including investment banking fees, legal fees, accounting fees, valuation fees, and other professional or consulting fees are expensed as incurred. The costs to issue equity securities of the Company as consideration for the acquisition are reduced from share capital as share issuance costs. The costs to issue debt securities are capitalized and amortized using the effective interest method.

Provisional fair values are finalized within twelve months of the acquisition date. Measurement period adjustments are adjustments that arise from additional information obtained during the measurement period about facts and circumstances that existed at the acquisition date.

**e)** **Goodwill** 

Goodwill typically arises on the Company's business combinations due to: i) the ability of the Company to capture certain synergies through management of the acquired operation within the Company; and ii) the requirement to record a deferred tax liability for the difference between the assigned fair values and the tax bases of assets acquired and liabilities assumed.

Goodwill arising on the acquisition of a business is carried at cost as established at the date of the acquisition less accumulated impairment losses, if any. Goodwill is allocated to each of the Company's cash-generating units ("CGUs") that is expected to benefit from the synergies of the acquisition. A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognized directly in the consolidated statement of comprehensive income.

An impairment loss recognized for goodwill is not reversed in subsequent periods.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

**3. MATERIAL ACCOUNTING POLICIES (continued)**

**f)** **Joint arrangements** 

A joint arrangement is an arrangement over which two or more parties have joint control. Joint control is the contractually agreed sharing of control over an arrangement which exists only when the decisions about the relevant activities (being those that most significantly affect the returns from the arrangement) require the unanimous consent of the parties sharing control.

The Company has assessed the nature of its joint arrangements and determined them to be joint operations. The Company's 45% interest in the joint arrangement (operation), the general partnership that holds the Bolivar and Porco mines ("Illapa Joint Operation"), located in Bolivia has been accounted for as a joint operation. The remaining 55% interest is held by Corporación Minera de Bolivia ("COMIBOL").

SCHEDULE OF JOINT ARRANGEMENTS

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| | | | | |
|:---|:---|:---|:---|:---|
| **Joint Arrangements** | **Location** | **Ownership Interest** | **Classification and**<br> **accounting method** | **Mining properties**<br> **and projects owned** |
| Illapa Joint Operation | Bolivia | 45% | Joint operation,<br> Record 45% Santacruz share | Bolivar and Porco mines |

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The Illapa Joint Operation are within the Illapa legal entity which is 100% owned by the Company however its operations are part of a joint association agreement in which the Company has a 45% interest with the remaining 55% interest held by Corporación Minera de Bolivia ("COMIBOL"). The joint association agreement meets the definition of a Joint Operation in accordance with IFRS 11 Joint Arrangements, and the Company recognizes its 45% share of the operation's assets, liabilities, revenues and expenses arising from the Joint Operation. The Company is solely responsible for certain transactions made by the Illapa entity, for these transactions, the assets, liabilities, revenues and expenses are recognized at 100% in the Company's Financial Statements and result in balances payable to or owed from COMIBOL for its share of the joint operation. The net amount due to/from COMIBOL from differences in the participation share of certain transactions has been recognized as a non-current other asset or liability.

**g)** **Cash and cash equivalents** 

Cash and cash equivalents include cash on hand, deposits held on call with banks, and other short-term highly liquid investments with original maturities of three months or less and/or with original maturities over three months but redeemable on demand without penalty.

**h)** **Inventories** 

Inventories include concentrate and stockpiled ore and are valued at the lower of average production cost and estimated net realizable value. Net realizable value is the amount estimated to be obtained from sale of the inventory in the normal course of business, less any anticipated costs to be incurred prior to its sale. The production cost of inventories is determined on a weighted average basis and includes cost of production consumables, direct labour, mine-site overhead, and depreciation and depletion of mine properties and property, plant and equipment. Joint-product costing is applied as the primary concentrate products (silver/zinc, silver/lead and silver/copper) both contribute to the profitability of the operation. Joint costing allocates total production costs based on the relative values of the products.

If the carrying value exceeds the net realizable amount, a write-down is recognized. The write-down may be reversed in a subsequent period if the circumstances which caused the write-down no longer exist, to the extent that the related inventory has not been sold. Net realizable value is calculated as the estimated price at the time of sale based on prevailing metal prices less estimated future costs to convert the inventories into saleable form and estimated costs to sell.

Supplies inventory is valued at the lower of average cost and net realizable value. Costs include acquisition, freight, and other directly attributable costs.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

**3. MATERIAL ACCOUNTING POLICIES (continued)**

**i)** **Mineral property, plant and equipment ("MPPE")** 

On initial acquisition, MPPE are valued at cost, being the purchase price and the directly attributable costs of acquisition or construction required to bring the asset to the location and condition necessary for the asset to be capable of operating in the manner intended by management. When provisions for closure and decommissioning are recognized, the corresponding cost is capitalized as part of the cost of the related assets, representing part of the cost of acquiring the future economic benefits of the operation. The capitalized cost of closure and decommissioning activities is recognized in MPPE and depreciated accordingly.

In subsequent periods, buildings, plant and equipment are stated at cost less accumulated depreciation and any impairment in value, while land is stated at cost less any impairment in value and is not depreciated.

Estimates of remaining useful lives and residual values are reviewed annually. Changes in estimates are accounted for prospectively. The expected useful lives are included below. The net carrying amounts of MPPE are reviewed for impairment either individually or at the cash-generating unit ("CGU") level when events and changes in circumstances indicate that the carrying amounts may not be recoverable. To the extent that these values exceed their recoverable amounts, that excess is recorded as an impairment provision in the financial year in which this is determined.

Expenditure on major maintenance or repairs includes the cost of the replacement of parts of assets and overhaul costs. Where an asset or part of an asset is replaced and it is probable that future economic benefits associated with the item will be available to the Company, the expenditure is capitalized and the carrying amount of the item replaced derecognized. Similarly, overhaul costs associated with major maintenance are capitalized and depreciated over their useful lives where it is probable that future economic benefits will be available and any remaining carrying amounts of the cost of previous overhauls are derecognized. All other costs are expensed as incurred.

Where an item of MPPE is disposed of, it is derecognized and the difference between its carrying value and net sales proceeds is disclosed as earnings or loss on disposal in the consolidated statement of comprehensive income. Any items of mineral property, plant or equipment that cease to have future economic benefits are derecognized with any gain or loss included in the financial year in which the item is derecognized.

Operational mining properties and mine development

When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves (which occurs upon completion of a positive economic analysis of the mineral deposit), the costs incurred to develop such property including costs to further delineate the ore body and remove overburden to initially expose the ore body prior to the start of mining operations, are also capitalized. Such costs are amortized using the units-of-production ("UOP") method considering the expected production to be obtained over the life of the mineral property.

The expected production includes proven and probable reserves, and a portion of inferred resources expected to be extracted economically as part of the production cost.

Costs associated with commissioning activities on constructed plants are deferred from the date of mechanical completion of the facilities until the date the Company is ready to commence commercial production. Amounts received from selling items produced while preparing the asset for its intended use will be recognized as revenue and the related cost of sales in the consolidated statement of comprehensive income. These costs are amortized using the UOP method (described below) over the life of the mine, commencing on the date of commercial production.

Acquisition costs related to the acquisition of land and mineral rights are capitalized as incurred. Prior to acquiring such land or mineral rights, the Company makes a preliminary evaluation to determine that the property has significant potential to economically develop the deposit. The time between initial acquisition and full evaluation of a property's potential is dependent on many factors including: location relative to existing infrastructure, the property's stage of development, geological controls and metal prices. If a mineable deposit is discovered, such costs are amortized when production begins. If no mineable deposit is discovered, such costs are expensed in the period in which it is determined the property has no future economic value.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

**3. MATERIAL ACCOUNTING POLICIES (continued)**

Major development expenditures on producing properties incurred to increase production or extend the life of the mine are capitalized while ongoing mining expenditures on producing properties are charged against earnings as incurred. Gains or losses from sales or retirements of assets are included in gain or loss on sale of assets.

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset that takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the asset until the asset is substantially ready for its intended use. Other borrowing costs are recognized as an expense in the period incurred.

Depreciation of MPPE

The carrying amounts of MPPE (including initial and any subsequent capital expenditure) are depreciated to their estimated residual value over the estimated useful lives of the specific assets concerned, or the estimated life of the associated mine or mineral lease, if shorter. Estimates of residual values and useful lives are reviewed annually and any change in estimate is taken into account in the determination of remaining depreciation charges, and adjusted if appropriate, at each statement of financial position date. Changes to the estimated residual values or useful lives are accounted for prospectively. Depreciation commences on the date when the asset is available for use as intended by management.

For mining properties excluding those at the Bolivar and Porco mines, the economic benefits from the asset are consumed in a pattern which is linked to the production level. Except as noted below, such assets are depreciated on a UOP basis. In applying the UOP method, depreciation is normally calculated using the quantity of material extracted from the mine in the period as a percentage of the total quantity of material to be extracted in current and future periods based on proven and probable reserves and the portion of inferred resources where it is considered highly probable that those resources are expected to be extracted economically. The mineral properties at the Bolivar and Porco mines are depreciated on a straight-line basis over the term of the association contract with COMIBOL.

Assets within operations for which production is not expected to fluctuate significantly from one year to another or which have a physical life shorter than the related mine are depreciated on a straight line basis. PPE are depreciated over their useful life, or over the remaining life of the mine if shorter. The mining, property, plant, and equipment assets at the Bolivar and Porco mines are depreciated on a straight-line basis over the term of the association contract with COMIBOL. The other mining assets and categories of property, plant, and equipment are depreciated on a unit of production and/or straight-line basis as follows:

● Land – not depreciated

● Mobile equipment – 2 to 11 years

● Buildings and plant facilities – 2 to 50 years

● Mining properties and leases including capitalized evaluation and development expenditures – UOP method

● Exploration and evaluation – not depreciated until mine goes into production

● Assets under construction – not depreciated until assets are ready for their intended use

**j)** **Exploration and evaluation assets** 

Exploration expenditures are incurred in the search for economic mineral deposits or the process of obtaining more information about existing mineral deposits and typically include costs associated with drilling, sampling, mapping and other activity related to the search for ore.

Evaluation expenditures are incurred to establish the technical and commercial viability of mineral deposits and typically include costs associated with determining optimal methods of extraction and metallurgical and treatment processes, permitting, and preparing economic evaluations.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

**3. MATERIAL ACCOUNTING POLICIES (continued)**

Exploration expenditures are expensed as incurred. Evaluation expenditures are capitalized when management determines there is a high degree of confidence that future economic benefits will flow to the Company. Acquired exploration and evaluation projects and acquired exploration rights are recognized as assets at their cost of acquisition or at fair value if purchased as part of a business combination.

Capitalized exploration and evaluation expenditures are reclassified to mineral properties, plant and equipment, in accordance with Note 3, once the technical feasibility and commercial viability are demonstrated.

**k)** **Impairment of non-current assets** 

The carrying amounts of long-lived assets are tested for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. If there are indicators of impairment, the recoverable amount of the asset is estimated in order to determine the extent of the impairment. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount and is recorded as an expense in the consolidated statement of comprehensive income.

Where the asset does not generate independent cash inflows, the Company estimates the recoverable amount of the CGU to which the asset belongs.

If the recoverable amount of the asset or CGU is determined to be less than its carrying amount, the carrying amount of the asset or CGU is reduced to its recoverable amount and an impairment loss is recognized as an expense in the consolidated statement of comprehensive income. Recoverable amount is the higher of fair value less costs of disposal ("FVLCD") and value in use ("VIU").

FVLCD is determined as the amount that would be obtained from the sale of the asset or CGU in an arm's length transaction between knowledgeable and willing parties. The Company considers the use of a combination of its internal discounted cash flow economic models and in-situ value of reserves, resources and exploration potential of each CGU for estimation of its FVLCD. These cash flows are discounted by an appropriate post-tax discount rate to arrive at a net present value of the asset. VIU is determined as the present value of the estimated cash flows expected to arise from the continued use of the asset or CGU in its present form and its eventual disposal. VIU is determined by applying assumptions specific to the Company's continued use and does not take into account future development.

Impairment losses are evaluated for potential reversals when events or circumstances warrant such consideration. Where an impairment loss is subsequently reversed, the amount of such reversal is limited such that, the revised carrying amount of the asset or CGU does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or CGU in the prior years. A reversal of an impairment loss is recognized into earnings immediately.

**l)** **Leases** 

At inception of a contract, the Company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. An identified asset may be implicitly or explicitly specified in a contract, but must be physically distinct, and must not have the ability for substitution by a lessor. The Company has the right to control an identified asset if it obtains substantially all of its economic benefits and either pre-determines, or directs how and for what purpose the asset is used.

At lease commencement, the Company recognizes a Right of Use Asset ("ROU Asset") and a lease obligation. The ROU Asset is initially measured at cost, which comprises the initial amount of the lease obligation adjusted for any lease payments made at, or before, the commencement date, plus any initial direct costs incurred, less any lease incentives received.

The ROU Asset is subsequently amortized on a straight-line basis over the shorter of the term of the lease, or the useful life of the asset determined on the same basis as the Company's property, plant and equipment. The ROU Asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease obligation.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

**3. MATERIAL ACCOUNTING POLICIES (continued)**

The lease obligation is initially measured at the present value of lease payments remaining at the lease commencement date, discounted using the Company's incremental borrowing rate. Lease payments included in the measurement of the lease obligation, when applicable, may comprise fixed payments, variable payments that depend on an index or rate, amounts expected to be payable under a residual value guarantee and the exercise price under a purchase, extension or termination option that the Company is reasonably certain to exercise.

The lease obligation is subsequently measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company's estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease obligation is remeasured, a corresponding adjustment is made to the carrying amount of the ROU Asset.

The Company has elected not to recognize ROU Assets and lease obligations for short-term leases that have a lease term of twelve months or less or for leases of low-value assets. Payments associated with these leases are recognized as an operating expense on a straight-line basis over the lease term within costs and expenses on the consolidated statement of comprehensive income.

**m)** **Provisions** 

Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate of the obligation can be made. The amount recognized as a provision is the present value of the expenditures expected to be required to settle the obligation using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognized as finance costs.

Decommissioning and restoration costs

Decommissioning and restoration provisions are measured at the expected value of future cash flows, discounted to their present value and determined according to the probability of alternative estimates of cash flows occurring for each operation. Discount rates used are specific to the underlying obligation.

When provisions for decommissioning and restoration are initially recognized, the corresponding cost is capitalized as a component of the cost of the related asset, representing part of the cost of acquiring the future economic benefits of the operation. The capitalized cost of decommissioning and restoration activities is recognized in property, plant and equipment and depreciated accordingly. The value of the provision is progressively increased over time as the effect of discounting unwinds, creating an expense recognized in finance expenses. Decommissioning and restoration provisions are also adjusted for changes in estimates. Those adjustments are accounted for as a change in the corresponding capitalized cost, except where a reduction in the provision is greater than the un-depreciated capitalized cost of the related assets, in which case the capitalized cost is reduced to nil and the remaining adjustment is recognized in the consolidated statement of comprehensive income. In the case of closed sites, changes to estimated costs are recognized immediately in the consolidated statement of comprehensive income. Changes to the capitalized cost result in an adjustment to future depreciation and finance charges. Adjustments to the estimated amount and timing of future decommissioning and restoration cash flows are a normal occurrence in light of the significant judgments and estimates involved.

The provision is reviewed at the end of each reporting period for changes to obligations, legislation or discount rates that impact estimated costs or lives of operations and adjusted to reflect current best estimate. The cost of the related asset is adjusted for changes in the provision resulting from changes in the estimated cash flows or discount rate and the adjusted cost of the asset is depreciated prospectively.

**n)** **Share capital** 

The Company records proceeds from share issuances net of issue costs and any tax effects in equity. Common shares issued for consideration other than cash are valued based on their fair value on the date of issuance. Professional, consulting, regulatory, and other costs directly attributable to equity transactions are recorded as share issuance costs.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

**3. MATERIAL ACCOUNTING POLICIES (continued)**

The Company follows the residual method with respect to the measurement of common shares and common share purchase warrants issued as private placement units. Proceeds from private placements are first allocated to the common shares contained in the units based on the market value of shares on the date of issuance, with any residual amount allocated to warrants in the units. If the proceeds are less than or equal to the estimated fair market value of the share issuance, a $nil carrying amount is assigned to the warrants.

**o)** **Share-based payments** 

Employees (including directors and officers) of the Company may receive a portion of their remuneration in the form of share-based awards, which include stock options ("Options"), restricted share units ("RSUs"), performance share units ("PSUs"), and deferred share units ("DSUs"). The fair value of the share-based awards is charged to the consolidated statement of comprehensive income on a straight-line basis over the vesting period, after adjusting for the estimated number of awards that are expected to vest. The fair value of the share-based awards is determined at the date of grant.

The fair value of the stock options granted is determined using the Black-Scholes option pricing model at the date on which they were granted. Forfeitures are adjusted prospectively based on actual forfeitures. Share-based payments expense, for stock options that are forfeited or cancelled prior to vesting, is reversed. The costs of share-based payments are recognized, together with a corresponding increase in the equity reserve, over the period in which the services and/or performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ("the vesting date"). On exercise by the employee, the associated option value in the equity reserve is reclassified to share capital.

The fair value of the RSUs and DSUs granted is based on the value of the Company's share price at the date of grant. Unless otherwise stated, the RSUs have a graded vesting schedule over the vesting period as set by the Board of Directors and can either be settled in cash or equity upon vesting at the discretion of the Company. DSUs vest over a period of one year.

The fair value of PSUs is determined using its expected value at the time of grant. The expected value is determined based upon the fair value of the underlying shares at the time of grant and the estimated probability of meeting performance criteria.

In situations where equity instruments are issued to non-employees, the share-based payments are measured at the fair value of goods or services received, together with a corresponding increase in the equity reserve. If some or all of the goods or services received by the Company as consideration cannot be specifically identified, they are measured at the fair value of the share-based award.

**p)** **Revenue** 

Revenue associated with the concentrate sales is recognized when control of the asset sold is transferred to the customer. Indicators of control transferring include an unconditional obligation to pay, legal title, physical possession, transfer of risk and rewards, and customer acceptance. This generally occurs when the goods are delivered to a loading port, warehouse, vessel, or metal account as contractually agreed with the buyer; at which point the buyer controls the goods. In cases where the Company is responsible for the cost of shipping and certain other services after the date on which control of the goods transfers to the customer, these other services are considered separate performance obligations and thus a portion of revenue earned under the contract is allocated and recognized as these performance obligations are satisfied.

The Company's concentrate sales contracts with third-party buyers, in general, provide for a provisional payment based upon provisional assays and quoted metal prices. Final settlement is based on applicable commodity prices set on specified quotational periods, typically ranging from one month prior to shipment, and can extend to three months after the shipment arrives at the smelter and is based on average market metal prices. For this purpose, the transaction price can be measured reliably for those products, such as silver, zinc, lead and copper, for which there exists an active and freely traded commodity market such as the London Metals Exchange and the value of product sold by the Company is directly linked to the form in which it is traded on that market.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

**3. MATERIAL ACCOUNTING POLICIES (continued)**

Sales revenue is commonly subject to adjustments based on an inspection of the product by the customer. In such cases, sales revenue is initially recognized on a provisional basis using the Company's best estimate of contained metal, and adjusted subsequently. Revenues are recorded under these contracts at the time control passes to the buyer based on the expected settlement period. Revenue on provisionally priced sales is recognized based on estimates of the fair value of the consideration receivable based on forward market prices and estimated quantities. At each reporting date provisionally priced metal is marked to market based on the forward selling price for the quotational period stipulated in the contract.

Variations between the price recorded at the date when control is transferred to the buyer and the actual final price set under the smelting contracts are caused by changes in metal prices resulting in the receivable being recorded at fair value through profit or loss ("FVTPL").

IFRS 15 – Revenue from Contracts with Customers ("IFRS 15") requires that variable consideration should only be recognized to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The Company concluded that the adjustments relating to the final assay results for the quantity and quality of concentrate sold are not significant and do not constrain the recognition of revenue.

Refining and treatment charges under the sales contracts are netted against revenue for sales of metal concentrate.

The Company recognizes deferred revenue in the event it receives payments from customers in consideration for future commitments to deliver metals and before such sale meets the criteria for revenue recognition. The Company recognizes amounts in revenue as the metals are delivered to the customer. The Company estimates the current portion of deferred revenue based on quantities anticipated to be delivered over the next twelve months.

**q)** **Income taxes** 

Provision for income taxes consists of current and deferred tax expense. Income tax expense is recognized in profit or loss except to the extent that it relates to items recognized either in other comprehensive income (loss) or directly in equity, in which case it is recognized in other comprehensive income (loss) or in equity, respectively. Mining duties, taxes, royalties, and withholding taxes are treated and disclosed as current and deferred taxes if they have the characteristics of an income tax. This is considered to be the case when they are imposed by a government authority and the amount payable is calculated by reference to taxable income.

Current tax expense is the expected tax payable on the taxable income for the year, using tax rates and tax laws enacted or substantively enacted at the reporting date, adjusted for amendments to tax payable or recoverable with regards to previous years.

Deferred tax expense is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax expense is not recognized for temporary differences associated with the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable income or loss and temporary differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future. Deferred tax expense is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred income tax assets and deferred income tax liabilities are offset only when there is a legally enforceable right to set off current tax assets against current income tax liabilities and when they relate to income taxes levied by the same taxation authority on the same taxable entity.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

**3. MATERIAL ACCOUNTING POLICIES (continued)**

The Company's operations involve dealing with uncertainties and judgments in the application of tax regulations in multiple jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with tax authorities in various jurisdictions and resolution of disputes arising from tax audits. The Company recognizes potential liabilities and records tax liabilities for anticipated tax audit issues based on its estimate of whether, and the extent to which, additional taxes will be due. The Company adjusts these liabilities in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company's current estimate of the tax liabilities. If the Company's estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If the estimate of tax liabilities proves to be greater than the ultimate assessment, a tax benefit would result.

**r)** **Earnings (loss) per share** 

Basic earnings (loss) per share is calculated by dividing the net income (loss) available to common shareholders by the weighted average number of shares issued and outstanding during the year. For all periods presented, the net income (loss) available to common shareholders equals the reported income (loss). Diluted earnings (loss) per share is calculated using the treasury stock method. Under the treasury stock method, the weighted average number of common shares outstanding for the calculation of diluted earnings (loss) per share assumes that the proceeds to be received on the exercise of dilutive stock options and warrants are used to repurchase common shares at the average market price during the period. In the Company's case, when a loss is incurred during the year, diluted and basic loss per share are the same because the effect on loss per share of potential issuance of shares under options and warrants would be anti-dilutive.

**s)** **Financial instruments** 

Measurement – initial recognition

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. On initial recognition, all financial assets and financial liabilities are recorded at fair value, net of attributable transaction costs, except for financial assets and liabilities classified as at fair value through profit or loss ("FVTPL"). The directly attributable transaction costs of financial assets and liabilities classified as at FVTPL are expensed in the period in which they are incurred.

Subsequent measurement of financial assets and liabilities depends on the classifications of such assets and liabilities.

Classification of financial assets

*Amortized cost*

 

Financial assets that meet the following conditions are measured subsequently at amortized cost:

● the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, and

● the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

The amortized cost of most of the financial assets is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortization using effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. Interest income is recognized using the effective interest method. In accordance with the amortized cost method, revisions to estimated future cash flows result in adjustments to the carrying value of the financial asset, keeping the original effective interest rate unchanged. Revisions result in amounts recognized in income or loss.

The Company's financial assets at amortized cost include cash and cash equivalents, receivables not arising from sale of metal concentrates, COMIBOL initial investment period CAPEX receivables, participation receivable from COMIBOL for interest in joint operation and other receivables in the Consolidated Statement of Financial Position.

 

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

**3. MATERIAL ACCOUNTING POLICIES (continued)**

*FVTPL*

 

The Company, at initial recognition, may also irrevocably designate a financial asset as measured at FVTPL if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases.

Financial assets measured at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognized in profit or loss to the extent they are not part of a designated hedging relationship. Fair value is determined in the manner described in Note 20. The Company's financial assets at FVTPL include its trade receivables from provisional concentrate sales.

*Financial assets at fair value through other comprehensive income ("FVTOCI")*

 

Elected investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTOCI are recognized in other comprehensive income (loss).

The Company acquired Treasury Bills and Treasury notes during the year ended 2025. These instruments are financial assets and will be carried at fair value through other comprehensive income. The instruments are classified as marketable securities in the statement of financial position. The instruments at FVTOCI are initially recognized at fair value plus transaction costs. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTOCI are recognized in other comprehensive income (loss). When the securities mature or are sold the cumulative realized gains and losses are recognized through profit and loss as finance costs.

Classification of financial liabilities

*Financial liabilities and equity*

 

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs. Repurchase of the Company's own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.

Financial liabilities that are not contingent consideration of an acquirer in a business combination, held for trading or designated as FVTPL, are measured at amortized cost using the effective interest method. The Company's financial liabilities designated as FVTPL include its consideration payable. Financial liabilities at amortized cost primarily include trade and other payables, loans payable and lease liabilities.

*Impairment of financial assets at amortized cost*

 

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If, at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses.

Management has recognized negligible expected credit losses on the COMIBOL initial investment period CAPEX receivable balance because the company expects to fully utilize the receivables by offsetting amounts payable to COMIBOL for its 55% share of the Joint Operation.

The Company shall recognize in the consolidated statement of comprehensive income, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

**3. MATERIAL ACCOUNTING POLICIES (continued)**

**t)** **New IFRS accounting standards and pronouncements - adopted** 

The following amendments to standards were effective for annual periods beginning on or after January 1, 2025:

**Lack of exchangeability – Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates**

The amendments contain guidance to specify when a currency is exchangeable and how to determine the exchange rate when it is not. The amendments are effective for annual reporting periods beginning on or after January 1, 2025. There was no material impact on the Company's consolidated financial statements from the adoption of these amendments, however the guidance contained was considered when determining the appropriate exchange rate to record transactions denominated in BOB, see section below in Note 4 for further information.

**u)** **New IFRS accounting standards and pronouncements – not yet adopted** 

Below are the amendments to standards applicable for future periods that the Company has not yet adopted:

**Amendments to IFRS 9: Financial Instruments and IFRS 7: Financial Instruments: Disclosures**

In May 2024, the IASB issued amendments to update classification and measurement requirements in IFRS 9: Financial Instruments, and related disclosure requirements in IFRS 7: Financial Instruments: Disclosures. The IASB clarified the recognition and derecognition date of certain financial assets and liabilities, and amended the requirements related to settling financial liabilities using an electronic payment system. It also clarified how to assess the contractual cash flow characteristics of financial assets in determining whether they meet the solely payments of principal and interest criterion, including financial assets that have environmental, social and corporate governance ("ESG")-linked features and other similar contingent features. The IASB added disclosure requirements for financial instruments with contingent features that do not relate directly to basic lending risks and costs and amended disclosures relating to equity instruments designated at fair value through other comprehensive income.

The amendments are effective for annual periods beginning on or after January 1, 2026 with early application permitted. The Company is currently assessing the effect of these amendments on our financial statements.

**IFRS 18: Presentation and Disclosure in Financial Statements**

In April 2024, the IASB issued IFRS 18: Presentation and Disclosure of Financial Statements ("IFRS 18"), which replaces IAS 1: Presentation of Financial Statements. IFRS 18 introduces a specified structure for the income statement by requiring income and expenses to be presented into the three defined categories of operating, investing and financing, and by specifying certain defined totals and subtotals. Where company-specific measures related to the income statement are provided, IFRS 18 requires companies to disclose explanations around these measures, which are referred to as management-defined performance measures. IFRS 18 also provides additional guidance on principles of aggregation and disaggregation which apply to the primary financial statements and the notes. IFRS 18 will not affect the recognition and measurement of items in the financial statements, nor will it affect which items are classified in other comprehensive income and how these items are classified.

Some of the requirements in IAS 1 are moved to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and IFRS 7 Financial Instruments: Disclosures. The IASB also made minor amendments to IAS 7 Statement of Cash Flows and IAS 33 Earnings per Share in connection with the new standard.

The standard is effective for reporting periods beginning on or after January 1, 2027, including for interim financial statements. Retrospective application is required, and early application is permitted. The Company is currently assessing the effect of this new standard to its financial statements.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

4. MATERIAL
 ACCOUNTING ESTIMATES AND JUDGMENTS

Judgments that have the most significant effect on the amounts recognized in the Company's consolidated financial statements are as follows:

Determination of functional currency

The functional currency for each of the Company's subsidiaries is the currency of the primary economic environment in which the entity operates. Determination of functional currency involves certain judgments to determine the primary economic environment of an entity. The Company re-evaluates the functional currency of its entities when there is a change in events and conditions which previously determined the primary economic environment of an entity.

Interests in other entities

The Company applies judgment in determining the classification of its interest in other entities, such as (i) the determination of the level of control or significant influence held by the Company; (ii) the legal structure and contractual terms of the arrangement; (iii) concluding whether the Company has rights to assets and liabilities or to net assets of the arrangement; and (iv) when relevant, other facts and circumstances. The Company has determined that the association agreement with COMIBOL represents a joint operation. All other interests, excluding marketable securities, in other entities have been determined to be subsidiaries as described in IFRS 10, "Consolidated Financial Statements."

Collectability and classification of value added tax ("VAT") receivable

VAT receivable is collectible from the governments of Mexico and Bolivia. The collection of VAT is subject to risk due to the complex application and collection process and, therefore, risk related to the collectability and timing of payment from the Mexican and Bolivian governments. The Company uses the facts known at the time and its historical experience to determine its best estimate of the collectability and timing of these recoveries. Changes in the assumptions regarding collectability and the timing of collection could impact the valuation and classification of VAT receivable.

Impairment, or impairment reversal, of MPPE and goodwill

There is significant judgment involved in assessing whether any indications of impairment of MPPE and goodwill, or impairment reversal of MPPE, with consideration given to both external and internal sources of information. Information the Company considers include changes in the market, economic and legal environment in which the Company operates that are not within its control that affect the recoverable amount of mining interests. Internal sources of information include the manner in which mineral property, plant and equipment are being used or are expected to be used and indications of the economic performance of the assets. Estimates include but are not limited to estimates of the discounted future after-tax cash flows expected to be derived from the Company's mining properties, costs to sell the mining properties and the appropriate discount rate. Changes in metal price forecasts, increases or decreases in estimated future costs of production, increases or decreases in estimated future capital costs, reductions or increases in the amount of recoverable mineral reserves and mineral resources and/or adverse or favorable current economics can result in a write-down or write-up of the carrying amounts of the Company's mining interests.

Key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are:

Revenue<u>recognition</u>

Revenue from the sale of concentrate to independent smelters is recognized when control of the asset sold is transferred to the customer. The Company's concentrate sales contracts with third-party buyers, in general, provide for a provisional payment based upon provisional assays and quoted metal prices. Final settlement is based on applicable commodity prices set on specified quotational periods, typically ranging from one to three months following scheduled delivery and is based on average market metal prices. Sales revenue is commonly subject to adjustments based on an inspection of the product by the customer. In such cases, sales revenue is initially recognized on a provisional basis using the Company's best estimate of contained metal, and adjusted subsequently. Revenues are recorded under these contracts at the time control passes to the buyer based on the expected settlement period.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

**4. MATERIAL ACCOUNTING ESTIMATES AND JUDGMENTS (continued)**

Revenue on provisionally priced sales is recognized based on estimates of the fair value of the consideration receivable based on forward market prices and estimated quantities. At each reporting date provisionally priced metal is marked to market based on the forward selling price for the quotational period stipulated in the contract. Variations between the price recorded at the date when control is transferred to the buyer and the actual final price set under the smelting contracts are caused by changes in metal prices resulting in the receivable being recorded at FVTPL. In a period of high price volatility, as experienced under current economic conditions, the effect of mark-to-market price adjustments related to the quantity of metal which remains to be settled with independent smelters could be significant.

For changes in metal quantities upon receipt of new information and assay, the provisional sales quantities are adjusted.

Mineral<u>resource estimate</u>

The lives of operating mines are determined from the tonnes of mineralized material or ore that are available to be extracted at the end of each reporting period. The Company initially estimates the tonnes of mineralized material or ore available based on either the findings of qualified, independent mining professionals or the findings of its own technical staff. These estimates are updated from time to time as additional technical and economic information becomes available.

Factors that impact the computation of tonnes of mineralized material or ore available include the geological data on the size, depth, and shape of the mineralized deposit or ore body, the prevailing and expected market price for the underlying metals to be extracted, and the expected costs to extract and process the mined material. Changes in the mineable tonnes of mineralized material or ore available may impact the carrying values of mine properties, exploration and evaluation properties, property, plant and equipment, decommissioning and restoration provision, and result in changes in the recognition of deferred tax amounts in addition to changes in the recognition of depreciation and depletion.

Depreciation<u>and amortization rates for MPPE</u>

Depreciation and amortization expenses are allocated based on assumed asset lives and depreciation and amortization rates. Should the asset life or depreciation rate differ from the initial estimate, an adjustment would be made in the consolidated statement of comprehensive income prospectively. A change in the mineral resource estimate for assets depreciated using the units of production method would impact depreciation expense prospectively.

 

Estimation of decommissioning and reclamation costs and the timing of expenditures

The cost estimates are updated annually during the life of a mine to reflect known developments, (e.g. revisions to cost estimates and to the estimated lives of operations), and are subject to review at regular intervals. Decommissioning, restoration and similar liabilities are estimated based on the Company's interpretation of current regulatory requirements, constructive obligations and are measured at the best estimate of expenditures required to settle the present obligation of decommissioning, restoration or similar liabilities that may occur upon decommissioning of the mine at the end of its productive life. The carrying amount is determined based on the net present value of estimated future cash expenditures for the settlement of decommissioning, restoration or similar liabilities that may occur upon decommissioning of the mine. Such estimates are subject to change based on changes in laws and regulations and negotiations with regulatory authorities. Refer to Note 13 for details on decommissioning and restoration costs.

Income taxes and recoverability of deferred tax assets

In assessing the probability of realizing income tax assets recognized, the Company makes estimates related to expectations of future taxable income, applicable tax planning opportunities, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. In making its assessments, the Company gives additional weight to positive and negative evidence that can be objectively verified.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

**4. MATERIAL ACCOUNTING ESTIMATES AND JUDGMENTS (continued)**

Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. The Company considers relevant tax planning opportunities that are within the Company's control, are feasible and within management's ability to implement. Examination by applicable tax authorities is supported based on individual facts and circumstances of the relevant tax position examined in light of all available evidence. Where applicable tax laws and regulations are either unclear or subject to ongoing varying interpretations, it is reasonably possible that changes in these estimates can occur that materially affect the amounts of income tax assets recognized. Also, future changes in tax laws could limit the Company from realizing the tax benefits from the deferred tax assets. The Company reassesses unrecognized income tax assets at each reporting period. Refer to Note 18 for further discussion on income taxes.

Provisions and contingencies

Due to the size, complexity and nature of the Company's operations, various legal and tax matters are outstanding from time to time. In the event the Company's estimates of the future resolution of these matters change, the Company will recognize the effects of the changes in its consolidated financial statements on the date such changes occur.

Measurement of contingent consideration liability

The consideration payable includes a contingent value rights (CVR) component that is contingent upon the zinc price reaching a minimum market price of zinc which if met triggers a payment. CVR payments are based on the average LME zinc price for each calendar month. Therefore, the payoff on the CVR is "path-dependent", the ultimate amount paid depends on the price of the underlying over time. Additionally, commodity prices exhibit mean reversion, whereby asset prices tend to move back toward their long-term average over time. A valuation approach capable of capturing the path-dependent and mean reversion feature is therefore required.

The Monte Carlo Simulation is a commonly used approach to model securities with path-dependent payoffs and mean reversion features. Monte Carlo Simulation uses random sampling techniques based on continuous time Stochastic processes to generate a large number of possible, but random, asset price paths. In each Individual price path, the payoff of the security can be calculated based on the average zinc price relative to a fixed base price (see note 10(b)). These payoffs are then discounted to the reporting date and averaged to determine the fair value of the CVR.

Uncertainty of timing of cash flows for the COMIBOL initial investment period CAPEX receivable

The initial investment period CAPEX receivable amount becomes available for the Company to offset against amounts due to COMIBOL for its 55% interest in the operation over seven years from 2020 to 2026. If the joint operation does not produce sufficient positive cash flows, COMIBOL can defer payment until cash flows are positive at which point the amounts receivable can be used to reduce the amount due to COMBIOL for its 55% share of the interest in the operation. If the operation does not generate enough positive cash flows to offset amounts due, the outstanding amount receivable will be paid by COMIBOL at the end of the agreement.

The timing of the cash flows will vary depending on the operational results from the joint operation and how much is payable to COMIBOL for their 55% interest in the operation. Depending on estimates and actual results each period the asset will be revalued to reflect the timing of the expected cash flows and will be discounted using the same effective interest rate at inception resulting in recognizing a gain or loss on the re-estimation of cash flows related to the CAPEX receivable.

Measurement of residual value of Illapa Joint Operation's assets

The Company has recognized a non-depletable mineral properties asset that represents the residual value of the Illapa Joint Operation's assets. The residual value is derived from the amount the Company expects to receive as compensation from COMIBOL when it transfers the property, plant and equipment from the Illapa Joint Operation at the end of the agreement in 2028. The amount of compensation expected to be received is 45% of the actual and future spending on capital expenditures adjusted for a valuation allowance. Since the amount that will ultimately be received at the end of the agreement will vary depending on the actual CAPEX investment made and the actual payable amount according to an appraisal process, each period management will assess its estimation of the amount receivable, and the difference between the initial carrying value and the revised carrying value will be recorded as a prospective adjustment to depreciation expense of MPPE so that at the end of the agreement, the ending value of MPPE will be equal to the amount receivable from COMIBOL.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

Years ended December 31, 2025 and 2024

(Expressed in thousands of US dollars, unless otherwise noted)

**4. MATERIAL ACCOUNTING ESTIMATES AND JUDGMENTS (continued)**

Determination of Exchange rate for Bolivian operations

The Sinchi Wayra and Illapa operations are located in Bolivia and sales revenue from the Bolivian operations is denominated and settled in USD but most operating expenses are denominated in BOB. The functional currency of the Bolivian subsidiaries is USD and has not changed since acquisition. Since the operations were acquired in 2022 through to the end of fiscal 2024, the Company used the official exchange rate published by the Central Bank of Bolivia to record all transactions denominated in BOB: this exchange rate has been fixed at 6.96 BOB/USD since 2009.

The spread between the official exchange rate (the "Official rate") and the Bank rate used to acquire BOB has widened progressively and is no longer a temporary situation. Management expects that the spread will continue due to macroeconomic fundamentals. Recording BOB denominated expenses at the Official rate is no longer appropriate and to better present the economic substance of BOB denominated transactions, management has changed its approach to using a spot rate that is in line with the Bank rate.

As defined in IAS 21 – The effects of changes in foreign exchange rates, the BOB is *exchangeable*. However, because there is no availability of the currency at the Official rate it is more appropriate to determine the spot rate that is the actual exchange rate that is being used to purchase BOB. Management has applied an estimation technique to determine the spot exchange rate used for translating transactions denominated in BOB. This estimated rate (the "Bank rate") is based on the average of weekly quotations obtained from commercial banks which reflects the rate at which an orderly exchange transaction takes place at the measurement date between market participants under the prevailing economic conditions.

The Official rate of 6.96 BOB/USD was used to record transactions denominated in BOB since the acquisition of the Bolivian operations until December 31, 2024. Starting January 1, 2025, the Bank rate has been used to record transactions denominated in BOB. The average Bank rate for the year ended December 31, 2025 was 11.92 BOB/USD. All monetary assets and liabilities outstanding as at December 31, 2025 have been translated using the Bank spot rate of 8.36 BOB/USD. The exchange rate is management's estimate of the USD value of transactions denominated in BOB. Accordingly, comparative figures which were translated using the Official rate have not been restated as the change in estimate is only applied prospectively.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

5. CASH AND CASH EQUIVALENTS

A summary of the Company's cash and cash equivalents is as follows:

SCHEDULE OF CASH AND CASH EQUIVALENTS

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | December 31, 2024 |
|  | **$** | $|
| Cash | **41607** | 35721 |
| Cash equivalents | **2660** | - |
| Total | **44267** | 35721 |

---

6. TRADE AND OTHER RECEIVABLES

A summary of the Company's trade and other receivables is as follows:

SCHEDULE OF TRADE AND OTHER RECEIVABLES

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | December 31, 2024 |
|  | **$** | $|
| Trade receivables | **20371** | 17402 |
| COMIBOL contract prepayment | **1995** | 2395 |
| COMIBOL initial investment period CAPEX receivable (note 6(a)) | **16193** | 21158 |
| Uncertain income tax position receivable (note 18(c)) | **9356** | 15226 |
| VAT receivable | **71944** | 73320 |
| Other receivables | **4789** | 909 |
| **Balance, end of year** | **124648** | 130410 |
| Less: current portion | **(88399)** | (99854) |
| Non-current portion | **36249** | 30556 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**a)** **COMIBOL initial investment period CAPEX receivable** 

The COMIBOL initial investment period CAPEX receivable is a reimbursement of 22.5% of a pre-defined amount of capital investments made by the Company from 2012 to 2019 in the Illapa Joint Operation. The refundable amount becomes available for the Company to offset against amounts due to COMIBOL for its 55% interest in the operation over seven years from 2020 to 2026. If the joint operation does not produce sufficient positive cash flows, COMIBOL can defer payment until cash flows are positive at which point the amounts receivable can be used to reduce the amount due to COMBIOL for its 55% share of the interest in the operation. If the operation does not generate enough positive cash flows to offset amounts due, the outstanding amount receivable will be paid by COMIBOL at the end of the agreement. The classification between current and non-current has been made based upon management's best estimate of when the receivable will be used to offset future payments to COMIBOL for its 55% interest.

The timing of the cash flows will vary depending on the operational results from the joint operation and how much is payable to COMIBOL for their 55% interest in the operation. Depending on estimates and actual results each period the asset will be revalued to reflect the timing of the expected cash flows and will be discounted using the same effective rate at acquisition resulting in recognizing a gain or loss on the re-estimation of cash flows related the CAPEX receivable.

7. INVENTORIES

A summary of the Company's inventories is as follows:

SCHEDULE OF INVENTORIES

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | December 31, 2024 |
|  | **$** | $|
| Mineralized material stockpiles | **11983** | 7062 |
| Concentrate inventory | **30172** | 11256 |
| Supplies inventory | **15362** | 14119 |
| Total | **57517** | 32437 |

---

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**7. INVENTORIES (continued)**

During the year ended December 31, 2025, the inventory recognized as cost of sales was $199,493 (2024 – $206,055), which includes production costs directly attributable to the inventory production process.

During the year ended December 31, 2025, the Company recognized through cost of sales a net realizable value write-off of inventory for $501 (2024 – $nil).

8. MINERAL PROPERTIES, PLANT AND EQUIPMENT

A summary of the Company's Mineral Properties, Plant and Equipment is as follows:

SCHEDULE OF MINERAL PROPERTIES, PLANT AND EQUIPMENT

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Depletable mineral properties** | **Exploration and evaluation** | &nbsp;&nbsp;<br>**Plant and equipment** | **Total** |
|  | $| $| $| $|
| **Cost** |  |  |  |  |
| **Balance, December 31, 2023** | **69555** | **12189** | **111103** | **192847** |
| Additions | 15194 |  | 7425 | 22619 |
| Change in decommissioning and restoration costs (Note 13) | 1752 |  |  | 1752 |
| Disposals |  |  | (2721) | (2721) |
| Adjustments | 29220 | - | - | 29220 |
| **Balance, December 31, 2024** | **115721** | **12189** | **115807** | **243717** |
| Additions | 9212 |  | 21407 | 30619 |
| Change in decommissioning and restoration costs (Note 13) | 3006 |  |  | 3006 |
| Disposals | (3244) |  | (3758) | (7002) |
| Impairment reversals | 2071 |  | 2017 | 4088 |
| **Balance, December 31, 2025** | **126766** | **12189** | **135473** | **274428** |
| **Accumulated depreciation and impairment** |  |  |  |  |
| **Balance, December 31, 2023** | **16860** | **-** | **34222** | **51082** |
| Depletion, depreciation and amortization | 3933 |  | 15773 | 19706 |
| Disposals |  |  | (1024) | (1024) |
| Adjustments | 29220 | - | - | 29220 |
| **Balance, December 31, 2024** | **50013** | **-** | **48971** | **98984** |
| Depletion, depreciation and amortization | 7199 |  | 14378 | 21577 |
| Disposals | (3245) |  | (3446) | (6691) |
| Adjustments | (513) | - | 513 | - |
| **Balance, December 31, 2025** | **53454** | **-** | **60416** | **113870** |
| Cost as at December 31, 2024 | 115721 | 12189 | 115807 | 243717 |
| Accumulated depreciation and impairment | (50013) | - | (48971) | (98984) |
| **Carrying value - December 31, 2024** | **65708** | **12189** | **66836** | **144733** |
| Cost as at December 31, 2025 | 126766 | 12189 | 135473 | 274428 |
| Accumulated depreciation and impairment | (53454) | - | (60416) | (113870) |
| **Carrying value – December 31, 2025** | **73312** | **12189** | **75057** | **160558** |

---

As at December 31, 2025, the Company's plant and equipment included right-of-use assets with a carrying amount of $2,926 for leased mining equipment (December 31, 2024 - $2,395). Depreciation on the right of use assets for the year ended December 31, 2025 was $509 (2024 - $677).

