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Exploration Program & Resource Estimate

The San Ignacio Mine is located in the La Luz vein system of the Guanajuato silver-gold district, in central Mexico, 22 kilometres by vehicle from the Company's Guanajuato Mine milling facility. This new mine entered commercial production in June 2014 as a satellite operation of the Guanajuato Mine Complex and it is currently operating at approximately 370 tonnes per day.

A 3,728 metre surface drill program consisting of 25 holes was concluded in mid-December 2014. The program successfully extended the continuity of high grade silver-gold mineralization for approximately 300 metres south of present mining activities. In addition, this single vein extension forms a thick lens of epithermal mineralization extending at least 300 metres south of the former mineral resource block, and under historic workings dating back to the 19th century. The vein structures are known to extend for approximately four kilometres along the length of the property leaving almost three kilometres of untested strike potential. The 2014 drill results will be used to guide follow up underground drilling and development in 2015, all of which will be used to improve the classification of the resource. Surface drilling in 2015 will focus primarily on the depth continuity of the Melladito vein and further extensions to the south.

The Mineral Resource Estimate for San Ignacio (effective date of December 15, 2014) was released on February 23, 2015. This updated Mineral Resource Estimate includes the most recent drill results at San Ignacio and the discovery of high grade silver-gold mineralization to the south of the 2014 mining area (see news releases October 30, 2014 and January 27, 2015).

The updated 2014 San Ignacio Mine Mineral Resource Estimate contains 2,351,000 Ag eq oz in the Indicated category, in the Intermediate and Melladito veins. Inferred mineral resources are estimated at 9,897,000 Ag eq oz and are contained in the Intermediate, Melladito, Melladito 2, Melladito 3, Nombre de Dios and Nombre de Dios II veins. Recent surface drilling at San Ignacio has discovered that the Intermediate and Melladito veins merge into a thicker, higher grade lens of silver-gold mineralization. The Melladito 2 and Melladito 3 structures are splays along the west side of Melladito vein. The old mining areas along Melladito vein have been completely extracted from the mineral resource estimation.

Mining at San Ignacio in 2014 was focused on the Intermediate vein and, to a lesser degree, the Melladito vein. As the two merge to the south, the single vein will retain the Melladito name. Underground drilling in 2015 will be focused on improving the classification of the resource adjacent to exploitation along Melladito and Intermediate, while surface drilling will test the depth and strike continuity of all veins.

San Ignacio Mine: Mineral Resource Estimations and Contained Silver, Gold and Silver Equivalent

INDICATED

Vein

Tonnes

Ag (g/t)

Ag (oz)

Au (g/t)

Au (oz)

Ag eq (g/t)

Ag eq (oz)

Intermediate

84,228

173

468,005

3.03

3.03

3.03

1,046,349

Melladito

96,061

148

456,108

3.89

12,025

423

1,305,086

Total Indicated

180,289

159

924,113

3.49

20,217

406

2,351,435

Indicated Rounded

180,300

159

924,100

3.49

20,220

406

2,351,000

INFERRED

Vein

Tonnes

Ag (g/t)

Ag (oz)

Au (g/t)

Au (oz)

Ag eq (g/t)

Ag eq (oz)

Intermediate

91,632

250

736,214

2.79

8,221

447

1,316,614

Melladito

270,008

157

1,365,463

3.48

30,248

403

3,500,938

Melladito 2

106,906

134

460,521

3.98

13,689

415

1,426,947

Melladito 3

54,656

84

147,013

3.25

5,713

313

550,345

Nombre de Dios

175,265

145

818,312

2.71

15,269

337

1,896,288

Nombre de Dios II

89,332

185

532,602

3.32

9,541

420

1,206,168

Total Inferred

787,799

160

4,060,125

3.26

82,680

391

9,897,300

Inferred Rounded

787,800

160

4,060,000

3.26

82,680

391

9,897,000

Notes:

    1. All San Ignacio Mineral Resource Estimates used an effective date of December 15, 2014 and all used a metal price outlook of US$17.00/oz silver and US$1,200/oz gold.
    2. US$100 NSR cut-off (~246g/t Ag Eq).
    3. Mill recoveries 84% silver and 86% gold.
    4. Silver equivalent was calculated using a 70.6 to 1 ratio of silver to gold value.
    5. Rock Density for Intermediate and Melladito is 2.63t/m³, for Melladito 2, Melladito 3, Nombre de Dios, and Nombre de Dios II is 2.62t/m³.
    6. Totals may not agree due to rounding.
    7. Grades in metric units.
    8. Contained silver and gold in troy ounces.
    9. Minimum true width 1.0m.