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**8. MINERAL PROPERTIES, PLANT AND EQUIPMENT (continued)**

Impairment assessment of Mineral Properties, Plant and equipment and Goodwill

In accordance with the Company's accounting policies, the Company assesses its CGUs for indicators of impairment or impairment reversal at each period-end. Judgment is applied in assessing whether certain facts and circumstances are indicators of impairment or reversal of impairment, and accordingly, require an impairment test to be performed. The Company considers both external and internal sources of information in assessing whether there are any indications that its assets or CGUs may be impaired or may require a reversal of impairment. The primary external factors considered are changes in estimated long-term metal prices, changes in laws and regulations and the Company's market capitalization relative to its net asset carrying amount. The primary internal factors considered are the performance of its CGUs against expectations, changes in mineral reserves and resources, life of mine plans and exploration results.

If indicators of impairment or impairment reversal exist for any CGU, those CGUs are tested for impairment or impairment reversal. In general, the CGU carrying amount includes the carrying value of the MPPE and goodwill, less deferred tax liabilities and decommissioning and restoration provision related to each CGU. For CGUs that have allocated goodwill, the CGUs are tested for impairment annually.

Goodwill Impairment test

The Company performed an annual impairment test of the goodwill recognized when the Company acquired the operations in Bolivia upon acquisition as at December 31, 2025. The goodwill that was allocated to the Caballo Blanco and San Lucas Groups CGUs was not impaired because their CGUs' carrying values were greater than the recoverable amounts.

A summary of the Company's goodwill and allocation to each CGU is as follows:

SCHEDULE OF GOODWILL

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | December 31, 2024 |
|  | **$** | $|
| Caballo Blanco Group (Tres Amigos mine) | 2963 | 2963 |
| San Lucas Group | 12503 | 12503 |
| **Goodwill** | **15466** | **15466** |

---

Impairment Reversal test

During the year ended December 31, 2023, the Company recorded an impairment charge of $13,830 on the carrying value of the Bolivar CGU (of which $6,472 was allocated to goodwill), and of $8,802 on the Porco CGU.

During the year ended December 31, 2025, the Company assessed the increased long-term consensus silver price to be an indicator of impairment reversal for both CGUs. As a result, the Company performed an impairment reversal test on the Bolivar and Porco CGUs as at December 31, 2025. The Company concluded that the carrying value of the Bolivar CGU as at December 31, 2025 was lower than the recoverable amount. This resulted in a reversal of the impairment charge recognized in 2023. The Company recorded an impairment reversal of $4,088 on the carrying value of the Bolivar CGU. The impairment reversal was calculated after considering the depreciation expense that would have been recorded had the CGUs not been impaired.

The recoverable amount for each CGU was determined by applying a fair value less cost of disposal ("FVLCD") methodology based on future after-tax cash flows expected to be derived from the CGU discounted with after-tax weighted average cost of capital ("WACC") of 10.65%, a Level 3 fair value estimate. The projected cash flows used in impairment testing are significantly affected by changes in assumptions for metal prices, estimated quantities of mineral reserves and resources, production costs estimates, capital expenditure estimates, and discount rates. Specific to the Bolivar and Porco CGUs, operations are expected to continue to the end of 2028, equal to the end of the association contract with COMIBOL (i.e. assume no extension of the contract).

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**8. MINERAL PROPERTIES, PLANT AND EQUIPMENT (continued)**

For the year ended December 31, 2024 and 2025, the Company's impairment testing incorporated the following metal price assumptions:

SCHEDULE OF IMPAIRMENT TESTING

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** |
| | **2026-2029 Average** | **2030 and long-term** | **2025-2028 Average** | **2029 and long-term** |
| Zinc price per tonne | $2801 | $2670 | $2757 | $2770 |
| Silver price per ounce | $45.70 | $37.74 | $30.79 | $27.29 |

---

9. TRADE PAYABLES AND ACCRUED LIABILITIES

A summary of the Company's trade payables and accrued liabilities is as follows:

SCHEDULE OF TRADE PAYABLES AND ACCRUED LIABILITIES

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | December 31, 2024 |
|  | **$** | $|
| Trade payables | **34541** | 29784 |
| COMIBOL contract obligations (note 9(a)) | **7167** | 8608 |
| Accrued liabilities | **12861** | 8997 |
| **Balance, end of year** | **54569** | 47389 |
| Less: current portion | **(47402)** | (38781) |
| Non-current portion | **7167** | 8608 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**a)** **COMIBOL contract obligations** 

COMIBOL contract obligations represent the Company's obligation to pay its portion of committed funding related to the investment of inventories and fixed assets made prior to 2013 under the previous contract of $4,689, and COMIBOL's share of the VAT receivable of $2,478 (all of which are classified as non-current)

10. CONSIDERATION PAYABLE

On March 18, 2022, the Company acquired 100% ownership of Sinchi Wayra and Illapa (the "Acquisition") from Glencore plc ("Glencore") under the terms and conditions outlined in the Share Purchase Agreement ("SPA").

On May 10, 2023, the Company signed amendments to the SPA ("Amended SPA") that impacted the timing of the repayments of the deferred cash consideration and timing of payment of certain VAT amounts collected by the Company.

On March 28, 2024, the Company entered into a binding term sheet (the "Term Sheet") with Glencore to amend the SPA, Amended SPA and certain transaction documents in connection with the Acquisition. On October 3, 2024, the Company entered into a definitive omnibus agreement under the terms established in the Term Sheet.

The following table summarizes the consideration payable to Glencore.

SCHEDULE OF CONSIDERATION PAYABLE

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | December 31, 2024 |
|  | **$** | $|
| Base purchase price (note 10(a)) | **-** | 34625 |
| Contingent value rights (note 10(b)) | **20243** | 10158 |
| **Balance, end of year** | **20243** | 44783 |
| Less: current portion | **-** | (10000) |
| Non-current portion | **20243** | 34783 |

---

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**10. CONSIDERATION PAYABLE (continued)**

&nbsp;&nbsp;&nbsp;&nbsp;**a)** **Base purchase price** 

Subject to the Acceleration Option (as defined below), the Company will pay up to $80,000 in cash to Glencore in eight equal annual instalments of $10,000 each (the "Base Purchase Price" or "BPP") with the first payment being made on or before November 1, 2025. The Company can exercise an option to accelerate the payment of the outstanding balance of the Base Purchase Price in full at any time, such prepayment amount will be $40,000 if exercised prior to November 1, 2025 and shall decrease by $2,000 for each annual instalment of $10,000 that has been paid by the Company (the "Acceleration Option").

As at the date of the Term Sheet the fair value of the BPP was estimated using a discounted cash flow method to calculate the net present value of the expected cash flows. The initial recognition of the liability used a discount rate of 20% based on various qualitative and quantitative considerations.

As at December 31, 2025, the Company has paid Glencore $40,000 to exercise the accelerated payment option in full and has fully extinguished the Base Purchase Price liability.

&nbsp;&nbsp;&nbsp;&nbsp;**b)** **Contingent value rights & additional payments** 

The Company granted to Glencore a contingent value right (the "CVR") whereby the Company will pay Glencore a monthly payment of $1,333 (the "CVR Payment"), subject to a total cap of $77,700 (the "Valuation Cap"), in the event that in any calendar month after the date the parties enter into the Term Sheet, the average London Metal Exchange ("LME") spot price of zinc (or the highest open hedge price if the Hedging Option (as defined below) has been exercised) in the calendar month is at least $3,850 per tonne (the "Base Price"). The CVR Payment will increase by $83 for each increase of $100 per tonne above the Base Price and up to a price of $5,049.99 per tonne.

In addition to the CVR Payment, in the event the average LME spot price of zinc (or the highest open hedge price if the Hedging Option has been exercised) in a calendar month is at least $5,050 per tonne (the "Additional Payment Price"), the CVR Payment will increase by $83 for each increase of $100 per tonne above the Additional Payment Price and the Company will pay Glencore a monthly payment of $83 as a Bonus Payment that will increase by $83 for each increase of $100 per tonne above the Additional Payments Price. The Bonus Payment is not considered as part of the CVR Payment.

Upon the occurrence of the monthly average zinc LME spot price exceeding the Base Price, Glencore can require the Company to hedge a limited amount of zinc production from its Bolivian mining operations (so long as the hedging price would exceed the Base Price) subject to certain conditions (the "Hedging Option").

The CVR and Additional Payments will be effective from the date of the Term Sheet until the earlier of December 31, 2032 and the date the Valuation Cap is reached. The Additional Payments and the Hedging Option will terminate once the Company is no longer obligated to make CVR Payments.

The fair value at the initial recognition of the CVR was calculated using a Monte Carlo Simulation with key inputs and assumptions including the zinc spot price ($3,082 per tonne), the expected price of zinc in each year until December 31, 2032, the market risk-free rate and credit spread and the volatility and variability of historical zinc prices.

The Company performed a valuation exercise as at December 31, 2025, and determined a fair value of the CVR of $20,243 (December 31, 2024 – $10,158). The loss on change in fair value attributed to the CVR was $10,085 for the year ended December 31, 2025 (2024 – $8,772), which is recorded as a finance cost (Note 17).

&nbsp;&nbsp;&nbsp;&nbsp;**c)** **Deferred cash consideration, royalties payable and other payables** 

Prior to the Term Sheet, the Company had $164,566 in consideration payable accounted for as deferred cash consideration, royalties payable and other payables from the profits on sale of inventory and payment of certain VAT amounts. As a result of entering into the term sheet as described above, the Company determined that the contractual change was an extinguishment of the previous liabilities and recognized the base purchase price, CVR and additional payment obligations at their fair value which resulted in a gain of $133,255 during the year ended December 31, 2024.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**10. CONSIDERATION PAYABLE (continued)**

The following table summarizes the details of the consideration payable to Glencore and when the previous consideration payable liabilities were considered extinguished and the new consideration was recognized at fair value at inception resulting in a gain on modification:

SCHEDULE OF CONSIDERATION PAYABLE AT FAIR VALUE AT INCEPTION RESULTING IN A GAIN ON MODIFICATION

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | <br>**BPP**<br>**(a)** | <br>**CVRs**<br>**(b)** | **Deferred cash consideration**<br>**(c)** | **Royalties payable**<br>**(c)** | **Other payables**<br>**(c)** | **Total** |
|  | $| $| $| **$** | $| $|
| **Balance, December 31, 2023** | **-** | **-** | **91619** | **15102** | **56267** | **162988** |
| Accretion (Note 17) |  |  | 976 | 18 | 584 | 1578 |
| Gain on adjustment to consideration payable | 29925 | 1386 | (92595) | (15120) | (56851) | (133255) |
| Loss on change in fair value of consideration payable | 4700 | 8772 | - | - | - | 13472 |
| **Balance, December 31, 2024** | **34625** | **10158** | **-** | **-** | **-** | **44783** |
| Less: current portion | (10000) | **-** | - | - | - | (10000) |
| Non-current portion | 24625 | 10158 | - | - | - | 34783 |
| **Balance, December 31, 2024** | **34625** | **10158** | **-** | **-** | **-** | **44783** |
| Loss on change in fair value of consideration payable | 5375 | 10085 |  |  |  | 15460 |
| Payment of base purchase price obligation | (40000) | - | - | - | - | (40000) |
| **Balance, December 31, 2025** | **-** | **20243** | **-** | **-** | **-** | **20243** |
| Less: current portion | - | - | - | - | - | - |
| Non-current portion | - | 20243 | - | - | - | 20243 |

---

11. LOANS PAYABLE

A summary of the Company's loans payable is as follows:

SCHEDULE OF LOANS PAYABLE

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Bank facilities<br> (a)** | **Trafigura loan facility**<br>**(b)** | **Other loans payable** <br>**(c)** | **Promissory loan payable** <br>**(d)** | **Total** |
|  | $| $| $| $| $|
| **Balance, December 31, 2023** | **11327** | **5498** | **950** | **-** | **17775** |
| Proceeds advanced | 58192 |  | 1026 |  | 59218 |
| Accretion |  | 547 |  |  | 547 |
| Interest expense (Note 17) | 830 | 658 |  |  | 1488 |
| Repayment with cash | (55558) | (2669) | (1232) | - | (59459) |
| **Balance, December 31, 2024** | **14791** | **4034** | **744** | **-** | **19569** |
| Less: Current portion | (14791) | (1423) | (218) | - | (16432) |
| Non-current portion | **-** | 2611 | 526 | - | 3137 |
| **Balance, December 31, 2024** | **14791** | **4034** | **744** | **-** | **19569** |
| Proceeds advanced | 44279 |  | 16993 | 11684 | 72956 |
| Interest expense (Note 17) | 1223 | 336 |  | 569 | 2128 |
| Foreign exchange loss (gain) | 3797 |  | (160) | 5270 | 8907 |
| Repayment with cash | (32595) | (1848) | (17131) | - | (51574) |
| **Balance, December 31, 2025** | **31495** | **2522** | **446** | **17523** | **51986** |
| Less: Current portion | (31495) | (1412) | (212) | (17523) | (50642) |
| Non-current portion | - | 1110 | 234 | - | 1344 |

---

&nbsp;&nbsp;&nbsp;&nbsp;**a)** **Bank facilities** 

The Company has a secured credit facility denominated in Bolivian Bolivianos with Banco BISA S.A. of BOB 55,000 ($6,579), which is comprised of 1) a revolving credit facility of BOB 48,800 ($5,837) for the financing of mining operations and working capital with a fixed interest rate between 6.0% and 10.00% per annum; and 2) a "loan guarantee" credit facility of BOB 6,200 ($742) for the purpose of providing collateral to the Bolivian government for VAT refunds collected prior to the completion of the audit process by the Bolivian tax authority.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**11. LOANS PAYABLE (continued)**

In Bolivia, companies have the option to receive VAT refunds in advance of the audit process being completed if a loan guarantee for the refund amount is provided. The BOB 55,000 ($6,579) total credit facility is secured by certain real estate assets in Bolivia.

The BOB 48,800 ($5,837) revolving credit facility for working capital purposes can be drawn down at BOB 3,480 ($416) increments and automatically rolls over at maturity once fully repaid. As at December 31, 2025, BOB 48,720 ($5,828) (December 31, 2024 – BOB 48,720 ($7,000)), was drawn down from this credit facility.

Additionally, during December 2025, Sociedad Minera Illapa S.A. received BOB 20,000 ($2,392) from Banco BISA S.A. to cover payroll costs. The loan term is 180 calendar days and due on June 15, 2026. The loan is unsecured and has a fixed annual nominal rate of 10%.

As at December 31, 2025, BOB 1,703 ($204) of the BOB 6,200 ($742) loan guarantee credit facility was used to provide collateral to the Bolivian government on VAT refunds received (December 31, 2024 – BOB 2,415 ($347)).

On April 24, 2025, Sociedad Minera Illapa S.A. obtained a 360-day bank loan from Banco BISA S.A. with a fixed interest rate of 6.0% per annum. The facility is secured by a standby letter of credit guarantee issued by Stifel Bank where the marketable securities are held as collateral (refer to note 20). As at December 31, 2025, the loan amount outstanding was BOB 90,500 ($10,825).

The Company also has an unsecured revolving credit facility for working capital requirements and a loan guarantee with Banco de Crédito de Bolivia S.A. for a total of BOB 48,020 ($5,744). The credit facility has a weighted average fixed interest rate of 6.0% and 10.00% per annum and the weighted average interest rate on the loan guarantee facility is 2.0%.

As at December 31, 2025, BOB 50,078 ($5,990) (December 31, 2024 - BOB 52,332 ($7,519)) was drawn down on the credit facility and $nil (December 31, 2024 - $nil) was used on the loan guarantee. The credit facility has varying maturity dates up to February 2026. The loan guarantee is used for replacement parts for machinery imported from China. The collateral is a fixed term deposit with an annual percentage yield (APY) fixed at annual 6.00% for a term of 120 calendar days for an amount of BOB 3,433 ($411).

The loan guarantee is used for the purpose of providing collateral to the Bolivian government for VAT refunds collected prior to the completion of the audit process by the Bolivian tax authority. All credit facilities are denominated in Bolivian Bolivianos.

On March 31, 2025, Sociedad Minera Illapa S.A. obtained 180-day bank loan outstanding for BOB 45,962 ($5,498) from Banco de Crédito de Bolivia S.A. with a fixed interest rate of 6.00% per annum. The facility is secured by a standby letter of credit guarantee issued by Stifel Bank where the company holds some of its USD cash balances from sales revenues (refer to note 20).

&nbsp;&nbsp;&nbsp;&nbsp;**b)** **Trafigura loan facility** 

On April 23, 2021, in connection with the acquisition of Zimapan, Trafigura Mexico, S.A. de C.V. ("Trafigura") loaned the Company $17,616 under a new loan facility ("Trafigura Loan Facility").

The Trafigura Loan Facility is secured by a first charge over all Zimapan Mine assets and all other material rights and properties owned by Zilar Mendi. In addition, the Company issued to Trafigura 7,000,000 warrants ("Trafigura Warrants"), each Trafigura Warrant exercisable into a Santacruz common share at C$1.58 per share, for a period of 12 months with respect to 1,820,000 of the Trafigura Warrants and 42 months with respect to the remaining 5,180,000 Trafigura Warrants. As at December 31, 2024, a total of 3,320,000 Trafigura Warrants were exercised for gross proceeds to the Company of $4,049 (C$5,246). On October 24, 2024 the remaining 3,680,000 Trafigura Warrants expired unexercised.

Pursuant to the Trafigura Loan Facility, Trafigura will have the right to offset payments owing by Trafigura to Zilar Mendi and/or its affiliates under existing commodity purchase and sale agreements against payments owing by Zilar Mendi to Trafigura under the Trafigura Loan. No offsets were made as of December 31, 2025.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**11. LOANS PAYABLE (continued)**

In the third quarter of 2024, the Company entered into a new amended and restated agreement to settle the outstanding principal amount of $4,156. The amended agreement has the same annual interest rate as the original agreement (1-month SOFR + 6.5%) and is for a period of 36 months, ending on October 31, 2027. The loan is repayable in monthly installments of principal plus accrued interest for the respective period.

The agreement requires that the Company maintain a current ratio greater than 1.1:1 and that the debt to equity ratio not exceed 9:1. The Company is fully compliant with all financial covenants stipulated in the agreement as at December 31, 2025.

On January 29, 2026, the Company made an early payment to settle the remaining balance of the loan facility, fully extinguishing the liability.

&nbsp;&nbsp;&nbsp;&nbsp;**c)** **Other loans payable** 

In the fourth quarter of 2022, the Company entered into contracts to sell trucks and machinery for net proceeds of $1,310. The Company subsequently leased the trucks and machinery back from the counterparty for a period of five years at a financing charge of 10.0% per annum and is required to make quarterly lease payments plus accrued interest.

As the contracts provide the Company the right to repurchase the trucks and machinery at the end of the term for their residual value of 1%, the Company has an irrevocable right to repurchase the assets, and control of the assets did not transfer to the counterparty. Hence, these contracts are accounted for as financing transactions in accordance with IFRS 9 - Financial Instruments, rather than as sale and leaseback transactions under IFRS 16 – Leases.

In accordance with IFRS 9, these contracts were recorded as a financial liability at amortized cost using the effective interest rate method. As at December 31, 2025, the financial liability was $446 (December 31, 2024 - $744). No interest expense was accrued as it was immaterial.

On February 14, 2026 the Company obtained an unsecured 6 month working capital term loan for BOB 17,150 ($2,051) with a fixed interest rate of 9.95% with repayment of interest and principal at the end of the term from Banco Mercantil Santa Cruz S.A. On March 17, 2026 obtained an unsecured 6 month working capital term loan for BOB 14,000 ($1,675) with a fixed interest rate of 10% with repayment of interest and principal at the end of the term from Banco Bisa S.A.

&nbsp;&nbsp;&nbsp;&nbsp;**d)** **Promissory notes** 

On February 20, 2025, the Company completed an offering of BOB 70,000 ($8,373) in promissory notes under its San Lucas Promissory Notes Issuance program. The San Lucas Promissory Notes Issuance program allows the Company to issue up to BOB 140,000 ($16,746) in the Bolivian stock market (Bolsa Boliviana de Valores). The notes are denominated in Bolivian Bolivianos and have a 6.50% interest rate and a maturity date of February 15, 2026 and are unsecured. On February 15, 2026, the Company repaid the notes settling the liability in full. In accordance with IFRS 9, these contracts were recorded as a financial liability at amortized cost using the effective interest rate method.

On August 8, 2025, the Company completed a second offering of BOB 70,000 ($8,373) in promissory notes under its San Lucas Promissory Notes Issuance program. The notes under the second offering have an interest rate of 7.00% and a maturity date of June 15, 2026.

The promissory notes require that San Lucas maintain a current ratio greater than 1.15, a debt service ratio greater than 1.5, and that the debt to equity ratio not exceed 1.85. The Company is fully compliant with all financial covenants stipulated as at December 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;**e)** **Bonds** 

On December 30, 2024, the Financial System Supervisory Authority (ASFI) authorized the San Lucas Bonds Program. The San Lucas Bonds program allows the Company to issue up to $40,000 of unsecured bonds in the Bolivian Stock market (Bolsa Boliviana de Valores), the bonds can be denominated in USD or Bolivian Bolivianos. As at December 31, 2025, no bonds have been issued under the program.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

12. OTHER LIABILITIES

A summary of the Company's other liabilities is as follows:

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | December 31, 2024 |
|  | **$** | $|
| Post employment benefits (note 12(a)) | **12608** | 12784 |
| Lease liability | **867** | 650 |
| Bolivia uncertain tax position financing arrangement (note 18(c)) | **-** | 5974 |
| Other taxes payable (note 12(b)) | **5106** | 6976 |
| Long-term portion of current income taxes payable | **713** | 1503 |
| Participation payable to COMIBOL for interest in joint operation (note 12(c)) | **8873** | 8977 |
| Other liabilities | **1250** | 1714 |
| **Balance, end of the year** | **29417** | 38578 |
| Less: current portion | **(8876)** | (16070) |
| **Non-current portion** | **20541** | 22508 |

---

**a)** **Post-employment benefits** 

As at December 31, 2025, the Company recognized a provision of $1,933 ($1,473 as at December 31, 2024) for payments that must be made to employees upon termination of employment which is required by Mexican labour legislation. A provision of $9,694 ($11,311 as at December 31, 2024) has been recognized in Bolivia which entitles employees to receive a payment after five years of employment, if the employee resigns or is terminated before the 5-year period they are entitled to receive the amount accrued at the time of separation. Based on expected employee turnover, these provisions are considered non-current.

**b)** **Other taxes payable** 

Other taxes payable includes amounts payable to the Mexican and Bolivian tax authorities for miscellaneous taxes such as payroll taxes, withholding taxes, VAT payables and income taxes from prior periods which are being paid under an installment plan.

**c)** **Participation payable to COMIBOL for interest in joint operation** 

The net participation payable from COMIBOL is derived from the Illapa Joint Operation. The Company is solely responsible for 100% of certain transactions specified in the agreement and such transactions are recorded as liabilities where there is a net amount payable to COMIBOL.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

13. DECOMMISSIONING AND RESTORATION PROVISION

The Company has an obligation to undertake decommissioning, restoration, rehabilitation and environmental work when environmental disturbance is caused by the development and ongoing production of a mining operation. Movements in decommissioning liabilities during the years ended December 31, 2025 and 2024 are allocated as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Bolivar** | **Porco** | **Caballo Blanco Group** | <br>**San Lucas Group** | **Zimapan** | **Total** |
|  | $| $| $| $| $| $|
| Balance, December 31, 2023 | 3105 | 5296 | 6092 | 2773 | 6241 | 23507 |
| Change in estimate (Note 8) | 479 | 522 | 1105 | 92 | (446) | 1752 |
| Reclamation work performed | (192) | (8) | (83) | (81) | (74) | (438) |
| Accretion (Note 17) | 274 | 446 | 429 | 222 | 524 | 1895 |
| Foreign exchange gain | - | - | - | - | (1040) | (1040) |
| **Balance, December 31, 2024** | 3666 | 6256 | 7543 | 3006 | 5205 | 25676 |
| Less: current portion | (73) | (20) | (476) | (70) | - | (639) |
| Non-current portion | 3593 | 6236 | 7067 | 2936 | 5205 | 25037 |
| Balance, December 31, 2024 | 3666 | 6256 | 7543 | 3006 | 5205 | 25676 |
| Change in estimate (Note 8) | 813 | 1113 | 570 | 399 | 111 | 3006 |
| Reclamation work performed | (20) | (7) | (72) | (30) |  | (129) |
| Accretion (Note 17) | 250 | 423 | 698 | 286 | 490 | 2147 |
| Foreign exchange gain | 443 | 655 | 2445 | 1104 | 669 | 5316 |
| **Balance, December 31, 2025** | **5152** | **8440** | **11184** | **4765** | **6475** | **36016** |
| Less: current portion | (84) | (15) | (650) | (73) | - | (822) |
| **Non-current portion** | **5068** | **8425** | **10534** | **4692** | **6475** | **35194** |

---

A provision for decommissioning liabilities is estimated based on current regulatory requirements and is recognized at the present value of such costs. The expected timing of cash flows in respect of the provision is based on the estimated life of the Company's mining operations.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Decommissioning and restoration provisions - December 31, 2025** | **Decommissioning and restoration provisions - December 31, 2025** | **Decommissioning and restoration provisions - December 31, 2025** | **Decommissioning and restoration provisions - December 31, 2025** | **Decommissioning and restoration provisions - December 31, 2025** |
| | **Bolivar** | **Porco** | **Caballo Blanco Group** | **San Lucas Group** | **Zimapan** |
| Undiscounted uninflated estimated cash flow | $4248 | $6925 | $7829 | $3250 | $9791 |
| Discount rate | 10.2% | 10.2% | 9.9% | 9.6% | 8.7% |
| Inflation rate | 20.2% | 20.2% | 20.2% | 20.2% | 3.6% |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Decommissioning and restoration provisions - December 31, 2024** | **Decommissioning and restoration provisions - December 31, 2024** | **Decommissioning and restoration provisions - December 31, 2024** | **Decommissioning and restoration provisions - December 31, 2024** | **Decommissioning and restoration provisions - December 31, 2024** |
| | **Bolivar** | **Porco** | **Caballo Blanco Group** | **San Lucas**<br>**Group** | **Zimapan** |
| Undiscounted uninflated estimated cash flow | $3587 | $6119 | $7333 | $2917 | $8032 |
| Discount rate | 9.3% | 9.3% | 9.6% | 9.6% | 10.1% |
| Inflation rate | 10.0% | 10.0% | 10.0% | 10.0% | 3.7% |

---

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

14. SHARE CAPITAL

a) Authorized share capital

The Company is authorized to issue an unlimited number of common shares without par value.

b) Issued – share capital

During the year ended December 31, 2025, the Company issued 148,334 common shares from the vesting of RSUs, 200,000 common shares from the vesting of PSUs and 2,649,909 common shares from the exercising of Options for proceeds of $3,721. During the year ended December 31, 2024, the Company issued 1,216,100 shares from the exercise of options for proceeds of $641.

c) Stock options

On November 25, 2025 at the Company's annual general meeting, shareholders re-approved the omnibus equity incentive plan (the "Omnibus Incentive Plan"). Pursuant to the Omnibus Incentive Plan, the Company may grant options, RSUs, PSUs, and DSUs to directors, officers, employees, management company employees, and consultants of the Company and its subsidiaries. The maximum number of shares available for issuance under the Omnibus Incentive Plan is limited to 10% of the issued and outstanding common shares.

Pursuant to the Omnibus Incentive Plan, options granted have a maximum term of ten years and the vesting provisions of options granted are at the discretion of the Board of Directors. Options are non-transferrable and the exercise price of the options shall be determined by the Board of Directors at the time the options are granted but in no event shall be lower than the discounted market price permitted by the TSX-V.

The following is a summary of the Company's stock options for the years ended December 31, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
| | **Number of stock options** | **Weighted average exercise price** |
|  | # | C$ |
| Balance, December 31, 2023 | 5928600 | 1.60 |
| Granted | 625000 | 1.60 |
| Exercised | (1216100) | 0.72 |
| Cancelled | (1725000) | 1.71 |
| Balance, December 31, 2024 | 3612500 | 1.84 |
| Granted | 862500 | 4.40 |
| Exercised | (2663544) | 1.94 |
| Cancelled | (54166) | 3.54 |
| **Balance, December 31, 2025** | **1757290** | **2.89** |

---

As at December 31, 2025, the Company had the following stock options outstanding:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | **Options outstanding** | **Options outstanding** | **Options outstanding** | **Options exercisable** | **Options exercisable** | **Options exercisable** |
| <br>**Grant Date** | <br>**Date of expiry** | **Number of options** | **Weighted average exercise price** | **Weighted average years until expiry** | **Number of options** | **Weighted average exercise price** | **Weighted average years until expiry** |
|  |  | # | C$ | Years | # | C$ | Years |
| May 7, 2021 | May 7, 2026 | 575000 | 1.88 | 0.35 | 575000 | 1.88 | 0.35 |
| August 1, 2024 | August 1, 2029 | 409375 | 1.60 | 3.59 | 117709 | 1.60 | 3.59 |
| October 16, 2024 | October 16, 2029 | 18750 | 1.64 | 3.79 | 18750 | 1.64 | 3.79 |
| June 26, 2025 | June 26, 2030 | 754165 | 4.40 | 4.49 | 204170 | 4.40 | 4.49 |
| **Balance, December 31, 2025** |  | **1757290** | **2.89** | **2.92** | **915629** | **2.40** | **1.76** |

---

During the year ended December 31, 2025, the Company recognized share-based compensation expense of $1,119 (2024 – ($89)) based on the fair value of the options granted in the current and prior years.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**14. SHARE CAPITAL (continued)**

The weighted average assumptions used in the Black-Scholes option pricing model were as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Assumption** | **Based on** | **2025** | 2024 |
| Risk-free rate (%) | Yield curves on Canadian government zero-coupon bonds with a remaining term equal to the stock options' expected life | **2.83%** | 3.02% |
| Expected life (years) | Expiry term of the options | **5 years** | 5 years |
| Expected volatility (%) | Historical volatility of the Company's share price | **89.86%** | 87.08% |
| Dividend yield (%) | Annualized dividend rate as of the date of grant | **nil** | nil |

---

The weighted average closing share price on the date of the option exercises for the year ended December 31, 2025 was C$8.58 per share (year ended December 31, 2024 - C$1.68).

d) Warrants

The following is a summary of the Company's warrants for the years ended December 31, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
| | **Number of warrants** | **Weighted average exercise price** |
|  | # | C$ |
| Balance, December 31, 2023 | 15805490 | 1.72 |
| Expired | (15805490) | 1.72 |
| **Balance, December 31, 2024 and December 31, 2025** | **-** | **-** |

---

All of the 15,805,490 warrants issued as at December 31, 2023 expired unexercised during 2024. When the warrants expired, the share-based compensation reserve corresponding to the warrants was transferred to contributed surplus. No additional warrants have been issued in the year ended December 31, 2025.

e) Restricted Share Units ("RSU")

RSUs are non-transferrable awards for service which upon vesting and settlement entitle the recipient to receive cash or common shares of equivalent value at the discretion of the Company. The choice of settlement method is at the Company's sole discretion and the RSUs have been accounted for assuming they will be settled through equity. Vesting conditions for RSUs are set by the Board of Directors.

The following is a summary of the Company's RSUs for the years ended December 31, 2025 December 31, 2024:

---

| | | |
|:---|:---|:---|
| | **Number of RSUs outstanding** | **Weighted average fair value** |
|  | # | C$ |
| Balance, December 31, 2023 |  |  |
| Granted | 206250 | 1.38 |
| Balance, December 31, 2024 | 206250 | 1.38 |
| Granted | 238750 | 3.92 |
| Vested | (148334) | 2.74 |
| **Balance, December 31, 2025** | **296666** | **2.74** |

---

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**14. SHARE CAPITAL (continued)**

As at December 31, 2025, the Company had the following RSUs outstanding:

---

| | | | |
|:---|:---|:---|:---|
| <br>**Grant Date** | **Vesting Date** | **Number of RSUs outstanding** | **Weighted average fair value** |
|  |  | # | C$ |
| August 1, 2024 | April 1, 2026 | 68751 | 1.38 |
| August 1, 2024 | April 1, 2027 | 68749 | 1.38 |
| June 26, 2025 | June 26, 2026 | 79586 | 3.92 |
| June 26, 2025 | June 26, 2027 | 79580 | 3.92 |
| **Balance, December 31, 2025** | **Balance, December 31, 2025** | **296666** | **2.74** |

---

During the year ended December 31, 2025, the Company recognized share-based compensation expense of $556 (2024 – $63) related to RSUs.

f) Deferred Share Units ("DSU")

DSUs are non-transferrable awards that become payable upon termination of service of the participant. Vesting conditions for DSUs are set by the Board of Directors. Upon settlement, DSUs entitle the recipient to receive cash or common shares of an equivalent value at the discretion of the Company. Timing of settlement after vesting occurs at the discretion of the participant and communicated to the Company by the participant in writing at least fifteen days prior to the designated day, or an earlier date as the participant and the Company pay agree. If no notice is given by the participant for a designated day, the DSUs shall be payable on the first anniversary of the date on which the participant's termination of service, or any earlier period on which the DSUs vest, at the sole discretion of the participant.

The following is a summary of the Company's DSUs for the years ended December 31, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
| | **Number of DSUs outstanding** | **Weighted average fair value** |
|  | # | C$ |
| Balance, December 31, 2023 |  |  |
| Granted | 168750 | 1.38 |
| Balance, December 31, 2024 | 168750 | 1.38 |
| **Balance, December 31, 2025** | **168750** | **1.38** |

---

As at December 31, 2025, the Company had the following DSUs outstanding:

---

| | | | |
|:---|:---|:---|:---|
| <br>**Grant Date** | **Vesting Date** | **Number of DSUs outstanding** | **Weighted average fair value** |
|  |  | # | C$ |
| August 1, 2024 | August 1, 2025 | 168750 | 1.38 |
| **Balance, December 31, 2025** | **Balance, December 31, 2025** | **168750** | **1.38** |

---

During the year ended December 31, 2025, the Company recognized share-based compensation expense of $97 (2024 – $70) related to DSUs.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**14. SHARE CAPITAL (continued)**

g) Performance Share Units ("PSU")

PSUs are non-transferrable awards that will vest and become payable upon the attainment of performance criteria within a certain period, the criteria and the evaluation of performance in relation to the criteria is determined by the Board of Directors. PSUs are settled through cash or the issuance of common shares of equivalent value at the discretion of the Company. The choice of settlement method is at the Company's sole discretion.

The following is a summary of the Company's PSUs for the years ended December 31, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
| | **Number of PSUs outstanding** | **Weighted average fair value** |
|  | # | C$ |
| Balance, December 31, 2023 |  |  |
| Granted | 312500 | 1.38 |
| Cancelled | (62500) | 1.38 |
| Balance, December 31, 2024 | 250000 | 1.38 |
| Granted | 125000 | 3.92 |
| Vested | (200000) | 1.38 |
| Cancelled | (50000) | 1.38 |
| **Balance, December 31, 2025** | **125000** | **3.92** |

---

As at December 31, 2025, the Company had the following PSUs outstanding:

---

| | | | |
|:---|:---|:---|:---|
| <br>**Grant Date** | **Vesting Date** | **Number of PSUs outstanding** | **Weighted average fair value** |
|  |  | # | C$ |
| June 26, 2025 | June 26, 2026 | 125000 | 3.92 |
| **Balance, December 31, 2025** | **Balance, December 31, 2025** | **125000** | **3.92** |

---

During the year ended December 31, 2025, the Company recognized share-based compensation expense of $270 (2024 – $61) related to PSUs.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

15. COST OF SALES

Cost of sales excluding depletion, depreciation and amortization are costs that directly relate to production and generation of revenues at the operating segments. Significant components of cost of sales are comprised of the following:

---

| | | |
|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, |
| | **2025** | 2024<br><sup>(1)</sup> |
|  | **$** | $|
| Consumables and materials | 16120 | 18527 |
| Energy | 3219 | 4502 |
| Insurance | 3796 | 3236 |
| Mining and plant maintenance costs | 85272 | 90851 |
| Ore and concentrate purchase costs | 56166 | 46610 |
| Other costs | (672) | 895 |
| **Production Costs** | **163901** | **164621** |
| Transportation and other selling costs | 23698 | 23551 |
| Mining royalties expense | 10246 | 11713 |
| Finished goods inventory changes | 1648 | 6170 |
| **Cost of sales** | **199493** | **206055** |

---

<sup>(1)</sup> Mine royalty expense relates to the mining royalty due to the Bolivian government as a result of mining operations at the Sinchi Wayra and Illapa businesses.

16. GENERAL AND ADMINISTRATIVE EXPENSES

A summary of the Company's general and administrative expenses is as follows:

---

| | | |
|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, |
| | **2025** | 2024 |
|  | **$** | $|
| Community relationship | **1701** | 2106 |
| Corporate administration | **2925** | 2717 |
| Professional fees | **2594** | 2427 |
| Salaries and benefits | **8487** | 11960 |
| Tax penalties and inflation charges | **6598** | 5097 |
|  | **22305** | 24307 |

---

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

17. FINANCE COSTS

A summary of the Company's finance costs (income) is as follows:

---

| | | |
|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, |
| | **2025** | 2024 |
|  | **$** | $|
| Accretion of consideration payable (Note 10) | **-** | 1578 |
| Accretion of decommissioning provisions (Note 13) | **2147** | 1895 |
| Accretion of Trafigura facility loan (Note 11) | **-** | 547 |
| Accretion (income) of receivable from COMIBOL | **(1056)** | (2924) |
| Financing charge on leases | **603** | 189 |
| Loss on change in fair value of consideration payable (Note 10) | **15460** | 13472 |
| Re-measurement of 12.2a COMIBOL CAPEX receivable | **2927** | 1868 |
| Interest expense, carrying and finance charges (Note 11) | **2128** | 1488 |
| Interest (income) | **(1511)** | (480) |
| Other finance expense (income) | **(8330)** | 599 |
|  | **12368** | 18232 |

---

18. INCOME TAX

a) Income
 tax expense

A summary of the Company's income tax expense is as follows:

---

| | | |
|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, |
| | **2025** | 2024 |
|  | **$** | $|
| Current tax expense | **25746** | 27976 |
| Deferred tax (recovery) | **6732** | (424) |
| Income tax expense | **32478** | 27552 |

---

A summary of the Company's reconciliation of income taxes at statutory rates for the year ended December 31, 2025 and 2024, is as follows:

---

| | | |
|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, |
| | **2025** | 2024 |
|  | **$** | $|
| Income before income taxes | **74700** | 192036 |
| Combined federal and provincial statutory income tax rates | **27%** | 27% |
| Income tax expense at statutory rates | **20169** | 51850 |
| Permanent differences | **(11894)** | (29175) |
| Change due to differences in tax rates | **16188** | 7128 |
| Inflation adjustment | **(192)** | (402) |
| Change due to foreign translation | **(13148)** | 29 |
| Deferred tax assets not recognized | **14315** | (3991) |
| Mexico mining royalty tax | **1396** | 608 |
| Tax effect of investment in subsidiaries | **(4067)** | 1044 |
| Impact of change in accounting estimate | **9215** |  |
| Others | **496** | 461 |
| Income tax expense | **32478** | 27552 |

---

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**18. INCOME TAX EXPENSE (continued)**

**b)** **Deferred taxes** 

The significant components of the Company's deferred tax assets are as follows:

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | December 31, 2024 |
|  | **$** | $|
| Trade and other receivables | **1916** | 1346 |
| Other liabilities | **5871** | 5431 |
| Mineral properties, plant and equipment | **12** | 2048 |
| Decommissioning and restoration provision | **2671** | 2554 |
| Non-capital losses | **2706** | 2813 |
| Capital losses | **-** | 4607 |
| Inventories | **-** | 858 |
| Other assets | **-** | 497 |
| Mining tax | **616** | 128 |
| Other | **187** | 164 |
| Deferred tax assets | **13979** | 20446 |

---

The significant components of the Company's deferred tax liabilities are as follows:

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | December 31, 2024 |
|  | **$** | $|
| Mineral properties, plant and equipment | **(22570)** | (17773) |
| Investment in subsidiaries | **(1916)** | (5954) |
| Inventories | **(1444)** | (256) |
| Trade payables and accrued liabilities | **(22)** | (160) |
| COMIBOL initial investment period CAPEX receivable | **(3565)** | (7934) |
| Other | **(2676)** | - |
| Deferred tax liabilities | **(32193)** | (32077) |

---

The following table reconciles the deferred tax assets and liabilities to the Consolidated Statements of Financial Position:

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | December 31, 2024 |
|  | **$** | $|
| Deferred tax assets | **6798** | **9602** |
| Deferred tax liabilities | **(25012)** | **(21233)** |
|  | **(18214)** | **(11631)** |

---

Deferred tax assets and liabilities that are probable to be utilized are offset if they relate to the same taxable entity and same taxation authority. Future potential tax deductions that do not offset deferred tax liabilities are considered to be deferred tax assets.

As at December 31, 2025, the Company had unrecognized capital losses of approximately $48,424 (December 31, 2024 - $16,355) that arose in Canada, the capital losses can be carried forward indefinitely.

As at December 31, 2025, the Company had unrecognized inflationary adjustments on its investments in subsidiaries of $21,315 (December 31, 2024 – $nil) that arose in Bolivia, the amount can be utilize upon sale of subsidiaries.

As at December 31, 2025 the Company has unrecognized taxable temporary differences of $87,100 (December 31, 2024 - $109,706) for taxes that would be payable on the unremitted earnings of certain subsidiaries of the Company.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**18. INCOME TAX EXPENSE (continued)**

**c)** **Bolivia uncertain income tax position relating to tax year 2017** 

As part of the Acquisition, the Company assumed potential pre-acquisition income tax liabilities for Bolivia's 2017 tax year related to decommissioning and restoration provisions, depreciation of mineral properties, plant and equipment, undeclared income, and non-deductible expenses in the determination of the Bolivian current income tax. In the second quarter of 2023, the Company received notification from the Bolivian tax authorities on its decision to deny an appeal and confirmed the tax reassessment of 132,559 BOB ($15,856), which includes tax interest and penalties. The Company and the Bolivian tax authorities agreed on a financing arrangement ("financing arrangement") by making an initial deposit of 40,479 BOB ($4,841) (which represents 35% of the total balance) in the second quarter of 2023, and monthly instalments for the remaining balance of 75,175 BOB ($8,992) over the next five years to June 2028.

As the matter relates to income tax, and there was uncertainty over whether the relevant authorities will accept the current tax treatment under the Bolivian tax law, management concluded that it meets the definition of an uncertain tax treatment within the scope of *IAS 12 – Income Taxes* and *IFRIC 23 – Uncertainty over Income Tax Treatments.* In accordance with IFRIC 23, an entity shall consider whether it is probable (more likely than not) that a taxation authority will accept an uncertain tax treatment. If an entity concludes it is probable that a taxation authority will accept an uncertain tax treatment, the entity shall determine the taxable income or loss consistent with the tax treatment applied in its income tax filings. Pursuant to the Sinchi Wayra and Illapa acquisition agreements, Glencore has agreed to indemnify the Company for up to a maximum of $25,000, in aggregate, for all claims and liabilities arising from the acquisition. Such indemnification would, subject to such cap and certain conditions, extend to income tax liabilities. In the unlikely event that the Company exhausts all avenues and receives an unfavourable ruling, the Company is indemnified by the acquisition agreements and would not be liable for any income tax liability up to $25,000.

The Company successfully challenged the Bolivian tax authorities' decision through legal proceedings with the Supreme Court of Justice and the Constitutional Court in Bolivia. On January 7, 2025 the Supreme Court of Justice ruled in favor of the Company by issuing sentence 188/2025 which nullified the previous rulings in favor of the tax authority and requires the tax authority issue a new assessment that is legally compliant. At that point management will determine whether or not to accept the new assessment or challenge it again. The tax authority appealed the decision during the second quarter of 2025, but the appeal was denied in October 2025. Management has concluded that the matter has been resolved, accordingly, the Company believes there is no current tax liability and has not recognized an expense related to this matter as at December 31, 2025.

As at December 31, 2025, the Company has remitted tax instalments totaling $9,356 inclusive of interest and penalties to the Bolivian tax authorities based on the financing arrangement mentioned in the first paragraph above. As the Company believes the current tax owing related to this matter is $nil and the amounts paid will ultimately be refunded to the Company, the total payment made to date of $9,356 has been recognized as "trade and other receivables" (Note 6). On February 27, 2026, the Company filed a formal refund request with the tax authority requesting the refund of the amounts paid. Due to the current legal status of the proceedings, management expects to receive the full amount and no valuation allowance has been recognized.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

19. CAPITAL MANAGEMENT

The Company's objective when managing its capital is to maintain its ability to continue as a going concern while at the same time maximizing the growth of its business and providing returns to its shareholders. The Company's capital structure consists of shareholders' equity (comprising issued capital plus equity reserves plus retained earnings (deficit)) with a shareholders' equity of $179,058 as at December 31, 2025 (December 31, 2024 - $131,347).

The Company manages its capital structure and makes adjustments based on changes to its economic environment and the risk characteristics of the Company's assets. The Company's capital requirements are effectively managed based on the Company having a thorough reporting, planning and forecasting process to help identify the funds required to ensure the Company is able to meet its operating and growth objectives.

The Company is not subject to any externally imposed capital requirements with the exception of compliance with covenants for the Trafigura Loan Facility and for the San Lucas Promissory Notes Issuance program, see note 11(b) and note 11(d) for details.

20. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The carrying amounts of the Company's financial assets and financial liabilities by category are as follows:

---

| | | | |
|:---|:---|:---|:---|
| **December 31, 2025** | **Amortized cost** | **FVTOCI** | **Total** |
|  | $| $— | $|
| **Financial assets** |  |  |  |
| Cash and cash equivalents | 44267 |  | 44267 |
| Marketable securities |  | 22462 | 22462 |
| Trade and other receivables | 22977 | - | 43348 |
|  | **67244** | **22462** | **110077** |
| **Financial liabilities** |  |  |  |
| Trade payables and accrued liabilities | 54569 |  | 54569 |
| Consideration payable |  |  | 20243 |
| Loans payable | 51986 |  | 51986 |
| Other liabilities | 23598 | - | 23598 |
|  | **130153** | **-** | **150396** |
| **December 31, 2024** |  |  |  |
| **Financial assets** |  |  |  |
| Cash and cash equivalents | 35721 |  | 35721 |
| Trade and other receivables | 24462 | - | 41864 |
|  | **60183** | **-** | **77585** |
| **Financial liabilities** |  |  |  |
| Trade payables and accrued liabilities | 47389 |  | 47389 |
| Consideration payable | 34625 |  | 44783 |
| Loans payable | 19569 |  | 19569 |
| Other liabilities | 24125 | - | 24125 |
|  | **125708** | **-** | **135866** |

---

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**20. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)**

The categories of the fair value hierarchy that reflect the inputs to valuation techniques used to measure fair value are as follows:

**Level 1:** Quoted prices in active markets for identical assets or liabilities;

**Level 2:** Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

**Level 3:** Inputs for the asset or liability based on unobservable market data.

The carrying values of cash and cash equivalents, other receivables, and trade payables and accrued liabilities approximate their fair values because of their short-term nature.

Marketable securities consist of US treasury notes and US treasury bills which are held as part of the Company's cash position and liquidity management strategy. The marketable securities are measured at fair value using level 1 inputs, the unrealized gain/loss is recorded as other comprehensive income and once the securities are sold or mature the corresponding gain/loss is recorded as finance income/cost.

The securities are held with Stifel which uses a portion of the holdings as collateral for the Standby Letters of Credit that were issued to Banco BISA and Banco Credito de Bolivia (see note 11(a)). Although the securities held can be readily converted to cash, they are restricted to the extent that the amounts serve as collateral. The Standy Letter of credit issued to Banco BISA is for $10,000 and expires on May 26, 2026. The standby letter of credit issued to Banco Credito de Bolivia is for $5,800 and expires on March 26, 2026, and automatically renews each year. Since the standby letter of credit to Banco Credito de Bolivia will renew indefinitely, the amount held as collateral has been classified as non-current.

Trade receivables are measured at fair value using Level 2 inputs. The fair value of trade receivables is measured based on inputs other than quoted prices for the underlying commodity prices (silver, lead, zinc, copper) to which the receivable relates as the trade receivables are provisionally priced at the time of sale.

The fair value of the loans payable for disclosure purposes is determined using discounted cash flows based on the expected amounts and timing of future cash flows discounted using a market rate of interest adjusted for appropriate credit risk.

Consideration payable, comprised of contingent value rights (see note 10(b)), is measured at fair value using Level 3 inputs. The fair value is calculated using a Monte Carlo Simulation with key inputs and assumptions including the zinc spot price, the expected price of zinc in each year until December 31, 2032, the market risk-free rate and credit spread and the volatility and variability of historical zinc prices.

The levels in the fair value hierarchy into which the Company's financial assets and liabilities that are measured and recognized on the consolidated statements of financial position at fair value on a recurring basis were categorized as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| | **Level 1** | **Level 2** | **Level 3** | **Level 1** | **Level 2** | **Level 3** |
|  | $| $| $| $| $| $|
| **Assets** |  |  |  |  |  |  |
| Marketable securities | 22462 |  |  |  |  |  |
| Trade and other receivables | - | 20371 | - | - | 17402 | - |
|  | **22462** | **20371** | **-** | **-** | **17402** | **-** |
| **Liabilities** |  |  |  |  |  |  |
| Consideration payable | - | - | 20243 | - | - | 10158 |
|  | **-** | **-** | **20243** | **-** | **-** | **10158** |

---

The Company's trade receivables arose from provisional concentrate sales and are valued using quoted market prices based on the forward London Metal Exchange for silver, zinc and lead and the London Bullion Market Association P.M. fix for silver.

The methodology and assessment of inputs for determining the fair value of financial assets and liabilities as well as the levels of hierarchy for the Company's financial assets and liabilities measured at fair value remains unchanged from that at December 31, 2024.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**20. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)**

The Company has exposure to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives for growth and shareholder returns. The Company's Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework and reviews the Company's policies on an ongoing basis.

***Credit risk***

 ****

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company's trade receivables.

The Company has concentrate contracts to sell the zinc, lead and copper concentrates produced by all of the Company's mines. Concentrate contracts are a common business practice in the mining industry. The terms of the concentrate contracts may require the Company to deliver concentrate that has a value greater than the payment received at the time of delivery, thereby introducing the Company to credit risk of the buyers of concentrates. Should any of these counterparties not honour purchase arrangements, or should any of them become insolvent, the Company may incur losses for products already shipped and be forced to sell its concentrates on the spot market or it may not have a market for its concentrates and therefore its future operating results may be materially adversely impacted. At December 31, 2025, the Company had receivable balances associated with buyers of its concentrates of $20,371 (December 31, 2024 - $17,402), the Company's concentrate is sold to well-known and well-established international concentrate buyers.

The following financial assets represent the maximum credit risk to the Company:

SCHEDULE OF FINANCIAL ASSETS REPRESENT MAXIMUM CREDIT RISK

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | December 31, 2024 |
|  | **$** | $|
| Cash and cash equivalents | **44267** | 35721 |
| Marketable securities | **22462** |  |
| Trade and other receivables | **43348** | 41864 |

---

Management constantly monitors and assesses the credit risk resulting from its concentrate sales, trading counterparties and customers. With the exception to the above, the Company believes it is not exposed to significant credit risk.

***Liquidity risk***

 ****

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages its liquidity risk by continuously monitoring forecasted and actual cash flows. The Company has in place a rigorous planning and budgeting process to help determine the funds required to support the Company's normal operating requirements on an ongoing basis and its expansion plans. The Company strives to maintain sufficient liquidity to meet its short-term business requirements, taking into account its anticipated cash flows from operations, its holdings of cash and marketable securities, and its committed loan facilities.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**20. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)**

In the normal course of business, the Company enters into contracts that give rise to commitments for future minimum payments. The following tables summarize the remaining contractual maturities of the Company's financial liabilities and operating and capital commitments on an undiscounted basis at December 31, 2025:

SCHEDULE OF CONTRACTUAL MATURITIES OF FINANCIAL LIABILITIES

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **<1 <br> year** | **1 – 2 <br> years** | **2 – 5 <br> years** | **>5 <br> years** | **Total** |
|  | $| $| $| $| $|
| Trade payables and accrued liabilities | 47402 | 7167 |  |  | 54569 |
| Consideration payable – CVR & additional payments | 1697 | 4644 | 13147 | 9035 | 28523 |
| Loans payable | 50642 | 1344 |  |  | 51986 |
| Lease payments | 854 | - | - | - | 854 |
|  | **100595** | **13155** | **13147** | **9035** | **135932** |

---

 

***Currency risk***

 ****

The Company reports its financial statements in USD; however, the Company operates in jurisdictions that utilize other currencies. As a consequence, the financial results of the Company's operations as reported in USD are subject to changes in the value of the USD relative to local currencies. Since the Company's sales are denominated in USD and a portion of the Company's operating costs and capital spending are in local currencies, the Company is negatively impacted by strengthening local currencies relative to the USD and positively impacted by the inverse.

The sensitivity of the Company's net loss to changes in the exchange rate between the US dollar and the Bolivian boliviano, the Mexican peso and the Canadian dollar, would be as follows: a 1% change in the US dollar exchange rate relative to the Bolivian boliviano would change the Company's net income by approximately $540, a 1% change in the US dollar exchange rate relative to the Mexican peso would change the Company's net income by approximately $151, and a 1% change in the US dollar exchange rate relative to the Canadian dollar would change the Company's net income by approximately ($77).

The Company's financial assets and liabilities as at December 31, 2025 are denominated in Canadian dollars, US dollars, Bolivian bolivianos and Mexican pesos and translated to US dollars as follows:

SCHEDULE OF CURRENCY EXPOSURES

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **CAD** | **BOB** | **USD** | **MXN** | **Total** |
|  | $| $| $| $| **$** |
| **Financial assets** |  |  |  |  |  |
| Cash and cash equivalents | 2024 | 21 | 41468 | 754 | 44267 |
| Marketable securities |  |  | 22462 |  | 22462 |
| Trade and other receivables | 24 | 21694 | 21532 | 98 | 43348 |
|  | **2048** | **21715** | **85462** | **852** | **110077** |
| **Financial liabilities** |  |  |  |  |  |
| Trade payables and accrued liabilities | 728 | 35040 | 5944 | 12857 | 54569 |
| Consideration payable |  |  | 20243 |  | 20243 |
| Loans payable |  | 49464 | 2522 |  | 51986 |
| Other liabilities | - | 10675 | 10124 | 2799 | 23598 |
|  | **728** | **95179** | **38833** | **15656** | **150396** |
| **Net financial assets (liabilities)** | **1320** | **(73464)** | **46629** | **(14804)** | **(40319)** |

---

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**20. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)**

***Interest rate risk***

 ****

Interest rate risk is the risk that the fair values and future cash flows of the Company will fluctuate because of changes in market interest rates. The Company monitors its exposure to interest rates and has not entered into any derivative contracts to manage this risk. As at December 31, 2025, the Company's exposure to interest rate risk on interest bearing liabilities is limited to its consideration payable, loans payable and lease liabilities. Based on the Company's interest rate exposure at December 31, 2025, a change of 1% increase or decrease of market interest rate would impact the Company's income or loss by approximately $529.

***Price risk***

 ****

Metal price risk is the risk that changes in metal prices will affect the Company's income or the value of its related financial instruments. The Company derives its revenue from the sale of silver, zinc, lead and copper. The Company's sales are directly dependent on metal prices that have shown significant volatility and are beyond the Company's control. Consistent with the Company's mission to provide equity investors with exposure to changes in precious metal prices, the Company's current policy is to not hedge the price of precious metal.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

21. RELATED PARTY TRANSACTIONS AND KEY MANAGEMENT COMPENSATION

The Company's related parties include its subsidiaries, joint arrangements and key management personnel. During its normal course of operation, the Company enters into transactions with its related parties for goods and services. All related party transactions for the years ended December 31, 2025 and 2024 have been disclosed in these consolidated financial statements.

These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the parties.

**Remuneration of key management personnel**

Key management includes directors of the Company, the CEO, the CFO, the Executive Chairman, and other members of key management. Compensation to key management personnel was as follows:

---

| | | |
|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, |
| | **2025** | 2024 |
|  | **$** | $|
| Management and consulting fees | **2723** | 2806 |
| Share-based compensation expense | **1655** | 61 |
|  | **4378** | 2867 |

---

Of the $2,723 in management and consulting fees incurred with related parties during the year ended December 31, 2025, $231 (2024 - $158) was related to directors' fees and $2,492 (2024 - $2,648), was related to management fees.

22. SEGMENT INFORMATION

The Company has identified its operating segments based on the internal reports that are reviewed and used by the chief executive officer and the executive management team, collectively the chief operating decision maker ("CODM"), in assessing performance and in determining the allocation of resources. The Company primarily manages its business by looking at individual producing and developing resource projects as well as the aggregate of the exploration and evaluation properties and typically segregate these projects between production, development, and exploration.

**a)** **Operating segments** 

The following reportable operating segments have been identified: the Bolivar mine and processing plant, the Porco mine and processing plant, the Caballo Blanco Group which includes the Tres Amigos, Colquechaquita mines and the Don Diego processing plant, the San Lucas Group which includes the Reserva mine and San Lucas feed sourcing business, Zimapan mine and processing plant, and Corporate and Other activities. The corporate division earns income that is considered incidental to the Company's activities and therefore does not meet the definition of an operating segment.

<sup>(1)</sup> In the following tables it should be noted that the CODM reviews Bolivar and Porco revenues, cost of sales information, capital expenditures, total assets and total liabilities on a 100% basis whereas this financial information is recorded at 45% in the consolidated statement of comprehensive income.

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**22. SEGMENT INFORMATION (continued)**

**a)** **Revenues, operating costs and gross profit by operating segment** 

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Year ended December 31, 2025** | **Bolivar** | **Porco** | **Caballo Blanco Group** | **San Lucas Group** | **Zimapan** | **Corporate and other** | **Illapa Joint Operation eliminations<sup>(1)</sup>** | **Inter-company eliminations** | **Total** |
| Country | Bolivia | Bolivia | Bolivia | Bolivia | Mexico |  | Bolivia | Bolivia |  |
|  | $| $| $| $| $| $| $| $| $|
| Revenues | 71616 | 36500 | 79196 | 99364 | 102439 |  | (58511) | (4222) | 326382 |
| Mine operating costs |  |  |  |  |  |  |  |  |  |
| Cost of sales | (37244) | (23937) | (31103) | (77288) | (67767) |  | 33624 | 4222 | (199493) |
| Depletion and amortization | (10255) | (6108) | (6972) | (1988) | (7727) |  | 11473 |  | (21577) |
| Impairment reversals | 9084 | - | - | - | - | - | (4996) | - | 4088 |
|  | (38415) | (30045) | (38075) | (79276) | (75494) | - | 40101 | 4222 | (216982) |
| **Gross profit** | **33201** | **6455** | **41121** | **20088** | **26945** | **-** | **(18410)** | **-** | **109400** |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Year ended December 31, 2024** | **Bolivar** | **Porco** | **Caballo Blanco Group** | **San Lucas Group** | **Zimapan** | **Corporate and other** | **Illapa Joint Operation eliminations<sup>(1)</sup>** | **Inter-company eliminations** | **Total** |
| Country | Bolivia | Bolivia | Bolivia | Bolivia | Mexico |  | Bolivia | Bolivia |  |
|  | $| $| $| $| $| $| $| $| $|
| Revenues | 84160 | 40168 | 68239 | 80719 | 81688 |  | (66863) | (5124) | 282987 |
| Mine operating costs |  |  |  |  |  |  |  |  |  |
| Cost of sales | (53089) | (34134) | (46117) | (70232) | (55094) |  | 47487 | 5124 | (206055) |
| Depletion and amortization | (11122) | (3385) | (7191) | (888) | (7684) | - | 10564 | - | (19706) |
|  | (64211) | (37519) | (53308) | (71120) | (62778) | - | 58051 | 5124 | (225761) |
| Gross profit | **19949** | **2649** | **14931** | **9599** | **18910** | **-** | **(8812)** | **-** | **57226** |

---

&nbsp;&nbsp;&nbsp;&nbsp;**b)** **Capital expenditures, assets and liabilities by operating segment** 

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **As at December 31, 2025** | **Bolivar** | **Porco** | **Caballo Blanco Group** | **San Lucas Group** | **Zimapan** | **Corporate and other** | **Illapa Joint Operation eliminations<sup>(1)</sup>** | **Inter-company eliminations** | **Total** |
| Country | Bolivia | Bolivia | Bolivia | Bolivia | Mexico |  | Bolivia | Bolivia |  |
|  | $| $| $| $| $| $| $| $| $|
| Capital expenditures | 11184 | 1887 | 5097 | 3895 | 15602 |  | (7046) |  | 30619 |
| Total assets | 138287 | 88393 | 136936 | 74026 | 66534 | 26687 | (85092) |  | 445771 |
| Total liabilities | (56573) | (39876) | (133428) | (4405) | (42714) | (20502) | 30785 | - | (266713) |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **As at December 31, 2024** | **Bolivar** | **Porco** | **Caballo Blanco Group** | **San Lucas Group** | **Zimapan** | **Corporate and other** | **Illapa Joint Operation eliminations<sup>(1)</sup>** | **Inter-company eliminations** | **Total** |
| Country | Bolivia | Bolivia | Bolivia | Bolivia | Mexico |  | Bolivia | Bolivia |  |
|  | $| $| $| $| $| $| $| $| $|
| Capital expenditures | 7309 | 3756 | 6588 | 2683 | 9642 |  | (7359) |  | 22619 |
| Total assets | 119275 | 72971 | 92386 | 89962 | 59878 | 16582 | (77029) |  | 374025 |
| Total liabilities | (47244) | (31169) | (7985) | (96666) | (40292) | (45039) | 25717 | - | (242678) |

---

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

**22. SEGMENT INFORMATION (continued)**

**c)** **Segment revenue by operating segment, product and major customers** 

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Year ended December 31, 2025** | **Bolivar** | **Porco** | **Caballo Blanco Group** | **San Lucas Group** | **Zimapan** | **Corporate and other** | **Illapa Joint Operation eliminations<sup>(1)</sup>** | **Inter-company eliminations** | **Total** |
| Country | Bolivia | Bolivia | Bolivia | Bolivia | Mexico |  | Bolivia | Bolivia |  |
|  | $| $| $| $| $| $| $| $| $|
| Silver | 36960 | 11344 | 35503 | 37595 | 51755 |  |  |  | 173157 |
| Zinc | 34689 | 24727 | 39170 | 65974 | 43072 |  |  |  | 207632 |
| Lead | 1536 | 993 | 3726 | 4060 | 8559 |  |  |  | 18874 |
| Copper |  |  |  |  | 9450 |  |  |  | 9450 |
| Illapa joint operation 55% <br> interest |  |  |  |  |  |  | (58511) |  | (58511) |
| Intercompany transactions | 647 | 1086 | 2489 |  |  |  |  | (4222) |  |
| Provisional pricing adjustments | 2273 | 1173 | 2680 | (514) | 11758 |  |  |  | 17370 |
| Smelting and refining costs | (4489) | (2823) | (4372) | (7751) | (22155) | - | - | - | (41590) |
| **Sales to external customers** | **71616** | **36500** | **79196** | **99364** | **102439** | **-** | **(58511)** | **(4222)** | **326382** |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Year ended December 31, 2024** | **Bolivar** | **Porco** | **Caballo Blanco Group** | **San Lucas Group** | **Zimapan** | **Corporate and other** | **Illapa Joint Operation eliminations<sup>(1)</sup>** | **Inter-company eliminations** | **Total** |
| Country | Bolivia | Bolivia | Bolivia | Bolivia | Mexico |  | Bolivia | Bolivia |  |
|  | $| $| $| $| $| $| $| $| $|
| Silver | 44525 | 13477 | 26105 | 25237 | 40717 |  |  |  | 150061 |
| Zinc | 45036 | 27943 | 42754 | 60148 | 13942 |  |  |  | 189823 |
| Lead | 2782 | 1500 | 4398 | 2934 | 8693 |  |  |  | 20307 |
| Copper |  |  |  |  | 32787 |  |  |  | 32787 |
| Illapa joint operation 55% <br> interest |  |  |  |  |  |  | (66863) |  | (66863) |
| Intercompany transactions | 1088 | 1670 | 2366 |  |  |  |  | (5124) |  |
| Provisional pricing adjustments | 1650 | 1619 | 1979 | (636) | 7293 |  |  |  | 11905 |
| Smelting and refining costs | (10921) | (6041) | (9363) | (6964) | (21744) | - | - | - | (55033) |
| **Sales to external customers** | **84160** | **40168** | **68239** | **80719** | **81688** | **-** | **(66863)** | **(5124)** | **282987** |

---

During the year ended December 31, 2025, the Company had two customers (2024 – two customers). One customer accounted for 69% of the total sales revenue for the year ended December 31, 2025 (2024 – 71%). The other customer accounted for the remaining 31% of the total sales revenue for the year ended December 31, 2025 (2024 – 29%).

**SANTACRUZ SILVER MINING LTD.**

**Notes to the Consolidated Financial Statements**

**Years ended December 31, 2025 and 2024**

(Expressed in thousands of US dollars, unless otherwise noted)

23. EARNINGS PER SHARE

Earnings per share for the Company was calculated based on the following:

---

| | | |
|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, |
| | **2025** | 2024 |
| Net income for the year | **$42222** | $164484 |
| Weighted average number of shares outstanding | **89849385** | 88438988 |
| Earnings per share – basic | **$0.47** | $1.86 |

---

---

| | | |
|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, |
| | **2025** | 2024 |
| Net income for the year | **$42222** | $164484 |
| Weighted average number of shares outstanding | **89849385** | 88438988 |
| Incremental shares from options, RSUs, DSUs and PSUs | **2347706** | 625000 |
| Earnings per share – diluted | **$0.46** | $1.85 |

---

Earnings per share is based on the weighted average number of common shares of the Company outstanding during the period. The diluted earnings per share reflects the potential dilution of common share equivalents, such as outstanding share options, RSUs, DSUs and PSUs in the weighted average number of common shares outstanding during the period, if dilutive.

The following securities could potentially dilute basic earnings per share in the future, but were not included in the computation of diluted earnings per share because they were anti-dilutive:

---

| | | |
|:---|:---|:---|
| | **2025** | 2024 |
| Stock options | **-** | 3612500 |
| | **-** | 3,612,500 |

---

24. SUPPLEMENTAL CASH FLOW INFORMATION

A summary of the Company's non-cash finance costs is as follows:

---

| | | |
|:---|:---|:---|
|  | Year ended December 31, | Year ended December 31, |
| | **2025** | 2024 |
|  | **$** | $|
| Accretion of consideration payable (Note 10) | **-** | 1578 |
| Accretion of decommissioning provision (Note 13) | **2147** | 1895 |
| Accretion of Trafigura Loan Facility (Note 11(b)) | **-** | 547 |
| Accretion of COMIBOL initial investment CAPEX receivable (Note 6(a)) | **(1056)** | (2924) |
| Finance charges on leases | **603** | 189 |
| Loss on change in fair value of consideration payable (Note 10) | **15460** | 13472 |
| Loss on remeasurement of cash flows related to CAPEX receivable (Note 6(a)) | **2927** | 1868 |
| Interest expense, carrying and finance charges (Note 11) | **2128** | 1488 |
|  | **22209** | 18113 |

---

Other non-cash transactions not included in the table above are disclosed elsewhere in the notes to the consolidated financial statements.

## Exhibit 99.4

**Exhibit 99.4**

**CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14 OF**

**THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT**

**TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Arturo Préstamo, certify that:

1. I
 have reviewed this annual report on Form 40-F of Santacruz Silver Mining Ltd.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this
 report;

4. The
 issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the issuer and have:

&nbsp;&nbsp;&nbsp;&nbsp;a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

b) Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

c) Evaluated
 the effectiveness of the issuer's disclosure controls and procedures and presented in this report our conclusions about the
 effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

d) Disclosed
 in this report any change in the issuer's internal control over financial reporting that occurred during the period covered
 by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer's internal control
 over financial reporting; and

5. The
 issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the issuer's auditors and the audit committee of the issuer's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a) All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the issuer's ability to record, process, summarize and report financial information;
 and

b) Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal
 control over financial reporting.

---

| |
|:---|
| Date: May 1, 2026 |
| */s/ Arturo Préstamo* |
| Arturo Préstamo |
| Chief Executive Officer |
| (Principal Executive Officer) |

---

## Exhibit 99.5

**Exhibit 99.5**

**CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14 OF**

**THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT**

**TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Andres Bedregal, certify that:

1. I
 have reviewed this annual report on Form 40-F of Santacruz Silver Mining Ltd.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this
 report;

4. The
 issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the issuer and have:

&nbsp;&nbsp;&nbsp;&nbsp;a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

b) Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

c) Evaluated
 the effectiveness of the issuer's disclosure controls and procedures and presented in this report our conclusions about the
 effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

d) Disclosed
 in this report any change in the issuer's internal control over financial reporting that occurred during the period covered
 by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer's internal control
 over financial reporting; and

5. The
 issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the issuer's auditors and the audit committee of the issuer's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a) All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the issuer's ability to record, process, summarize and report financial information;
 and

b) Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal
 control over financial reporting.

---

| |
|:---|
| Date: May 1, 2026 |
| */s/ Andres Bedregal* |
| Andres Bedregal |
| Chief Financial Officer |
| (Principal Financial Officer) |

---

## Exhibit 99.6

**Exhibit 99.6**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report of Santacruz Silver Mining Ltd. (the "**Company**") on Form 40-F for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "**Report**"), I, Arturo Préstamo, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The
 Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The
 information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
 of the Company.

---

| | |
|:---|:---|
| By: | */s/ Arturo Préstamo* |
|  | Arturo Préstamo |
|  | Chief Executive Officer |
| May 1, 2026 | May 1, 2026 |

---

## Exhibit 99.7

**Exhibit 99.7**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Annual Report of Santacruz Silver Mining Ltd. (the "**Company**") on Form 40-F for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "**Report**"), I, Andres Bedregal, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The
 Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The
 information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
 of the Company.

---

| | |
|:---|:---|
| By: | */s/ Andres Bedregal* |
|  | Andres Bedregal |
|  | Chief Financial Officer |
| May 1, 2026 | May 1, 2026 |

---

## Exhibit 99.8

**Exhibit 99.8**

**CONSENT OF Independent AUDITORS**

We hereby consent to the incorporation by reference of our report dated March 31, 2026, relating to the consolidated financial statements of Santacruz Silver Mining Ltd. appearing in the Annual Report on Form 40-F for the year ended December 31, 2025, as filed with the United States Securities Exchange and Commission.

---

| | |
|:---|:---|
| /s/ Davidson & Company LLP | Vancouver, Canada |
| Chartered Professional Accountants |  |

---

May 1, 2026

## Exhibit 99.9

**Exhibit 99.9**

**CONSENT OF INDEPENDENT AUDITORS**

We consent to the use of our report dated May 28, 2025 relating to the financial statements of Santacruz Silver Mining Ltd. appearing in this Annual Report on Form 40-F for the year ended December 31, 2025.

/s/ Deloitte LLP

Chartered Professional Accountants

Vancouver, Canada

May 1, 2026

## Exhibit 99.10

**Exhibit 99.10**

Consent of Garth David Kirkham, P. Geo.

The undersigned hereby consents to (a) being named as a Qualified Person in the Annual Information Form (the "**AIF**") for the fiscal year ended December 31, 2025, of Santacruz Silver Mining Ltd. (the "**Company**") being filed as an exhibit to the Company's Annual Report on Form 40-F for the fiscal year ended December 31, 2025, being filed by the Company with the United States Securities and Exchange Commission and any amendments thereto, and (b) the references to, and the information derived from, the technical reports titled (i) *"NI 43-101 Technical Report on the Advanced Project, Porco Mining Operations, Antonio Quijarro Province, Bolivia*," (ii) "*NI 43-101 Technical Report on the Advanced Project, Caballo Blanco Mining Operations, near Potosi, Bolivia*," and (iii) "*NI 43-101 Technical Report on the Advanced Project, Bolivar Mining Operations, Atequera, Bolivia,*" each with an effective date of January 1, 2024, being incorporated by reference into the AIF.

---

| |
|:---|
| /s/ Garth David Kirkham |
| Garth David Kirkham, P. Geo. |
| Dated: May 1, 2026 |

---

## Exhibit 99.11

**Exhibit 99.11**

Consent of Richard Mervin Goodwin.

The undersigned hereby consents to (a) being named in the Annual Information Form (the "**AIF**") for the fiscal year ended December 31, 2025, of Santacruz Silver Mining Ltd. (the "**Company**") being filed as an exhibit to the Company's Annual Report on Form 40-F for the fiscal year ended December 31, 2025, being filed by the Company with the United States Securities and Exchange Commission and any amendments thereto, and (b) the references to, and the information derived from, the technical reports titled (i) *"NI 43-101 Technical Report on the Advanced Project, Porco Mining Operations, Antonio Quijarro Province, Bolivia*," (ii) "*NI 43-101 Technical Report on the Advanced Project, Caballo Blanco Mining Operations, near Potosi, Bolivia*," and (iii) "*NI 43-101 Technical Report on the Advanced Project, Bolivar Mining Operations, Atequera, Bolivia,*" each with an effective date of January 1, 2024, being incorporated by reference into the AIF.

---

| |
|:---|
| /s/ Richard Mervin Goodwin |
| Richard Mervin Goodwin |
| Dated: May 1, 2026 |

---

## Exhibit 99.12

**Exhibit 99.12**

Consent of Shane Tad Crowie, P. Eng.

The undersigned hereby consents to (a) being named in the Annual Information Form (the "**AIF**") for the fiscal year ended December 31, 2025, of Santacruz Silver Mining Ltd. (the "**Company**") being filed as an exhibit to the Company's Annual Report on Form 40-F for the fiscal year ended December 31, 2025, being filed by the Company with the United States Securities and Exchange Commission and any amendments thereto, and (b) the references to, and the information derived from, the technical reports titled (i) *"NI 43-101 Technical Report on the Advanced Project, Porco Mining Operations, Antonio Quijarro Province, Bolivia*," (ii) "*NI 43-101 Technical Report on the Advanced Project, Caballo Blanco Mining Operations, near Potosi, Bolivia*," and (iii) "*NI 43-101 Technical Report on the Advanced Project, Bolivar Mining Operations, Atequera, Bolivia,*" each with an effective date of January 1, 2024, being incorporated by reference into the AIF.

---

| |
|:---|
| /s/ Shane Tad Crowie |
| Shane Tad Crowie, P. Eng. |
| Dated: May 1, 2026 |

---

## Exhibit 99.13

**Exhibit 99.13**

Consent of Garth Kirkham, P. Geo.

The undersigned hereby consents to (a) being named in the Annual Information Form (the "**AIF**") for the fiscal year ended December 31, 2025, of Santacruz Silver Mining Ltd. (the "**Company**") being filed as an exhibit to the Company's Annual Report on Form 40-F for the fiscal year ended December 31, 2025, being filed by the Company with the United States Securities and Exchange Commission and any amendments thereto (the "**Annual Report**"), and (b) the references to, and the information derived from, the technical report titled "*Technical Report, Zimapan Mine, Hidalgo State, Mexico*" with an effective date of December 31, 2025, being incorporated by reference into the AIF and being filed as an exhibit to the Annual Report.

---

| |
|:---|
| /s/ Garth Kirkham |
| Garth Kirkham, P. Geo. |
| Dated: May 1, 2026 |

---

## Exhibit 99.14

**Exhibit 99.14**

Consent of Paul Thornton, P. Eng.

The undersigned hereby consents to (a) being named in the Annual Information Form (the "**AIF**") for the fiscal year ended December 31, 2025, of Santacruz Silver Mining Ltd. (the "**Company**") being filed as an exhibit to the Company's Annual Report on Form 40-F for the fiscal year ended December 31, 2025, being filed by the Company with the United States Securities and Exchange Commission and any amendments thereto (the "Annual Report"), and (b) the references to, and the information derived from, the technical report titled "*Technical Report, Zimapan Mine, Hidalgo State, Mexico*" with an effective date of December 31, 2025, being incorporated by reference into the AIF and being filed as an exhibit to the Annual Report.

---

| |
|:---|
| /s/ Paul Thornton |
| Paul Thornton, P. Eng. |
| Dated: May 1, 2026 |

---

## Exhibit 99.15

**Exhibit 99.15**

Consent of Shane Tad Crowie, P. Eng.

The undersigned hereby consents to (a) being named in the Annual Information Form (the "**AIF**") for the fiscal year ended December 31, 2025, of Santacruz Silver Mining Ltd. (the "**Company**") being filed as an exhibit to the Company's Annual Report on Form 40-F for the fiscal year ended December 31, 2025, being filed by the Company with the United States Securities and Exchange Commission and any amendments thereto (the "**Annual Report**"), and (b) the references to, and the information derived from, the technical report titled "*Technical Report, Zimapan Mine, Hidalgo State, Mexico*" with an effective date of December 31, 2025, being incorporated by reference into the AIF and being filed as an exhibit to the Annual Report.

---

| |
|:---|
| /s/ Shane Tad Crowie |
| Shane Tad Crowie, P. Eng. |
| Dated: May 1, 2026 |

---

## Exhibit 99.16

**Exhibit 99.16**

I, Garth David Kirkham, P.Geo., do hereby certify that:

1) I am a consulting geoscientist with an office at 6331 Palace Place, Burnaby, British Columbia.

2) This certificate applies to the technical report titled, "NI 43-101 Technical Report, Zimapan Project, Hidalgo State, Mexico" prepared for Santacruz Silver Mining Limited ("Zimapan") with an effective date of December 31, 2025 (the "Technical Report").

3) I am a graduate of the University of Alberta in 1983 with a BSc. I have continuously practiced my profession since 1988. I have worked on and been involved with NI43-101 studies on the Kutcho Creek and Debarwa poly-metallic deposits, Bolivar, Porco and Caballo Blanco Ag-Zn-Pb projects in Bolivia, Las Minas in Vera Cruz and Esperansa deposit in Mexico, Cerro Blanco Au-Ag, project in Guatemala, along with multiple technical reports on the Cerro Las Minitas Project, Durango.

4) I am a member in good standing of Engineers and Geoscientists BC (EGBC).

5) I have visited the property on February 20 through March 5, 2023 and March 22 through 29, 2026.

6) In the independent Technical Report, I am responsible for Sections 1.1 to 1.5, 1.10 to 1.12, 2 through 11, 12.1 and 12.2, 14, 20 and 23 to 28.

7) I have not had prior involvement with the property.

8) I am independent of Santacruz as defined in Section 1.5 of National Instrument 43-101.

9) I have read the definition of "qualified person" set out in National Instrument 43-101 and certify that by reason of education, experience, independence and affiliation with a professional association, I meet the requirements of an Independent Qualified Person as defined in National Instrument 43-101.

10) I am not aware of any material fact or material change with respect to the subject matter of the technical report that is not reflected in the Technical Report and that, at the effective date of the Technical Report, to the best of my knowledge, information and belief, this technical report contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.

11) I have read National Instrument 43-101, Standards for Disclosure of Mineral Projects and Form 43-101F1. This technical report has been prepared in compliance with that instrument and form.

Dated this 30<sup>th</sup> day of April, 2026 in Burnaby, British Columbia.

<u>*"Garth Kirkham" {signed and sealed}*</u> <br> Garth Kirkham, P.Geo. <br> Kirkham Geosystems Ltd.

## Exhibit 99.17

**Exhibit 99.17**

**CERTIFICATE OF QUALIFIED PERSON**

**Paul Thornton, P.Eng**

I, Paul Thornton, P.Eng, do hereby certify that:

1. I
 am a Senior Mining Engineer of:

JDS Energy & Mining Inc.

Suite 900 – 999 W Hastings St, Vancouver, BC, Canada V6C 2W2

2. I
 graduated from the University of British Columbia in 2016 with a B.A.Sc in Mining Engineering.
 I have practiced my profession consistently since 2017.

3. I
 am a Registered Professional Engineer (#56236) in good standing in British Columbia.

4. I
 have worked as an engineer for a total of 9 years. My experience includes mine technical
 services management, mine design and scheduling, field engineering, mine surveying, project
 management, cost estimation, construction planning and construction management for mining
 projects.

5. I
 have read the definition of "Qualified Person" set out in National Instrument
 43-101 ("NI 43-101") and certify that by reason of my education, affiliation
 with a professional association (as defined in NI 43-101) and past relevant work experience,
 I fulfill the requirements to be a "Qualified Person" for the purposes of NI
 43-101.

6. I
 am a contributing author for the preparation of the technical report titled " NI 43-101
 Technical Report Zimapan Mine Hidalgo State, Mexico" (the "Technical Report"),
 dated effective December 31, 2025, prepared for Santacruz Silver Mining Ltd.; and am responsible
 for Sections 1.7, 1.10 to 1.12, 12.3, 12.5, 15, 16, 18, 19, 21,
22, 25, and 26. I visited the project site from March 22 to 29, 2026.

7. I
 have had no prior involvement with the property that is the subject of the Technical Report.

8. As
 of the effective date of the technical report, to the best of my knowledge, information and
 belief, the Technical Report contains all scientific and technical information that is required
 to be disclosed to make the Technical Report not misleading.

9. I
 am independent of the issuer applying all of the tests in Section 1.5 of National Instrument
 43-101.

10. I
 have read National Instrument 43-101 and Form 43-101F1, and the Technical Report has been
 prepared in compliance with that instrument and form.

11. I
 consent to the filing of the Technical Report with any stock exchange and other regulatory
 authority and any publication by them, including electronic publication in the public company
 files on their websites accessible by the public, of the Technical Report.

Signed and dated this 30<sup>th</sup> day of April, 2026.

---

| |
|:---|
| /s/ Paul Thornton |
| Paul Thornton, P.Eng |

---

## Exhibit 99.18

**Exhibit 99.18**

**CERTIFICATE OF QUALIFIED PERSON**

**Shane Tad Crowie, P.Eng**

I, Shane Tad Crowie, P.Eng, do hereby certify that:

1. I
 am a Senior Metallurgist of:

JDS Energy & Mining Inc.

Suite 900 – 999 W Hastings St, Vancouver, BC, Canada V6C 2W2

2. I
 graduated from the University of British Columbia in 2001 with a B.A.Sc in Mining and Mineral
 Process Engineering. I have practiced my profession consistently since 2001.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. I
 am a Registered Professional Engineer (#34052) in good standing in British Columbia.

4. I
 have worked as a metallurgist and mineral process engineer for a total of 24 years. I have
 been involved with various mining projects and studies; where I have performed, technical,
 operations and management positions at mines in Canada. I have been responsible for recovery
 optimization projects, capital improvement projects, budgeting, planning and pilot plant
 operations. I also have been responsible for writing technical reports, managing metallurgical
 testwork, and performing due diligence audits on mines and development properties.

5. I
 have read the definition of "Qualified Person" set out in National Instrument
 43-101 ("NI 43-101") and certify that by reason of my education, affiliation
 with a professional association (as defined in NI 43-101) and past relevant work experience,
 I fulfill the requirements to be a "Qualified Person" for the purposes of NI
 43-101.

6. I
 am a contributing author for the preparation of the technical report titled " NI 43-101
 Technical Report Zimapan Mine Hidalgo State, Mexico" (the "Technical Report"),
 dated effective December 31, 2025, prepared for Santacruz Silver Mining Ltd.; and am responsible
 for Sections 1.6, 1.8, 1.9 to 1.12, 12.4, 12.5, 13, 17, 26,

27, and 28. I visited the project site from March 22 to 24, 2026.

7. My
 prior involvement with the property includes the management of a metallurgical test work
 campaign in 2023.

8. As
 of the effective date of the technical report, to the best of my knowledge, information and
 belief, the Technical Report contains all scientific and technical information that is required
 to be disclosed to make the Technical Report not misleading.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. I
 am independent of the issuer applying all of the tests in Section 1.5 of National Instrument
 43-101.

10. I
 have read National Instrument 43-101 and Form 43-101F1, and the Technical Report has been
 prepared in compliance with that instrument and form.

11. I
 consent to the filing of the Technical Report with any stock exchange and other regulatory
 authority and any publication by them, including electronic publication in the public company
 files on their websites accessible by the public, of the Technical Report.

Signed and dated this 30<sup>th</sup> day of April, 2026.

---

| |
|:---|
| /s/ Shane Tad Crowie |
| Shane Tad Crowie, P.Eng |

---

## Exhibit 99.19

**Exhibit 99.19**

![](ex99-19_001.jpg)

---

| | |
|:---|:---|
| ![](ex99-19_002.jpg) | ![](ex99-19_003.jpg) |

---

Date and Signature Page

This report entitled NI 43-101 Technical Report, Zimapan Mine, Hidalgo, Mexico, effective as of 31 December 2025 was prepared and signed by the following authors:

Original document signed and sealed by:

---

| | |
|:---|:---|
| *Paul Thornton* | April 30, 2026 |
| Paul Thornton, P.Eng. | Date Signed |
| Original document signed and sealed by: |  |
| *Garth Kirkham* | April 30, 2026 |
| Garth Kirkham, P.Geo. | Date Signed |
| Original document signed and sealed by: |  |
| *Tad Crowie* | April 30, 2026 |
| Tad Crowie, P.Eng. | Date Signed |

---

ZIMAPAN MINE \| NI 43-101 TECHNICAL REPORT PAGE i

---

| | |
|:---|:---|
| ![](ex99-19_002.jpg) | ![](ex99-19_003.jpg) |

---

 

**NOTICE**

JDS Energy & Mining, Inc. prepared this National Instrument 43-101 Technical Report, in accordance with Form 43-101F1, for Santacruz Silver Mining Ltd. The quality of information, conclusions and estimates contained herein is based on: (i) information available at the time of preparation; (ii) data supplied by outside sources, and (iii) the assumptions, conditions, and qualifications set forth in this report.

Santacruz Silver Mining Ltd. filed this Technical Report with the Canadian Securities Regulatory Authorities pursuant to provincial securities legislation. Except for the purposes legislated under provincial securities law, any other use of this report by any third party is at that party's sole risk.