The 2014 Guanajuato Mine Mineral Resource Estimate (see details reported in news release dated January 29, 2015) contains Measured and Indicated mineral resources of 3,757,800 Ag eq oz including 3,190,300 Ag eq oz in the Measured category and 567,500 Ag eq oz in the Indicated category. Inferred mineral resources are estimated at 1,782,200 Ag eq oz. These are all contained within the Cata Clavo (seven zones), Los Pozos (two zones), Santa Margarita, San Cayetano, Promontorio, Valenciana (five zones) and Guanajuatito (five zones) areas. The Guanajuatito (“GTTO”) area has been expanded with the addition of the Intermediate zone located in the foot wall to the GTTO hanging wall zone. Resources in the Santa Margarita and Cata areas have also been increased.

The 2014 Mineral Resource Estimate for the El Horcon Project (see details reported in news release dated January 29, 2015) includes only the Inferred classification of 149,200 tonnes containing 375,300 oz silver, 16,830 oz gold, 9,275,000 lbs lead, and 13,024,500 lbs zinc. There has been no additional drilling since 2013 and the resource update reflects only updated metal pricing, which resulted in a 7% decrease compared to the previously reported mineral resource. The El Horcon Project is not in production and the Company has no specific plans to advance the project in 2015 except by completing various environmental permitting that is already underway.

Overall, from the last Mineral Resource Estimate for the GMC, (effective date July 31, 2014), the Measured and Indicated classification increased by 10% (+550,800 Ag eq oz), while the Inferred mineral resource increased by 80% (+6,122,700 Ag eq oz). The increases are due to the successful drill program at San Ignacio in late 2014 that has added substantial Indicated and Inferred Resources at that mine. The potential to further increase the resources at San Ignacio is highlighted by the three kilometres of mostly untested strike length and by the fact that the veins are still locally open to depth.

Summary Table of the Updated 2014 Mineral Resource Estimate for the Guanajuato Mine Complex¹

MEASURED

Mine

Tonnes

Ag (g/t)

Ag (oz)

Au (g/t)

Au (oz)

Ag eq (g/t)

Ag eq (oz)

Guanajuato1

184,500

309

1,832,500

3.24

19,780

538

3,190,300

Total Measured

184,500

309

1,832,500

3.24

19,780

538

3,190,300


INDICATED

Mine

Tonnes

Ag (g/t)

Ag (oz)

Au (g/t)

Au (oz)

Ag eq (g/t)

Ag eq (oz)

San Ignacio1

180,300

159

924,100

3.49

20,220

406

2,351,000

Guanajuato1

36,000

335

387,900

2.20

2,540

490

567,500

Total Indicated

216,300

188

1,312,000

3.28

22,760

420

2,918,500


MEASURED & INDICATED

Mine

Tonnes

Ag (g/t)

Ag (oz)

Au (g/t)

Au (oz)

Ag eq (g/t)

Ag eq (oz)

San Ignacio1

180,300

159

924,100

3.49

20,220

406

2,351,000

Guanajuato1

220,500

313

2,220,300

3.07

22,300

530

3,757,800

Total M & I

400,800

244

3,144,400

3.26

42,520

474

6,108,800


INFERRED

Mine

Tonnes

Ag (g/t)

Ag (oz)

Au (g/t)

Au (oz)

Ag eq (g/t)

Ag eq (oz)

San Ignacio1

787,800

160

4,060,000

3.26

82,680

391

9,897,000

Guanajuato1

163,600

101

532,600

3.37

17,710

339

1,782,200

SI & GTO Inferred

951,400

150

4,592,600

3.28

100,390

382

11,679,200

El Horcon1,2

149,200

78

375,300

3.51

16,830

434

2,081,200

Total Inferred

1,100,600

140

4,967,900

3.31

117,220

389

13,760,400


¹ Mineral Resource Estimates for Guanajuato and El Horcon use an effective date of July 31, 2014 while San Ignacio uses an effective date of December 15, 2014; and all used a metal price outlook of $17.00/oz silver and $1,200/oz gold.
² Silver equivalent calculations for El Horcon include lead content but not zinc as the zinc would not be recovered in the Guanajuato plant. Recoveries and smelter terms are also factored into the calculation.

The estimates were classified according to the CIM Definition Standards on Mineral Resources and Mineral Reserves and, as such, are consistent with the requirements of NI 43-101. The Mineral Resource Estimate was completed by Robert Brown, P. Eng. and Company, Q.P.

The Company’s QA/QC program includes the regular insertion of blanks, duplicates, and standards into the sample shipments; diligent monitoring of assay results; and necessary remedial actions. Sample assaying was completed at the independent SGS-GTO lab in Guanajuato, GTO, Mexico. Silver assaying was completed with AAS12B technique, with over-limits (300g/t) completed by FAG323. Gold assaying was completed with FAA313 technique, with over-limits (10g/t) completed by FAG323. Where necessary lead, zinc, copper, arsenic and antimony assays were completed using atomic absorption spectroscopy.

1.59 +0.00 +0% Volume: 55,700 September 25, 2017
1.29 +0.01 +0.39% Volume: 453,919 September 25, 2017
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