ZIMAPAN MINE \| NI 43-101 TECHNICAL REPORT PAGE ii

---

| | |
|:---|:---|
| ![](ex99-19_002.jpg) | ![](ex99-19_003.jpg) |

---

**Table of Contents**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **1** |  |  | **Executive Summary** | 1-1 |
|  | 1.1 |  | Introduction | 1-1 |
|  | 1.2 |  | Project Description | 1-1 |
|  | 1.3 |  | Location, Access and Ownership | 1-2 |
|  | 1.4 |  | History, Exploration and Drilling | 1-2 |
|  | 1.5 |  | Geology and Mineralization | 1-4 |
|  | 1.6 |  | Metallurgical Testing and Mineral Processing | 1-5 |
|  | 1.7 |  | Mining | 1-5 |
|  | 1.8 |  | Recovery Methods | 1-6 |
|  | 1.9 |  | Infrastructure | 1-7 |
|  |  | 1.9.1 | Carrizal and Monte Mines | 1-8 |
|  |  | 1.9.2 | San Francisco Processing Plant | 1-9 |
|  | 1.1 |  | Capital and Operating Cost Estimates | 1-11 |
|  |  | 1.10.1 | Capital Costs | 1-11 |
|  |  | 1.10.2 | Operating Costs | 1-12 |
|  | 1.11 |  | Conclusions | 1-13 |
|  |  | 1.11.1 | Risks | 1-13 |
|  |  | 1.11.2 | Opportunities | 1-13 |
|  | 1.12 |  | Recommendations | 1-14 |
| **2** |  |  | **Introduction** | 2-1 |
|  | 2.1 |  | Terms of Reference and Scope | 2-1 |
|  | 2.2 |  | Qualifications and Responsibilities | 2-1 |
|  | 2.3 |  | Site Visit | 2-2 |
|  | 2.4 |  | Sources of Information | 2-2 |
|  | 2.5 |  | Units, Currency and Rounding | 2-3 |
| **3** |  |  | **Reliance on Other Experts** | 3-1 |
| **4** |  |  | **Property Description and Location** | 4-1 |
|  | 4.1 |  | General Description | 4-1 |
|  | 4.2 |  | Agreements and Royalties | 4-2 |

---

ZIMAPAN MINE \| NI 43-101 TECHNICAL REPORT PAGE iii

---

| | |
|:---|:---|
| ![](ex99-19_002.jpg) | ![](ex99-19_003.jpg) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  | 4.2.1 | Lease Agreement | 4-2 |
|  |  | 4.2.2 | Carrizal Mining Acquisition | 4-3 |
|  |  | 4.2.3 | Terms and Conditions Agreement to Purchased Zimapan Property | 4-3 |
|  | 4.3 |  | Grant of Concessions | 4-4 |
|  | 4.4 |  | Taxes and Fees | 4-6 |
|  | 4.5 |  | Verification of Title Status | 4-6 |
|  | 4.6 |  | Surface Rights | 4-6 |
|  |  | 4.6.1 | General Information | 4-6 |
|  |  | 4.6.2 | Land Tenure and Title – Private Property | 4-6 |
|  |  | 4.6.3 | Surface Rights Agreements | 4-7 |
|  |  | 4.6.4 | Permitted Uses and Operational Rights | 4-9 |
|  |  | 4.6.5 | Agreement Terms and Considerations | 4-9 |
|  |  | 4.6.6 | Legal and Compliance Considerations | 4-9 |
|  |  | 4.6.7 | Project Surface Area | 4-10 |
|  |  | 4.6.8 | Legal and Registry Support | 4-10 |
|  |  | 4.6.9 | Rights and Obligations | 4-10 |
|  |  | 4.6.10 | Tenue Risk Assessment | 4-11 |
|  |  | 4.6.11 | Conclusion | 4-11 |
|  | 4.7 |  | Environmental Liability and Permitting | 4-11 |
|  |  | 4.7.1 | Regulatory Framework and Project Context | 4-11 |
|  |  | 4.7.2 | Inventory of Project Permits and Authorizations | 4-12 |
|  |  | 4.7.3 | Detailed Description of Authorizations | 4-13 |
|  |  | 4.7.4 | Environmental Monitoring Program (EMP) | 4-15 |
|  |  | 4.7.5 | Regulatory Risk and Mitigation – Environmental Framework | 4-15 |
|  |  | 4.7.6 | QP Opinion | 4-16 |
| **5** |  |  | **Accessibility, Climate, Local Resources, Infrastructure and Physiography** | 5-1 |
|  | 5.1 |  | Access | 5-1 |
|  |  | 5.1.1 | Route to Zimapan from Mexico City | 5-1 |
|  |  | 5.1.2 | Access to Mine Facilities | 5-1 |
|  |  | 5.1.3 | Access Conditions and Operational Considerations | 5-2 |
|  |  | 5.1.4 | Summary of Distances and Travel Times | 5-3 |
|  | 5.2 |  | Physiography | 5-3 |
|  | 5.3 |  | Climate | 5-4 |
|  | 5.4 |  | Infrastructure and Local Resources | 5-4 |

---

ZIMAPAN MINE \| NI 43-101 TECHNICAL REPORT PAGE iv

---

| | |
|:---|:---|
| ![](ex99-19_002.jpg) | ![](ex99-19_003.jpg) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **6** |  |  | **History** | 6-1 |
|  | 6.1 |  | General History | 6-1 |
|  | 6.2 |  | Previous Work by Carrizal Mining | 6-2 |
|  |  | 6.2.1 | Mining and Production | 6-2 |
|  |  | 6.2.2 | Development Drilling | 6-2 |
| **7** |  |  | **Geological Setting and Mineralization** | 7-1 |
|  | 7.1 |  | Introduction | 7-1 |
|  | 7.2 |  | Regional Geology | 7-1 |
|  | 7.3 |  | Property Geology | 7-7 |
|  |  | 7.3.1 | Stratigraphy | 7-7 |
|  |  | 7.3.2 | Structure | 7-9 |
|  | 7.4 |  | Local Geology | 7-10 |
|  |  | 7.4.1 | Lithology | 7-10 |
|  | 7.5 |  | Alteration and Mineralization | 7-10 |
|  |  | 7.5.1 | Pre-Mineralization K-Silicate Alteration within Intrusions | 7-11 |
|  |  | 7.5.2 | Pre-Mineralization Prograde-Anhydrous Exoskarn | 7-11 |
|  |  | 7.5.3 | Pre-Mineralization Prograde-Anhydrous Endoskarn | 7-11 |
|  |  | 7.5.4 | Syn-Mineralization Stage Retrograde-Hydrous Exoskarn | 7-11 |
|  |  | 7.5.5 | Post-Mineralization Stage Supergene Alteration | 7-12 |
|  |  | 7.5.6 | Structural Controls and Size | 7-12 |
|  | 7.6 |  | Mineral Zones | 7-14 |
|  |  | 7.6.1 | El Monte Mine | 7-15 |
|  |  | 7.6.2 | Carrizal Mine. | 7-16 |
| **8** |  |  | **Deposit Types** | 8-1 |
| **9** |  |  | **Exploration** | 9-1 |
| **10** |  |  | **Drilling** | 10-1 |
| **11** |  |  | **Sample Preparation, Analyses and Security** | 11-1 |
|  | 11.1 |  | Sample Methods and Sample Security | 11-1 |
|  | 11.2 |  | Sample Preparation and Analytical Procedures | 11-2 |
|  | 11.3 |  | Quality Assurance and Quality Control (QA/QC) | 11-2 |
|  | 11.4 |  | Opinion | 11-3 |

---

ZIMAPAN MINE \| NI 43-101 TECHNICAL REPORT PAGE v

---

| | |
|:---|:---|
| ![](ex99-19_002.jpg) | ![](ex99-19_003.jpg) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **12** |  |  | **Data Verification** | 12-1 |
|  | 12.1 |  | Introduction | 12-1 |
|  | 12.2 |  | Geology and Sampling | 12-1 |
|  | 12.3 |  | Mining | 12-2 |
|  | 12.4 |  | Metallurgy | 12-3 |
|  | 12.5 |  | Conclusions | 12-3 |
| **13** |  |  | **Mineral Processing and Metallurgical Testing** | 13-1 |
|  | 13.1 |  | 2023 Geometallurgical Testwork program | 13-1 |
|  |  | 13.1.1 | Recovery By Mineralized Zone | 13-2 |
|  |  | 13.1.2 | Mineralized Zone Compatibility | 13-3 |
|  | 13.2 |  | Operational Data | 13-3 |
|  | 13.3 |  | Metallurgical Assumptions | 13-4 |
| **14** |  |  | **Mineral Resource Estimate** | 14-1 |
| **15** |  |  | **Mineral Reserve Estimate** | 15-1 |
| **16** |  |  | **Mining Methods** | 16-1 |
|  | 16.1 |  | Introduction | 16-1 |
|  | 16.2 |  | Mining Methods | 16-1 |
|  |  | 16.2.1 | Mine Design | 16-1 |
|  |  | 16.2.2 | Stoping | 16-2 |
|  |  | 16.2.3 | Development | 16-3 |
|  | 16.3 |  | Mine Equipment | 16-3 |
| **17** |  |  | **Process Description / Recovery Methods** | 17-1 |
|  | 17.1 |  | Introduction | 17-1 |
|  | 17.2 |  | Plant Flowsheet | 17-1 |
|  | 17.3 |  | Process Plant Description | 17-2 |
|  |  | 17.3.1 | Crushing | 17-2 |
|  |  | 17.3.2 | Grinding | 17-3 |
|  |  | 17.3.3 | Lead/Copper Flotation | 17-3 |
|  |  | 17.3.4 | Zinc Flotation | 17-3 |
|  |  | 17.3.5 | Concentrates | 17-4 |
|  |  | 17.3.6 | Tailings | 17-4 |

---

ZIMAPAN MINE \| NI 43-101 TECHNICAL REPORT PAGE vi

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| | |
|:---|:---|
| ![](ex99-19_002.jpg) | ![](ex99-19_003.jpg) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **18** |  |  | **Project Infrastructure and Services** | 18-1 |
|  | 18.1 |  | Carrizal and Monte Mines | 18-1 |
|  |  | 18.1.1 | San Francisco Processing Plant | 18-2 |
|  |  | 18.1.2 | Photos of Mine and Plant Infrastructure | 18-4 |
| **19** |  |  | **Market Studies and Contracts** | 19-1 |
|  | 19.1 |  | Market Studies | 19-1 |
|  | 19.2 |  | Smelting | 19-1 |
|  | 19.3 |  | Metal Prices | 19-1 |
| **20** |  |  | **Environmental Studies, Permitting and Social or Community Impacts** | 20-1 |
|  | 20.1 |  | Environmental | 20-1 |
|  |  | 20.1.1 | Highlights | 20-1 |
|  |  | 20.1.2 | Implement of the EMS | 20-2 |
|  | 20.2 |  | Environmental Studies and Known Issues | 20-5 |
|  | 20.3 |  | Permitting | 20-5 |
|  |  | 20.3.1 | Environmental Impact Authorization – Tailings Dam N° 9 | 20-5 |
|  |  | 20.3.2 | Operating License (Atmospheric Contamination Control) | 20-6 |
|  |  | 20.3.3 | Mining Waste Management Plan Registration (Flotation Tailings) | 20-7 |
|  |  | 20.3.4 | Record of the Hazardous Waste Management Plan | 20-7 |
|  |  | 20.3.5 | Special Management Waste (SMW) Management Plan Registration | 20-8 |
|  |  | 20.3.6 | Water Concessions and Federal Zones (CONAGUA) | 20-8 |
|  |  | 20.3.7 | Social and Community | 20-9 |
|  | 20.4 |  | Communities | 20-11 |
|  |  | 20.4.1 | Social Management System | 20-12 |
|  |  | 20.4.2 | Social Responsibility Policy and FPIC Procedure | 20-13 |
|  |  | 20.4.3 | Social Investment and Beneficiaries 2025 | 20-13 |
|  |  | 20.4.4 | Mine Closure, Remediation and Recovery | 20-14 |
|  |  | 20.4.5 | Conclusions | 20-14 |
| **21** |  |  | **Capital and Operating Costs** | 21-1 |
|  | 21.1 |  | Capital Costs | 21-1 |
|  | 21.2 |  | Operating Costs | 21-2 |
| **22** |  |  | **Economic Analysis** | 22-1 |
| **23** |  |  | **Adjacent Properties** | 23-1 |
|  | 23.1 |  | La Negra Property | 23-1 |
| **24** |  |  | **Other Relevant Data and Information** | 24-1 |
| **25** |  |  | **Interpretations and Conclusions** | 25-1 |
|  | 25.1 |  | Risks | 25-1 |
|  | 25.2 |  | Opportunities | 25-1 |
| **26** |  |  | **Recommendations** | 26-1 |
| **27** |  |  | **References** | 27-1 |
| **28** |  |  | **Units of Measure, Abbreviations, Acronyms, and Glossary of Spanish Terms** | 28-1 |

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List of Figures

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| Figure 1 1: | San Francisco Processing Plant Flowsheet | 1-7 |
| Figure 1 2: | Site Layout, Carrizal Mine Facilities | 1-8 |
| Figure 1 3: | Site Layout, Monte Mine, San Francisco Processing Plant and Tailings Pond | 1-9 |
| Figure 1 4: | Site Layout for San Francisco Processing Plant | 1-10 |
| Figure 4 1: | Geographic Location Map | 4-1 |
| Figure 6 1: | Mineralized Zones at the Carrizal Underground Mine | 6-5 |
| Figure 6 2: | Mineralized Zones in the El Monte Underground Mine | 6-6 |
| Figure 7 1: | Generalized Tectonic Map of the North American Cordillera | 7-2 |
| Figure 7 2: | Distribution of Late Jurassic – Early Cretaceous carbonates Prior to Deformation | 7-2 |
| Figure 7 3: | Regional Geological Map | 7-4 |
| Figure 7 4: | Idealized Stratigraphic Section of the Zimapan Basin | 7-5 |
| Figure 7 5: | Property Geology | 7-6 |
| Figure 7 6: | Simplified Geological Cross-Section between Carrizal and El Monte Mines | 7-7 |
| Figure 7 7: | Section Looking Northeast Through the Carrizal Mine | 7-17 |
| Figure 8 1: | Schematic Cross-Section of an Idealized Polymetallic Replacement Deposit | 8-1 |
| Figure 16 1: | Stoping Method Selection Based on Rock Quality (RMR) | 16-2 |
| Figure 17 1: | San Francisco Processing Plant Flowsheet | 17-2 |
| Figure 17 2: | Plant and TSF Locations | 17-5 |
| Figure 17 3: | North Dam Cross Section | 17-6 |
| Figure 17 4: | South Dam Cross Section | 17-6 |
| Figure 17 5: | Site Hydraulic Infrastructure Layout | 17-7 |
| Figure 18 1: | Site Layout, Carrizal Mine Facilities | 18-1 |
| Figure 18 2: | Site Layout, Monte Mine, San Francisco Processing Plant and Tailings Pond | 18-2 |
| Figure 18 3: | Site Layout for San Francisco Processing Plant | 18-3 |
| Figure 18 4: | Photos of the Zimapan Infrastructure | 18-4 |

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List of Tables

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| Table 1 1: | Estimated Metallurgical Recoveries, Concentrate Grades and Mineral Processing Factors | 1-5 |
| Table 1 2: | Capital Cost Requirements | 1-11 |
| Table 1 3: | Operating Costs for 2025 | 1-12 |
| Table 2 1: | QP Responsibilities | 2-1 |
| Table 2 2: | QP Site Visits | 2-2 |
| Table 4 1: | List of Mining Concessions | 4-5 |
| Table 5 1: | Distances and Travel Times | 5-3 |
| Table 6 1: | Exploration Drilling by Zone, Monte Mine | 6-3 |
| Table 6 2: | Exploration Drilling by Zone, Carrizal Mine | 6-3 |
| Table 6 3: | Exploration Drilling by Year, Monte Mine | 6-4 |
| Table 6 4: | Exploration Drilling by Year, Carrizal Mine | 6-4 |
| Table 7 1: | List of Mineralized Structures | 7-14 |
| Table 7 2: | Styles of Mineralization through the Carrizal Mine | 7-16 |
| Table 13 1: | Estimated Recovery by Mineralized Zone and Element | 13-2 |
| Table 13 2: | 2023 Reconciled Data | 13-3 |
| Table 13 3: | 2024 Reconciled Data | 13-3 |
| Table 13 4: | Combined 2023 and 2024 Reconciled Data | 13-4 |
| Table 13 5: | Recovery and Concentrate Grade Estimates | 13-4 |
| Table 19 1: | CIBC Consensus Metal Prices | 19-5 |
| Table 20 1: | Environmental Aspects Addressed in Santacruz Environmental Program | 20-3 |
| Table 20 2: | Current Environmental Impact Authorization – Tailings N°9 | 20-5 |
| Table 20 3: | Operating License – Carrizal Mining | 20-6 |
| Table 20 4: | Tailings Management Plan Authorization | 20-7 |
| Table 20 5: | Amount of Hazardous Authorized in the Management Plan | 20-7 |
| Table 20 6: | Water use and wastewater discharge concession title | 20-8 |
| Table 20 7: | Environmental Authorizations of Carrizal Mining | 20-9 |
| Table 20 8: | Communities Adjacent to Zimapan Operations | 20-10 |
| Table 20 9: | Investment in Ejidos within the direct area of influence | 20-13 |
| Table 20 10: | Direct Beneficiaries By Projects in Communities within the Direct Area of Influence | 20-14 |
| Table 21 1: | Capital Cost Requirements | 21-1 |
| Table 21 2: | Operating Costs for 2025 | 21-2 |

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1 Executive Summary

1.1 Introduction

JDS Energy & Mining Inc. (JDS) was commissioned by Santacruz to prepare a Technical Report in accordance with the Canadian Securities Administrators' National Instrument 43-101 and Form 43-101F1, collectively referred to as National Instrument (NI) 43-101 for the Zimapan Mine Project (Zimapan or the Project) operated by Carrizal Mining S.A. de C.V. located in the state of Hidalgo, Mexico.

The Zimapan mining district was discovered by Spanish miners in 1575. From 1632 to 1920, more than 18 mines were put into production, including the El Monte and Carrizal mines. Peñoles operated the mine from 1964 until leasing to Santacruz in August 2009. From 2011 to 2020, Santacruz completed ~30 km of underground drilling and mined ~5.9 million tonnes (Mt) of mineralized material from the El Monte and Carrizal mines.

The mine is fully operational at the time of this Report's preparation.

1.2 Project
 Description

The Zimapan property is located in the municipality of Zimapan, Hidalgo state, Mexico. The Property is situated 241 road-km north of Mexico City and seven km northwest from the town of Zimapan. The Property consists of 34 mining concessions covering an area of 5,138.76 ha that is centered at longitude 99°25'2.5" W and latitude 20°47'6.5" N (WGS 84) on the 1:250,000 topographic map sheets F14-11 and F14-C58. Included in these concessions are the Carrizal mine, El Monte mine, and the El Monte mineral processing plant (El Monte plant) (together the "Zimapan Mine").

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1.3 Location,
 Access and Ownership

The Zimapan property is located in the municipality of Zimapan and is approximately seven km northwest from the town of Zimapan in Hidalgo state, Mexico. Travel to Zimapan from Mexico City is approximately 241 road-km via federal highway 85D and No. 85 through Pachuca. An alternative route from Queretaro City is approximately 141 road-km via federal highway 45 to El Paraiso, federal highway 100 to Ezequiel Montes, and federal highway 120 to Zimapan. Both Mexico City and Queretero City receive international flights daily.

The El Monte mine can be accessed from Zimapan by paved road by traveling east along Venusliano Carranza-Zimapan road and merging onto federal highway 85. At kilometre 9.9 from Zimapan, a turn-off to a 15.5 kilometres (km) dirt access road leads west to the El Monte mine and San Francisco plant. The Carrizal mine can be accessed from Zimapan by paved road by traveling west along Avenda Jorge Preisser Teran road for approximately 4.1 km where it transitions to a dirt road for the remaining 12.4 km to the Carrizal mine entrance. The Carrizal and El Monte mines are connected by a 7.4 km long underground access tunnel (Lomo de Toro – San Francisco Tunnel).

1.4 History,
 Exploration and Drilling

Information provided in General History is primarily extracted from Simons and Mapes (1956), and Suter (2016). The author has not completed sufficient work to verify this information.

In 1575, Zimapan was founded by Spanish miners who were extracting silver, lead, and other metals from mines located in the Sierra El Monte and Barranca Toliman, near the present day Carrizal mine. The discovery of the Lomo del Toro is attributed to Don Lorenzo de Labra in 1632. Silver and lead production continued in the Zimapan mining district until the Mexican war of independence of 1810. Mining activity was interrupted during the war and resumed in 1870. Between 1890 and 1901, interest in the Lomo de Toro mine was revived and the La Luz mine was developed. Mining activity was again suspended in 1910 due to the Mexican Revolution.

In 1913, mines in the El Monte area resumed operation under the ownership of the Hidalgo Copper Mining and Smelting Company. According to Simons and Maples (1956) 1,742 tons of mineralized rock averaging 21 percent lead and 806 grams per ton of silver was smelted in 1913.

By 1920, approximately 18 mines operated in the district. The Compania Fundidora y Minera de Zimapan operated the Rosario, Santa Gorgonia, La Candelaria, San Geronimo, Poder de Dios, and Las Animas mines. The Hidalgo Copper Mining and Smelting Co. operated the Nevada and Purisima mines. The Preisser family operated the San Francisco and Los Balcones mines. Mineralized material was either roasted in furnaces on-site to extract silver-lead alloys or shipped off-site for processing elsewhere.

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In 1929, the San Pascual and La Cruz mines were operated by Compania Minera Mexicana and the Preciosa Sangre and San Jose Maravillas deposits were operated by Negociacion Minera La Aurora. The Lomo de Toro mine resumed production with the reopening of existing workings.

In 1945, new oxide bodies were discovered in the Lomo de Toro mine and an access road to the Carrizal area was built.

In 1948, Fresnillo began exploitation of oxide and sulfide mineralization in the Monte area and continued mining activities from the Monte mine.

In 1949, operators chose to ship raw materials to San Luis Potosi and Zacatecas for smelting rather than smelting in the Zimapan area. Raw materials were shipped by truck to the railhead at Huichapan, located 88 km from Zimapan. Compania Minera La Llave operated the only smelter in the Zimapan area at that time. While raw materials were transported by truck from the Carrizal mining area to Zimapan, raw materials from the El Monte mining area were moved 10.5 km to Zimapan by donkey.

In 1957, a road to the Monte mine was built, stimulating production to reach an average of 2,500 tons per month according to Simons and Maples (1956).

In 1964, Peñoles acquired 51% of Fresnillo and 51% of Compania Zimapan. Through Fresnillo, Peñoles became the underlying owner of the property and mining operation. In subsequent years Compania Zimapan assigned its concession rights to Fresnillo.

In 1972, the San Francisco mineral processing facility was constructed (the El Monte plant).

In 2004, Fresnillo entered into a mining and exploitation agreement with Compania Minera Nuevo Monte, S.A. de C.V. for an initial term of 60 months: through which the latter acquired the exclusive right to exploit from the Property and operate the El Monte plant.

In 2007, Fresnillo assigned all concession rights and agreements to Minera Cedros.

In 2009, Compania Minera Nuevo Monte suspended operations and cancelled its agreement with Minero Cedros. Carrizal Mining entered into a Lease Agreement with Minera Cedros on August 18, 2009.

Between January 1, 2011, and December 31, 2025, Carrizal Mining completed approximately 75,995.78 metre (m) of underground core drilling – including 32,562.7 m completed at the El Monte mine and 43,433.08 m completed at the Carrizal mine. Drilling produced 36.5 millimetre (mm) core from BQ size holes and 35.3 mm core from TT-46 size holes. Carrizal Mining workers carried out drilling and utilized underground drilling equipment owned by Carrizal Mining. Summary tables detailing the metres drilled for each zone at each mine area are provided in Table 6-1 through Table 6-4. Approximately 51% of the total m drilled have been dedicated to the Escondida, Dike Concordia, Dike 1493, Dike 1600, Horizontes, Santa Fe and Juan Pablo mineral zones.

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1.5 Geology
 and Mineralization

The Zimapán Project is situated along the western margin of the Sierra Madre Oriental physiographic province in central Mexico, within a region characterized by a long and complex history of sedimentation, deformation, magmatism, and hydrothermal mineralization. The regional geological framework comprises thick sequences of Mesozoic platform and basinal sedimentary rocks, principally limestones and calcareous shales, which unconformably overlie Paleozoic and Precambrian basement. These strata were subsequently subjected to compressional tectonics associated with the Laramide orogeny, resulting in a structurally complex setting defined by folding, thrusting, faulting, and uplift.

Mineralization at Zimapán is spatially and genetically associated with intrusive activity of probable Pliocene age, consisting of quartz monzonitic to monzonitic stocks and related quartz-feldspar porphyry dikes. These intrusions acted as heat and fluid sources, driving hydrothermal systems responsible for the development of high-temperature carbonate replacement deposits ("CRD" systems). The mineralizing fluids exploited favourable stratigraphic horizons and structural conduits, producing replacement-style mineralization within reactive carbonate host rocks.

The principal mineralization styles are mantos and chimneys, which are preferentially developed within the "Horizontes" horizon of the La Negra member of the Lower Cretaceous Tamaulipas Formation. These horizons represent chemically favourable, permeable stratigraphic units that facilitate lateral and vertical fluid flow. Mantos typically form as stratabound, laterally extensive replacement bodies, whereas chimneys represent more vertically developed, structurally controlled feeder zones.

At the deposit scale, mineralization is hosted within limestones and calcareous shales of the Las Trancas, Tamaulipas, and Soyatal formations. The Carrizal Mine comprises at least six discrete mineralized zones, while the El Monte Mine contains eight recognized zones, reflecting a combination of stratigraphic control, structural complexity, and proximity to intrusive centres. The distribution, geometry, and continuity of these zones are governed by the interplay of lithological contrasts, fault structures, and intrusive contacts.

The mineral assemblage is characteristic of high-temperature polymetallic CRD systems and consists predominantly of semi-massive to massive sulfides. The principal economic minerals include argentite (silver), galena (lead), sphalerite (zinc), and chalcopyrite (copper), with variable gangue assemblages. Mineralization grades and metal zonation patterns are consistent with proximity to intrusive sources, with higher-temperature assemblages and copper enrichment generally observed nearer to intrusive contacts, transitioning outward to lead-zinc-silver dominant zones.

Overall, the Zimapán Project represents a classic polymetallic carbonate replacement system developed within a structurally complex and stratigraphically favourable carbonate platform setting. The combination of well-developed mantos and chimney systems, multiple mineralized horizons, and clear genetic linkage to intrusive activity provides a robust geological framework for ongoing exploration and potential resource delineation, subject to verification through modern data acquisition and estimation methodologies in accordance with current reporting standards.

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1.6 Metallurgical
 Testing and Mineral Processing

The San Francisco Processing Plant has a long history of operation which has contributed to the current processing strategy. A significant geometallurgical testwork program was run in 2023 under the guidance of JDS Energy and Mining.

The geometallurgical program developed guidance on ore zones that were compatible for being processed together vs ore zones which should be processed separately. The program also developed expected recoveries from each of zones tested to assist with future mine planning.

The recovery expectations for the mill were developed by reviewing the operating data from the latest years of operation prior to this Report, 2023 and 2024. It was decided to base the recoveries on the 2024 operating data due to improvements that were made in the San Fransico Processing Plant and material blending strategies developed from the geometallurgical testwork.

A summary of the expected recoveries and concentrate grades can be found in Table 1-1.

**Table 1-1: Estimated Metallurgical Recoveries, Concentrate Grades and Mineral Processing Factors**

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| **Parameter** | **Unit** | **Concentrates** | **Concentrates** | **Concentrates** |
| **Parameter** | **Unit** | **Lead Concentrate** | **Copper Concentrate** | **Zinc Concentrate** |
| Cu Recovery | % | 11.4 | 43.1 | 27.8 |
| Zn Recovery | % | 1.4 | 1.3 | 78.0 |
| Pb Recovery | % | 85.2 | 3.1 | 3.3 |
| Ag Recovery | % | 54.0 | 13.7 | 7.8 |
| Cu | % | 2.52 | 19.88 | 1.96 |
| Zn | % | 2.72 | 5.03 | 46.83 |
| Pb | % | 49.30 | 3.75 | 0.60 |
| Ag | g/t | 2237 | 1783 | 155 |

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Notes:

\*Variable with Cu concentrate pull factor.

1.7 Mining

There are two operational mines on the property:

● The Carrizal Mine which produces approximately half of the total mine production and is connected to the Monte Mine and San Francisco concentrator by a 7 km Underground trackless haulage drift; and

● The Monte Mine which also produces about half of the total mine production and lies along the main haulage drift more proximal to the San Franciso concentrator.

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The Carrizal has been subdivided into four zones: Lomo de Toro, Socavón La Cuña, Cuerpo 960 (mining in Carrizal below 960 m elevation), and the historic Carrizal Mine.

All feed the San Francisco processing plant.

In general, the Carrizal mine consists of both remnant mineralized zones and pillars which are being recovered, as well as extensions of historically mined zones. Mining is more selective and conventional with jackleg drills and small Load Haul Dump (LHD) machines. The grades at Carrizal are marginally higher than Monte. Monte mine is comprised of mostly large bulk mineable mineralized zones and utilizes more Sub Level Open Stoping. The grade is generally lower at Monte mine, as are the unit costs.

Metallurgically, a blend of feeds from multiple sources is required to achieve increased recoveries and acceptable quality concentrates, so the operation of both zones simultaneously is a requirement.

Mining methods are selected for each mineralized block using the following criteria and methodology:

● Rock stability and quality analyses are carried out by the rock mechanics department;

● Analysis of mineral quality, contents and mineral value, and Cut-off-Grade are carried out by the Geology department; and

● Analysis of the preparation cost vs mineral value are carried out by the Planning and Engineering department (cost-benefit).

Selection of the proper mining methods are closely linked to and often dictated by Geotechnical conditions of each mineralized zone. Sublevel open stoping, as well as cut and fill are the primary methods in use at Monte and Carrizal.

1.8 Recovery
 Methods

The San Francisco Processing Plant uses conventional crushing, grinding and flotation to produce 3 concentrates: Lead, Zinc, and Copper. The plant can handle 2,500 tonnes per day (t/d) of fresh feed, which is a blend of material from the Monte Mine, Carrizal Mine, and Limo De Toro Mine.

Feed from the separate mining areas is stockpiled separately at the mill facility. Blending is achieved by a loader combining stockpile material in the crusher feed hopper.

The San Francisco Processing Plant flowsheet follows a typical lead, copper, and zinc flotation circuit with a crushing circuit to reduce the mill feed size to a P<sub>80</sub> of 3/8 inch. The feed is then ground in one of three primary ball mills to a feed size P<sub>80</sub> of approximately 110 µm.

The feed is then conditioned in a conditioning tank and subjected to a lead copper bulk flotation. The lead/copper flotation tails reports to the zinc rougher circuit.

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The lead/copper rougher concentrate is upgraded into a cleaner flotation circuit and then run through a lead-copper differential flotation circuit where the copper is depressed, and the lead is floated to a final lead concentrate. The zinc rougher concentrate is cleaned in the zinc cleaner flotation circuit.

Each of the 3 concentrates reports to a separate concentrate thickener and filtration circuit. Each of the three concentrates are sold in bulk to smelters.

The flowsheet can be seen in Figure 1-1.

**Figure 1-1: San Francisco Processing Plant Flowsheet**

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1.9 Infrastructure

Facilities for the Project are located at the Carrizal Mine, the San Francisco Processing plant, and in the town of Zimapan.

There are no facilities located at the Monte Mine.

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Although each mine has small offices for local technical, safety, and supervisory teams, the main administrative, warehousing, and technical support facility is the La Llave camp located in Zimapan.

1.9.1 Carrizal
 and Monte Mines

Each mine is independently operated and has their own support infrastructure. Each has their own ramp entry and independent ventilation systems, with some benefits derived from the connecting haulage way which doubles as a ventilation conduit and pipeway for drilling and process water as needed.

Grid power is available at each portal, and each mine has dedicated substations. Compressed air is supplied to each mine from surface compressors located at each portal.

Figure 1-2 shows the location of facilities servicing the Carrizal Mine.

**Figure 1-2: Site Layout, Carrizal Mine Facilities**

Source: Carrizal Mining (2023)

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1.9.2 San
 Francisco Processing Plant

The San Francisco processing plant accepts feed via truck from both mines. It comprises crushing, grinding, flotation, and concentrate dewatering circuits as well as a preparation and assay laboratory and mine offices. The plant is situated at the southern and upstream end of a series of nine tailings storage facilities, eight of which have been decommissioned and the current active facility (No. 9), at the northern extent of the valley. The location of the tailings storage facilities is shown in Figure 1-3 relative to the El Monte underground workings, Portal, and San Francisco Plant.

**Figure 1-3: Site Layout, Monte Mine, San Francisco Processing Plant and Tailings Pond**

Source: Carrizal Mining (2023)

A site layout drawing of the plant is provided in Figure 1-4.

Plant process water supply is a combination of groundwater sourced from the Monte Underground workings, and workings from an adjacent operator, as well as reclaim from the Tailings Storage Facility. Approximately 80% of process water is recovered for reuse.

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Figure 1-4: Site Layout for San Francisco Processing Plant

![](ex99-19_006.jpg)

Source: Carrizal Mining (2026)

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1.10 Capital
 and Operating Cost Estimates

1.10.1 Capital
 Costs

The Zimapan Operation has been in continuous operation for many years. There will be, as the mines are expanded and developed, the need for step changes in mine access, production or haulage methods, that may require large capital outlays. These will be financially justified as needed. However, the capital needs for continued operation to exploit the remaining reserves is limited to primary mine development, capital equipment rebuilds and replacements, and Tailing Storage Facility expansions.

The actual capital expenditure for 2025 and the projected budget for the next five years is shown in Table 1-2.

**Table 1-2: Capital Cost Requirements**

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|:---|:---|:---|:---|:---|:---|:---|
|  | **Actual** | **Budget** | **Projection** | **Projection** | **Projection** | **Projection** |
| | **2025** | **2026** | **2027** | **2028** | **2029** | **2030** |
| Long-term infrastructure | 6619659 | 8549651 | 5262872 | 3481660 | 2589497 | 1635767 |
| Overhaul | 1384514 | 600072 | 369384 | 244366 | 181748 | 114809 |
| Exploration BDD | 451418 | - | 101956 | 106034 | 110275 | 110534 |
| Eq Mine-Plant Investment | 6473854 | 2938550 | 1808871 | 1196661 | 890021 | 562220 |
| **Total** | **14929444** | **12088273** | **7543082** | **5028722** | **3771541** | **2423330** |

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Source: Santacruz (2025)

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1.10.2 Operating
 Costs

Actual operating costs from 2025 are shown in Table 1-3.

**Table 1-3: Operating Costs for 2025**

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|:---|:---|:---|:---|:---|:---|:---|
|  | **Actual** | **Budget** | **Projection** | **Projection** | **Projection** | **Projection** |
|  | **2025** | **2026** | **2027** | **2028** | **2029** | **2030** |
| Mined | 921476 | 907776 | 907776 | 907776 | 907776 | 874910 |
| Milled | 893067 | 888000 | 888000 | 888000 | 888000 | 855851 |
| Mine | 24930042 | 26491585 | 27551248 | 28653298 | 20859601 | 20908572 |
| Maintenance | 7955346 | 10639101 | 11064665 | 11507252 | 11967542 | 11995637 |
| Plant | 8343718 | 8357211 | 8691500 | 9039160 | 9400726 | 9422796 |
| Plant Maint. | 5334456 | 5648274 | 5874204 | 6109173 | 6353540 | 6368455 |
| Utility Vehic. | 529313 | 717733 | 746443 | 776300 | 565147 | 566473 |
| GA & Services | 12891927 | 15847650 | 16481556 | 17140818 | 12478516 | 12507811 |
| **Total** | **59984801** | **67701554** | **70409616** | **73226001** | **61625071** | **61769745** |
| **OPEX $/t** | **67.17** | **76.24** | **79.29** | **82.46** | **69.40** | **72.17** |

---

Source: Santacruz (2025)

Mine operations include direct costs of mining, including labor, energy, materials, and services.

Mine Equipment Maintenance Costs includes maintenance of all equipment related to direct development, exploitation and haulage, as well as service equipment such as pumping, ventilation, winches, etc.

Plant and Plant maintenance costs include direct costs as well as indirect costs.

General and Administration includes Concentrate haulage, Site Management, Technical services, Site Administration, Environmental and Social, Safety and Security.

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1.11 Conclusions

The following observations were made:

● Zimapan operation has successfully extended operations by recovering remnant stopes and extending operations to depth based on the predictability of the vertical ore lenses without extensive diamond drilling;

● Ground conditions are quite competent in the longhole mining areas, allowing for large unsupported hangingwalls. Ground control in development and cut and fill stoping areas appears to be well executed;

● Mining operations are well run, as evidenced by good housekeeping practices in the mine and maintenance areas;

● The mines have multiple active workplaces, allowing for flexible operations; and

● The workforce is local, stable, and competent. Good survey controls are apparent throughout development and stoping areas.

1.11.1 Risks

Modern planning tools need to be implemented at the operation to assist in the preparation of a sound mine plan. While the current system works, it is inefficient and should be replaced with industry-standard practices.

The practice was not observed by JDS, but it is understood that remote LHD's occasionally operate inside the open stopes without remote. The stopes should be treated as non-entry to personnel.

Surface access to the Carrizal Mine for personnel and ore haulage is provided by a very narrow and steep road that is heavily travelled. The two-way traffic meets regularly, requiring vehicles to back up and park to the side on switchbacks to allow other vehicles to pass. This is a very precarious procedure that should be better controlled, both for safety and efficiency.

Ventilation is in general quite poor throughout the mines, with a high level of particulates resulting from the low flow volumes.

1.11.2 Opportunities

Zimapan operations has the opportunity to extend mining to depth in both mines. This will require a comprehensive plan that is based on diamond drilling future mining zones and effective planning using industry-standard software and tools.

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1.12 Recommendations

JDS recommends the following actions:

● The drill pattern used in the longhole stopes should be reassessed to reduce drilling and blasting costs. An intense program to optimize blasting should be initiated. This would reduce external dilution and the associated costs (mucking, truck haulage, processing, tailings disposal) significantly. This could be done by increasing drill ring and drill hole spacing, reducing the drillhole diameter, or some combination of both changes;

● The access road to Monte should either be controlled by radio or long delay traffic lights, making the most dangerous portions one-way for an intermittent durations. This would enhance safety but also make haulage travel more efficient;

● A leaky feeder system for radio communication or similar infrastructure should be installed underground. This would improve emergency response time and simplify underground traffic control;

● All mucking past the stope brow should be remote controlled. The percentage of remote mucking can sometimes be reduced by shaping the blasts to feed the ore to a drawpoint with a final blast of short upholes at the draw point. This concept should be evaluated for application in the mines;

● The ventilation system must be improved. This will reduce heat in the mine, improve occupational health outcomes, and allow for faster re-entry times after blasting; and

● Earlier and better geologic information must be gathered to optimize mine planning. This should include a diamond drill program prior to mining each zone and in-fill drilling to improve definition of mineralized zones.

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2 Introduction

2.1 Terms
 of Reference and Scope

JDS Energy & Mining Inc. (JDS) was commissioned by Santacruz to prepare a Technical Report in accordance with the Canadian Securities Administrators' National Instrument 43-101 and Form 43-101F1, collectively referred to as National Instrument (NI) 43-101 for the Zimapan Project (Zimapan or the Project) operated by Carrizal Mining S.A. de C.V. located in the state of Hidalgo, Mexico.

This technical report provides an update for the Zimapan Project for the purpose of providing a current Technical Report in support of SEC (Securities and Exchange Commission) and TSX uplisting requirements. The Technical Report was prepared in conformity with generally accepted CIM guidelines in "CIM Mineral Exploration Best Practice Guidelines" published on November 23, 2018.

2.2 Qualifications
 and Responsibilities

The Qualified Persons (QPs) preparing this Report are specialists in the fields of geology, exploration, mineral resource estimation, metallurgy and mining.

None of the QPs or any associates employed in the preparation of this Report has any beneficial interest in Santacruz and neither are any insiders, associates, or affiliates. The results of this Report are not dependent upon any prior agreements concerning the conclusions to be reached, nor are there any undisclosed understanding concerning any future business dealings between Santacruz and the QPs. The QPs are being paid a fee for their work in accordance with normal professional consulting practice.

The following individuals, by virtue of their education, experience and professional association, are considered QPs as defined in the NI 43-101, and are members in good standing of appropriate professional institutions / associations. The QPs are responsible for the specific report sections listed in Table 2-1.

**Table 2-1: QP Responsibilities**

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|:---|:---|:---|:---|
| **Qualified Person** | **Company** | **QP Responsibility / Role** | **Report Section(s)** |
| Paul Thornton, P.Eng. | JDS | Mining | 1.7, 1.10 to 1.12, 12.3, 12.5, 15, 16, 18, 19, 21, 22, 25, 26 |
| Garth Kirkham, P. Geo. | Kirkham Geosystems Inc. | Geology, QA/QC, Data Verification, Drilling, Exploration | 1.1 to 1.5, 1.10 to 1.12, 2 through 11, 12.1, 12.2, 12.5, 14, 20, 23, 24, 25, 26, 27, 28 |
| Tad Crowie, P.Eng. | JDS | Metallurgy | 1.6, 1.8, 1.9 to 1.12, 12.4, 12.5, 13, 17, 26, 27, 28 |

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2.3 Site
 Visit

In accordance with NI 43-101 guidelines, site visits are summarized in **Table 2-2**. Santacruz staff and management were cooperative and helpful during the course of each visit. Access to all requested information and physical sites was provided voluntarily.

**Table 2-2: QP Site Visits**

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|:---|:---|:---|:---|
| **Qualified Person** | **Company** | **Date** | **Description of Inspection** |
| Paul Thornton, P.Eng. | JDS | March 22 to 29, 2026 | Zimapan office, Carrizal Mine, Monte Mine, San Francisco plant, discussions with site personnel |
| Garth Kirkham, P. Geo. | Kirkham Geosystems Inc. | February 20 to March 1, 2023; March 22 to 29, 2026 | Zimapan office, Carrizal Mine, Monte Mine, San Francisco plant, discussions with site personnel |
| Tad Crowie, P. Eng. | JDS | January 15 to 18, 2023; March 22 to 24, 2026 | Zimapan office, El Monte Mill, discussions with site personnel |

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2.4 28Sources
 of Information

This Report is primarily based on information collected by the QPs during their site visits performed on February 20 to March 1, 2023 and March 22 to 29, 2026 (Kirkham), January 15 to 18, 2023; March 22 to 24, 2026 (Crowie), and March 22 to 29, 2026 (Thornton) and on additional information provided by Santacruz throughout the course of the QPs investigations. Other information was obtained though sources within the public domain. The QPs conducted adequate verification of the information and take responsibility for the information provided by Santacruz.

This Technical Report includes and, in certain sections, is based upon information, data, and interpretations derived from the technical report titled "Technical Report, Zimapan Property, Hidalgo, Mexico dated effective April 2, 2020" authored be Van Phu Bui, P.Geo. and Stephen DeWitt, P.Geol. with an effective date of April 2, 2020 (the "Previous Technical Report").

The QPs have reviewed the Previous Technical Report and, where applicable, has verified the relevant data and assumptions in accordance with the requirements of NI 43-101 and CIM Definition Standards (2014) and CIM Best Practice Guidelines (2019).

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Except where otherwise stated, the QP considers the information derived from the Previous Technical Report to be current, reliable, and appropriate for the purposes of this Technical Report. Any material changes, updates, or reinterpretations are identified and discussed in the relevant sections of this Report.

This Technical Report should be read in conjunction with the Previous Technical Report, which is available on SEDAR+ under the issuer's profile. The QP accepts responsibility for the current Technical Report in its entirety.

2.5 Units,
 Currency and Rounding

The units of measure used in this Report are as per the International System of Units (SI) or metric, except for Imperial units that are commonly used in industry (e.g., ounces (oz.) and pounds (lb.) for the mass of precious and base metals).

All dollar figures quoted in this Report refer to United States dollars (US$ or $) unless otherwise noted.

Frequently used abbreviations and acronyms can be found in Section 28. This Report includes technical information that required subsequent calculations to derive subtotals, totals and weighted averages. Such calculations inherently involve a degree of rounding and consequently introduce a margin of error. Where these occur, the QPs do not consider them to be material.

This Report may include technical information that requires subsequent calculations to derive sub-totals, totals and weighted averages. Such calculations inherently involve a degree of rounding and consequently introduce a margin of error. Where these occur, JDS does not consider them to be material.

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3 Reliance on Other Experts

The authors have relied fully upon the opinion of Mr. Jose Enrique Rodriguez del Bosque of RB Abogados (RB Lawyers) for the verification of agreements and royalties (Section 4.2), grant of concession (Section 4.3), taxes and fees (Section 4.4), verification of title (Section 4.5), surface rights (Section 4.6), and environmental liability and permitting (Section 4.7). RB Lawyers prepared an independent legal title report dated July 3, 2020 for Santacruz Silver Mining Ltd. titled "Legal Title Report".

The authors have also relied fully upon translated and original legal agreements, tax payment receipts, and permits provided by Carrizal Mining in the preparation of Sections 4.4, 4.5, 4.6 and 4.7.

The QP's opinions contained herein are based on information provided by Santacruz and others throughout the course of the study. The QPs have taken reasonable measures to confirm information provided by others and take responsibility for the information.

The QPs used their experience to determine if the information from previous reports was suitable for inclusion in this Technical Report and adjusted information that required amending.

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4 Property Description and Location

4.1 General
 Description

The Zimapan property is located in the municipality of Zimapan, Hidalgo state, Mexico. The Property is situated 241 road-km north of Mexico City and seven km northwest from the town of Zimapan. The Property consists of 34 mining concessions covering an area of 5,138.76 ha that is centered at longitude 99°25'2.5" W and latitude 20°47'6.5" N (WGS 84) on the 1:250,000 topographic map sheets F14-11 and F14-C58. Included in these concessions are the Carrizal mine, El Monte mine, and San Francisco Processing Plant (El Monte plant) (together the "Zimapan Mine") as shown in Figure 4-1.

**Figure 4-1: Geographic Location Map**

![](ex99-19_007.jpg)

Source: Van Bui and DeWitt (2020)

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4.2 Agreements
 and Royalties

4.2.1 Lease
 Agreement

On August 18, 2009 Carrizal Mining entered into an exploration and exploitation lease agreement (the "Lease Agreement") with Minera Cedros S.A. de C.V. (Minero Cedros), a wholly-owned subsidiary of Grupo Peñoles, S.A.B. de C.V. (Peñoles). The Lease Agreement was valid for an initial five-year term with an expiry date of August 18, 2014 and the option to extend for an additional five-year term upon written request. The Lease Agreement grants Carrizal Mining the rights to explore, develop and exploit materials from 33 mining concessions that total 5,005.56 hectares, and to operate the San Francisco processing plant. In exchange for the rights, Carrizal Mining agreed to pay Minero Cedros three percent (3%) net smelter return (NSR) on concentrate sales produced at the San Francisco processing plant for calendar year 2010, 2011 and 2012. From calendar year 2013 onward, the NSR has increased to four percent (4%). In addition, Carrizal Mining agreed to pay Minero Cedros minimum monthly payments of US $45,000 to US $60,000 for any month that the NSR payment amount is less than US $45,000. Carrizal Mining is also required to pay Minero Cedros US$3 per tonne for any third-party material processed at the San Francisco processing plant. Payment obligations outlined in the Lease Agreement included:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) US
 $250,000 plus VAT upon signing the Lease Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Advance
 twelve (12) m of underground development for every 1,000 tonnes of material mined and processed
 at the San Francisco processing plant. Failure to comply will result in a penalty payment
 of US $350 per metre;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Complete
 200 m of diamond drilling monthly. Failure to comply will result in a penalty payment of
 US $40 per metre; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Pay
 the amount of US $37,703 monthly for the restoration of the tailings dams No. 4, No. 5, No.
 7, No. 8, No. 9, tunnel 1 and tunnel 2, the general drainage tunnel, and the San Miguel stream.
 Furthermore, it is the Company's obligation to provide maintenance to the aforementioned
 tailings dams at its own expense and risk.

The Lease Agreement assigns Carrizal Mining the responsibility to acquire and pay for bonds, authorizations, permits and licenses necessary to operate, maintain and reclaim areas affected by the exploration, development and exploitation activities. It also requires Carrizal Mining to sell all concentrate and minerals to Peñoles.

On October 2, 2013, Carrizal Mining and Minera Cedros agreed to extend the expiry date of the Lease Agreement to August 18, 2019 (the "First Modifying Agreement").

On May 9, 2018, Carrizal Mining and Minera Cedros amended the Lease Agreement whereby the parties agreed to include mining concession title 239349, which comprise of 133.20 ha. The total number of mining concessions included in the amended Lease Agreement increased to 34 from 33, and the total area of mining concessions increased to 5,138.76 ha from 5,005.56 ha. Carrizal Mining and Minera Cedros also agreed to extend the expiry date of the Lease Agreement to December 31, 2019 (the "Second Modifying Agreement").

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On December 9, 2019, Carrizal Mining and Minera Cedros agreed to extend the expiry date of the Lease Agreement to December 31, 2020 (the "Third Modifying Agreement").

4.2.2 Carrizal
 Mining Acquisition

On July 1, 2019, Santacruz, through its wholly-owned subsidiary Carrizal Holdings Ltd., acquired 50% of the outstanding shares of PCG Mining, S.A. de C.V. (PCG) (the "Initial PCG Transaction"). PCG is the parent company to Carrizal Mining. The shares of PCG were purchased from one of PCG's shareholders, who was at arm's-length to Santacruz (the "Vendor").

Consideration for the share acquisition was a cash payment on closing by Santacruz to the Vendor of US $500,000 and other consideration in the amount of approximately US $680,000, including the transfer of a life-insurance policy and three vehicles from Carrizal to the Vendor; and the forgiveness of approximately US $301,000 in debt owed by the Vendor to Carrizal.

On May 21, 2019, Santacruz, through its wholly-owned subsidiary Carrizal Holdings Ltd., entered into an agreement to acquire the remaining 50% of the outstanding shares of PCG that were owned by Carlos Silva (the "Silva Acquisition"), Santacruz's chief operating officer. The consideration paid by Santacruz to Mr. Silva with respect to the Silva Acquisition was 30,000,000 shares of Santacruz at a deemed price of C$0.05 per share.

As of October 4, 2019, Santacruz owned 100% of the outstanding shares of Carrizal Mining.

4.2.3 Terms
 and Conditions Agreement to Purchased Zimapan Property

On July 28, 2020 Carrizal Mining entered into a terms and conditions agreement (Term and Conditions Agreement) with Minera Cedros to purchase the Zimapan property and related assets for considerations totaling US $20,000,000 plus VAT. The Term and Conditions Agreement states that the closing of the purchase transaction is to be executed prior to December 15, 2020. A penalty equal to 20% of the total consideration will be applied to the non-signing party. Upon completion of the purchase transaction, Minera Cedros will transfer ownership of the following assets:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Ownership
 of fixed assets owned by Minera Cedros, which is currently in possession of Carrizal Mining,
 including computer equipment, telecommunication equipment, laboratory equipment, machinery
 and mining equipment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) The
 rights and obligations of the thirty-four mining concessions totalling 5,138.76 ha;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) The
 ownership of the seven properties contained in public deed 54,512 that covers the total area
 of the Zimapán Mine;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) The
 ownership of the rights and obligations of the four current temporary occupation agreements
 to access community lands of the Ejidos Benito Juarez, Xohde, San Franciso and Tadhe;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) The
 ownership of water concessions;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) All
 environmental responsibility generated by the transfer of ownership of assets, freeing the
 Minera Cedros, at the time of their respective signature and ratification, of any environmental
 liability that may be generated by their respective management; and

g) In
 addition to the Purchase Agreement between Carrizal Mining and Minera Cedros, the Company
 entered into a separate line of credit agreement with Trafigura México, S.A. de C.V.
 to obtain a loan for approximately US$17.6 million (the "Trafigura Loan"), of
 which US$15 million was paid to Minera Cedros through Trafigura México on behalf of
 Carrizal upon the signing of said Agreement. The remaining balance of the Purchase price,
 payable to Minera Cedros pursuant to the Purchase Agreement, was financed by Minera Cedros
 (the "Seller Loan").

In January 2026, Carrizal Mining paid Trafigura México US$2.5 million as final settlement of the loan corresponding to the financing for the acquisition of all the assets transferred by Minera Cedros.

With regard to its payment obligations arising from agreements for the acquisition of assets, concessions and infrastructure, it is important to note that these obligations have been paid in full; therefore, the company currently has no outstanding obligations to third parties and owns 100% of its share capital, without being legally burdened by contractual liabilities

4.3 Grant
 of Concessions

In accordance with the Mexican Mining Law (valid in the year the concessions are acquired and applicable throughout their term), mining concessions are valid for 50 years from the date of their granting. They can then be renewed for another 50 years. The concession holder is obligated to meet the minimum annual work requirements and pay semi-annual fees (Mining Rights) to maintain the concession in force.

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On August 24, 2018, Carrizal Mining acquired mining concession title number 246513, known as La Pechuga, and therefore the company currently holds 35 mining concessions totaling 8,164.06 as listed in Table 4-1.

**Table 4-1: List of Mining Concessions**

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|:---|:---|:---|:---|:---|:---|
| **Name** | **Title Number** | **Owner** | **Grant Date** | **Expiry Date** | **Area** <br> **(ha)** |
| SANTA ELENA | 9598 | CEDROS | 23/05/1961 | 22/05/2061 | 3.00 |
| SANTA GORGONIA | 10569 | CEDROS | 20/10/1961 | 19/10/2061 | 2.00 |
| LAS ANIMAS | 168204 | CEDROS | 19/03/1981 | 18/03/2031 | 25.00 |
| LA TERCERA | 170041 | CEDROS | 15/03/1982 | 14/03/2032 | 15.16 |
| ANA MARIA | 170042 | CEDROS | 15/03/1982 | 14/03/2032 | 1.81 |
| EL VAQUERO | 170045 | CEDROS | 15/03/1982 | 14/03/2032 | 2.17 |
| EUREKA UNIFICACION | 171100 | CEDROS | 09/08/1982 | 08/08/2032 | 14.07 |
| LA ZAPATERA | 171831 | CEDROS | 15/06/1983 | 14/06/2033 | 3.00 |
| PODER DE DIOS UNIFICACION | 171992 | CEDROS | 21/09/1983 | 20/09/2033 | 11.59 |
| SAN VIRGINIO UNIFICACION | 172680 | CEDROS | 28/06/1984 | 27/06/2034 | 4.48 |
| EL CONEJO | 180291 | CEDROS | 24/03/1987 | 23/03/2037 | 2.94 |
| SAN PABLO | 180365 | CEDROS | 25/03/1987 | 24/03/2037 | 8.00 |
| BELGICA | 193794 | CEDROS | 19/12/1991 | 18/12/2041 | 12.00 |
| LOMO DE TORO | 199814 | CEDROS | 12/11/1961 | 11/11/2061 | 695.54 |
| EL BARRENO | 208870 | CEDROS | 29/01/1999 | 28/01/2049 | 304.88 |
| UNIFICACION EL MONTE | 210728 | CEDROS | 26/11/1999 | 18/03/2031 | 919.23 |
| SANTO NIÑO | 211001 | CEDROS | 29/02/2000 | 28/02/2050 | 25.90 |
| MONICA | 211077 | CEDROS | 31/03/2000 | 30/03/2050 | 380.97 |
| ALEJANDRA | 211419 | CEDROS | 23/05/2000 | 22/05/2050 | 1.69 |
| SAN FERNANDO | 211699 | CEDROS | 30/06/2000 | 29/06/2050 | 360.48 |
| SANTA GORGONIA 1 | 212800 | CEDROS | 31/01/2001 | 30/01/2051 | 337.16 |
| SANTA LUCY 2 | 217507 | CEDROS | 16/07/2002 | 15/07/2052 | 218.99 |
| LA CUÑA II | 217987 | CEDROS | 18/09/2002 | 17/09/2052 | 1.68 |
| NUEVA ERA 2 | 218208 | CEDROS | 11/10/2002 | 10/10/2052 | 267.46 |
| STA. SOCORRO 2 | 218613 | CEDROS | 22/11/2002 | 21/11/2052 | 13.04 |
| A.T.H. | 219220 | CEDROS | 18/02/2003 | 17/02/2053 | 101.86 |
| STA. SOCORRO 1 | 219383 | CEDROS | 04/03/2003 | 03/03/2053 | 5.56 |
| STA. SOCORRO 3 | 219384 | CEDROS | 04/03/2003 | 03/03/2053 | 95.89 |
| STA. SOCORRO 4 | 219385 | CEDROS | 04/03/2003 | 03/03/2053 | 59.55 |
| STA. SOCORRO 5 | 221210 | CEDROS | 11/12/2003 | 10/12/2053 | 389.98 |
| FATIMA | 221868 | CEDROS | 06/04/2004 | 05/04/2054 | 14.00 |
| EL TAHUR | 229772 | CEDROS | 15/06/2007 | 14/06/2057 | 254.84 |
| MANIS | 230565 | CEDROS | 20/09/2007 | 19/09/2057 | 451.96 |
| E.T.D. | 239349 | CEDROS | 13/12/2011 | 12/12/2061 | 133.20 |
| LA PECHUGA | 24651 | CARRIZAL MINING | 24/08/2018 | 23/08/2068 | 3025.00 |
|  | **Total Area (ha)** | **Total Area (ha)** | **Total Area (ha)** | **Total Area (ha)** | **8164.06** |

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4.4 Taxes
 and Fees

Generally, semiannual fees are paid in January and July of each year, following the submission of semiannual work reports. Mining fees are calculated based on the age of the concession within its granting period, its size in hectares, and the adjusted annual fee published in the Official Gazette of the Federation, in accordance with Articles 59 and 60 of the Mexican Mining Law (2014). The fee is adjusted annually for the annual inflation rate calculated by the Bank of Mexico (Banxico). The mining fees paid to the Public Registry of Mines by the Company in 2025 totaled US$139,570. In addition, Carrizal paid the following taxes in 2025: Social Security (IMSS) US$3,419,059, Income Tax (ISR) US$2,381,396, Value Added Tax (VAT) US$2,065,216, Payroll Tax (ISN) US$317,540, Water Rights US$103,981, Extraordinary Mining Rights US$191,165, Property Tax and Other Minor Services US$69,779.

4.5 Verification
 of Title Status

The authors have relied upon the legal opinion of Mr. Jose Enrique Rodriguez del Bosque of RB Abogados (RB Lawyers) in the verification of title status (see Section 3 – Reliance on Other Experts). The result of the legal title opinion confirms title information as shown in Table 4-1.

4.6 Surface
 Rights

4.6.1 General
 Information

The project area operated by Carrizal Mining is located in the municipality of Zimapán, State of Hidalgo, Mexico, and comprises land under a mixed tenure scheme, consisting of private property (titled) and temporary occupation rights over ejidal land.

This combination of tenure is common in mining projects in Mexico and ensures access, use, and operational control of the land necessary for exploration, exploitation, and mineral beneficiation activities.

4.6.2 Land
 Tenure and Title – Private Property

The reviewed agreements consistently establish that the company holds broad and well-defined rights to conduct mining activities across the subject lands. These rights include the full scope of mineral exploration and exploitation, as well as the construction, operation, and maintenance of all necessary infrastructure such as processing plants, tailings storage facilities, access roads, and power distribution systems. The company is also authorized to undertake hydraulic works and implement operational control measures as required. Importantly, the agreements provide flexibility to access, modify, and adapt the land in accordance with evolving project requirements, and include provisions allowing the assignment or transfer of contractual rights, thereby supporting operational and corporate flexibility.

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A significant portion of the project is located on land acquired through formalized public deeds executed before a public notary, registered in the Public Registry of Property and supported by cadastral documentation and commercial appraisals.

The main identified properties include:

● Rustic property "San Francisco" (various fractions);

● Lots 311, 312, 412 and other associated lots;

● Rustic property "El Sabino";

● Fractions of the Rancho San Francisco; and

● Urban properties within the "La Llave" neighborhood.

These properties are located within the project's operational zone and form the territorial foundation for the development of mining infrastructure and production activities.

Documented evidence includes public deeds, certificates of freedom from encumbrances, cadastral records, commercial appraisals, and technical site plans.

4.6.3 Surface Rights Agreements

The project area operated by Carrizal Mining falls within land subject to the ejidal property regime, over which the company maintains use and occupation rights through formally established contracts with various agrarian communities (nucleos agrarios) in the municipality of Zimapán, State of Hidalgo.

These rights permit the development of exploration, exploitation, mineral beneficiation, and mining infrastructure construction activities, as established by applicable agrarian and mining legislation in Mexico.

The ejido that may be affected by development activities with whom contracts have been negotiated and agreed are as follows;

4.6.3.1 Ejido San Francisco

A temporary occupation contract and its respective addendum are in place, granting the right of use over a total approximate area of:

● 17-75-66 ha.

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which includes:

● 9-48-75 ha (original contract); and

● 8-26-91 (extension).

This contract establishes that the surface may be used for mining activities, including the possible installation of infrastructure such as tailings dams, as well as the company's right to carry out the necessary works for its operation.

4.6.3.2 Ejido Tadhé

Through a temporary occupation contract, the ejido authorizes the company the use of an approximate area of:

● 20-24-66 ha.

The contract establishes:

● Use for mineral exploration, exploitation, and beneficiation;

● Term of up to 30 years, including a renewable option;

● Possibility of area adjustment based on operational requirements; and

● Payment of compensation according to the INDAABIN appraisal.

4.6.3.3 Ejido Benito Juarez

A temporary occupation contract covering an approximate area of:

● 31-45-00 ha.

This agreement allows for the :

● Continuous use of the land for mining activities;

● Development of associated infrastructure (roads, facilities, hydraulic works, etc.); and

● Right to modify the area based on project needs.

4.6.3.4 Ejido Khode

The corresponding contract establishes occupation of an approximate area of:

● 50-47-34 ha

This contract includes:

● Authorization for exploration and exploitation activities;

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● Construction of mining infrastructure;

● Term of up to 30 years, which is renewable; and

● Possibility of rights assignment and asset transfer.

4.6.4 Permitted Uses and Operational Rights

The analyzed contracts consistently establish that the company has the right to:

● Conduct mining exploration and exploitation activities;

● Build operational infrastructure (plants, tailings dams, roads, power lines, etc.);

● Execute hydraulic and control works;

● Access, modify, and adapt the land according to project needs; and

● Assign or transfer rights granted from the contract.

Likewise, the ejidos are obligated to:

● Not restrict or prevent company activities;

● Respect the granted surface rights; and

● Facilitate mining operations within the agreed areas.

4.6.5 Agreement Terms and Considerations

The contracts show homogeneous characteristics in their structure:

● Term: generally tied to the useful life of the project or mining concessions, with periods of up to 30 years, renewable;

● Compensation: annual payments per hectare, adjusted according to inflationary indices or official appraisals; and

● Adjustment: in accordance with the National Consumer Price Index (NCPI).

4.6.6 Legal and Compliance Considerations

The reviewed contracts:

● Have been formalized before a public notary; and

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● Comply with the provisions of the Agrarian Law and Mining Law.

Based on the available documentation, no legal restrictions have been identified that would prevent the use of the surfaces for mining activities.

4.6.7 Project Surface Area

Based on the analyzed documentation, the project surface area is distributed as follows:

● Private property: approximately 180 to 220 hectares; and

● Ejidal occupation: approximately 119 hectares.

4.6.8 Legal and Registry Support

The company has a robust documentary support backing land tenure, including:

● Public deeds duly notarized;

● Registration in the Public Registry of Property;

● Freedom from encumbrance certificates confirming the absence of legal charges on the property;

● Municipal cadastral records validating the location and characteristics of the properties;

● Commercial appraisals prepared by certified experts supporting the value of the assets; and

● Topographic plans and surveys defining the geometry and boundaries of the project.

Additionally, transaction receipts and administrative records are available confirming the legal acquisition of the properties.

4.6.9 Rights and Obligations

The reviewed legal instruments establish that the company has rights to:

● Use, occupy, and modify the land according to operational needs;

● Develop mining infrastructure;

● Conduct exploration and exploitation activities; and

● Maintain continuous access to project areas.

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Obligations are also established related to:

● Payment of compensation;

● Compliance with applicable regulations; and

● Respect for contractual terms.

4.6.10 Tenue Risk Assessment

Based on the review of available documentation:

● No encumbrances, mortgages, or liens have been identified on the properties;

● No active agrarian conflicts or litigation have been detected; and

● No legal restrictions exist that limit land use for mining purposes.

The main factor to consider is the partial dependence on ejidal land; however, this is mitigated through current and formally established contracts.

4.6.11 Conclusion

The company maintains effective control over the project surface through a combination of private property and ejidal temporary occupation rights, both supported by solid legal documentation, official records, and technical evidence.

The land access and surface rights agreements demonstrate a consistent and well-structured framework governing the company's ability to develop and operate the project. Collectively, these contracts establish clear and comprehensive operational rights in favor of the company, including the authority to conduct mineral exploration and exploitation activities across the designated areas. The agreements further permit the construction and operation of all necessary infrastructure, including processing plants, tailings storage facilities, access roads, and power distribution systems. In addition, the company is authorized to undertake hydraulic works and other control measures required for safe and efficient operations. Importantly, the contracts provide the flexibility to access, modify, and adapt the surface as required by evolving project needs, and they allow for the assignment or transfer of rights, which is a critical element in maintaining operational and corporate flexibility.

4.7 Environmental Liability and Permitting

4.7.1 Regulatory Framework and Project Context

The Carrizal Mining Project operates in the municipality of Zimapán, Hidalgo, under the federal environmental regulatory framework administered by the Secretariat of Environment and Natural Resources (SEMARNAT), in compliance with the General Law of Ecological Equilibrium and Environmental Protection (LGEEPA), its Regulations on Environmental Impact Assessment, and the General Law for the Prevention and Integral Management of Waste.

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Environmental compliance is based on the application of Mexican Official Standards (NOMs), including:

● NOM-001-SEMARNAT-2021 (water);

● NOM-035-SEMARNAT-1993 and NOM-043-SEMARNAT-1993 (air);

● NOM-081-SEMARNAT-1994 (noise);

● NOM-052-SEMARNAT-2005 (hazardous waste);

● NOM-157-SEMARNAT-2009 (mining waste);

● NOM-141-SEMARNAT-2003 (tailings dam);

● NOM-161-SEMARNAT-2011 (special management waste); and

● NOM-120-SEMARNAT-2020 (mining exploration).

4.7.2 Inventory of Project Permits and Authorizations

Based on the documentary review of the project file, the following current authorizations are identified:

4.7.2.1 Key Authorizations Identified

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Environmental Impact Assessment (EIA) Resolution
 – Tailings Dam No. 9;

b) Extension of EIA validity;

c) Operating License (atmospheric emissions);

d) Hazardous Waste Management Plan (HW);

e) Mining Tailings Management Plan Registration;

f) Special Management Waste Plan (SMW);

g) Municipal Solid Waste Disposal Permit (Municipality);

h) Water Concession Title (CONAGUA);

i) Concession title associated with infrastructure
 (dam); and

j) Federal Zone Occupation Title.

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4.7.3 Detailed Description of Authorizations

4.7.3.1 Environmental Impact Assessment (EIA) – Tailings Dam No. 9

Environmental impact authorization is the governing instrument for the project's environmental compliance, authorizing tailings dam operations and establishing mandatory conditions.

This authorization includes:

● Environmental monitoring program;

● Mitigation measures;

● Water, air, soil, and biodiversity monitoring;

● Reporting obligations; and

● Cumulative impact control.

EIA establishes conditional environmental viability.

4.7.3.2 Extension of EIA Validity

The project has an authorized extension of the EIA validity, extending its operational horizon to approximately 2031.

This extension implies:

● Validation of historical compliance;

● Continuity of conditions; and

● No increase in authorized impacts.

4.7.3.3 Operating License (Atmosphere)

The Operating License regulates atmospheric emissions from:

● Beneficiation plant; and

● Metallurgical processes.

Includes:

● Emission limits;

● Mandatory monitoring;

● Annual report (COA); and

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● Compliance with legal requirements (NOM-035 and NOM-043).

License updates reflect operational continuity and regulatory adaptation.

4.7.3.4 Hazardous Waste Management Plan (HW)

This instrument governs the management of hazardous waste generated by the project, such as:

Supplier controls — Only authorized companies may:

● Transport, collect, and dispose;

● Mandatory reporting and integration into the Annual Operating Certificate (COA); and

● Document records must be maintained: logbooks and hazardous waste manifests.

4.7.3.5 Mining Waste Management Plan (Tailings)

The tailings management plan governs the disposal of mining waste in the dam.

Includes:

● Dam design and operation;

● Geotechnical control;

● Environmental monitoring;

● Contingency plan; and

● Regulated under legal requirements (NOM-141 and NOM-157).

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4.7.3.6 Special Management Waste Plan (SMW)

The handling and temporary disposal of inorganic waste is regulated:

● Delivery only through companies authorized by state authority;

● Mandatory temporary storage must comply with: covered area, controlled access, safety signs, separation by type, identified containers; and

● Mandatory reporting: Semi-annual report using form SEMARNATH/RME-03.

4.7.3.7 Federal Zone Occupation Title

Authorizes the use of federal zones (water bodies or channels) for project infrastructure.

4.7.4 Environmental Monitoring Program (EMP)

The Project implements an Environmental Monitoring Program as a comprehensive mechanism for environmental compliance control.

This program articulates:

● Monitoring;

● Verification;

● Operational control; and

● Continuous improvement.

The EMP covers:

● Water (NOM-001);

● Air (NOM-035 / NOM-043);

● Noise (NOM-081);

● Soil;

● Waste (NOM-052 / NOM-161); and

● Tailings (NOM-141 / NOM-157).

4.7.5 Regulatory Risk and Mitigation – Environmental Framework

As part of the regulatory framework applicable to the Carrizal Mining Project (the "Project"), consideration has been given to the requirements of Mexican environmental legislation, including the Ley General del Equilibrio Ecológico y la Protección al Ambiente (LGEEPA) and associated technical standards (Normas Oficiales Mexicanas or "NOMs").

In particular, NOM-120-SEMARNAT-2020, which establishes environmental protection specifications for direct mining exploration activities involving surface disturbance, has been reviewed. Based on the QP's understanding of current Project activities, this standard is not presently applicable, as the Project is in an exploitation and beneficiation stage and does not include active surface exploration programs.

Notwithstanding the above, NOM-120-SEMARNAT-2020 is considered relevant within a forward-looking regulatory context. Should future Project development include surface exploration activities, such work would be subject to environmental assessment requirements under LGEEPA. This process would typically require the submission of a Preventive Report (Informe Preventivo) to the Secretaría de Medio Ambiente y Recursos Naturales (SEMARNAT) for review and approval prior to the commencement of such activities.

From a regulatory risk perspective, the requirement for prior environmental authorization introduces a moderate risk to future Project expansion timelines. This risk is primarily associated with regulatory approval processes, technical compliance with environmental standards, and potential conditions imposed by the environmental authority. However, as no such exploration activities are currently contemplated, this risk does not materially affect ongoing operations but remains relevant to long-term strategic planning and environmental compliance.

4.7.5.1 Environmental Regulatory Risk Summary and
Mitigation Measures

A structured review of key environmental and regulatory risks has been undertaken, with consideration given to applicable legislation, potential impacts, and mitigation measures. The principal risks identified are summarized as follows:

● Tailings Management: Risks associated with structural integrity and monitoring compliance under applicable standards (e.g., NOM-141, NOM-157, and Environmental Impact Statement conditions) are considered to have high impact. Mitigation includes continuous geotechnical monitoring, instrumentation, routine inspections, and implementation of an emergency preparedness and response plan;

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● Hazardous Waste Management: Risks related to improper handling or lack of traceability (NOM-052 and Hazardous Waste Management Plan requirements) are assessed as having a high impact. Mitigation measures include strict document control, use of authorized contractors, and periodic compliance audits;

● Regulatory Reporting (COA): The risk of omission or inconsistency in the Annual Environmental Operating Report (Cédula de Operación Anual, COA) under LGEEPA is considered high impact. This risk is mitigated through internal validation procedures, technical cross-review, and maintenance of supporting documentation;

● Water Management: Compliance risks related to discharge parameters and water concession conditions (NOM-001 and CONAGUA requirements) are considered moderate impact, mitigated through routine water quality monitoring, discharge controls, and regulatory reporting;

● Air Quality (Dust): Given semi-arid climatic conditions, particulate emissions may exceed regulatory thresholds (NOM-035, NOM-043), representing a moderate impact risk with relatively higher probability. Mitigation includes dust suppression systems, operational controls, and periodic monitoring;

● Soil and Spill Management: Potential contamination risks under LGEEPA and NOM-052 are considered moderate, mitigated through spill prevention measures, inspection protocols, and incident reporting systems;

● Noise and Special Waste: Risks related to noise (NOM-081) and special management waste (NOM-161) are considered low to moderate, with standard operational controls and reporting procedures in place;

● Environmental Impact Authorization Compliance: Non-compliance with conditions established in the Environmental Impact Assessment (EIA) resolution is considered a high impact risk, albeit with low probability. Mitigation includes implementation of an environmental management system, ongoing monitoring programs, and periodic internal and external audits;

● Regulatory Inspections: Inspections by the Procuraduría Federal de Protección al Ambiente (PROFEPA) may result in sanctions in cases of non-compliance. This risk is managed through maintenance of comprehensive documentary evidence, adherence to environmental management systems, and proactive compliance practices; and

● Future Exploration Permitting: As noted, the potential requirement to submit a Preventive Report under NOM-120-SEMARNAT-2020 introduces a moderate forward-looking regulatory risk, mitigated through advance planning, early engagement with SEMARNAT, and preparation of compliant environmental documentation.

4.7.6 QP Opinion

In the opinion of the QP, the Project is operating within a well-defined regulatory framework, and the identified environmental and permitting risks are typical of mining operations at a comparable stage of development in Mexico. Based on the information reviewed, these risks are considered manageable through the implementation of standard industry practices, regulatory compliance systems, and proactive environmental management. No material environmental or regulatory issues have been identified that would reasonably be expected to prevent the continuation of current operations or materially impact the advancement of the Project, provided that recommended mitigation measures and compliance protocols are maintained.

The Carrizal Mining Project has a robust system of environmental authorizations and operational permits that comprehensively cover its activities.

The validity of the EIA, the existence of authorized management plans, and the implementation of an Environmental Monitoring Program aligned with current regulations, including NOM-120-SEMARNAT-2020, lead to the conclusion that:

The project is environmentally viable and has the necessary regulatory elements to ensure its operational continuity within the authorized time horizon.

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5 Accessibility, Climate, Local Resources, Infrastructure and Physiography

5.1 Access

5.1.1 Route to Zimapan from Mexico City

The Project is accessible year-round via established federal highway infrastructure from major regional population centres. From Mexico City, primary access to the Property is achieved by traveling approximately 220 km northward, with an estimated travel time of approximately 4.5 hours under normal driving conditions. The route follows the tolled Federal Highway 85D and the adjacent Federal Highway 85, passing through the metropolitan area of Pachuca. This corridor consists predominantly of paved, well-maintained roadways, including segments with controlled access and toll infrastructure, providing reliable transport for personnel, light vehicles, and heavy equipment.

An alternative access route is available from Querétaro, located approximately 141 km from the Property. This route follows Federal Highway 45 to El Paraíso, then connects via Federal Highway 100 to Ezequiel Montes, and subsequently Federal Highway 120 to Zimapán, the nearest principal service centre to the Property. This secondary route is also fully paved and suitable for regular industrial access.

Both Mexico City and Querétaro are serviced by major international airports offering frequent domestic and international flights, thereby facilitating efficient mobilization of personnel, contractors, and supplies to the Project area. Overall, access to the Property is considered good, with multiple reliable transportation options supporting exploration, development, and mining operations.

5.1.2 Access to Mine Facilities

5.1.2.1 El Monte Mine

The El Monte Mine is located approximately 23.8 km north of the town of Zimapán, with an estimated travel time of approximately 50 minutes under normal driving conditions.

Access to the site from Zimapán is via Federal Highway 85, travelling north in the direction of the Jacala–Tasquillo corridor. This segment of the route consists of paved, well-maintained highway infrastructure suitable for year-round access by personnel, light vehicles, and heavy equipment. At a designated turnoff, access transitions to an unpaved (dirt) road leading directly to the El Monte Mine and its associated processing plant facilities, situated near the community of San Francisco Zimapán (ZIP Code 42346).

The final unpaved access segment is generally passable under normal weather conditions; however, periodic maintenance may be required to ensure reliable access to heavy vehicles, particularly during seasonal rainfall events. Overall, the access to the El Monte Mine is considered adequate to support current and planned operations, with proximity to Zimapán providing logistical advantages in terms of workforce availability, supplies, and basic services.

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5.1.2.2 El Carrizal Mine

The El Carrizal Mine is situated approximately 14.8 km northwest of the urban centre of Zimapán, with an estimated travel time of approximately 35 to 40 minutes under normal conditions.

Access from Zimapán is achieved via Avenida Jorge Preisser Terán Avenue, proceeding westward along a paved municipal roadway. The route continues to a clearly signposted junction for "A Mina El Carrizal," from which access transitions to an unpaved (dirt) road extending to the mine site and associated facilities. This final segment is typically suitable for light vehicles and site traffic under normal weather conditions, although seasonal maintenance may be required to ensure consistent access to heavier equipment.

The proximity of the mine to Zimapán provides ready access to basic services, labour, and supplies, while the established road network allows for efficient daily commuting and transport of materials. Overall, site access is considered adequate to support ongoing exploration, development, and mining activities, with only minor limitations related to the condition of the final unpaved access segment.

The Lomo de Toro-San Francisco Tunnel is a key underground infrastructure component of the Carrizal Mining operations, providing an integrated connection between the El Carrizal Mine and the El Monte Mine. The tunnel extends approximately 7.4 km in total length and constitutes a principal haulage and logistics corridor within the operation.

The access portal to the tunnel is located approximately 2.7 km from the El Carrizal Mine facilities, accessible via an unpaved road trending toward Zimapán. From this portal, the tunnel provides a direct underground connection to the El Monte Mine workings, thereby enabling the efficient transfer of ore between the two mining areas.

Operationally, the tunnel serves several critical functions. It facilitates the internal underground transport of ore extracted from El Monte Mine to surface handling points associated with the processing plant. In doing so, it significantly optimizes the overall logistics of ore movement across the operation by integrating production from both mines into a coordinated haulage system. Additionally, the use of underground transport infrastructure materially reduces reliance on surface haulage routes between the El Carrizal Mine and the processing plant, resulting in improved operational efficiency, reduced transportation times, and minimized surface traffic and associated costs.

Overall, the Lomo de Toro-San Francisco Tunnel represents a strategically important infrastructure asset that enhances operational integration, improves haulage efficiency, and supports sustained mining operations across the Carrizal Mining complex.

5.1.3 Access Conditions and Operational Considerations

The final sections for access to both mining facilities present the following characteristics:

● Dirt roads with intensive mining use;

● Steep grades and curves typical of mountainous terrain;

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● Limited signage on the final sections;

● Restricted telecommunications coverage near the mines; and

● Variable road conditions during the rainy season.

The use of high-clearance vehicles (pickup truck or 4x4) is recommended for safe access to the facilities.

5.1.4 Summary of Distances and Travel Times

The following table summarizes the distances and travel times verified via Google Maps (April 2026):

**Table 5-1: Distances and Travel Times**

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| **Origin** | **Destination** | **Distance**<br> **(km)** | **Estimated Time**<br> **(min)** |
| Mexico City | El Carrizal Mine | 220 | 4h 36 |
| Zimapan Center | El Monte Mine | 23.8 | 50 |
| Zimapan Center | El Carrizal Mine | 14.8 | 39 |
| El Carrizal Mine | Lomo de Toro Tunnel Entrance | 2.7 | 8 |

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Notes:

Estimated times under normal traffic conditions.

Source: Carrizal Mining (April 2026)

5.2 Physiography

The Property is located within the El Monte mountain range along the southwestern margins of the Sierra Madre Oriental physiographic province. The topography of the area consists of broad upland valleys with an elevation of 1,600 to 1,700 m above sea level (ASL), interspersed with jagged mountain ranges rising to elevations greater than 2,500 m ASL. Locally, sharp and resistive mountain ranges are characterized by steep slopes and deep "V"-shaped valleys – including the Rio Moctezuma and Rio Toliman valleys that drain through the Property.

Local flora in the semi-arid region consists of natural grasses, different varieties of cactus-like plants (nopaleras, maguey, organos, cardones, biznagas, huizaches, hortigas and mezquites), low bushes and tall scrubs. Standing bodies of water are dammed as most streams are intermittent. Local fauna in the region is comprised of wolves, coyote, wild spotted cat, opossum, hare, squirrel, fox, skunk, badger and field mouse. Reptiles include vipers and lizards. Hawk, eagle, crow, badger, owl, and varieties of songbird are also native to the region (Enciclopedia de Los Municipios y Delegaciones de México, 2020).

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5.3 Climate

The Project is located within the municipality of Zimapán and is characterized by predominantly semi-arid climatic conditions in accordance with the Köppen–García climate classification. The dominant climate type in the Project area is classified as BS1hw (semi-arid semi-warm), with subordinate climatic variations occurring in peripheral zones.

The BS1hw climate covers the majority of the Project area and is defined by mean annual temperatures exceeding 18°C, with precipitation concentrated during the summer months and minimal winter contribution, typically ranging between approximately 5% and 10%. These conditions result in extended dry periods and limited natural water availability. Climatic variability is reflected in seasonal runoff patterns, with short-duration, higher-intensity precipitation events during the wet season and prolonged dry intervals throughout the remainder of the year.

Secondary climate types identified within the broader Project area include BS1kw (semi-arid temperate) and BS0hw (arid semi-warm). The BS1kw climate occurs in higher elevation or peripheral northern and southeastern areas and is characterized by mean annual temperatures below 18°C, influencing local watershed hydrology and drainage patterns toward the Project. The BS0hw climate is present in more arid western zones, typically associated with canyon and ravine topography, and is characterized by reduced precipitation and increased aridity relative to the dominant climate.

These climatic conditions have a direct influence on mining operations and infrastructure. Extended dry periods contribute to elevated dust generation and necessitate dust suppression measures, while seasonal rainfall events require appropriate design and management of surface water control systems, including runoff diversion and containment. Limited water availability underscores the importance of water management strategies, including recycling and conservation practices within the processing circuit. In addition, climatic variability, particularly during the rainy season, must be considered in the design, operation, and stability management of tailings storage facilities. Overall, the climate is considered typical of semi-arid mining environments and presents manageable, though important, operational considerations.

5.4 Infrastructure and Local Resources

The town of Zimapan is a historical mining center that provides the region with access to medical facilities, local amenities, shipping and transport stations, suppliers and a skilled workforce. Other nearby supply centers include the cities of Pachuca and San Juan del Rio. Grid electrical power at the Carrizal mine, El Monte mine, and El Monte plant is provided by the Mexican Federal Electricity Commission (Comisión Federal de Electricidad or "CFE"). Process water and mining support water are sourced from underground workings and water recovered from the tailing dams. Potable water is transported to site.

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| 6 | History |

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6.1 General History

Information provided in General History is primarily extracted from Simons and Mapes (1956), and Suter (2016). The author has not completed sufficient work to verify this information.

In 1575, Zimapan was founded by Spanish miners who were extracting silver, lead, and other metals from mines located in the Sierra El Monte and Baranca Toliman, near the present day Carrizal mine. The discovery of the Lomo del Toro is attributed to Don Lorenzo de Labra in 1632. Silver and lead production continued in the Zimapan mining district until the Mexican war of independence of 1810. Mining activity was interrupted during the war and resumed in 1870. Between 1890 and 1901, interest in the Lomo de Toro mine was revived and the La Luz mine was developed. Mining activity was again suspended in 1910 due to the Mexican Revolution.

In 1913, mines in the El Monte area resumed operation under the ownership of the Hidalgo Copper Mining and Smelting Company. According to Simons and Maples (1956) 1,742 tons of mineralized rock averaging 21 percent lead and 806 grams per ton of silver was smelted in 1913.

By 1920, approximately 18 mines operated in the district. The Compania Fundidora y Minera de Zimapan operated the Rosario, Santa Gorgonia, La Candelaria, San Geronimo, Poder de Dios, and Las Animas mines. The Hidalgo Copper Mining and Smelting Co. operated the Nevada and Purisima mines. The Preisser family operated the San Francisco and Los Balcones mines. Mineralized material was either roasted in furnaces on-site to extract silver-lead alloys or shipped off-site for processing elsewhere.

In 1929, the San Pascual and La Cruz mines were operated by Compania Minera Mexicana and the Preciosa Sangre and San Jose Maravillas deposits were operated by Negociacion Minera La Aurora. The Lomo de Toro mine resumed production with the reopening of existing workings.

In 1945, new oxide bodies were discovered in the Lomo de Toro mine and an access road to the Carrizal area was built.

In 1948, Fresnillo began exploitation of oxide and sulfide mineralization in the Monte area and continued mining activities from the Monte mine.

In 1949, operators chose to ship raw materials to San Luis Potosi and Zacatecas for smelting rather than smelting in the Zimapan area. Raw materials were shipped by truck to the railhead at Huichapan, located 88 km from Zimapan. Compania Minera La Llave operated the only smelter in the Zimapan area at that time. While raw materials were transported by truck from the Carrizal mining area to Zimapan, raw materials from the El Monte mining area were moved 10.5 km to Zimapan by donkey.

In 1957, a road to the Monte mine was built, stimulating production to reach an average of 2,500 tons per month according to Simons and Maples (1956).

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In 1964, Peñoles acquired 51% of Fresnillo and 51% of Compania Zimapan. Through Fresnillo, Peñoles became the underlying owner of the property and mining operation. In subsequent years Compania Zimapan assigned its concession rights to Fresnillo.

In 1972, the San Francisco mineral processing facility was constructed (the El Monte plant).

In 2004, Fresnillo entered into a mining and exploitation agreement with Compania Minera Nuevo Monte, S.A. de C.V. for an initial term of 60 months: through which the latter acquired the exclusive right to exploit from the Property and operate the El Monte plant.

In 2007, Fresnillo assigned all concession rights and agreements to Minera Cedros.

In 2009, Compania Minera Nuevo Monte suspended operations and cancelled its agreement with Minero Cedros. Carrizal Mining entered into a Lease Agreement with Minera Cedros on August 18, 2009.

6.2 Previous Work by Carrizal Mining

6.2.1 Mining and Production

Between January 1, 2010 and December 31, 2025 Carrizal Mining mined approximately 10.05 Mt of mineralized material, including:

● 5.62 Mt at head grades ranging from 76 g/t Ag, 0.50 % Pb, 2.00 % Zn, and 0.51 % Cu from the Monte mine; and

● 4.42 Mt at head grades ranging from 96 g/t Ag, 1.03 % Pb, 3.16 % Zn, and 0.32 % Cu from the Carrizal.

The author has not completed sufficient work to verify the production figures provided by Carrizal Mining. Mining activities primarily focused on the Escondida, Dike Concordia, Horizontes and Santa Fe mineral zones.

The author has not completed sufficient work to verify the production figures provided by Carrizal Mining. Mining activities primarily focused on the Escondida, Dike Concordia, Horizontes and Santa Fe mineral zones.

6.2.2 Development Drilling

Between January 1, 2011, and December 31, 2025, Carrizal Mining completed approximately 75,995.78 m of underground core drilling – including 32,562.7 m completed at the El Monte mine and 43,433.08 m completed at the Carrizal mine. Drilling produced 36.5 mm core from BQ size holes and 35.3 mm core from TT-46 size holes. Carrizal Mining workers carried out drilling and utilized underground drilling equipment owned by Carrizal Mining. Summary tables detailing the metres drilled for each zone at each mine area are provided in Table 6-1 through Table 6-4. Approximately 51% of the total m drilled have been dedicated to the Escondida, Dike Concordia, Dike 1493, Dike 1600, Horizontes, Santa Fe and Juan Pablo mineral zones.

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The Carrizal mine operates on a local metric grid system and the coordinates of the drill hole locations are recorded in this local grid format. Assay analysis was completed at the San Fransisco plant laboratory. The laboratory is not independent of Carrizal Mining and is not an ISO accredited laboratory. For these reasons, the author is unable to validate the drill hole data or disclose further information regarding drill hole results.

**Table 6-1: Exploration Drilling by Zone, Monte Mine**

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|:---|:---|:---|:---|:---|:---|
| **Zone** | **Hole <br> Count** | **Total <br> m** | **Mean <br> m** | **Median <br> m** | **Hole <br> >150 m** |
| FALLA DEL AGUA | 1 | 18.7 | 18.7 | 18.7 | - |
| DK TECOLOTE | 2 | 229.2 | 114.6 | 114.6 | 1 |
| 385 DK | 2 | 189.0 | 94.5 | 94.5 | - |
| DK 1400 | 3 | 216.5 | 72.2 | 69.5 | - |
| 385 NO | 3 | 158.2 | 52.7 | 53.6 | - |
| 385 SE | 4 | 120.5 | 30.1 | 31.0 | - |
| ESPERANZA | 8 | 531.0 | 66.4 | 67.2 | - |
| DK 1414 | 11 | 1404.8 | 127.7 | 142.9 | 3 |
| DK 1700 | 11 | 1111.3 | 101.0 | 91.2 | 4 |
| DK 1600 | 30 | 3345.6 | 111.5 | 120.3 | - |
| CPO. 385 | 30 | 2351.1 | 78.4 | 69.5 | - |
| DK 1493 | 35 | 3559.7 | 101.7 | 92.9 | 2 |
| CONCORDIA | 68 | 9972.4 | 146.7 | 139.0 | 22 |
| ESCONDIDA | 98 | 9354.9 | 95.5 | 88.0 | 9 |
| **Total** | **306** | **32562.7** |  |  | **41** |

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Source: Carrizal Mining (December 2025)

**Table 6-2: Exploration Drilling by Zone, Carrizal Mine**

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|:---|:---|:---|:---|:---|:---|
| **Zone** | **Hole <br> Count** | **Total <br> m** | **Mean <br> m** | **Median <br> m** | **Hole <br> >150 m** |
| LA INTERNCAIONAL | 2 | 121.2 | 60.6 | 60.6 | - |
| 3 ARCANGELES | 3 | 148.6 | 49.5 | 50.7 | - |
| BALCONES | 5 | 147.2 | 29.4 | 26.1 | - |
| LA LAMOSA | 6 | 536.7 | 89.5 | 59.2 | 1 |
| SAN CARLOS | 7 | 704.3 | 100.6 | 73.0 | 1 |
| LAS ESTACAS | 10 | 1867.9 | 186.8 | 178.7 | 7 |
| DK EL TIRO | 12 | 1378.0 | 114.8 | 74.7 | 3 |
| ANIMAS | 12 | 2668.4 | 222.4 | 229.6 | 7 |
| SAN VALENTIN | 13 | 651.5 | 50.1 | 52.6 | - |
| SANTA FE | 17 | 2950.5 | 173.6 | 239.3 | 10 |
| SANTA ELENA | 18 | 1046.2 | 58.1 | 48.8 | 1 |
| LA PAZ | 19 | 4805.8 | 252.9 | 321.7 | 12 |
| SAN BUENAVENTURA | 20 | 1786.2 | 89.3 | 74.8 | 4 |
| SANTA MARTHA | 23 | 1467.5 | 63.8 | 65.8 | - |
| LA CUÑA | 26 | 1462.2 | 56.2 | 56.7 | - |
| JUAN PABLO | 27 | 2235.1 | 82.8 | 69.0 | 2 |
| PROMONTORIO | 40 | 4557.8 | 113.9 | 79.7 | 9 |
| HORIZONTES | 162 | 14898.4 | 92.0 | 73.6 | 10 |
| **Total** | **422** | **43433.1** |  |  | **67** |

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Source: Carrizal Mining (December 2025)

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**Table 6-3: Exploration Drilling by Year, Monte Mine**

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|:---|:---|:---|
| **Year** | **Hole Count** | **Total (m)** |
| 2011 | 33 | 2725.1 |
| 2012 | 13 | 1785.3 |
| 2013 | 8 | 2018.5 |
| 2014 | 7 | 369.2 |
| 2015 | - | - |
| 2016 | - | - |
| 2017 | 31 | 2970.9 |
| 2018 | 41 | 3694.0 |
| 2019 | 33 | 2976.2 |
| 2020 | 6 | 610.2 |
| 2021 | 9 | 670.6 |
| 2022 | 31 | 2307.1 |
| 2023 | 21 | 4290.3 |
| 2024 | 43 | 4884.5 |
| 2025 | 30 | 3260.9 |
| **Total** | **306** | **32562.7** |

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Source: Carrizal Mining (December 2025)

**Table 6-4: Exploration Drilling by Year, Carrizal Mine**

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| | | |
|:---|:---|:---|
| **Year** | **Hole Count** | **Total** <br> **(m)** |
| 2011 | - | - |
| 2012 | 13 | 1733.3 |
| 2013 | 8 | 1227.7 |
| 2014 | - | - |
| 2015 | 4 | 1085.6 |
| 2016 | 9 | 1771.0 |
| 2017 | 35 | 3082.8 |
| 2018 | 32 | 1855.3 |
| 2019 | 34 | 2284.5 |
| 2020 | 7 | 469.3 |
| 2021 | 22 | 2300.1 |
| 2022 | 23 | 4296.8 |
| 2023 | 52 | 2761.3 |
| 2024 | 93 | 7868.2 |
| 2025 | 90 | 12697.5 |
| **Total** | **422** | **43433.1** |

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Source: Carrizal Mining (December 2025)

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**Figure 6-1: Mineralized Zones at the Carrizal Underground Mine**

![](ex99-19_008.jpg)

Note:

Modified from Carrizal Mining (2025). Only main underground workings are shown.

Source: Carrizal Mining (December 2025)

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**Figure 6-2: Mineralized Zones in the El Monte Underground Mine**

![](ex99-19_009.jpg)

Note:

Modified from Carrizal Mining (2025). Only main underground workings are shown.

Source: Carrizal Mining (December 2025)

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7 Geological Setting and Mineralization

7.1 Introduction

The geological setting, mineralization, and deposit type descriptions presented herein are derived in part from the Previous Technical Report, as described in Section 2. The QP has reviewed the underlying data, interpretations, and supporting documentation and considers the geological model to be reasonable and appropriate for the purposes of this Technical Report. The QP has no reason to believe that the geological interpretations derived from the Previous Technical Report are materially inaccurate or misleading, subject to the limitations and qualifications discussed herein.

7.2 Regional Geology

The Zimapan property is located within the Sierra El Monte range within southern Sierra Madre Oriental physiographic province (Figure 7-1). During the Late Jurassic through the Early Cretaceous the El Doctor and Valles-SLP carbonate platforms formed on the east and west margins, respectively, of the submersed Archean-Jurassic North American continental crust. Between these two carbonate platforms marine basinal carbonates and clastic sediments of the Zimapan Basin (ZB) were deposited (Figure 7-2). The Zimapan property is located along the margin between the El Doctor carbonate platform and the carbonates and clastic sediments deposited in the Zimapan basin.

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**Figure 7-1: Generalized Tectonic Map of the North American Cordillera**

![](ex99-19_010.jpg)

Source: Modified after Fitz-Diaz et al. (2014)

**Figure 7-2: Distribution of Late Jurassic – Early Cretaceous carbonates Prior to Deformation**

![](ex99-19_011.jpg)

Source: Modified after Fitz-Diaz et al. (2014).

During the late Cretaceous, corresponding to the late collision of the Guerrero Terrane to the southwest coast of North America and the initiation of east dipping subduction of the Faralon Plate; regional uplift to the west began and the carbonate platforms and marine basin were covered by turbiditic sediments of either North American or Guerrero Terrane origin.

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The onset of this marked the beginning of the Mexican Orogen began at about ~83 Ma along the western margin of the Mexican Fold and Thrust Belt (MFTB) (Fitz-Diaz et al.,2012., Martini 2016). Deformation was progressive and episodic, migrating from the west to east. Deformation began to the west of the Property. During the first deformation event (D1 ~84-80 Ma) the Paleozoic basement and resistant carbonate platform rocks of the El Doctor platform were thrust northeastward over the bedded carbonates and shales of the Zimapan basin. The thinly bedded sediments of the Zimapan basin deformed plastically and buckled forming high amplitude folds which resulted in shortening of the basin by 70% and thickening of the basinal sediments multiple times (Fitz-Diaz et al., 2014) (Figure 7-3). The second deformation event (D2 ~77 Ma) deformed the rocks of the Valles-SLP Platform and over-printed D1 deformation to the west. Two other deformation events occurred east of the Valles-SLP platform whose effects are not seen on the Property. The greatest deformation and greatest thickening were to the western edge of the Zimapan basin near the Zimapan property.

Subsequent to the termination of the of the compressional regime responsible for the formation of the MFTB, post ~43 Ma and before ~25 Ma was a period of extension that resulted in minor normal faulting in the MFTB. During this period of extension there was the emplacement of magmatic bodies following the reactivated northwest trending fold axis of the MFTB and the northeast trending normal structures.

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**Figure 7-3: Regional Geological Map**

Source: Modified after Fitz-Diaz et al. (2012).

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**Figure 7-4: Idealized Stratigraphic Section of the Zimapan Basin**

Source: Modified after Fitz-Diaz et al. (2012).

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**Figure 7-5: Property Geology**

Source: Carrizal Mining (2020)

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**Figure 7-6: Simplified Geological Cross-Section between Carrizal and El Monte Mines**

Source: Modified from Carrizal Mining (2018)

7.3 Property Geology

Figure 7-4 presents generalized stratigraphic columns for the Zimapan basin and bounding carbonate platforms. Lithologic units are described below.

7.3.1 Stratigraphy

7.3.1.1 Las Trancas Formation (Late Jurassic-Early Cretaceous, Kimmerigian-Barremian Age)

The Las Trancas Formation is the oldest exposed unit on the Zimapan property. It consists of dark grey, thin bedded shiny, slightly phyllitic calcareous shales, siltstones and impure limestones with pyrite nodules. The Trancas Formation is Late Jurassic to Early Cretaceous in age and was deposited in a shallow marine environment on subsiding continental crust. The base of the Trancas Formation has not been observed, but the estimated thickness of the unit is roughly 800 m. The carbonate platform El Doctor- Abra Formation and time equivalent basinal Tamaulipas Formation unconformably overlie the Las Trancas Formation (Carrillo-Martinez, 2001). The Las Trancas Formation is observed along the northern limit of the property and in the northeast near the El Monte plant.

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7.3.1.2 El Doctor, El Abra and Tamaulipas Formation (Early Cretaceous, Middle Albian-lower Cenomanian Age)

Historically the time-equivalent, Early Cretaceous, formations representing the El Doctor carbonate platform and the basinal sediments of the Zimapan basin have been collectively grouped together as the El Doctor Formation (Sergerstrom, 1962., Garcia and Querol, 1991., Barrios-Rodriquez,1996). Currently the formations are separated into The El Doctor and El Abra formations representing the carbonate platforms to the west and east of the Zimapan Basin and the Tamaulipas Formation that represents the sediments deposited within the Zimapan Basin (Carrillo-Martinez, 2001., Suter et al. 1997., Fitz-Diaz, 2011.). The El Doctor formation and the El Abra Formations are exposed outside the Zimapan property to west and east respectively.

7.3.1.3 Tamaulipas Formation (Lower Cretaceous, Aptian-Lower Cenomanian Age)

The Tamaulipas Formation represents the basinal sediments deposited within the Zimapan basin. It is divided into two facies based upon the environment of deposition: the basinal facies, and the foreslope facies.

The Foreslope Facies consist of variable thicknesses of lime silt and bioclastic wackestone and packstone, limestone conglomerates. These deposits are wedge shaped thickest, up to 800 m, towards the platform and thinning towards the basin where the dominant lithology is fine grained limestone with discontinuous chert lenses and bands. The Foreslope Facies includes the Cerro Ladron and the Sovacon members of Segerstrom (1962) and Garcia and Querol (1991).

The Basinal Facies consists of deeper water mudstone-wackestone with chert lenses and beds. The Basinal Facies overlies and deposited laterally basin-ward from the Foreslope Facies and includes the San Joaquin and La Negra members of Segerstrom 1962, Garcia and Querol, 1991 and Barrios-Rodriquez et al., 1996.

The San Joaquin member consists of dark gray, compact, cryptocrystalline thickly bedded (0.5-1.0 m) calcareous mudstones reworked gelatinous chert which solidified to form 2-30 centimetre (cm) dark gray chert nodules.

The La Negra member consists of undisturbed medium bedded (10-30 cm) grey very-fine grained cryptocrystalline calcareous mudstone with continuous bands and nodules of dark grey chert. The La Negra member is similar to that of the San Joaquin member but was deposited in a deeper environment that was not disturbed by storms or wave action. Within the La Negra member is the Horizontes horizon a massive thick bedded limestone that forms a barrier and boundary for mineralizing fluid movement. The Horizontes horizons or equivalents have been mapped across the width of the property and play a role in both the Carrizal and El Monte mines. At the Carrizal mine the Horizontes are associated with both manto and chimney mineralization.

7.3.1.4 Soyatal Formation (Upper Cretaceous, Turonian-Campanian Age)

The Soyatal Formation varies gradationally both vertically and laterally. At its base is a gradational contact with the Tamaulipas Formation where it grades from narrow beds of calcareous mudstones (1-3 cm) with discontinuous chert beds intercalated with thick beds of grey shales (2-7 cm) and marls. Chert decreases upward and laterally towards the basin with the decrease in carbonate content. The maximum thickness is roughly 1000 m (Simons and Mapes, 1956). The Soyatal Formation is interpreted to be a turbiditic clastic sediments derived from the uplifted Guerrero terrane to the west or North American crustal rocks to the north. The Soyatal formation that marks the beginning of uplift and compression beginning of the deformation related to the Mexican Orogen and the development of the MFTB. The Soyatal Formation is unconformably overlain by the Morro Fanglomerate or the Espinas Formation volcanic rocks. On the Zimapan property, the Soyatal Formation is observed in the base of synclines between Carrizal and El Monte.

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7.3.1.5 El Morro Fanglomerate (Tertiary)

The El Morro Fanglomerate is a poorly sorted, poorly stratified, red to purple-gray fluvio-lacustrine conglomerate with subangular limestone and volcanic clasts and sandy beds interfingering with volcanic agglomerates and flows. The thickness of the El Morrow Fanglomerate is variable with maximum thickness of 350 m. It is deposited unconformably over the Soyatal and Tamaulipas formations and is intercalated with the volcanic rocks of the Las Espinas Formation. The El Morro Formation postdates the Mexican orogeny and the development of the MFTB.

7.3.1.6 Las Espinas Formation (Tertiary)

The Las Espanias Formation consists of dark grey often feldspar porphyritic andesite and basalt flows with lessor agglomerates and tuffs. Thickness varies from zero to 375 m and emplacement is controlled by paleo topography.

7.3.1.7 Tertiary Intrusive Igneous Rocks

In the area of the Carrizal area, the Carrizal pluton is a quartz-monzonite to monzonite that is roughly elongated along a trend 060° and is approximately 900 m x 400 m in dimension. It broadens at depth and bifurcates upwards into many smaller narrow dikes. The Tecolote Dike is mapped on surface as an extension of the Carrizal pluton, can be traced, discontinuously northeast across the Zimapan property to El Monte.

In the El Monte area intrusives consist of monzonite – latite dikes, including the Concordia, the Tecolote and others. The main Concordia dike roughly parallels the regional strike of the Piñon Anticlinorium, but it is cut by later east-west striking normal faults that down drop the northern block by about 200 m.

Collectively, the networks of dikes and sills at El Monte is interpreted to represent a high-level dike swarm above a larger intrusive (Lang et al., 1999). Three age date for the Carrizal mine were determined providing a range of 43.6+1.2 Ma for quartz monzonite and two dates from porphyritic diorite dikes of 40.8+1.0 and 40.8+1.0 Ma (Vassallo, 2017).

7.3.2 Structure

The dominant structural feature observed on the Zimapan property are the ductily deformed, high amplitude, northwest striking, northeastward steeply inclined folds that collectively constitute the Piñon Anticlinorium (Figure 7-5). The absence of brittle thrust faults and ductile fold development is attributed to the thin bed thickness and contrast in strength between resistant limestone and chert layers relative to thin shale beds, allowing the rocks to flex like a deck of cards.

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Other important structures on the Property have not been adequately studied. The structures associated with the intrusions in the area appear to be dominated by two trends. First, are the intrusions that follow the northwest striking trend of the MFTB. The main body of the Concordia dike was emplaced in an orientation that parallels this trend. The second are intrusions that appear perpendicular to the strike of the MFTB. The Carrizal pluton appears to follow an orientation of roughly 060°, similar to the Maconi intrusion near the La Negra Mine. In the Zimapan property geology map from Garcia and Querol, 1991 the orientation of the Carrizal pluton parallels a normal fault that has a foot wall dropping to the north, however, there does not appear to be vertical displacement on either side of the structure hosting the Carrizal pluton. It is unclear as to whether the Carrizal pluton was emplaced along planes of weakness or tears associated with the MFTB, post orogenic normal faults, or structures related to flexure related to the emplacement of the intrusion.

Another structural feature that is not well understood is the east-west striking normal faults that displace the Concordia dike. These faults have up to 40 m of left-lateral displacement and down-drop of the northern block by 200 m. There are very few extensional structures mapped on the property, other than those mapped in relation to the Concordia dike, and regionally there is little reference to post orogenic deformation in this part of the MFTB.

7.4 Local Geology

7.4.1 Lithology

Locally, the Carrizal and El Monte mine areas occupy a stratigraphic section comprised of the Las Trancas Formation; overlain by thinly bedded limestone intercalated with chert of the Tamaulipas Formation; and overlain by yellow shales banded with marl and limestone of the Soyatal Formation. Quartz-monzonite to monzonite intrusions and quartz-feldspar porphyry dikes intrude the local stratigraphy at a subvertical orientation. Exoskarn (skarn developed in the host rock to the intrusion) and endoskarn (skarn developed within the intrusion) occur at the dike contact. Mineralization consists of disseminated sulfides, vein filled sulfides, and massive sulfide bodies.

7.5 Alteration and Mineralization

All of the deposits on the Zimapan property are related to the alteration process that resulted from the emplacement of quartz-monzonite and monzonite plutons and dikes into the host limestones and marine clastic sediments, and the alteration and mineralization that resulted. The distribution of mineral deposits on the Zimapan property can be divided by geometry and degree of calc-silicate alteration:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Skarn Orebodies: either at a pluton or dike/sill contacts, with disseminated and fine veinlets, also massive
sulfide pods;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Massive-Sulfide Mantos: parallel to stratigraphic contacts with minor to no calc-silicate alteration;
and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Massive Sulfide Chimneys: that cross-cut stratigraphy and contain no calc-silicate alteration.

This represents a continuum from deposits formed along the direct contact between the intrusion and sedimentary rocks to satellite deposits formed by the interaction of hot fluids from the intrusion reacting with favorable horizons of host sedimentary rocks distally.

The alteration process for the Zimapan property, as described by Lang et al. (1999), is a four-stage process which includes: prograde-anhydrous, exoskarn and endoskarn alteration that is barren and predates sulfide mineralization; retrograde-hydrous exoskarn that transitions from barren prograde alteration and is responsible for most sulfide mineralization; and post-ore veining that is barren. Within the intrusions, associated with prograde endoskarn development, K-silicate alteration is developed.

7.5.1 Pre-Mineralization K-Silicate Alteration within Intrusions

K-silicate alteration is predominantly pervasive or selectively pervasive fracture controlled. It is most apparent within larger intrusions where it has not been overprinted by prograde endoskarn alteration near intrusion contacts. Sulfide mineralization is limited to minor disseminated pyrite and trace chalcopyrite. K-silicate alteration is common in dikes at Carrizal. Within the Carrizal Pluton sericitic alteration is characterized by quartz pyrite veins with quartz-sericite envelopes.

7.5.2 Pre-Mineralization Prograde-Anhydrous Exoskarn

The prograde exoskarn is visually recognized as wollastonite and brown garnet banding that is most intense in contact with an intrusion and pervasively decreases in intensity outward. Prograde exoskarn is associated spatially with all CRD sulfide mineral deposits on the Zimapan property. Alteration can be very narrow and may extend outward over 100 m from the intrusion but usually limited to 10's of m from contacts. Sulfide mineralization is limited to minor disseminated pyrite and/or pyrrhotite and trace chalcopyrite.

7.5.3 Pre-Mineralization Prograde-Anhydrous Endoskarn

The prograde endoskarn consists of pervasive and fracture-controlled alteration developed along the outer contact of the intrusion, within the intrusion. Alteration minerals are dominated by brown-garnet, vesuvianite, wollastonite and pyroxene. Endoskarn may include minor disseminated pyrite or pyrrhotite.

7.5.4 Syn-Mineralization Stage Retrograde-Hydrous Exoskarn

Retrograde exoskarn alteration represents a continuum of alteration styles that overprinted upon pre-mineralization skarn and other alteration types.

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7.5.5 Post-Mineralization Stage Supergene Alteration

Supergene oxide alteration is a weathering process where meteoric water follows fractures and permeability within host rocks to where it reacts with and oxidizes sulfide minerals. Between the time of discovery of mineralization in the Zimapan area in the late 16th century and the mid-20<sup>th</sup> century supergene oxides were the focus of mining. The principal supergene oxide minerals exploited in the El Monte and Carrizal areas were plumbojarosite, argentojarosite, and cerussite (Simons & Mapes. 1956) with zinc and other oxides left behind as at that time had no economic value. Supergene oxide mineralization was exploited on a large scale in the upper levels of the Las Animas, Balcones, Lomo de Toro (El Claro) at Carrizal, and Concordia mines prior to mid-20<sup>th</sup> century. No commercially viable deposits of supergene oxide mineralization are currently identified on the Zimapan Property.

A total of 14 mineral zones that have been explored and mined at the Carrizal and El Monte mine area by Carrizal Mining. One mineral zone may consist of one or more mineralized target(s) depending on the number of dikes and skarn occurrences in the zone. Six mineralized zones occur at or near the margins of the Carrizal monzonite intrusion.

In contrast, the Monte mine is characterized by narrow and irregularly oriented monzonitic quartz- feldspar porphyry dikes. A large intrusive body has not yet been encountered in the Monte mine area. Eight mineralized zones occur near these dikes.

Metal zoning occurs vertically through the mineralized body. According to Gonzalez-Partida et al (2003), the zonation comprises of a copper-sulfide rich base; a zinc- and lead-sulfide rich center; a silver-sulfide rich middle to upper zone; and a top devoid of sulfides and composed of fluorite and calcite.

7.5.6 Structural Controls and Size

Mineralization within each target at the various mineral zones vary greatly in dimension and orientation. Mineralized skarn zones can occur as narrow bodies less than one metre wide to larger bodies, like the skarn bodies at Concordia (Monte mine) and DK del Tiro (Carrizal mine), which can be approximately 20 m wide and extend 100-200 m long along strike. Massive sulfide bodies are discontinuous in their dimensions and can also vary from several centimetres to several m thick.

The importance of primary permeability in the host limestones appears to be limited. The lack of large metasomatic aureoles leading outward from the intrusive bodies would suggest that the host rocks were relatively tight at the time of intrusion and subsequent prograde and retrograde mineralization.

Fracturing, brecciation and metasomatism related to the emplacement and cooling of intrusive bodies is likely sufficient to produce permeability necessary for exoskarn mineralization.

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Stratigraphic controls on mineralization are evident at the Carrizal and El Monte mines. Much of the host sequence consists of finely bedded units with fine sale rich beds that would likely act as self-sealing aquitards. Subsequent hydrothermal modification, structural control by folding, fracturing and brecciation along lithological contacts, and geochemical contrasts between different lithologies at a bed contact scale may be important. As mentioned above, mineralization formed preferentially in the La Negra and San Joaquin members of the Tamaulipas Formation. More specifically the upper contact of the Horizontes 1 and Horizontes 2 massive limestone beds in contact with overlying thinly bedded limey shales, limestones and cherts is an important horizon. Contrasts in competency between the massive and bedded limestones create permeable zones of fracturing and brecciation along the Horizontes. The Horizonte 1, Horizonte 2, Santa Fe 1 and Sante Fe 2 mantos are examples. Carbonate replacement mineralization occurs both in the hanging wall and footwall along this contact. Mineralization in these mantos follows bedding contact and geometry and may be controlled in part by fold geometry.

The large, massive sulfide chimney deposits appear to be a genetic relative of the manto deposits. The discordant El Claro chimney emanates from the Horizonte 1 manto where the stratigraphy is recumbently folded and highly fractured.

Geochemical controls on carbonate replacement mineralization distal from calc-silicate alteration is not well understood. Lead isotope work by Potra (2009) concluded that metal bearing fluids responsible for mineralization were of magmatic origin, it is less clear how host rock chemistry plays a role in mineralization.

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7.6 Mineral Zones

Both the Carrizal and Monte mines are comprised a series of multiple mineralized structures as listed in Table 7-1 with detail provided in the following sections.

**Table 7-1: List of Mineralized Structures**

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|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Map <br> ID** | **Mine** | **Zone** | **Structures** | **Strike** | **Dip** | **Length <br> (m)** | **Width <br> (m)** | **Height <br> (m)** |
| 1 | Carrizal | Horizontes | Horizontes, Promontorio, San Carlos | NW-SE | 35°SW | 1000 | 2.0 | 590 |
| 2 | Carrizal | Santa Fe | Santa Fe | NW-SE | 45°SW | 268 | 5.5 | 150 |
| 3 | Carrizal | Santa Martha | Santa Martha, San Buenaventura, Santa Elena | NE-SW | 75°SE | 215 | 4.5 | 350 |
| 4 | Carrizal | Animas | Animas, DK Del Tiro, Balcones | NE-SW | 75°SE | 40 | 5.5 | 490 |
| 5 | Carrizal | San Valentin | San Valentin, 3 Arc Angels | E-W | 75°S | 330 | 3.5 | 360 |
| 6 | Carrizal | La Cuña | La Cuña | NW-SE | 60°SW | 95 | 3.5 | 240 |
| 7 | Monte | Dike Concordia | Dike Concordia | NW 36° | 70°W | 430 | 50.0 | 470 |
| 8 | Monte | La Escondida | San Francisco, <br> Tecomate | E-W <br> NW 33° | 75°N <br> 75° SE | 300 <br> 100 | 10.0<br> 7.0 | 290 |
| 9 | Monte | CPO 385 | CPO 385 | NW 35° | 65°SW | 60 | 3.5 | 130 |
| 10 | Monte | Dike 1400 | Dike 1400 | NW 34° | 70°SW | 162 | 3.5 | 60 |
| 11 | Monte | Dike 1414 | Dike 1414 | E-W | 78°SW | 325 | 3.5 | 370 |
| 12 | Monte | Dike 1493 | Dike 1493 | NW 81° | 75°S | 424 | 8.0 | 390 |
| 13 | Monte | Dike 1600 | Dike 1600 <br> Dike 1700 | SW 78° <br> SW 74° | 75°S <br> 70°S | 143 <br> 44 | 3.0 | 220 <br> 40 |
| 14 | Monte | Manto Esperanza | Manto Esperanza | NW 28° | 60°SW | 300 | 8.0 | 260 |

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Notes:

Map ID in this table refers to numbers within the maps in Figure 7-6.

Source: Carrizal Mining (2025)

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7.6.1 El Monte Mine

The El Monte mine includes the Concordia dike, La Escondida, CPO 385, 1400 dike, 1414 dike, 1493 dike, 1600 dike, and Manto Esperanza deposits. All of the deposits being exploited at El Monte are dike contact skarns that formed within intrusives and in strongly folded and fractured limestones immediately adjacent to intermediate, steeply dipping, variably oriented dikes 1 to 50 m in width. One feature of the El Monte Mine is the high density of dikes with different orientations. Two dominant orientations dominate; northwest trending dikes that roughly parallel the strike of the regional fold axis, and dikes that cross perpendicular to this regional fabric. The intersection of dikes or the point where dikes split appears to be a locus of much of the massive sulfide chimney mineralization.

The Concordia and La Escondida deposits have been the focus of underground development drilling work, and the two deposits are described in further detail below.

7.6.1.1 Concordia

The Concordia mineral zone is mined from the lowermost four of six underground levels – Sublevel 10, 11, 12, and 13. The mineral zone formed adjacent to the Concordia dike, a northwest striking and steeply northeast dipping monzonite dike that is roughly 450 m long and averages 33 m in width (~325°/70°), It narrows bifurcates to the southeast splits into several smaller dikes that interfinger with zones of exoskarn alteration to the northeast. The Concordia dike is cross-cut by three northeast striking oblique normal faults; two, including the Concordia and Guadalupe faults dip to the southeast (~065°/70°) and the third, the Central fault dips to the northeast (~245°/70°). Cumulative displacement along the dikes is estimated to be 40 m of left lateral movement and 200 m the vertical drop to the north (Lang et al., 1999).

Exoskarn alteration form bodies form both in the hanging wall and footwall of the dike. In the hanging wall the exoskarn is thickest ranging up to 15 m in width. Endoskarn alteration parallels contacts of the dike and varies from a few centimetres to 2 m thick.

The mineral body associated with the Concordia dike is a tabular body that overlies the Concordia dike in the retrograde exoskarn and within the intrusion as disseminated sulfides and along irregular fractures trending 315° and 055°. The width of the mineralization is 25 m, with 5 m corresponding to the exoskarn and 20 m corresponding with the endoskarn within the dike (Gonzalez-Villalvaso, 1990)

Mineralization consists of disseminated retrograde skarn mineralization thickens to tens of m on the northeast hanging wall of the dike and irregular massive sulfide pods along the outer margins of the exoskarn alteration. Mineralization extends down roughly 300 m where it wedges out against the dike.

7.6.1.2 Escondida

The Escondida mineral zone is mined from eight underground levels – Levels 216-726, 210-ESC, 207-725, 205-725, 196-ESC, 192-573, 191-ESC, and 190-573. It consists of a stockwork of monzonite dikes that intrude intensely folded limestones. Some dikes run parallel to the northwest strike of regional folds, others cut oblique or perpendicular to the regional trend. The dikes are typically 1-5 m wide and run 10- 250 m in length.

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Mineralization consists of stockworks or sheeted veins within exoskarn and endoskarn mineralization along dikes and as massive sulfide chimney bodies. Best mineralization occurs where dikes bifurcate or the intersections of dikes where the intersections continue vertically forming vertically elongate mineral bodies that average 2 m and expand to tens of m in thickness and extend over 240 m deep.

Peripheral to the mineralization is sinuous discontinuous calcite+/-pyrite veins and disseminated pyrite/pyrrhotite which extends for 10's of m from skarn zones.

7.6.2 Carrizal Mine.

At the Carrizal mine, the Carrizal quartz-monzonite to monzonite intrusions and quartz-feldspar porphyry dikes intrude the local stratigraphy at a subvertical orientation. At its widest, the Carrizal monzonite intrusion measures approximately 450 m wide, trends northeast for approximately 1,400 m. Narrow to irregularly shaped quartz-feldspar porphyry dikes, generally 0.5 to 5 m wide, can extend away from the monzonite intrusion for approximately 400 to 700 m. Exoskarn and endoskarn occur at the dike contact.

The following descriptions are given in the order from northwest to southeast and increasing distance from the Carrizal Pluton. (Table 7-2 Styles of Mineralization through the Carrizal Mine. Figure 7-7 illustrates a section through the Carrizal Mine).

**Table 7-2: Styles of Mineralization through the Carrizal Mine**

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|:---|:---|:---|:---|:---|
| **Skarns Adjacent to Intrusive Contacts** | **Mixed Skarn and Massive Sulfide** | **Massive Sulfide, Minor Calc-Silicates** | **Massive Sulfide Mantos without**<br> **Calc-Silicates** | **Massive Sulfide Chimney Without**<br> **Calc-Silicates** |
|  | San Carlos |  |  |  |
|  | Las Animas |  |  |  |
| La Cuña | Santa Martha | Santa Fe 1 & 2 | Horizontes 1 & 2 | El Claro\* |
| Juan Pablo | San Valentine |  |  |  |
|  | Promontorio |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> ![](ex99-19_018.jpg)<br> *increasing distance from pluton* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> ![](ex99-19_018.jpg)<br> *increasing distance from pluton* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> ![](ex99-19_018.jpg)<br> *increasing distance from pluton* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> ![](ex99-19_018.jpg)<br> *increasing distance from pluton* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> ![](ex99-19_018.jpg)<br> *increasing distance from pluton* |

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Notes:

\* Past producer.

Source: Carrizal Mining (2020)

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**Figure 7-7: Section Looking Northeast Through the Carrizal Mine**

![](ex99-19_019.jpg)

Source: Modified after Lang et al. (1999)

7.6.2.1 Las Animas

The Las Aminas chimney is located on the contact between a monzonite dike (Dique del Tiro) with the Carrizal pluton of similar composition, along the outer edge of the thick exoskarn that marks the boundary between the limestones of the La Negra member and the pluton. The chimney is elliptical in plan measuring 25 m x 100 m, dips 60 °- 80 ° northeast. Its size is highly variable with vertical extension up to 250 m (Villaseñor-Cabral 1993). At its top the chimney bifurcates and transitions into irregular mantos near surface that follows limestone bedding (Simons & Mapes, 1956). At its base the chimney wedges out against skarn and the Carrizal pluton.

Roughly fifty m above the Las Anima chimney divides into two separate chimneys, on either side of the Dike del Tiro with the Las Animas continuing on the inside and Cuerpo 401 on the outside, continuing down 100 m and up 50 m. Cuerpo 401 is essentially part of the Las Animas chimney.

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At least five veins parallel the northwest structural grain and dip to the southwest 45°.These veins root in the Carrizal pluton crossing both dikes and sulfides and decreases in width and sulfide grade and ultimately become quartz-calcite (Villaseñor -Cabral, 1993) veins.

Several mantos extend from the Las Animas chimney following bedding in the host La Negra member limestones. Cuerpo 455 is a cylindrical shaped manto 20 m x 40 m dipping southwestward parallel to bedding. It is partially within the exoskarn. Sulfides present include sphalerite, chalcopyrite and pyrite. (Villaseñor-Cabral, 1993).

7.6.2.2 Horizontes & Santa Fe

The Horizontes and Santa Fe mineral zones are manto bodies located along the Horizontes 1 and 2 massive limestone horizons. The massive limestone forms the footwall of mineralization and the hangingwall is finely bedded limestone shale and chert. Sulfide mineralization replaces both massive limestone and finely bedded units. Replacement occurs outward from the bedding plane. Mineralization is finely bedded along the contact with the limestone. Calc-silicate alteration is limited to the vicinity of the Promotario dike near the Santa Fe. The Horizontes zone is mined from six underground levels – Level 1180, 1250, 1300, 1330, 1360, and 1370 while the Santa Fe zone is mined from three active levels – Level 1220, 1180, and 1080.

7.6.2.3 El Claro

The El Claro chimney is the most peripheral mineralization, the Carrizal Pluton. It was one of the earliest deposits to be discovered and was exploited prior to having it been subsequently closed. Currently the old workings are inaccessible. The following description is based upon work by Simons & Mapes, 1956. and Lang et al., 1999.

The El Claro chimney is a tabular body that was 35 m wide and 65 m long and extends from surface down 105 m. It extends across to the south to the wedge shaped La Mora chimney and manto, down to the La Peidad chimney (19 m x 40 m x 60 m) and further down into the San Pedro Nuevo chimney. The combined but discontinuous, vertical extent is roughly 200 m and along strike 150 m. Mineralization follows the nose of the La Paz Anticline an overturned fold along the contact Horizontes 1 horizon of the La Negra member and the overlying thinly bedded intensely folded and fractured shales limestones and cherts. These chimneys are connected below numerous mantos following the Horizontes 1 horizon.

Remnants of mineralization include plumbojarisite, and it was likely that these chimney bodies were altered to oxides throughout. No calc-silicate alteration was observed within these chimneys.

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8 Deposit Types

The general characteristics of mineralization at the Zimapan property are consistent with polymetallic replacement deposits as described by Morris (1986) and Cox (1986), published by Bray (1995). The mineral zones are further characterized as high temperature, chimney-style carbonate-replacement Zn- Pb-Ag±Cu±Au (CRD) deposits by Lang et al. (2000) in accordance with classification of Megaw et al. (1988) for similar deposits in Northern Mexico.

CRD generally vary in size. They occur in broad sedimentary basins that have undergone moderate deformation and have been intruded by small igneous intrusions. Metal-bearing fluids emanating from volcanic centers and igneous intrusion are localized along structural features (fractures, joints, and fold limbs) and stratigraphic features (karst openings and sedimentary beds).

**Figure 8-1: Schematic Cross-Section of an Idealized Polymetallic Replacement Deposit**

Source: Plumblee et al. (1995)

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Different styles of mineralization may occur depending on geometry, host rock and intrusions. Locally, deposits can be subdivided based on geometry and degree of calc-silicate alteration including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Massive sulphide chimneys that cross-cut stratigraphy and which contain minor or no calc-silicate alteration;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Massive sulphide mantos which are similar to chimneys but are instead generally parallel to stratigraphic
contacts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Skarn orebodies at either pluton or dike/sill contacts.

In addition, vein mineralization may also occur with quartz and/carbonate minerals that have in-filled structural planes.

Alteration can vary considerably. Calc-silicate skarn minerals (epidote, amphibole, garnet, pyroxene, and iron oxide minerals) can form within an igneous intrusion or near sedimentary-igneous intrusion contacts. The host sedimentary rock is commonly recrystallized due to metasomatic processes. The igneous intrusion may experience porphyry-style alteration including argillic and propylitic assemblages.

The occurrence of economic metals is also spatially related to the intrusion. Copper (± gold) rich bodies such as skarns occur within intrusions or at the intrusion and sediment contact. Lead and zinc (± gold and silver) rich bodies such as mantos and chimneys occur away the from the intrusion, and zinc (± silver) rich bodies such as veins occur distal to the intrusion. Minerals associated with a CRD may include pyrite, sphalerite, galena, siderite, quartz, marcasite, rhodochrosite, dolomite, chalcopyrite, pyrrhotite, tetrahedrite, digenite, argentite, electrum, enargite, bornite, and arsenopyrite, hessite, petzite, pyrargyrite, barite, and fluorite. Mineral grains are typically medium to coarse grained and can form as euhedral to massive interlocking texture.

High density, low resistivity, electrically chargeable and high magnetic susceptibility characteristics of the massive sulfide bodies are amenable to exploration geophysics techniques such as airborne or ground- based electromagnetic, direct current resistivity, and induced polarization surveys. In addition, the elevated abundance of Pb-Zn±Cu±Au±Ag±Mo±As±Bi±Sb associated with CRD are amenable to trace element geochemistry surveys such as stream water, silt, soil and rock sampling surveys.

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9 Exploration

Santacruz and Carrizal Mining have not performed surface exploration activities due to the Company's focus on the subsurface delineation of the mineral zones. Since 2009, Carrizal Mining has focused upon delineating the limits of mineralization in advance of production. This work consists of two activities.

First, drilling to determine the limits of mineralization in advance of planning underground development. Second, detailed underground mapping and sampling in areas of development and production.

Most of the drilling consists of drilling a fan of drill holes made from underground drill-sites within the mine. Because access is limited by underground infrastructure and large depths from surface, most of the drilling consisted of short holes drilled from sites located near the targeted mineralization within 10s of m of active production. As a result, the mean drill hole length for holes drilled at the Carrizal mine has been 94 m and at El Monte mine 84 m, with roughly 17% of holes drilled exceeding 150 m.

Underground mapping and sampling are detailed and systematic but is designed for the collection of data needed for production. Roof mapping of workings was completed at a scale of 1:250 with lithology, alteration and structure recorded on the maps. Sampling in areas of mineralization consists of channel sampling the roof of the workings with channels separated by 3 m. The channel samples are plotted on plans and are surveyed. In the database the channels are recorded like horizontal drill holes with a surveyed start point, azimuth and lengths with sample lengths determined by geology and mineralization.

Although the information collected is modeled using Surfer and AutoCAD software, geological interpretation has been limited.

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10 Drilling

Underground development drilling performed by Carrizal Mining from 2011 to 2025 is described in Section 6.2 within this Report.

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11 Sample Preparation, Analyses and Security

The sample procedures described herein are relevant for the drilling that was completed between 2011 and 2025 as described in Section 6.2. Underground rock sampling is the principal method currently used by Carrizal Mining to estimate grade and tonnage for their internal mineral estimates that are the basis for mine planning and production. The internal mineral estimates are based on methods and procedures employed during the Peneoles era not considered modern however Carrizal is currently adopting methods and procedures that are expected to ensure accordance with CIM Definition Standards (2014) and CIM Beset Practice Guidelines for Estimation of Mineral Resources and Mineral Reserves (2019) as required under NI43-101.

11.1 Sample Methods and Sample Security

Sampling at the Zimapán Project, including the El Carrizal, Monte, and Lomo del Toro deposits, has been conducted through a combination of diamond drilling and underground rock chip sampling programs completed between 2011 and 2025. Underground chip sampling currently represents the principal method utilized by Carrizal Mining for internal mineral estimates supporting mine planning and production.

The sampling methodologies employed are generally consistent with historical practices developed during prior operations and, while not uniformly aligned with modern best practices, Carrizal Mining is in the process of implementing updated procedures designed to achieve compliance with CIM Definition Standards (2014) and CIM Best Practice Guidelines (2019) as required under NI 43-101.

Drill core is transported by company personnel to the core logging facility in Zimapán, where it is laid out on logging racks for detailed geological logging, recovery measurement, and sample interval selection. Sample intervals are defined by geologists based on lithological and mineralization boundaries. Core is photographed, and specific gravity measurements are collected for selected lithologies. The core is then split longitudinally using a core saw, with one half retained for reference and the other submitted for analysis. Duplicate samples are prepared by quartering the core where required.

Underground rock sampling is conducted using continuous chip channel sampling across the backs (roof) of workings, typically at one-metre intervals. Parallel sample lines are spaced approximately three metres apart, forming a rib sampling pattern along the length of the working. Sampling locations are planned and documented by geological personnel and surveyed to establish spatial control, with samples recorded along vectors analogous to horizontal drillholes. Field duplicate samples are prepared by homogenization and splitting of collected material within a cleaned tarp

Samples are placed in sealed bags with corresponding sample tags and transported by company personnel to the laboratory facilities at the San Francisco mill. Chain-of-custody procedures are managed internally, and the QP considers the sample handling and transport protocols to be reasonable for the operating context.

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11.2 Sample Preparation and Analytical Procedures

Sample preparation and analytical work are conducted at the Monte plant laboratory operated by Carrizal Mining, which supports ongoing mining operations. Both drill core and underground chip samples are processed using similar preparation protocols. Upon receipt, samples are checked against submission records, and additional coarse blanks may be inserted into the sequence at predetermined intervals.

Samples are dried and crushed using a jaw crusher to <7 mm, followed by secondary crushing to <2 mm. The crushed material is homogenized and split using a Jones splitter to produce a representative sub-sample, with one portion retained as a coarse reject and the other prepared for pulverization. Pulverization is conducted using a ring mill to achieve >95% passing 100 mesh (0.149 mm), after which the pulp is split into analytical and archival fractions.

Analytical procedures include multi-element analysis following aqua regia digestion with determination by atomic absorption spectrometry for elements including silver, lead, zinc, and iron. Gold and silver analyses are conducted by fire assay using 5 g to 10 g aliquots with gravimetric finish.

Equipment cleaning procedures include the use of quartz, crushed glass, and compressed air between samples to minimize contamination. The QP has reviewed the preparation and analytical procedures and considers them to be generally appropriate for the commodities of interest and grade ranges encountered, noting that the use of an on-site laboratory requires careful QA/QC oversight.

11.3 Quality Assurance and Quality Control (QA/QC)

The QA/QC program includes the insertion of certified reference materials, blanks, and duplicate samples at various stages of the sampling and analytical process. Control sample insertion rates have historically ranged between approximately 2% and 14% of total samples analyzed; however, the frequency and consistency of insertion and monitoring have varied over time.

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For underground rock sampling, the insertion of field duplicates and coarse blanks has been relatively consistent in recent years. In contrast, the insertion of pulp blanks, laboratory duplicates, and certified reference materials has been less systematic. For drill core sampling, the use of QA/QC samples, particularly standards, has not been consistently applied across all sample batches.

QA/QC data have been compiled in periodic reports; however, detailed statistical analysis and ongoing monitoring of control sample performance have not been consistently implemented historically. As such, the effectiveness of the QA/QC program varies across different time periods and datasets.

The QP notes that, as of the effective date of this Report, additional verification work is required, including the submission of selected pulps, coarse rejects, and core re-splits to an independent accredited laboratory to confirm analytical accuracy and precision. A systematic audit of the sample database, by deposit and mineralization zone, is recommended to determine appropriate selection and frequency of verification samples for independent analysis.

The QP notes that the sampling, preparation, and analytical dataset includes a significant proportion of historical data collected under varying procedures and QA/QC protocols. While current practices are being improved to align with modern standards, inconsistencies in historical QA/QC implementation, particularly with respect to certified reference materials and laboratory control samples, introduce an element of uncertainty.

In addition, the reliance on an on-site laboratory requires robust and consistently applied QA/QC procedures to ensure analytical accuracy, particularly in the absence of routine external laboratory verification.

The heterogeneous and structurally controlled nature of carbonate replacement mineralization at the Zimapán Project may also contribute to variability in duplicate sample precision and short-range grade continuity, which should be considered in the interpretation of analytical results.

11.4 Opinion

The QP acknowledges that historical sampling and QA/QC practices at the Zimapán Project have not been consistently implemented in accordance with current industry best practices, particularly with respect to the routine insertion and monitoring of certified reference materials, blanks, and laboratory duplicates. These limitations are most evident in legacy drill core datasets and certain underground sampling campaigns, where documentation and QA/QC control density are variable.

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Notwithstanding these limitations, the QP notes that the potential impact of these deficiencies has been actively evaluated and mitigated through the independent data verification program described in Item 12. In particular, the collection and analysis of 282 check samples submitted to an independent accredited SGS laboratory demonstrate a high degree of correlation with the original analytical results and provide strong support for the overall accuracy and reliability of the assay database.

In addition, the QP's review of sampling methodologies, laboratory procedures, and site practices including direct observations during site visits and laboratory inspections, indicates that the sampling and analytical processes are generally appropriate for the style of mineralization and operating conditions. While variability inherent to carbonate replacement mineralization and localized inconsistencies in QA/QC implementation may contribute to short-range grade variability, there is no evidence to suggest the presence of systematic bias that would materially affect the integrity of the dataset.

On this basis, the QP is of the opinion that, when considered in conjunction with the independent verification work completed, the sampling, preparation, and analytical data are of sufficient quality and reliability to support the geological interpretations presented in this Technical Report. The dataset is considered fit for purpose, subject to the recommendations for continued QA/QC enhancement, increased use of independent laboratory verification, and ongoing database auditing.

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12 Data Verification

12.1 Introduction

Information pertaining to the Project location, access, local and site infrastructure, geological setting, and mineralization style was verified by the QPs during site inspections, as described below. In addition, supporting documentation, including historical and current product sales and prices, production data, plant performance and exploration results, was provided by Carrizal Mining for review. The QPs have assessed this information in conjunction with site observations and other available data and consider it to be reasonable and appropriate for the purposes of this Technical Report, subject to the limitations and qualifications described herein.

12.2 Geology and Sampling

The QP has undertaken comprehensive data verification procedures in support of the geological interpretations and Mineral Resource estimates for the Zimapán Project, including the El Carrizal, Monte, and Lomo del Toro deposits. These activities included two independent site visits during which the QP inspected representative drill core, reviewed geological logging practices, examined sampling protocols, verified drill collar locations relative to available survey control and topography, and observed sample handling, security, and storage procedures. The QP also conducted site tours of the primary analytical laboratories and the San Francisco processing mill to assess analytical workflows, metallurgical context, and chain-of-custody protocols from sample collection through to processing.

Independent analytical verification was completed through the collection and submission of 282 check samples to an independent SGS Certified Laboratory in Durango. SGS Mexico Minerals Durango conforms to the requirements of ISO/IEC17025 for specific tests as listed on their scope of accreditation found at <u>https://www.scc.ca/en/search/laboratories/sgs</u>. Statistical comparison of the check assay results against the original database demonstrates a high degree of correlation and no evidence of systematic bias, supporting the accuracy and precision of the primary analytical data. The QP notes that while minor assay variance is present, it is within acceptable limits given the style of mineralization and sampling methodologies employed.

The drillhole database was subjected to comprehensive validation and verification procedures, including checks for missing, overlapping, or inconsistent sample intervals; verification of collar coordinates, elevations, and downhole survey data (where possible) and reconciliation of assay values against original laboratory certificates on a representative basis. Geological coding and lithological assignments were reviewed for internal consistency and alignment with the interpreted vein models. No material errors were identified however, minor inconsistencies typical of legacy datasets were observed although are not considered to materially impact the geological interpretation.

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The QP notes that portions of the dataset are historical in nature and were collected by previous operators, and in certain instances, original documentation (including detailed survey records, density determinations, and aspects of QA/QC insertion protocols) is incomplete or limited. Collar elevations and locations, while generally consistent with available topographic and underground survey data, may be subject to local uncertainty typical of historical survey methods particularly considering the transformation between local orthogonal mine grid system and UTM. In addition, while density values are considered reasonable, the use of a global density value based on historic measurements and analysis adopted by Peneoles has not been validated and verified. As such a comprehensive bulk density measurement program is recommended.

12.3 Mining

The QP responsible for mining has undertaken data verification procedures to support the mining methods, mine planning assumptions, capital and operating cost estimates, and infrastructure design parameters for the Zimapán Project, including the El Carrizal, Monte, and Lomo del Toro deposits. These activities included one site visit during which the QP reviewed active and historical underground workings, assessed mining conditions, ground support practices, access development, ventilation, dewatering systems, and material handling infrastructure. The QP also conducted inspections of the San Francisco processing facility and associated surface infrastructure to confirm plant throughput assumptions, material transport logistics, and integration between mining and processing operations.

The QP reviewed the basis for the selection of underground mining methods, including cut-and-fill, longhole stoping, and other applicable methods, with consideration of the geometry, thickness, continuity, and geotechnical characteristics of the carbonate replacement mineralization. Mining assumptions, including dilution, recovery factors, stope dimensions, and sequencing, were assessed against observed site conditions and industry benchmarks for similar deposit types and operating environments. The QP considers the selected mining methods and associated assumptions to be reasonable and appropriate for the style of mineralization and stage of the Project.

Infrastructure assumptions, including access development, haulage systems, ventilation requirements, water management, power supply, and surface facilities, were reviewed for consistency with the proposed mining methods and production rates. The QP confirms that the infrastructure design concepts are appropriate and achievable within the context of the Project.

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12.4 Metallurgy

The QP responsible for metallurgy has undertaken data verification procedures to support the metallurgical testwork, process design criteria, recovery assumptions, and processing infrastructure for the Zimapán Project, including the El Carrizal, Monte, and Lomo del Toro deposits. These activities included two site visits during which the QP reviewed sampling protocols for metallurgical composites, inspected laboratory facilities, and conducted tours of the San Francisco processing plant to assess crushing, grinding, flotation, and concentrate handling circuits, as well as overall plant performance and operating practices. The QP also reviewed sample preparation methods and analytical workflows to confirm that metallurgical test results are representative and reliable.

The metallurgical database, including historical and recent testwork, was reviewed for completeness, representativity, and consistency with the geological model and mineralization styles typical of carbonate replacement systems. Testwork programs were evaluated with respect to sample selection, compositing strategies, mineralogical variability, and the distribution of sulfide and oxide material. Recovery assumptions for relevant metals were assessed in the context of testwork results, operating plant data where available, and benchmarking against comparable polymetallic carbonate replacement deposits. The QP considers the metallurgical assumptions, including process routes and expected recoveries, to be reasonable and appropriate for the style of mineralization and stage of the Project.

The QP notes that metallurgical response in carbonate replacement mineralization can exhibit variability due to differences in sulfide mineralogy, oxidation state, gangue composition, and grain size distribution, which may influence flotation performance and concentrate quality. While the available testwork and plant data provide a sound basis for the assumptions applied, the spatial distribution of metallurgical samples is variable and may not fully capture all domains of mineralization. In addition, certain historical testwork programs were conducted by previous operators, and in some cases, detailed supporting documentation is limited.

Processing infrastructure, including crushing, grinding, flotation circuits, concentrate handling, water supply, and tailings management systems, was reviewed for consistency with the proposed production rates and metallurgical performance assumptions. The QP considers the existing and proposed processing infrastructure to be appropriate and capable of supporting the Project, subject to normal engineering refinement.

12.5 Conclusions

Based on the information available, the work completed, and the data verification procedures undertaken, the QPs are of the opinion that the geological, exploration, analytical, metallurgical and mining supporting the Zimapán Project, including the El Carrizal, Monte, and Lomo del Toro deposits, are of sufficient quality and reliability to support the conclusions presented in this Technical Report. The geological interpretations, mining methods, metallurgical assumptions, and infrastructure concepts are considered reasonable, appropriate, and consistent with industry best practices for the style of mineralization and stage of the Project.

The QPs acknowledge that certain data utilized in this Technical Report are derived in part from historical sources and previous studies, and while verification procedures appropriate to the stage of the Project have been undertaken, such data are subject to inherent limitations. These limitations are not considered to materially affect the validity of the interpretations or conclusions presented herein.

In the opinion of the QPs, there are no known material issues related to data verification, geological modelling, mining, metallurgy, or infrastructure that would reasonably be expected to adversely affect the results or conclusions of this Technical Report, subject to the assumptions, qualifications, and limitations described herein. The QPs consider that the work completed is sufficient to support the disclosure in accordance with the requirements of NI 43-101 and the CIM Definition Standards (2014) and CIM Best Practice Guidelines (2019).

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13 Mineral Processing and Metallurgical Testing

The San Francisco Processing Plant treats concentrates for the combined Zimapan operations which include the Carrizal Mine, Monte Mine, and Lomo De Toro Mine. The metallurgical characterization for this Report is based on the operating results for the year 2024 as well as a geometallurgical program run by JDS in 2023.

13.1 2023 Geometallurgical Testwork program

The 2023 Geometallurgical testwork program was kicked off with a site visit to review the San Fransisco mill operation and to investigate the variety of zones that make up the regular mill feed, The site visit identified 18 distinct mineralized zones, with an additional 2 zones that were not accessible at the time of the program. The 3 phases of flotation testing planned were:

1) Flotation tests on all zones with a consistent reagent scheme at 3 different grind sizes;

2) Flotation tests on all zones with an additional 2 reagent schemes at the optimal grind size; and

3) Flotation tests on mixtures of 2 mineralized zones.

There were 2 goals of the testwork program:

● Generate a compatibility table to help the mine and mill to avoid blending feeds which negatively affect each other; and

● A table of expected recoveries (of silver, lead, zinc, and copper) for each mineralized zone, and a mineralized zone.

The testwork program was conducted by the in-house metallurgical team at the Zimapan processing complex.

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13.1.1 Recovery By Mineralized Zone

Through the testwork a model of expected recoveries by mineralized zone was developed. The expected recoveries are summarized in Table 13-1.

**Table 13-1: Estimated Recovery by Mineralized Zone and Element**

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|:---|:---|:---|:---|:---|:---|
| **Mine** | **Sample Description** | **Budget Recovery** | **Budget Recovery** | **Budget Recovery** | **Budget Recovery** |
| **Mine** | **Sample Description** | **Ag %** | **Pb%** | **Zn %** | **Cu%** |
| **Carrizal Mine** | Chiminea | 69.9 | 81.7 | 85.6 | 27.7 |
| **Carrizal Mine** | Santa Maria/La Cuna | 82.7 | 84.8 | 88.8 | 51.6 |
| **Carrizal Mine** | San Valentin | 63.2 | 48.7 | 92.8 | 13.1 |
| **Carrizal Mine** | San Carlos Horizontes | 95.8 | 98.7 | 86.0 | 24.7 |
| **Carrizal Mine** | Santa Fe | 91.1 | 77.0 | 17.6 | 92.3 |
| **Monte Mine** | Dike with Fault (1400141414931600) | 73.0 | 40.1 | 10.8 | 68.4 |
| **Monte Mine** | Dike without Fault | 85.7 | 80.2 | 93.6 | 34.2 |
| **Monte Mine** | Escondida with Fault | 86.3 | 80.0 | 82.9 | 64.2 |
| **Monte Mine** | Escondida without Fault | 92.6 | 85.1 | 66.9 | 90.0 |
| **Monte Mine** | Concordia with Fault | 87.9 | 85.0 | 7.6 | 82.2 |
| **Monte Mine** | Concordia with Fault | 90.4 | 93.1 | 84.3 | 72.1 |
| **Monte Mine** | Cuerpo 365 without Fault | 79.4 | 70.4 | 91.5 | 7.2 |
| **Monte Mine** | Esperanza 1 | 74.1 | 41.3 | 9.4 | 59.3 |
| **Lomo De Toro Mine** | LM CONOS | 98.0 | 98.4 | 78.5 | 31.7 |
| **Lomo De Toro Mine** | LM 128-921 | 95.5 | 95.3 | 79.1 | 12.9 |
| **Lomo De Toro Mine** | LM 126-950 | 97.4 | 99.1 | 65.0 | 18.6 |
| **Lomo De Toro Mine** | LM 119-882 | 97.4 | 99.1 | 78.0 | 23.4 |
| **Large Oxide Stockpile at Mill** | Oxide Material | 62.9 | 49.7 | 52.9 | 60.9 |

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A change in collector for the zinc circuit, which was not included in the geometallurgical program is estimated to improve zinc recoveries over the values found in the testwork by 3%, which is reflected in the expected recoveries for this Report.

The expected recoveries are based on the testwork (the 6 minute recovery for both the lead/copper rougher and the zinc rougher), with adjustments based on the improvement caused by the change in collector and changes to the conditioning tanks expected around the time of the conclusion of the testwork program.

The size vs recovery testing indicated that although different mineralized zones responded differently to grind size, the majority of the zones tested demonstrated that the optimal grind size is the current grind target of 62% passing 200 mesh (75 µm).

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13.1.2 Mineralized Zone Compatibility

It was generally found that zones that contained > 0.5% copper and had an oxide copper ratio (oxide copper assay/total copper assay) of >15% can be classified as "poisonous", meaning that they would negatively affect the recovery of other zones when mixed. In general, the mixtures that did not contain these "poisonous" zones either achieved the expected recovery for each of the zones or they exceeded the expected recovery when blended.

The results of oxidized copper minerals poisoning the flotation circuit were expected since copper sulphate (an oxidized copper mineral) is used to activate zinc in the zinc rougher flotation circuit.

13.2 Operational Data

Operational data from 2023 and 2024 was reviewed. The following Table 13 2, through Table 13 4 provide recovery and grade details for 2024, 2024, and the combined 2 year production. Operational improvements over the 2 years are demonstrated by improved recoveries despite lower feed grades. The mill improvements include new conditioning tanks and improvements based on the 2023 geometallurgical testwork.

**Table 13-2: 2023 Reconciled Data**

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|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Feed%** | **Assays** | **Assays** | **Assays** | **Assays** | **Recovery** | **Recovery** | **Recovery** | **Recovery** |
|  | **Feed%** | **Pb%** | **Zn%** | **Cu%** | **Ag (gr/t)** | **Pb%** | **Zn%** | **Cu%** | **Ag (gr/t)%** |
| &nbsp;&nbsp;Feed | 100.00 | 0.77 | 2.31 | 0.32 | 74.86 | 100.0 | 100.0 | 100.0 | 100.0 |
| &nbsp;&nbsp;Pb Concentrate | 1.23 | 50.40 | 2.23 | 3.11 | 3062.88 | 80.3 | 1.2 | 11.8 | 50.5 |
| &nbsp;&nbsp;Cu Concentrate | 0.69 | 4.27 | 4.27 | 20.96 | 1711.40 | 3.8 | 1.3 | 44.6 | 15.8 |
| &nbsp;&nbsp;Zn Concentrate | 3.38 | 0.52 | 48.50 | 1.54 | 116.96 | 2.3 | 71.0 | 16.0 | 5.3 |
| &nbsp;&nbsp;Tailings | 94.70 | 0.11 | 0.65 | 0.09 | 22.43 | 13.6 | 26.5 | 27.6 | 28.4 |

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**Table 13-3: 2024 Reconciled Data**

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|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Feed%** | **Assays** | **Assays** | **Assays** | **Assays** | **Recovery** | **Recovery** | **Recovery** | **Recovery** |
|  | **Feed%** | **Pb%** | **Zn%** | **Cu%** | **Ag (gr/t)** | **Pb%** | **Zn%** | **Cu%** | **Ag (gr/t)%** |
| &nbsp;&nbsp;Feed | 100.00 | 0.75 | 2.46 | 0.29 | 81.51 | 100.0 | 100.0 | 100.0 | 100.0 |
| &nbsp;&nbsp;Pb Concentrate | 1.30 | 49.30 | 2.72 | 2.52 | 3377.87 | 85.2 | 1.4 | 11.4 | 54.0 |
| &nbsp;&nbsp;Cu Concentrate | 0.63 | 3.75 | 5.03 | 19.88 | 1783.26 | 3.1 | 1.3 | 43.1 | 13.7 |
| &nbsp;&nbsp;Zn Concentrate | 4.10 | 0.60 | 46.83 | 1.96 | 154.54 | 3.3 | 78.0 | 27.8 | 7.8 |
| &nbsp;&nbsp;Tailings | 93.97 | 0.07 | 0.50 | 0.05 | 21.30 | 8.4 | 19.3 | 17.7 | 24.6 |

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**Table 13-4: Combined 2023 and 2024 Reconciled Data**

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|  | **Feed%** | **Assays** | **Assays** | **Assays** | **Assays** | **Recovery** | **Recovery** | **Recovery** | **Recovery** |
|  | **Feed%** | **Pb%** | **Zn%** | **Cu%** | **Ag (gr/t)** | **Pb%** | **Zn%** | **Cu%** | **Ag (gr/t)%** |
| &nbsp;&nbsp;Feed | 100.00 | 0.76 | 2.39 | 0.31 | 78.35 | 100.0 | 100.0 | 100.0 | 100.0 |
| &nbsp;&nbsp;Pb Concentrate | 1.27 | 49.81 | 2.50 | 2.79 | 3232.40 | 82.9 | 1.3 | 11.6 | 52.4 |
| &nbsp;&nbsp;Cu Concentrate | 0.66 | 4.01 | 4.65 | 20.42 | 1747.31 | 3.5 | 1.3 | 43.9 | 14.7 |
| &nbsp;&nbsp;Zn Concentrate | 3.76 | 0.57 | 47.54 | 1.78 | 138.48 | 2.8 | 74.8 | 21.9 | 6.6 |
| &nbsp;&nbsp;Tailings | 94.32 | 0.09 | 0.57 | 0.07 | 21.84 | 10.9 | 22.6 | 22.7 | 26.3 |

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13.3 Metallurgical Assumptions

The recoveries and concentrate grades used in this Report follows the 2024 operating data as it most accurately reflected current operating practices and the expected future feed conditions.

**Table 13-5: Recovery and Concentrate Grade Estimates**

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| &nbsp;&nbsp;**Parameter** | &nbsp;&nbsp;**Unit** | &nbsp;&nbsp;**Concentrates** | &nbsp;&nbsp;**Concentrates** | &nbsp;&nbsp;**Concentrates** |
| &nbsp;&nbsp;**Parameter** | &nbsp;&nbsp;**Unit** | &nbsp;&nbsp;**Lead Concentrate** | &nbsp;&nbsp;**Copper Concentrate** | &nbsp;&nbsp;**Zinc Concentrate** |
| &nbsp;&nbsp;Cu Recovery | &nbsp;&nbsp;% | &nbsp;&nbsp;11.4 | &nbsp;&nbsp;43.1 | &nbsp;&nbsp;27.8 |
| &nbsp;&nbsp;Zn Recovery | &nbsp;&nbsp;% | &nbsp;&nbsp;1.4 | &nbsp;&nbsp;1.3 | &nbsp;&nbsp;78.0 |
| &nbsp;&nbsp;Pb Recovery | &nbsp;&nbsp;% | &nbsp;&nbsp;85.2 | &nbsp;&nbsp;3.1 | &nbsp;&nbsp;3.3 |
| &nbsp;&nbsp;Ag Recovery | &nbsp;&nbsp;% | &nbsp;&nbsp;54.0 | &nbsp;&nbsp;13.7 | &nbsp;&nbsp;7.8 |
| &nbsp;&nbsp;Cu | &nbsp;&nbsp;% | &nbsp;&nbsp;2.52 | &nbsp;&nbsp;19.88 | &nbsp;&nbsp;1.96 |
| &nbsp;&nbsp;Zn | &nbsp;&nbsp;% | &nbsp;&nbsp;2.72 | &nbsp;&nbsp;5.03 | &nbsp;&nbsp;46.83 |
| &nbsp;&nbsp;Pb | &nbsp;&nbsp;% | &nbsp;&nbsp;49.30 | &nbsp;&nbsp;3.75 | &nbsp;&nbsp;0.60 |
| &nbsp;&nbsp;Ag | &nbsp;&nbsp;g/t | &nbsp;&nbsp;2237 | &nbsp;&nbsp;1783 | &nbsp;&nbsp;155 |

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Source: JDS (2024)

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14 Mineral Resource Estimate

The Property presently does not contain a mineral resource estimate that is in accordance with CIM Definition Standards on Mineral Resources and Reserves.

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15 Mineral Reserve Estimate

The Property presently does not contain a mineral reserve estimate that is in accordance with CIM Definition Standards on Mineral Resources and Reserves.

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16 Mining Methods

16.1 Introduction

The Zimapan mining district was discovered by Spanish miners in 1575. From 1632 to 1920, more than 18 mines were put into production, including the El Monte and Carrizal mines. Peñoles operated the mine from 1964 until leasing to Santacruz in August 2009. From 2011 to 2020, Santacruz completed ~30 Km of underground drilling and mined ~5.9 Mt of mineralized material from the El Monte and Carrizal mines. The Zimapan operation has been in continuous operation for many years.

The current configuration of the mine has been operating since 1972 when the San Francisco processing plant was constructed. The application of mining methods has thus been an adaptation of mining equipment technologies, evaluation, and monitoring tools to the specific mineralized zones. The resource zones are quite various, ranging from remnant bodies and pillars from historic mining to relatively wide, steeply dipping zones amenable to mechanized mining. Each of these zones requires separate evaluation and application of the correct mining method.

The factors considered for the selection of mining methods are as follows:

● Shape, geometry, consistency, and volume;

● Wall rock quality (strength, Fracture characterizations, in-situ strength, regional stress);

● Stability and support requirements;

● Grades, NSR Value, potential extraction rate;

● Mechanization/automation, use of gravity, flexibility and adaptability; and

● Unit costs, scheduling, dilution, development requirements.

Continuous improvement is followed in the evaluation and development of mining methods based on these criteria.

16.2 Mining Methods

16.2.1 Mine Design

There are two operational mines on the property:

● The Carrizal Mine which produces approximately half of the total mine production and is connected to the Monte Mine and San Francisco concentrator by a 7 km underground trackless haulage drift; and

● The Monte Mine which also produces about half of the total mine production and lies along the main haulage drift but proximal to the San Franciso concentrator.

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Both feed the San Francisco processing plant.

In general, the Carrizal mine consists of both remnant mineralized zones and pillars which are being recovered, as well as extensions of historically mined zones. The mining is more selective and conventional with jackleg drills and small LHD's. As well, the grades are marginally higher than Monte. Monte mine is comprised of mostly large bulk mineable mineralized zones and utilizes more sublevel open stoping with long hole drilling. The grade is generally lower at Monte mine, as are the costs.

Metallurgically, a blend of feeds from multiple sources is required to achieve profitable recoveries and acceptable quality concentrates, so the operation of both zones simultaneously is a requirement.

Mining methods are selected for each mineralized block using the following criteria and methodology:

● Rock stability and quality analyses carried out by the rock mechanics department;

● Analysis of mineral quality, contents and mineral value, and Cut-off-Grade, carried out by the Geology department; and

● Analysis of the preparation cost vs mineral value carried out by the Planning and Engineering department (cost-benefit).

16.2.2 Stoping

Selection of the proper stoping methods are closely linked to and often dictated by Geotechnical conditions of each Mineralized zone. Two methods are currently used in Zimapan:

● Cut and fill mining, which is quite versatile and allows different drilling and support options depending on stope conditions. The method can also be quickly modified to account for rapid changes in the rock conditions and selectivity required; and

● Sub Level open stoping, which is the lower cost method of choice when conditions allow.

Figure 16-1 shows the general guidelines followed for the selection of stoping method based on the rock quality analysis.

**Figure 16-1: Stoping Method Selection Based on Rock Quality (RMR)**

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| **Rock Quality (RMR)** | **Stoping Method and Type of Drilling** | **Stoping Method and Type of Drilling** |
| <21 "Very Poor" | &nbsp;&nbsp;Single lift Cut and Fill with tight fill drilled by jumbo | ![](ex99-19_021.jpg) |
| 21 to 40 "Poor" | &nbsp;&nbsp;Single Lift Cut and Fill with tight fill drilled by jumbo | ![](ex99-19_022.jpg) |
| 41 to 60 "Moderate" | &nbsp;&nbsp;Double lift Cut and fill extraction with horizontal or semi-vertical uphole drilling | ![](ex99-19_023.jpg) |
| 60 to 80 "Good" | &nbsp;&nbsp;Double lift extraction with horizontal or semi-vertical uphole drilling or Sublevel Open Stoping | ![](ex99-19_024.jpg) |
| 61 to 80 "Very Good" | &nbsp;&nbsp;Sublevel Open Stoping | ![](ex99-19_025.jpg) |

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Source: Santacruz (2023)

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The long hole drilling method is used in grade consistent mineralized areas, in which the mineral and wall rocks are stable and good quality. The method is characterized by its high productivity, and lower development ratio. Most of the stope preparation is carried out within the mineralized zone. This method is applied to mineralized zones of no less than 70° dip. Thus, blasted mineral falls by gravity to the draw level. The regularity of the stope panel allows the drilling of long, vertical and semi-vertical holes with an average stope height of 15 m. Design of the stope itself maximizes extraction of mineralized material while minimizing dilution and the development in waste rock.

Based on geotechnical analysis and the geometry of the stope, stopes of up to 40 m high are left open with support provided by a designed sill pillar. Vertical pillars are also designed in low grade areas to improve stability.

The Cut and Fill (C&F) mining method is quite versatile and is used when conditions are not amenable to long hole stoping:

● The dip of the mineralized zone is greater than 50 degrees, but too shallow or variable for Long Hole Stoping;

● The ground conditions of the wall rocks are too weak; and

● The width of the mineralized zone is too thin, inconsistent, or irregular.

The selectivity of the method makes it suitable for mining remnant bodies that may be high value, but small. As well the use of trackless development allows the grouping of several smaller mineralized remnants to be mined efficiently with the same equipment.

16.2.3 Development

Development drifts and ramps are driven both manually with jackleg drills and mechanized with the use of drill jumbos. All mucking is with LHD's. The specifications of standard development headings are shown in the following figures. The entire mine is trackless with ramp haulage.

&nbsp;&nbsp;&nbsp;&nbsp;16.3 Mine Equipment

The mine employs LHD's to load trucks which haul the ore directly to the mill. Lateral development drilling is done by drill jumbos and jacklegs. Production drilling for the sublevel stoping is done using electric longhole drill rigs.

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17 Process Description / Recovery Methods

&nbsp;&nbsp;&nbsp;&nbsp;17.1 Introduction

The San Francisco Processing Plant uses conventional crushing, grinding and flotation to produce 3 concentrates: Lead, Zinc, and Copper. The plant can currently process up to 3,000 t/d of fresh feed, which is a blend of material from the Monte Mine, Carrizal Mine, and Limo De Toro Mine.

Feed from the separate mining areas is stockpiled separately at the mill facility. Blending is achieved by a loader combining stockpile material in the crusher feed hopper.

&nbsp;&nbsp;&nbsp;&nbsp;17.2 Plant Flowsheet

The San Francisco Processing Plant flowsheet follows a typical lead, copper, and zinc flotation circuit with a crushing circuit to reduce the mill feed size to a P<sub>80</sub> of 3/8 inch. The feed is then ground in one of three primary ball mills to a feed size P<sub>68</sub> of 75 µm, which is equivalent to a P<sub>80</sub> of approximately 110 µm.

The feed is then conditioned in a conditioning tank and subjected to a lead copper bulk flotation. The lead/copper flotation tails reports to the zinc rougher circuit.

The lead/copper rougher concentrate is upgraded in a cleaner flotation circuit and then run through a lead-copper differential flotation circuit where the copper is depressed and the lead is floated to a final lead concentrate. The zinc rougher concentrate is cleaned in the zinc cleaner flotation circuit.

Each of the 3 concentrates reports to a separate concentrate thickener and filtration circuit. Each of the three concentrates are sold in bulk to smelters.

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The flowsheet can be seen in Figure 17-1.

**Figure 17-1: San Francisco Processing Plant Flowsheet**

![](ex99-19_026.jpg)

Source: Carrizal Mining (2026)

&nbsp;&nbsp;&nbsp;&nbsp;17.3 Process Plant Description

17.3.1 Crushing

The crushing circuit consists of 24" x 36" primary jaw crusher. The crusher discharges onto a conveyor belt which discharges the product into one of three bins. The bins are discharged onto a conveyor belt via vibratory feeder to feed one of two vibratory screens.

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The crushing circuit screens are double deck screens. The oversize from the first deck reports to a hopper which feeds a Metso HP300 cone crusher, designated the secondary crusher. The lower deck oversize reports to the tertiary crusher, which is also a Metso HP300 cone crusher.

The screen undersize reports to one of three fine ore bins, which feed the grinding mills. The crushing circuit produces a particle size P<sub>80</sub> of 3/8 inch.

17.3.2 Grinding

The grinding circuit consists of three single stage ball mills which operate in parallel to each other. The target grind size of each of the three grinding circuits is a P<sub>80</sub> of approximately 110 µm, typically measured by the processing plant as 68% passing 75 µm.

The first grinding mill circuit consists of a 10' 8" diameter by 11' long ball mill with a 600 HP motor. The mill is in closed circuit with a cluster of 2 Krebbs D20 cyclones which run as one operating and one standby cyclone. The cyclones are fed by one of two 60 HP 8x6 SRL pumps.

The second grinding mill circuit consists of a 9' diameter by 12' long ball mill with a 500 HP motor. The mill is in closed circuit with a cluster of 2 Krebbs D20 cyclones which run as one operating and one standby cyclone. The cyclones are fed by one of two 60 HP 6x6 SRL pumps.

The third grinding mill circuit consists of a 10.5' diameter by 14' long ball mill with a 1100 HP motor. The mill is in closed circuit with a cluster of 2 Krebbs D20 cyclones which run as one operating and one standby cyclone. The cyclones are fed by one of two 75 HP 8x6 SRL pumps.

17.3.3 Lead/Copper Flotation

The grinding circuit product reports to the lead conditioner tank where MCM 8020 collector, "Mixtura", and frother are added. "Mixtura" is a combination of zinc sulphate and cyanide solution.

The lead conditioner tank discharges into the lead/copper flash flotation cell. The flash flotation cell tailings reports to the rougher flotation cells which consist of 5 cells: two Wemco 300 cubic foot flotation cell and three Wemco 1000 cubic foot flotation cells.

The rougher concentrate from the first 2 rougher flotation cells reports to a single Denver 500 cubic foot cleaner flotation cell. The tailings from this cell reports to a pair of Denver 500 cubic foot flotation cells in series that act as a cleaner scavenger with the first of the two cells reporting to the cleaner cell and the second reporting to the feed of the first cleaner scavenger flotation cell. The tailings from the second cleaner scavenger cell reports to the middle of the rougher flotation bank.

The concentrate produced in the cleaner flotation, as well as the flash flotation cell concentrate, is sent to a series of seven copper lead separation flotation cells which consist of Denver 50 cubic foot flotation cells. The concentrate from the separation circuit reports to the lead concentrate thickener while the tails reports to the copper concentrate thickener.

The tailings from the rougher flotation cells reports to the zinc flotation circuit, which begins with 2 conditioning tanks where copper sulphate and additional frother are added.

17.3.4 Zinc Flotation

The lead/copper rougher tailings reports to a series of two conditioning tanks where copper sulphate, lime slurry, and additional frother are added to activate the zinc mineral sphalerite. The conditioning tanks discharge into the zinc rougher flotation circuit which consists of four Denver 300 cubic foot flotation cells and two Wemco 300 cubic foot flotation cells. The rougher circuit is followed by a series of four Wemco 300 cubic foot flotation cells which act as a rougher scavenger.

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The concentrate from the zinc rougher flotation circuit reports to the zinc cleaner circuit which consists of three stages of zinc cleaning. Each stage of cleaning consists of a single 500 cubic foot cleaner flotation cell. The concentrates from each of the stages reports to the next stage with the tailings from each stage reports to the stage before. The first cleaner cell tailings reports to the feed of the zinc rougher scavenger cells.

The concentrate from the third mechanical cleaner reports to a zinc cleaner flotation column where the final zinc concentrate is produced.

The tailings from the zinc rougher flotation circuit reports to the final tailings

17.3.5 Concentrates

The lead concentrate is thickened in a 20 foot diameter thickener and filtered by a pair of Clever MSR filter presses with 800 mm plates.

The copper concentrate is thickened in a 30 foot diameter thickener and filtered by a single Clever MSR filter press with 1200 mm plates.

The zinc concentrate is thickened in a 30 foot diameter thickener and filtered by a single 8' x 10' drum filter.

17.3.6 Tailings

The mine complex produces silver, lead, zinc, and copper from three separate concentrates. Mineralized material from the underground mines is trucked directly to the process plant for blending prior to processing. The plant is upstream of the TSF No. 9. However, flotation tailings are pumped to two water recovery thickeners before they ultimately gravity feed to the TSF. Tailings are separated at the main dam crest, using a hydrocyclone, into coarse and fine fractions. The cyclone underflow (coarse tailings fraction) is hydraulically placed as dam fill, following the downstream construction method.

There exist eight decommissioned TSFs all upstream of TSF No. 9. Figure 17-2 presents the plant and TSF locations.

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**Figure 17-2: Plant and TSF Locations**

Source: Carrizal Mining (2026)

TSF No. 9 is located north and downstream of the process plant (Figure 17-2). Previous TSFs (TSF No. 1, through 8) were constructed and operated between the process plant site and TSF No. 9 and are inactive. All storage areas are valley fill designs; Currently, TSF No. 9 is the only active facility at the site. TSF No. 9 was designed as a valley fill facility with two dams: North or Main and South or Back Dam. The Main and Back Dams were designed as cyclone tailings fill (underflow) and rockfill. Figure 17-3 and Figure 17-4 depict typical cross-sections for the Main and Back Dam. The buttress, at the North (Main) Dam downstream toe, was proposed after the slope stability analyses was completed (Ardici Tec Consultores, 2013). The entire facility is monitored with a series of Piezometers, monitoring wells, and survey controls.

TSF No. 9 is projected to reach full storage capacity in 2024, with plans for expansion currently in the design and permitting stage.

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**Figure 17-3: North Dam Cross Section**

Source: Carrizal Mining (2026)

**Figure 17-4: South Dam Cross Section**

Source: Carrizal Mining (2026)

The water collection and recovery system includes a seepage collection sump at the downstream toe of TSF No. 9 fed by designed TSF underdrains, and a sump between TSF No. 9 and TSF No. 7 which collects seepage from upstream and decommissioned facilities.

Surface water runoff is intercepted in engineered diversion channels and conveyed to the Drainage downstream of the Tailings Dam. Water from the San Miguel drainage itself is diverted via an underground tunnel below the Active TSF and discharges downstream of the tailings dam as well. Two reinforced concrete spillways are located, one in the middle of the basin called spillway 1 and the other close to the tail of the dam called spillway 2 and connected to the diversion tunnel. These structures are designed to preserve the minimum freeboard at both north and south dams.

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**Figure 17-5: Site Hydraulic Infrastructure Layout**

Source: Carrizal Mining (2026)

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18 Project Infrastructure and Services

Facilities for the Project are located at the Carrizal Mine, the San Francisco Processing plant, and in the town of Zimapan.

There are no facilities located at the Monte Mine.

Although each mine has small offices for local technical, safety, and supervisory teams, the main administrative, warehousing, and technical support facility is the La Llave camp located in Zimapan.

18.1 Carrizal and Monte Mines

Each mine is independently operated and has their own support infrastructure. Each has their own ramp entry and independent ventilation systems, with some benefits derived from the connecting haulage way which doubles as a ventilation conduit and pipeway for drilling and process water as needed.

Grid power is available at each portal, and each mine has dedicated substations. Compressed air is supplied to each mine from surface compressors located at each portal.

Figure 18-1 shows the location of facilities servicing the Carrizal Mine.

**Figure 18-1: Site Layout, Carrizal Mine Facilities**

Source: Carrizal Mining (2023)

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18.1.1 San Francisco Processing Plant

The San Francisco processing plant accepts feed via truck from both mines. It comprises crushing, grinding, flotation, and concentrate dewatering circuits as well as a preparation and assay laboratory and mine offices. The plant is situated at the southern and upstream end of a series of nine tailings storage facilities, eight of which have been decommissioned and the current active facility (No. 9), at the northern extent of the valley. The location of the tailings storage facilities is shown in Figure 18-2 relative to the El Monte underground workings, Portal, and San Francisco Plant.

**Figure 18-2: Site Layout, Monte Mine, San Francisco Processing Plant and Tailings Pond**

Source: Carrizal Mining (2023)

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A site layout drawing of the plant is provided in Figure 18-3.

Plant process water supply is a combination of groundwater sourced from the Monte Underground workings, and workings from an adjacent operator, as well as reclaim from the Tailings Storage Facility. Approximately 80% of process water is recovered for reuse.

**Figure 18-3: Site Layout for San Francisco Processing Plant**

Source: Carrizal Mining (2023)

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18.1.2 Photos of Mine and Plant Infrastructure

Some photographs of the mine and processing plant infrastructure have been included as Figure 18-4.

**Figure 18-4: Photos of the Zimapan Infrastructure**

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| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ![](ex99-19_034.jpg)<br> Photo 1 – El Monte Mine portal.<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ![](ex99-19_035.jpg)<br> Photo 2 – Carrizal Mine portal.<br>|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> ![](ex99-19_036.jpg)<br> Photo 3 – San Francisco Plant. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ![](ex99-19_037.jpg)<br> Photo 4 – Crushing and conveyor circuits. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>![](ex99-19_038.jpg)<br> Photo 5 – Ball mil #1 & #2<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> ![](ex99-19_039.jpg)<br> Photo 6 – Pb-Cu flotation and conditioner tanks.<br>|

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Source Santacruz (2025)

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19 Market Studies and Contracts

&nbsp;&nbsp;&nbsp;&nbsp;19.1 Market Studies

No market studies have been completed for the project at this time. All commodities produced by the mine are regularly sold on vast international markets and the operation has existing smelting agreements to ensure continued product sales.

&nbsp;&nbsp;&nbsp;&nbsp;19.2 Smelting

The mine produces three saleable concentrates: copper, lead, and zinc. All are sold to Trafigura Mexico, S.A. de C.V. Each product is sold under a unique contract.

&nbsp;&nbsp;&nbsp;&nbsp;19.3 Metal Prices

The copper, zinc, silver and gold price used for mine planning purposes were selected based on the CIBC Consensus Forecast Summary from December 1, 2025, as shown in Table 19-1. It should be noted that metal prices are highly variable, driven by complex market forces, and are extremely difficult to predict.

**Table 19-1: CIBC Consensus Metal Prices**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Metal** | **Units** | **2025** | **2026** | **2027** | **2028** | **LT** |
| Copper | $/lb | 4.94 | 5.34 | 5.41 | 5.37 | 4.87 |
| Silver | $/oz | 37.53 | 45.20 | 42.80 | 40.03 | 36.90 |
| Lead | $/lb | 0.98 | 1.01 | 1.03 | 1.04 | 1.01 |
| Zinc | $/lb | 1.25 | 1.25 | 1.25 | 1.24 | 1.22 |

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Source: CIBC (2025)

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20 Environmental Studies, Permitting and Social or Community Impacts

&nbsp;&nbsp;&nbsp;&nbsp;20.1 Environmental

Santacruz has a dedicated team whose priority is the environment and its management and ensuring compliance with the legal statutes set by municipal, state and federal governments. This is achieved through an Environmental Management System (EMS), which is based on continuous improvement sitewide and seeks to balance economic, environmental, and social aspects of the operation. The System is based on the ISO 14001:2015 standard and covers all operational areas of Carrizal Mining, as well as each of the stakeholders.

In accordance with Form 43-101F1 of NI 43-101, this item presents the reasonably available information on environmental, permit, and social or community factors related to the project operated by Carrizal Mining, S.A. de C.V., Located at Ex Hacienda La Llave street, no number, La Llave neighborhood, C.P. 42336, municipality of Zimapán, state of Hidalgo, Mexico.

Project activities are subject to the following federal legal framework on environmental matters:

● General Law of Ecological Equilibrium and Environmental Protection (LGEEPA) and its Regulations on Environmental Impact Assessment (REIA);

● General Law for the Prevention and Integral Management of Waste (LGPGIR) and its Regulations;

● National Waters Law (LAN) and its Regulations, administered by the National Water Commission (CONAGUA);

● Regulations of the LGEEPA on Prevention and Control of Atmospheric Contamination;

● NOM-157-SEMARNAT-2009 — Elements and procedures for implementing mining waste management plans;

● NOM-141-SEMARNAT-2003 — Characterization, specifications and criteria for tailings dams;

● NOM-001-SEMARNAT-2021 — Maximum permissible limits for contaminants in wastewater discharges to national receiving bodies; and

● Indigenous and Tribal Peoples Convention, 1989 (No. 169), and the Mining Law on prior consultation.

20.1.1 Highlights

● Energy savings of 2.97 kWh/TMS;

● Zero sanctions for environmental non-compliance;

● Zero environmental incidents;

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● Zero formal environmental complaints;

● Recovery of 80% of process water;

● Continuation of the process of installing solar cells; and

● No discharge of process water.

Within the framework of this plan, we have established and implemented the environmental policy, which establishes the commitment of senior management to the implementation and improvement of our environmental management system: efficient use of water and energy, monitoring of greenhouse gases, proper management of waste generated, as well as ensuring strict compliance with legal requirements and standards of environmental care.

20.1.2 Implement of the EMS

● Plan: The identification, evaluation and prioritization of environmental aspects are carried out. The environmental objectives and indicators, along with the programs and activities for their timely completion;

● Do: Everything planned in the previous stage is executed, allocating all resources necessary for their fulfillment. (financial, material and human);

● Verify: Internal and external audits are carried out that allow evaluation of performance. In the same way a record, measurement, monitoring, and analysis is maintained of the environmental indicators, to compare results of compliance with the environmental objectives and the findings of the audits carried out (legal compliance is included); and

● Act: Finally, procedures are implemented to reduce any non-conformities or shortfalls. This system allows preventive and corrective actions and continuous improvement of the management system.

The Mines at Zimapan have been operating continuously for many decades under various owners and operators. The matrix of environmental responsibilities is dictated by local and national legal requirements as well as international best practice. Specific third-party Environmental Studies are limited to environmental considerations for the submission and award of the Environmental Impact Manifest (MIA) No. 32/MP-0170/01/13 and subsequent Land Use License No. 13/DS-0294/03/17 authorizing operation and modification of the remaining 26% of tailings dam No. 9. The authors are unaware of any known environmental issues that are considered current that would impact the exploration, development and extraction of minerals on the Property.

Permits acquired by Carrizal Mining to undertake mineral extraction and processing activities are limited to the Operating License No. 84001, which is currently in good standing with SEMERNAT. The Operating License is supplemented by Tailings Dam Management Plan No. 13-PMM-I-0143-2015 and Hazardous Waste Management Plan No. 13-PMG-2871-2018. While a bond(s) related to the future reclamation of past and present mining activities have not been required by SEMARNAT, Carrizal Mining has paid the Mexican Forest Fund MEX $947,578.32 to be allocated to the reforestation, restoration and maintenance activities in an area of 35.75 hectares of state forest in relation to Land Use License No. 13/DS0294/03/17.

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**Table 20-1: Environmental Aspects Addressed in Santacruz Environmental Program**

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|:---|:---|:---|:---|
| **Environmental Aspect** | **Risk** | **Law / Regulations** | **Category / Article** |
| Municipal solid waste generation | Soil and/or water contamination | General Law for the Prevention and Integral Management of Waste | Waste / Art 10 |
| Municipal solid waste generation | Poor disposal of special handling waste | NOM-161-SEMARNAT-2011 | Waste |
| \*Generation of Special Handling Waste | Poor disposal of special handling waste | Law for the protection of the environment of the state of Hidalgo | Waste/Article 157 |
| Hazardous Waste Generation | &nbsp;&nbsp;\*Improper disposal of hazardous waste, Spillage of reclaimed water<br> Spill of hazardous waste | NOM-052-SEMARNAT-2012 | Waste |
| Final Disposal of Flotation Tailings in Tailings Dam. | Tailings spillage or overflow | NOM-141-SEMARNAT-2003 | Waste |
| Final Disposal of Flotation Tailings in Tailings Dam. | Poor arrangement and handling of float tailings | NOM-157-SEMARNAT-2009 | Waste |
| Construction, Operation and Maintenance of the Tailings Dam | Environmental impact | General Law of Ecological Balance and Environmental Protection | Environmental Impact / Chapter III Sect. V |
| Construction of BDD spreadsheet and maneuvering yard for direct mining exploration | Environmental impact | NOM-120-SEMARNAT-2011. | Impacto Ambiental |
| Water Usage | Particles suspended in water due to drilling, Fines, penalties, water pollution | National Water Law | Waters |
| Water Usage, Wastewater Generation | Suspension of water supply | Federal Bill of Rights | Consumption of Natural Resources / Article 1 |

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| | | | |
|:---|:---|:---|:---|
| **Environmental Aspect** | **Risk** | **Law / Regulations** | **Category / Article** |

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| | | | |
|:---|:---|:---|:---|
| **Water Usage** | **Particles suspended in water by boring / Residual discharge with contents above LMP** | **NOM-001-SEMARNAT-1996** | **WATER** |
| **Water Usage** | **Particles suspended in water by boring / Residual discharge with contents above LMP** | **NOM-001-SEMARNAT-1996** | **WATER** |
| Emissions to the atmosphere (gases, dusts and/or vapours) | Impact on the atmosphere | Regulations of the General Law of Ecological Balance and Environmental Protection on the prevention and control of pollution of the atmosphere | Air Emissions / ART 13; Section II |
| Use of electrical energy / Emissions to the atmosphere (vehicles) | Emission of Compounds and Greenhouse Gases | General Law on Climate Change and Regulations | Emissions to the air / Art 87 Chapter VIII |
| Electrical Power Usage | Incidents or Accidents | NOM-029-STPS-2011 | Security / Energy |
| Electrical Power Usage | Greenhouse Gas Emissions/Fines, Penalties | Electricity Industry Law/Network Code Resolution | Network Code Resolution |
| &nbsp;&nbsp;Lightning | &nbsp;&nbsp;Fire | &nbsp;&nbsp;NOM-022-STPS-2015 | &nbsp;&nbsp;Security / Energy |
| Local ventilation of the laboratory (evacuation of produced fumes). | Emission of toxic gases | NOM-043-SEMARNAT-1993 | Air emissions |
| Land Use in Forest Land | Land Use Violation | Regulations of the General Law on Sustainable Forestry Development | Consumption of Natural Resources / ART. 120, 121, 122 AND 123 |
| Chemical Handling | Minor and severe injuries to exposed personnel | NOM-005-STPS-1998 | Safety / Hazardous Substances |
| Use of Chemicals | Maximum permissible limits within the working environment | NOM-010-STPS-1999 | Salud |
| Chemical Handling | Failure to identify lines containing hazardous chemicals, evacuation routes, or assembly points | NOM-026-STPS-2008 | Safety |
| Storage of hazardous chemicals | Reactivity due to incompatibility | NOM-054- SEMARNAT-1993 | Waste |
| Herding of species, felling and clearing | Excessive logging and exploitation of protected species | NOM-059-SEMARNAT-2010 | Natural resources |
| Noise generation (by machinery) | Physical and psychological disorders in the human body. | NOM-081-SEMARNAT-1994; IRMA cap. 4.4 | Air emissions |
| Activities in Underground Mine. | Hazardous Chemical Spill / Explosion / Emergencies / Collapse, Collapse and/or Subsidence | NOMO-023-STPS-2012 | Safety |

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Source: Santacruz (2025)

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&nbsp;&nbsp;&nbsp;&nbsp;20.2 Environmental Studies and Known Issues

The project has been duly filed for environmental impact assessment before the Secretariat of Environment and Natural Resources (SEMARNAT), the federal authority responsible for establishing national environmental policy, evaluating environmental impact assessments, and granting permits for projects with potential environmental effects. All required authorizations have been obtained for the construction and operation of Tailings Dam No. 9, the primary facility for the disposal of flotation tailings.

Environmental baseline and impact studies identified key management priorities, including: proper handling and disposal of flotation tailings; control of air emissions from beneficiation activities; integrated management of hazardous and special waste streams; and ensuring the quality of wastewater discharges to receiving bodies.

At present, no environmental liabilities or constraints have been identified that could materially impact the Company's ability to exploit the approved mineral resources. The Company operates in compliance with applicable environmental regulations and is subject to routine inspections by the Federal Attorney for Environmental Protection (PROFEPA), the federal enforcement agency responsible for verifying compliance with environmental legislation and applying corrective measures or sanctions where necessary.

&nbsp;&nbsp;&nbsp;&nbsp;20.3 Permitting

In December 1999, the "Dirección General de Ordenamiento Ecológico e Impacto Ambiental" (DGIRA) approved the environmental impact study for TSF No. 9 for 5 years. In 2005, the approval was extended for an additional 5 years. In May 2013, after a site inspection completed by the "Procuraduría Federal de Protección al Ambiente" (PROFEPA), the Secretaria de Medio Ambiente y Recursos Naturales (SEMARNAT) authorized TSF No. 9 Environmental Impact Manifest (MIA) for 12 years. Licenses and permits associated with the TSF include:

● MIA No. 32/MP-0170/01/13 and subsequent Land Use License No. 13/DS-0294/03/17 authorizing operation and modification of the remaining 26% of TSF No. 9;

● TSF Management Plan No. 13-PMM-I-0143-2015; and

● Hazardous Waste Management Plan No. 13-PMG-2871-2018.

20.3.1 Environmental Impact Authorization – Tailings Dam N° 9

Through Official Letter No. 133.02.02/185/2013/131298, dated May 17, 2013, the Secretariat of Environment and Natural Resources (SEMARNAT), through its Federal Delegation in the State of Hidalgo—responsible for implementing national environmental policy at the state level and evaluating environmental impact authorizations—approved the environmental impact of the project titled "Operation of the remaining 26% of Tailings Dam No. 9." This authorization covers the construction and operation of the remaining portion of the dam, located approximately 2.5 km northeast of Ranchería San Francisco, in the municipality of Zimapán, Hidalgo. The original authorization established a 12-year term for the site preparation and operation stages, ending on June 20, 2025.

Subsequently, through Official Letter No. 133.03.01.087.2025 dated November 25, 2025, the SEMARNAT Representative Office in the State of Hidalgo resolved to grant a term extension for an additional six (6) years. As a result, the Second Term of the original resolution was modified, establishing that the operational phase of the project commenced on June 20, 2025 and will conclude on June 19, 2031. The authority further determined that the approved extension does not require the submission of a new Environmental Impact Statement (Manifestación de Impacto Ambiental), provided that all activities remain consistent with those authorized under the original 2013 resolution.

**Table 20-2: Current Environmental Impact Authorization – Tailings N°9**

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|:---|:---|
| **Field** | **Detail** |
| Issuing Authority | SEMARNAT Representative Office in the State of Hidalgo |
| Original Letter No. | 133.02.02/185/2013/131298 |
| Original Authorization Date | May 17, 2013 |
| Project Key | 13HI2013MD006 |
| Extension Letter No. | 133.03.01.087.2025 (Logbook: 13/DG-0184/05/25) |
| Extension Date | November 25, 2025 |
| New Validity | June 20, 2025 — June 19, 2031 |
| Extension Granted | 6 additional years |
| Authorized Project | Operation of remaining 26% of Tailings Dam No. 9 |

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Source: Santacruz (2025)

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20.3.2 Operating License (Atmospheric Contamination Control)

Carrizal Mining, S.A. de C.V. holds Operating License No. 84001, issued by the Secretariat of Environment and Natural Resources (SEMARNAT), through its Federal Delegation in the State of Hidalgo, within the scope of atmospheric emissions prevention and control. SEMARNAT is the federal authority responsible for environmental regulation, including the permitting and oversight of air emissions from industrial sources in Mexico.

In accordance with Article 18 of the Regulations of the General Law of Ecological Balance and Environmental Protection (LGEEPA) on Atmospheric Pollution Prevention and Control, the license has indefinite validity and applies to all emission sources associated with the facility.

The license has been updated on four occasions to reflect changes in operational conditions, infrastructure, and production capacity, as summarized below.

● First update (LF-04/13/084/001/ACT/2005): April 29, 2005;

● Second update (LF-04/13/084/002/2008): June 27, 2008. Installed production capacity established as follows: lead concentrates (2,250 t/month), zinc concentrates (6,875 t/month), and copper concentrates (1,250 t/month);

● Third update (Official Letter No. 133.02.01/128/2012, File No. 121806): July 17, 2012. Corporate name updated from Minera Nuevo Monte / Minera Cedros to Carrizal Mining, S.A. de C.V.; and

● Fourth update (Official Letter No. 133.02.01.0018.2019, Logbook No. 190159): January 23, 2019. Authorization granted to increase copper concentrate production capacity from 1,250 t/month to 2,000 t/month, with no modifications to lead and zinc production levels.

**Table 20-3: Operating License – Carrizal Mining**

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|:---|:---|
| **Field** | **Detail** |
| License No. | 84001 (NRA: CMIMK1308411) |
| Issuing Authority | SEMARNAT — Federal Delegation in Hidalgo |
| Validity | Indefinite |
| Authorized Lead Concentrates | 2,250 t/month |
| Authorized Zinc Concentrates | 6,875 t/month |
| Authorized Copper Concentrates | 2,000 t/month |
| Last Update | January 23, 2019 (4th update) |
| Last Update Letter No. | 133.02.01.0018.2019 |

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Source: Santacruz (2025)

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20.3.3 Mining Waste Management Plan Registration (Flotation Tailings)

Through Official Letter No. DGGIMAR.710/007801, the Secretariat of Environment and Natural Resources (SEMARNAT) granted Carrizal Mining, S.A. de C.V. the Mining Waste Management Plan Registration No. 13-PMM-I-0143-2015, valid for 16 years, in accordance with NOM-157-SEMARNAT-2009.

The plan covers flotation tailings disposed of in tailings dams in compliance with NOM-141-SEMARNAT-2003. It includes operational controls, recovery technologies, and an environmental emergency plan.

The Company must update the registration when operational changes occur and ensure engineering and maintenance practices that guarantee the stability of the tailings facility during operation and closure.

**Table 20-4: Tailings Management Plan Authorization**

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| | |
|:---|:---|
| **Field** | **Detail** |
| Registration No. | 13-PMM-I-0143-2015 |
| Official Letter | DGGIMAR.710/007801 |
| Registered Waste | Flotation tailings |
| Disposal Standard | In-situ in tailings dams (NOM-141-SEMARNAT-2003) |
| Validity | July 2031 |

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Source: Santacruz (2025)

20.3.4 Record of the Hazardous Waste Management Plan

Carrizal Mining, S.A. de C.V. holds Hazardous Waste Management Plan Registration No. 13-PMG-I-2871-2018, issued by the General Directorate of Integral Management of Materials and Hazardous Activities (DGGIMAR) of the Secretariat of Environment and Natural Resources (SEMARNAT), the federal authority responsible for regulating hazardous waste management under the General Law for the Prevention and Integral Management of Waste (LGPGIR) and applicable Official Mexican Standards (NOMs).

The registered plan identifies the hazardous waste streams generated by the operation, including their physical characteristics, hazard classification, and annual generation volumes, as summarized in Table 20-5.

**Table 20-5: Amount of Hazardous Authorized in the Management Plan**

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| | | | |
|:---|:---|:---|:---|
| **Waste Name** | **Physical State** | **Hazard** | **Annual Quantity (kg)** |
| Spent hydraulic oil | Liquid | Toxic | 24840 |
| Oil-impregnated rags, tow and filters | Solid | Toxic | 14450 |
| Hydrocarbon-contaminated soil | Solid | Toxic | 4750 |
| Grease | Solid | Toxic | 2100 |
| Fluorescent and mercury vapor lamps | Solid | Toxic | 90 |
| Batteries | Solid | Toxic, Corrosive | 10 |
| Drums and containers with hazardous substances | Solid | Toxic | 1120 |

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Source: Carrizal Mining (2026)

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External management of hazardous waste is carried out through authorized service provider companies with the following final destinations: co-processing (hydraulic oil, rags, tow, grease, and drums), treatment (hydrocarbon-contaminated soil and batteries), and confinement (fluorescent and mercury vapor lamps).

20.3.5 Special Management Waste (SMW) Management Plan Registration

Carrizal Mining, S.A. de C.V. holds a Special Management Waste Management Plan Registration issued by the Secretariat of Environment and Natural Resources (SEMARNAT), the federal authority responsible for regulating waste management under the General Law for the Prevention and Integral Management of Waste (LGPGIR) and its Regulations.

This registration covers industrial-origin waste generated by beneficiation plant operations that does not exhibit hazardous characteristics as defined under CRETIB criteria (Corrosive, Reactive, Explosive, Toxic, Flammable, or Biological-Infectious) but nonetheless requires controlled and integral management.

20.3.6 Water Concessions and Federal Zones (CONAGUA)

20.3.6.1 National Waters Concession Title

The company holds the Concession Title for the exploitation, use, or utilization of national waters issued by the National Water Commission (CONAGUA), covering both the extraction of national waters for the mineral beneficiation process and the discharge of wastewater to the receiving body. The authorized specific discharge conditions are shown in Table 20-6.

**Table 20-6: Water use and wastewater discharge concession title**

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| | |
|:---|:---|
| **Field** | **Detail** |
| Issuing Authority | CONAGUA |
| Hydrological Region | 26 Panuco |
| Hydrological Basin | 526 Moctezuma River 1 |
| Channel / Receiving Body Type | Direct tributary — Type A Rivers |
| Municipality / State | Zimapan, Hidalgo |
| Coordinates (discharge point) | Lat. North: 20° 43' 53.0072" / Long. West: 99° 22' 46.0010" |
| Authorized Annual Discharge Volume | 2,865.2500 m³/year |
| Discharge Regime | 365 days/year — 24 hours/day |
| Applicable Quality Standard | NOM-001-SEMARNAT-1996 |

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20.3.6.2 Federal Zone Concession Titles

The company holds Federal Zone Occupation and Use Titles issued by CONAGUA, covering the use of federal lands adjacent to national waterways and water bodies necessary for project infrastructure. The titles are subject to the general conditions for exploitation, use, or utilization of federal zones under the National Waters Law, including the obligation to remove facilities at the end of the concession and to carry out only the works approved by the Commission.

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20.3.6.3 Tailings Dam No. 9 Concession Title

Tailings Dam No. 9 has its own Concession Title issued by CONAGUA, granting use rights for the storage of flotation tailings and hydraulic operation of the dam, subject to compliance with hydraulic safety standards and maintenance and operation obligations established by the Commission

20.3.6.4 Waste Management, Site Monitoring and Water Management

The disposal of flotation tailings is carried out in a controlled manner in Tailings Dam No. 9, in accordance with the construction, operation, and post-operation specifications established in NOM-141-SEMARNAT-2003. The company is obligated, throughout the project lifecycle, to have engineering and maintenance specifications ensuring the physical stability of the deposit, as well as to implement the environmental emergency action plan included in the Mining Waste Management Plan.

In terms of water management, the company operates under a closed hydraulic circuit, so no process water discharges are made.

For the post-operation and closure stage of the tailings dam, the Mining Waste Management Plan establishes in-situ final disposal actions, with the stabilization and monitoring mechanisms required by regulations. The costs associated with site closure and remediation are part of the company's obligations as a condition of the environmental impact resolution

20.3.6.5 Summary of Current Regulatory Instruments

The following table consolidates the complete set of current environmental permits, authorizations, and registrations supporting the operation of the Nuevo Monte Mining Project.

**Table 20-7: Environmental Authorizations of Carrizal Mining**

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| | | | |
|:---|:---|:---|:---|
| **Instrument** | **Number / Reference** | **Issuing Authority** | **Validity / Status** |
| Environmental Impact Authorization — Tailings Dam No. 9 | Letter 133.02.02/185/2013/131298 (Original 2013) + Extension 133.03.01.087.2025 | SEMARNAT / Rep. Office Hidalgo | VALID until Jun 2031 |
| Operating License (Atmosphere) | LF No. 84001 — 4th Update (Jan 2019) | SEMARNAT / Federal Delegation Hidalgo | VALID — Indefinite |
| Mining Waste Mgmt. Plan (Tailings) | No. 13-PMM-I-0143-2015 | SEMARNAT / DGGIMAR | VALID (16 years) |
| Hazardous Waste Mgmt. Plan | No. 13-PMG-I-2871-2018 | SEMARNAT / DGGIMAR | VALID |
| Special Mgmt. Waste Plan | Registered with SEMARNAT | SEMARNAT | VALID |
| National Waters Concession Title | CONAGUA — Moctezuma R. Basin | CONAGUA | VALID |
| Federal Zone Title(s) | Federal Zone Occupation | CONAGUA | VALID |
| Tailings Dam No. 9 Concession | Dam No. 9 Concession Title | CONAGUA | VALID |

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20.3.7 Social and Community

There exist many local communities and Ejidos in the mining area as well as along the haulage routes to and from the mines. Each of these groups is a stakeholder in the operations of the mine and is dealt with accordingly. The operation is structured in such a way that separate contracts can be awarded for specific aspects of operations. In this way, the value of the deposit can be shared with the communities by creation of employment or small business opportunities. The level of negotiation required to equitably award contract work in this way is considerable and constant. However, the rewards are great for the operation and the Local Communities. Table 20-8 summarizes the local populations and their proximity to the operation.

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**Table 20-8: Communities Adjacent to Zimapan Operations**

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|:---|:---|:---|:---|:---|:---|
| **Community** | **Community** | **Santacruz Facility/Distance** | **Santacruz Facility/Distance** | **Population** | **Notes** |
| Verdosas | Ejido Benito Juárez | Mina Monte | 1.60 km | 5 |  |
| Tadhé | Ejido Tadhé | Mina Monte | 2.35 km | 100 |  |
| San Francisco | Ejido San Francisco | Planta Beneficio | 183.83 m | 40 |  |
| Mezquite Primero | Ejido Yerbabuena segunda | Planta Beneficio | 7.66 km | 44 | Comunidad Indígena |
| Iglesia Vieja | Iglesia vieja | Planta Beneficio | 5.46 km | 12 |  |
| El Sabino | El Sabino | Planta Beneficio | 4.67 km | 2 |  |
| Xhodé | Ejido Xhodé | Planta Beneficio | 3.43 km | 50 | Comunidad Indígena (INPI) |
| Garabatos |  | Planta Beneficio | 12.5 km | 165 |  |
| San Cristóbal | Ejido Benito Juárez | Mina Carrizal | 4.20 km | 35 |  |
| San Felipe | Ejido Benito Juárez | Mina Carrizal | 1.29 km | 29 |  |
| Detzaní | Ejido Benito Juárez | Mina Carrizal | 7.13 km | 842 | Comunidad Indígena |
| Dedhó | Ejido Benito Juárez | Mina Carrizal | 3.49 km | 61 |  |
| El Barrón | Ejido Benito Juárez | Mina Carrizal | 5 km | 142 | Comunidad Indígena |
| San Andrés | Ejido Benito Juárez | Mina Carrizal | 3.57 km | 55 | Comunidad Indígena |

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Source: Santacruz (2025)

Zimapan is currently and historically a district dominated by mining, and support of the mining industry. Local mining expertise and talented workers are available from this close-knit community. Approximately 95% of the workforce is from Zimapan, with 5% living in surrounding towns and commuting to the operations on some agreed schedule. Santacruz owned housing is available for commuting employees in Zimapan.

Santacruz Silver also initiates programs to directly help the communities affected by the mining operations with biannual health visits with a company medical team, to help monitor and improve health and wellbeing in the communities, including nutritional education. The visits also serve as an opportunity to educate the communities on the mine operations and solicit input from the communities on the impacts of the operations on their lives and how Santacruz might help to mitigate the negative and understand the positive.

Stakeholders are groups, organizations, or individuals who may be affected by mining operations, products or services of the company and vice versa. They can be internal or external, for this reason, active participation by listening to their opinions, expectations and suggestions, strengthens not only the interaction, but the ties of trust that allow us to maintain our social license

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&nbsp;&nbsp;&nbsp;&nbsp;20.4 Communities

An Ejido is an area of communal land used for agriculture in which community members have usufruct rights rather than ownership rights to land, which in Mexico is held by the Mexican state. These ejidos may be worked by one or more communities. Ejido Benito Juárez is the largest in the state of Hidalgo and is inhabited by several communities in the area of influence of Santacruz' operation.

Santacruz works with four ejidos: Tadhé, Xhodé, San Francisco and Benito Juárez, each which are represented by their own governing body. To foster a good relationship, the social management system seeks to sustainably promote the development of communities to establish a positive reputation and lasting legacy in our operating environment. To this end, we provide tools in education, health and environmental care so that communities are self-managers in both infrastructure and economic growth projects.

The main objective of the system and its tools is to maintain the long-term social license that allows us to establish ourselves as the leading mining company in the municipality by contributing value to each stakeholder and improve the quality of life to communities in a sustainable way. Within our management system, a mechanism of direct communication with affected communities allows the gathering of information such as health indicators, education, housing and basic services. In 2022, at least one scheduled visit was made to each of the 14 priority communities. Active listening was practiced during these visits and areas of opportunity were identified for cooperative solutions.

Our community principles:

● Maintain respectful and independent relationships with communities through the delivery of timely, accessible, truthful, and transparent information;

● Recognize vulnerable groups and reiterate commitment to maintain accessible, inclusive, and transparent processes;

● Show respect for diversity and cultural heritage, traditions, uses and customs;

● Treat our stakeholders with dignity and respect;

● Promote the rights of indigenous peoples and communities in accordance with national legislation and international guidelines; and

● Generate efficient and accessible communication with indigenous communities, promoting dialogue and exchange of ideas.

It was found that the highest priority need for most of the communities is the lack of fresh water and sewage systems. In response, Santacruz has been working since 2018 with Local representatives and Government agencies on projects that improve their supply of water and establish septic systems.

Also, education was found to be a priority to the communities. All communities have built preschool and primary schools, however, some have lost registration, lack teachers, and are no longer active. This is the case in the communities of San Francisco, Tadhé, San Cristóbal, and Dedhó. This causes families to migrate to municipal area of Zimapán for their children to continue their studies.

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The rights of indigenous peoples is also a priority. According to the annual report on the situation of poverty and social lag (2022) of the Welfare Secretary, the municipality of Zimapán has an indigenous population of 8,292 people, who are distributed in 31 communities that speak Otomi and Nahuatl in some areas. Of the 14 communities affected by Santacruz' operation, 3 are indigenous; Barron, Detzani and Xodhé.

As part of Santacruz' commitment to the communities. We seek to unite ties with entities that, like us, seek to generate positive legacies for the inhabitants. Such are the following cases:

1) Environmental monitoring and maintenance through community involvement;

2) Second Stage Tadhé Well - Tadhé is located 2.35 km from our operations and does not have clean drinking water or sewage systems available. In 2021, the "Solar well pumping system" project began and continued into 2022. Santacruz purchased equipment and lent construction equipment to install power for wells and septic systems which were cooperatively built with and for the community;

3) Installation of autonomous photovoltaic system at Mesquite Primero - like other communities in the municipality, Mesquite Primero lacks basic services, such as water, drainage, electricity and road access. Despite the difficulties, currently 17 families live this community, and they want to stay there. The community has a one room school for the seven children living there and a single teacher. The students walk approximately one hour each way to the school.

In collaboration with Santacruz, they designed an autonomous photovoltaic power system, which was installed in the school. The teacher now has the opportunity to carry out audiovisual activities or artistic works that strengthen children's education in both Spanish and their mother tongue, hñähñú;

4) Contracted Environmental Services with matching Payment Mechanisms program through Concurrent Funds (MLPSA-FC) of CONAFOR, with 180 hectares of Ejido Las Adjuntas and 320 hectares of the Ejido Yerbabuena Segunda. The company committed to providing support annually for 100,000 pesos for two years, which matched by CONAFOR is the equivalent of 200,000 pesos annually that will be distributed among the two ejidos according to the assigned surface area; and

5) Risk prevention training - Most of the communities with which the company operates are located between 20 and 40 minutes by vehicle from emergency services. Furthermore, they do not have public transportation or a network that allows them to communicate immediately in case of an emergency. In this context Carrizal, through his areas of risk prevention, health prevention and the social responsibility team, makes scheduled visits to provide training in first aid, risk prevention at home and even firefighting. The objective is that, in case they must face any risk situation, people have the basic tools to provide the first response, before help arrives.

20.4.1 Social Management System

Carrizal Mining has a formal Social Management System, structured in four cyclical stages: Planning, Execution, Verification, and Continuous Improvement. This system is applied with each community in the area of influence and allows for the identification of needs, addressing social risks from the source, and building long-term relationships.

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Planning: definition of the zone of influence with level of impact of operations, identification of key social actors, project start diagnosis, social risk assessment, and development of the community relations plan.

Execution: dialogue, consultation, and disclosure forums; community development initiatives; open doors and request reception; productive projects; emergency situation drills; service caravans; and complaint handling.

Verification: surveys, evaluations, and reports; control and follow-up of requests; impact assessment; and complaint handling results.

Continuous improvement: document control, indicator analysis, internal and external audits, and improvement actions.

20.4.2 Social Responsibility Policy and FPIC Procedure

The company has two formal instruments governing its community engagement:

● Social Responsibility Policy: Establishes the institutional commitment to maintain respectful and independent relations with communities through the delivery of timely, accessible, truthful, and transparent information; recognizing vulnerable groups; and ensuring accessible, inclusive, and transparent processes. Its activities include community forums and meetings, accompanying water sampling in nearby streams, scheduled community tours, training, and development projects;

● Free, Prior and Informed Consent (FPIC) Procedure: Based on ILO Convention 169 and the Mining Law, this procedure establishes the consultation process with communities before initiating any project or activity that generates direct or indirect impacts. The process contemplates: project definition, identification of the community or ejidal area, analysis of the presence of indigenous peoples, socialization with leaders, formal project presentation, start of the consultation process, explanation of consequences, formalization of pre-agreements and commitments, processing of corresponding permits, progress reports, and closing meeting with authorities and community; and

● The fundamental principles of FPIC are: Free (without pressure or conditions), Prior (before any decision, authorization, or execution), and Informed (with clear information about the project and its consequences).

20.4.3 Social Investment and Beneficiaries 2025

During 2025, Carrizal Mining made social investment in the communities of the area of influence totaling US$118,741.05, distributed as follows:

**Table 20-9: Investment in Ejidos within the direct area of influence**

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|:---|:---|:---|:---|:---|
| **Community / Ejido** | **Community Support**<br> **($)** | **Productive Dev.**<br> **($)** | **Education**<br> **($)** | **Traditions & Social Activities ($)** |
| Ejido Benito Juárez | 24650.01 |  | 217.22 | 5088.46 |
| Ejido San Francisco | 18567.00 |  |  |  |
| Ejido Xhodé | 19875.75 |  |  |  |
| Ejido Tadhé | 17778.92 | 1490.55 |  |  |
| Other communities | 26542.63 |  |  | 4530.51 |

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The indirect beneficiaries of social investment programs during 2025 total 8,245 people, broken down by component as follows:

**Table 20-10: Direct Beneficiaries By Projects in Communities within the Direct Area of Influence**

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|:---|:---|:---|:---|:---|
| **Component** | **No. of Projects** | **Total Beneficiaries** | **Men** | **Women** |
| Community Support | 3 | 2542 | 1192 | 1350 |
| Productive Development | 1 | 3 | 0 | 3 |
| Education | 9 | 3702 | 1785 | 1917 |
| Traditions and Social Activities | 5 | 1998 | 961 | 1037 |
| Total | 18 | 8245 | 3938 | 4307 |

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20.4.4 Mine Closure, Remediation and Recovery

The conditions of the environmental impact resolution (Official Letter 133.02.02/185/2013/131298 and its 2025 extension) establish that Carrizal Mining, S.A. de C.V. is solely responsible for ensuring the execution of all mitigation, restoration, and control actions for environmental impacts attributable to the development of project works and activities. In the event that works and activities put biotic or abiotic resources of the site at risk, SEMARNAT may demand the suspension of activities and implement compensation programs.

The Mining Waste Management Plan (No. 13-PMM-I-0143-2015) establishes obligations regarding post-operation of the tailings dam, including compliance with the NOM-141-SEMARNAT-2003 criteria for closure and post-closure stages. The company must maintain the physical stability of the deposit and uphold the required engineering specifications throughout the entire lifecycle of the dam, including post-operation.

The specific closure and remediation costs will be quantified in the project's economic analysis (Item 21), in accordance with the obligations established in the current environmental regulatory instruments.

20.4.5 Conclusions

Carrizal Mining, S.A. de C.V. holds all required permits, licenses, authorizations, and environmental registrations in accordance with applicable Mexican legislation for the Project. Key regulatory instruments include: the environmental impact authorization for Tailings Dam No. 9, with validity extended through June 19, 2031; Operating License No. 84001 for atmospheric emissions control, with indefinite validity; the Mining Waste Management Plan Registration No. 13-PMM-I-0143-2015 and Hazardous Waste Management Plan Registration No. 13-PMG-I-2871-2018; as well as concession titles for national waters and federal zones issued by the National Water Commission (CONAGUA), the federal authority responsible for water resource administration and hydraulic infrastructure regulation in Mexico.

Based on the information reviewed, no environmental liabilities, regulatory contingencies, or compliance gaps have been identified that could reasonably be expected to materially affect the continuity of operations or the extraction of authorized mineral resources.

From a social perspective, the Company maintains an active and structured presence across 14 communities within its area of influence, including five Indigenous communities formally recognized by the National Institute of Indigenous Peoples (INPI), the federal institution responsible for the promotion and protection of Indigenous peoples' rights in Mexico.

The Company has implemented formal governance mechanisms for community engagement, including a Social Management System, a Social Responsibility Policy, and a Free, Prior, and Informed Consent (FPIC) Procedure aligned with the principles of International Labour Organization Convention 169. These instruments provide a structured framework for stakeholder engagement, risk mitigation, and social performance management.

During 2025, the Company executed social investment programs totaling US$118,741.05, generating indirect benefits for approximately 8,245 individuals within the area of influence. No active social conflicts or material community-related risks have been identified that could compromise the Project's social license to operate.

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21 Capital and Operating Costs

&nbsp;&nbsp;&nbsp;&nbsp;21.1 Capital Costs

The Zimapan Operation has been in continuous operation for many years. There will be, as the reserve is expanded and developed, the need for step changes in mine access, production or haulage methods, that may require large capital outlays. These will be financially justified as needed. However, the capital needs for continued operation to exploit the remaining reserves is limited to Primary mine development, Capital equipment rebuilds and replacements, and Tailing Storage Facility expansions.

The actual capital expenditure for 2025 and the projected budget for the next five years is shown in Table 21-1.

**Table 21-1: Capital Cost Requirements**

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|:---|:---|:---|:---|:---|:---|:---|
|  | **Actual** | **Budget** | **Projection** | **Projection** | **Projection** | **Projection** |
|  | **2025** | **2026** | **2027** | **2028** | **2029** | **2030** |
| Long-term infrastructure | 6619659 | 8549651 | 5262872 | 3481660 | 2589497 | 1635767 |
| Overhaul | 1384514 | 600072 | 369384 | 244366 | 181748 | 114809 |
| Exploration BDD | 451418 | - | 101956 | 106034 | 110275 | 110534 |
| Eq Mine-Plant Investment | 6473854 | 2938550 | 1808871 | 1196661 | 890021 | 562220 |
| **Total** | **14929444** | **12088273** | **7543082** | **5028722** | **3771541** | **2423330** |

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Source: Santacruz (2025)

Recurring exploration and primary development costs have been included in the COG calculations to better anticipate and account for total costs and make the COG more meaningful for reserve estimation and mine planning.

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&nbsp;&nbsp;&nbsp;&nbsp;21.2 Operating Costs

Costs used for Cut-off-Grade analysis were taken from actual costs from 2025, as shown in Table 21-2. This most recent cost history was deemed the most accurate and stable period, and which best represented the true costs of the operation. The Zimapan operation was acquired by Santacruz Silver in 2021, so it was decided to use actual costs incurred while the mines were under current ownership.

**Table 21-2: Operating Costs for 2025**

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|:---|:---|:---|:---|:---|:---|:---|
|  | **Actual** | **Budget** | **Projection** | **Projection** | **Projection** | **Projection** |
|  | **2025** | **2026** | **2027** | **2028** | **2029** | **2030** |
| Mined | 921476 | 907776 | 907776 | 907776 | 907776 | 874910 |
| Milled | 893067 | 888000 | 888000 | 888000 | 888000 | 855851 |
| Mine | 24930042 | 26491585 | 27551248 | 28653298 | 20859601 | 20908572 |
| Maintenance | 7955346 | 10639101 | 11064665 | 11507252 | 11967542 | 11995637 |
| Plant | 8343718 | 8357211 | 8691500 | 9039160 | 9400726 | 9422796 |
| Plant Maint. | 5334456 | 5648274 | 5874204 | 6109173 | 6353540 | 6368455 |
| Utility Vehic. | 529313 | 717733 | 746443 | 776300 | 565147 | 566473 |
| GA & Services | 12891927 | 15847650 | 16481556 | 17140818 | 12478516 | 12507811 |
| **Total** | **59984801** | **67701554** | **70409616** | **73226001** | **61625071** | **61769745** |
| **OPEX $/t** | **67.17** | **76.24** | **79.29** | **82.46** | **69.40** | **72.17** |

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Source: Santacruz (2025)

Mine operations include direct costs of mining, including labor, energy, materials, and services.

Mine Equipment Maintenance Costs includes maintenance of all equipment related to direct development, exploitation and haulage, as well as service equipment such as pumping, ventilation, winches, etc.

Plant and Plant maintenance costs include direct costs as well as indirect costs. General and Administration includes Concentrate haulage, Site Management, Technical services, Site Administration, Environmental and Social, Safety and Security.

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22 Economic Analysis

An economic analysis has not been prepared for the Zimapán Project (including the Carrizal and El Monte mines) as part of this Technical Report.

The mineralized zones currently being exploited at the Carrizal and El Monte mines have a long and well-documented history of mining activity extending over approximately four centuries. Notwithstanding this extensive operational history, Santacruz Silver Mining Ltd. has not based its decision to commence or continue production on a feasibility study, pre-feasibility study, or other economic study demonstrating the technical and economic viability of mineral reserves in accordance with the requirements of NI 43-101.

Furthermore, the Property does not currently contain a mineral resource estimate that has been prepared in accordance with the CIM Definition Standards for Mineral Resources and Mineral Reserves (2014, as amended), nor has a current mineral reserve estimate been established. As a result, there is no compliant basis upon which to undertake a meaningful or reliable economic analysis, including cash flow modelling, net present value (NPV), internal rate of return (IRR), or sensitivity analyses.

Given the absence of current mineral resource and mineral reserve estimates, any attempt to prepare an economic evaluation would be speculative and potentially misleading. Accordingly, such analysis has not been undertaken in this Report.

The decision to operate the Carrizal and El Monte mines without the support of a current mineral resource or mineral reserve estimate, and in the absence of a supporting economic study, introduces inherent uncertainty and elevates both technical and economic risks. These risks include, but are not limited to, uncertainty in grade continuity, tonnage estimates, metallurgical performance, operating costs, and overall project viability. Consequently, there is a material risk that the production activities may not achieve the anticipated economic outcomes, and there exists a corresponding risk of technical and economic failure.

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23 Adjacent Properties

23.1 La Negra Property

The La Negra Property is situated 8.5 km to the northwest of the Carrizal mine in the Maconí Mining District, State of Querétaro, Mexico. AMC Mining Consultants (Canada) Ltd. (AMC) prepared a technical report dated January 16, 2015 for Aurcana Corporation (Mosher,2015), a listed company on the Toronto Stock Exchange who owned rights to the property at the effective date of the La Negra technical report.

The La Negra property is underlain by limestone of the El Doctor Formation that has been recrystallized and altered to skarn next to diorite intrusives and dikes. Mineralization at La Negra is contained within skarn that developed through alteration of El Doctor Formation limestone, forming chimney and mantos style mineralization with massive sulfide domains. AMC reported a mineral resource estimate for eleven mineral zones. The mineral resource estimate was reported in accordance with CIM Definition Standards on Mineral Resources and Reserves (CIM Definition Standards) and NI 43-101 Standards of Disclosure for Mineral Projects at the time. The author notes that since the date of the La Negra mineral resource estimate, metal prices have changed significantly.

The author believes the Zimapan property and the La Negra property share similar characteristics including geological setting, mineralization and alteration styles and an extensive history of mining activity.

Current (202The mine is now owned by Nuevo Silver Inc., which acquired 100% of the holding company (Minera La Negra S.A. de C.V.) in February 2026. There is also a pending/associated corporate transaction whereby Silverco Mining Corp. is advancing an acquisition of Nuevo Silver, which would effectively place La Negra under Silverco if completed.

Nuevo Silver Inc. is a privately held Canadian mining company focused on silver, formed to acquire and operate the La Negra polymetallic mine in Querétaro, Mexico. It has quickly become notable because it is the vehicle through which ownership of La Negra is being consolidated and then rolled into a listed Canadian producer via a proposed acquisition by Silverco Mining Ltd.

Latest NI 43-101 Technical Report (La Negra) entitled *Technical Report – Preliminary Economic Assessment Study, La Negra Mine, Minera La Negra S.A. de C.V.* with effective date March 31, 2022.

La Negra – Mineral Resource (NI 43-101, 2022 PEA)

Indicated:

● Tonnes: ~2.45 Mt

● Silver: ~191 g/t

● Copper: ~0.35 %

● Zinc: ~4.3 %

● Lead: ~2.2 %

Inferred:

● Tonnes: ~6.4 Mt

● Silver: ~202 g/t

● Copper: ~0.30 %

● Zinc: ~4.8 %

● Lead: ~2.0 %

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24 Other Relevant Data and Information

There is an ongoing effort to modernize methods, processes and procedures for data acquisition, QA/QC interpretation and modelling of mineralization, estimation techniques, and reporting to adhere to CIM Mineral Resource and Mineral Reserves Estimation Best Practice Guidelines (2019).

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25 Interpretations and Conclusions

The following observations were made:

● Zimapan operation has successfully extended operations by recovering remnant stopes and extending operations to depth based on the predictability of the vertical ore lenses without extensive diamond drilling;

● Ground conditions are quite competent in the longhole mining areas, allowing for large unsupported hangingwalls. Ground control in development and cut and fill stoping areas appears to be well executed;

● Mining operations are well run, as evidenced by good housekeeping practices in the mine and maintenance areas;

● The mines have multiple active workplaces, allowing for flexible operations; and

● The workforce is local, stable, and competent. Good survey controls are apparent throughout development and stoping areas.

25.1 Risks

Modern planning tools need to be implemented at the operation to assist in the preparation of a sound mine plan. While the current system works, it is inefficient and should be replaced with industry-standard practices.

The practice was not observed by JDS, but it is understood that remote LHD's occasionally operate inside the open stopes without remote. The stopes should be treated as non-entry to personnel.

Surface access to the Carrizal Mine for personnel and ore haulage is provided by a very narrow and steep road that is heavily travelled. The two-way traffic meets regularly, requiring vehicles to back up and park to the side on switch backs to allow other vehicles to pass. This is a very precarious procedure that should be better controlled, both for safety and efficiency.

Ventilation is in general quite poor throughout the mines, with a high level of particulates resulting from the low flow volumes.

25.2 Opportunities

Zimapan operations has the opportunity to extend mining to depth in both mines. This will require a comprehensive plan that is based on diamond drilling of future mining zones and effective planning using industry-standard software and tools.

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26 Recommendations

JDS recommends the following actions:

● Starting this year, all resource and reserve estimates should be conducted using industry-standard mine planning software;

● The drill pattern used in the longhole stopes should be reassessed to reduce drilling and blasting costs. An intense program to optimize blasting should be initiated. This would reduce external dilution and the associated costs (mucking, truck haulage, processing, tailings disposal) significantly. This could be done by increasing drill ring and drill hole spacing, reducing the drillhole diameter, or some combination of both changes;

● The access road to Monte should either be controlled by radio or long delay traffic lights, making the most dangerous portions one-way for an intermittent durations. This would enhance safety but also make haulage travel more efficient;

● A leaky feeder system for radio communication or similar infrastructure should be installed underground. This would improve emergency response time and simplify underground traffic control;

● All mucking past the stope brow should be remote controlled. The percentage of remote mucking can sometimes be reduced by shaping the blasts to feed the ore to a drawpoint with a final blast of short upholes at the draw point. This concept should be evaluated for application in the mines;

● The ventilation system must be improved. This will reduce heat in the mine, improve occupational health outcomes, and allow for faster re-entry times after blasting; and

● Earlier and better geologic information must be gathered to optimize mine planning. This should include a diamond drill program prior to mining each zone and in-fill drilling to improve definition of mineralized zones.

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27 References

Barrios-Rodriquez et al. (1996) *Informe Final Complementario a la Cartografia Geologico Minera y Geochemica Escala 1:50,000 de la hoja San Joaquin F14-C58, Queretaro e Hidalgo*. Consejo de Recursos Minerales.

Bray, E., 1995. *Preliminary compilation of descriptive geo-environmental mineral deposit models*. Open- File Report 95-831. US Geological Survey. Chapter 14. pp 121-129.

Bui, P.V. and DeWitt, S, "Technical Report, Zimapan Property, Hidalgo, Mexico dated effective April 2, 2020"

Carrillo-Martínez, M., 1989. *Estratigrafía y Tectónica de la parte Centro-oriental del Estado de Querétaro: Universidad Nacional Autónoma de México, Instituto de Geología. Revista*, v.8, núm. 2, p. 188- 193.

Carrillo-Martínez, M., Valencia, J. J., Vázquez, M. E., Bartolini, C., Buffler, R. R., & Cantú-Chapa, A. 2001. *Geology of the southwestern Sierra Madre Oriental fold-and-thrust belt, east-central Mexico, a review*. AAPG Memoir, 75, 145-158.

CIM Mineral Resource & Reserve Committee (2019) *CIM Estimation of Mineral Resources & Mineral Reserve Best Practice Guidelines*. Retrieved from: https://mrmr.cim.org/media/1129/cim-mrmr- bp-guidelines_2019.pdf

Diario Oficial de la Federación, Mexico (2011) *NORMA Official Mexicana NOM-120-SEMARNAT-2011*. DOF: 13/03/2012. retrieved from: http://dof.gob.mx/nota_detalle.php?codigo=5238496&fecha=13/03/2012

Diario Oficial de la Federación, Mexico (2018). *LEY GENERAL DEL EQUILIBRIO ECOLÓGICO Y LA PROTECCIÓN AL AMBIENTE*. DOF 05-06-2018, retrieved from: http://www.diputados.gob.mx/LeyesBiblio/pdf/148_050618.pdf

Diario Oficial de la Federación, Mexico (2014) *LEY MINERA*. DOF 11-08-2014, retrieved from: http://www.diputados.gob.mx/LeyesBiblio/pdf/151_110814.pdf

Fitz-Díaz, E., Tolson, G., Hudleston, P., Bolaños-Rodríguez, D., Ortega-Flores, B., & Serrano, A. V. (2012). *The role of folding in the development of the Mexican fold-and-thrust belt*. Geosphere, 8(4), 931-949.

García, G., & Querol, F. (1991). *Description of some deposits in the Zimapan district, Hidalgo. Economic Geology*, Mexico (Salas GP, ed). Boulder, CO: Geological Society of America, 295-313.

Gonzalez-Partida, E., Carrillo-Chaevez, A., Levresse, G., Tritlla, J., and Camprubi, A., 2003. *Genetic implications of fluid inclusions in skarn chimney ore, Las Animas Zn–Pb–Ag(–F) deposit, Zimapan, Mexico*. Ore Geology Reviews. v23. pp 91-96.

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Juarez, H., Medina, R., and Vega, I., 2009. *Biogeographic analysis of endemic cacti of the Sierra Madre Oriental, Mexico*. Biological Journal of the Linnean Society. v97. pp 373-389.

Martini, M., Solé, J., Garduño-Martínez, D. E., Puig, T. P., & Omaña, L. (2016). *Evidence for two Cretaceous superposed orogenic belts in central Mexico based on paleontologic and K-Ar geochronologic data from the Sierra de los Cuarzos*. Geosphere, 12(4), 1257-1270.

Mosher, G. Z. et al. (2015) *Technical Report: Minera La Negra Property, Queretaro, Mexico. NI43-101 Technical Report Prepared for Aurcana Corporation*. Retrieved from: https://sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00003467

Megaw, P., Ruiz, J., and Titley, S., 1988. *High-Temperature, Carbonate-Hosted Ag-Pb-Zn(Cu) Deposits of northern Mexico*. Economic Geology. V83. pp1856-1885.

Reyes, J., Montano, J., Casillas, S., and Bermeo, G., Carta Geologico-Minera Pachuca F14-11 [1:250,000]. *Servico Geologico Mexicano*, 1997.

Segerstrom, K. (1962). *Geology of South-central Hidalgo and North-eastern México. Geological Survey Bulletin 1104-C*. US Government Printing Office.

Simons, F.S., and Mapes., E.V., 1956. *Geology and Ore Deposits of the Zimapan Mining District, State of Hidalgo, Mexico*. Geological Survey Professional Paper 284, 125p.

Suter, M., Contreras-Pérez, J., & Ochoa-Camarillo, H. (1997). *Structure of the Sierra Madre Oriental fold- thrust belt in east-central Mexico*. II Convención sobre la Evolución Geológica de México, Libro- guía de las excursiones geológicas, Excursión, 2, 45-63.

Secretaria de Economia: *Coordinación General de Minería*. Web. November 2, 1998. http://tarjetarpm.economia.gob.mx/tarjeta.mineria/

Secretaria de Economia: *Direccion General de Minas*. Web. November 2, 2018. http://www.siam.economia.gob.mx/es/siam/home.

Secretaria de Economia: *Instituto Nacional para el Federalismo y el Desarrollo Municipal*. Web. November 2, 2018. <u>https://www.gob.mx/inafed</u>.

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28 Units of Measure, Abbreviations, Acronyms, and Glossary of Spanish Terms

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| |
|:---|
| **Description** |
| degree |
| $United States Dollars |
| One Million United States Dollars |
| degrees Celsius |
| micrometres |
| three-dimensions |
| annum (year) |
| AutoCAD<sup>TM</sup>, a commercially produced design software by Autodesk |
| silver |
| above mean sea level |
| gold |
| bismuth |
| calcium |
| Capital expense |
| cubic feet per minute |
| Canadian Institute of Mining, Metallurgy and Petroleum |
| centimetre |
| square centimetre |
| cubic centimetre |
| Canadian Imperial Bank of Commerce |
| Corporate income tax |
| Bolivian Government owned mining company; joint venture partner to Santacruz through the Illapa JV |
| Quality Assurance (for tailings disposal) |
| Quality control management (for tailings disposal) |
| copper |
| Coefficient of Variation |
| Declaration of Environmental Adequacy |
| Dry metric tonnes |
| East |
| Earnings before interest and taxes |
| Environmental Impact Assessment |
| National Electricity Company (Bolivia) |

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| **Symbol / Abbreviation** | **Description** |

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| | |
|:---|:---|
| ft<sup>3</sup> | cubic foot |
| g | gram |
| G&A | general and administrative |
| g/t | grams per tonne |
| hp | horsepower |
| HSEC | health, safety, environment and community |
| IDW | Inverse distance weighting |
| JDS | JDS Energy & Mining Inc. |
| JORC | Australasian Joint Ore Reserves Committee |
| JV | Joint venture |
| kg | kilogram |
| km | kilometre |
| km/h | kilometres per hour |
| kPa | kilopascal |
| kt | kilotonne |
| kV | kilovolt |
| kVA | kilovolt-ampere |
| kW | kilowatt |
| L | litre |
| L/min | litres per minute |
| L/s | litres per second |
| LOM | life of mine |
| m | metre |
| M | million |
| Ma | million years |
| masl | metres above sea level |
| mm | millimetre |
| Mm<sup>3</sup> | Millions of cubic metres |
| MPa | megapascal |
| Mt | million metric tonnes |
| MW | megawatt |
| N | north |
| NI 43-101 | National Instrument 43-101 |
| NSR | net smelter return |
| OPEX | Operating cost |
| oz | troy ounce |
| OK | Ordinary kriging |

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|:---|:---|
| **Symbol / Abbreviation** | **Description** |

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| | |
|:---|:---|
| P.Eng. | Professional engineer (a Canadian designation) |
| P.Geo. | Professional Geologist (a Canadian designation) |
| Pb | lead |
| ppm | parts per million |
| PVC | Polymerization of vinyl chloride (a plastic) |
| QA/QC | quality assurance/quality control |
| QP | qualified person |
| RMR | rock mass rating |
| S | South |
| SAG | Semi-autogenous grinding |
| SAMREC | South African Code for the Reporting of Exploration Results |
| Sb | Antimony |
| SDG | Sustainable development goals |
| SG | specific gravity |
| Sn | selenium |
| t | metric tonne |
| t/d | tonnes per day |
| t/m<sup>3</sup> | Tonnes per cubic metre |
| TSF | tailings storage facility |
| UTM | universal transverse mercator |
| V | volt |
| W | west |
| Zn | zinc |
| ZnEq | Zinc equivalent (other payable metal values have been converted to the same value of zinc metal) |

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| | |
|:---|:---|
| **Glossary** | **Glossary** |
| **Spanish Term** | **English Translation** |
| 1er | Primary |
| 2do | Secondary |
| Acceso | Sublevel access |
| Aire limpio | Fresh air |
| Aire viciado | Exhaust |
| Altura de banco | Bench height |
| Ancho | Width |

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|:---|:---|
| **Glossary** | **Glossary** |
| **Spanish Term** | **English Translation** |

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| | |
|:---|:---|
| Ángulo | Dip |
| Bomba estacionaria | Stationary pump |
| Bomba sumergible | Submersible pump |
| Bombeo | Pumping |
| Buzon | Ore bin |
| Cara libre | Free face |
| Chimenea | Raise |
| Chimenea de ventilacion | Ventilation raise |
| Circuito | Circuit |
| Desarollos | Development |
| Dique de colas | TSF |
| Direccion de tumbe | Ore mining direction |
| Etapa | Stage |
| Exploración | Exploration |
| Filtracion | Filtration |
| Flotacion | Flotation |
| Flujograma | Flowsheet |
| Galería | Drift (gallery), classified as Superior (main) and Inferior (secondary) |
| Ingeniera | Engineering |
| Ingreso rampa | Portal |
| Mantenimiento | Maintenance |
| Media ambiente | Environment |
| Mina | Mine |
| Nivel | Level |
| Perforación | Drilling |
| Planta Concentradora | Processing Plant |
| Plomo | Lead |
| Puente | Pillar |
| Red de bombeo | Pumping system |
| Relleno | Backfill |
| Seccion longitudinal | Long section |
| Seccion transversal | Cross section |
| Seguridad | Security |
| Sistema | System |
| Subnivel | Sublevel |
| Subnivel de relleno | Backfill drift |
| Taladros | Drillholes |
| Taza de bombeo | Water storage pond |
| Ventilador | Fan |
| Veta | Vein |
| Zonas explotadas | Mined zones |

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