Mr. Dale Andres reports

GATOS SILVER CONTINUES TO INTERCEPT HIGH GRADE MINERALIZATION AT CERRO LOS GATOS

Gatos Silver Inc. has provided an update on the drilling and exploration programs in the Los Gatos district (LGD) in Mexico. The update includes new intercepts of high-grade mineralization in the South-East Deeps (SE Deeps) zone of its 70-per-cent-owned Cerro Los Gatos (CLG) mine that could provide additional mineral resources and reserves to extend the mine life.

"We continue to be very encouraged by the results of the ongoing drill program in the South-East Deeps zone," said Dale Andres, chief executive officer of Gatos Silver. "These drill intercepts, which are from areas outside of our current mineral reserve, further support our target of extending the mine life by the third quarter of 2024. Definition drilling is identifying high-grade zones within the broader inferred resource. We are prioritizing these zones for potential conversion to reserves. We have also added an additional surface drill rig to advance drill testing of several high-priority near-mine and district exploration targets, which brings to 10 the number of active drill rigs on the property, including seven surface rigs and three underground rigs."

Q3 2023 highlights:

• Resource definition drilling in the SE Deeps zone of CLG continued to intercept high-grade mineralization below and north of the existing mineral reserve:
  • 3.9 metres (2.9 m estimated true width, or ETW) at 550 grams per tonne silver, 24.53 per cent zinc, 13.74 per cent lead, 0.46 g/t gold and 0.30 per cent copper (SE-530);
  • 6.8 m (5.8 m ETW) at 447 g/t Ag, 2.46 per cent Zn, 2.71 per cent Pb, 0.38 g/t Au and 1.13 per cent Cu (SE-534);
  • 3.5 m (2.8 m ETW) at 457 g/t Ag, 0.92 per cent Zn, 2.85 per cent Pb and 2.13 per cent Cu (SE-540);
  • 3.5 m (2.9 m ETW) at 140 g/t Ag, 17.11 per cent Zn, 5.61 per cent Pb, 0.19 g/t Au and 0.47 per cent Cu (SE-544);
  • Nine m (7.6 m ETW) at 148 g/t Ag, 1.56 per cent Zn, 1.92 per cent Pb, 0.58 g/t Au and 0.73 per cent Cu (SE-547);
  • Two m (1.7 m ETW) at 207 g/t Ag, 3.43 per cent Zn, 10.10 per cent Pb, 1.22 g/t Au and 0.74 per cent Cu (SE-556).
• Greenfields exploration work in the LGD continues to advance:
  • The company commenced drilling at the Santa Ana target with two initial holes completed during the quarter and it has recently started drilling at the Portigueno target;
  • Gatos completed detailed mapping and rock geochemistry at the San Luis, El Valle and Lince areas to support drill target generation;
  • The company completed the first stage of a magnetotelluric geophysics survey on an area of the Rio Conchos basin near CLG and interpretation is under way.

CLG South-East Deeps resource definition drilling

The drill intercepts to date show continuity of the SE Deeps mineralization extending approximately one kilometre laterally and 400 m vertically, which adjoins the existing southeastern mineral reserve and remains open along strike.

During 2022 and early 2023 Gatos completed drilling at approximately 100 m to 200 m spacing for the purpose of establishing the larger-scale strike and dip of the SE Deeps zone. Since Q2 2023 the company has focused on infilling the higher-grade areas of the zone to 50 m spacing and it expects that will continue until the end of Q1 2024. As expected, this tighter drill spacing is showing that variability within the zone exists, with higher grade in some areas and lower grade in other areas. On average, base metals including copper represent a higher proportion of the in situ value than in the Central and NW zones. Drill results continue to demonstrate excellent potential for a multiyear mine life extension.

There are two zones of higher-grade mineralization emerging from the infill drilling. One is at the northwestern end and the other is in the centre of the 2023 inferred resource in the SE Deeps zone.

Los Gatos district exploration update: current near-mine focus plus district-scale potential

The LGD comprises a large land package covering over 103,000 hectares with an established pipeline of prospects with over 50 targets identified to date. Gatos is advancing with detailed mapping and drill testing of the highest-priority known targets. It is also advancing with district mapping and geophysics to identify additional targets. During the third quarter of 2023 the company progressed with mapping at three prospective areas: Lince, El Valle and San Luis.

Gatos mobilized a second surface drill rig to site for allocation to the greenfield targets during the fourth quarter which will prioritize the near-mine targets.

The Santa Ana area is located approximately one km north of the NW zone at CLG. Calcite and manganese veining was identified within the epiclastic basin during the first quarter of 2023. The company completed two drill holes into the zone during the third quarter of 2023. After abandoning the first hole due to drilling challenges in the structure, its second hole reached targeted depth. The drill holes intercepted the structure in the rhyolites, the rock type above the andesites that host mineralization at CLG. While not mineralized, the drill holes did show encouraging geochemistry indicative of being high in an epithermal system. The drill holes also demonstrated that the andesite under the epiclastic basin is shallower than previously thought. The LGJV is preparing to follow up with drilling farther to the northwest to intercept the structure where it cuts through the andesite.

The Portigueno area is located approximately 2.5 km southeast of CLG. Detailed mapping has shown that this area of the basin is more complex than previously thought. New surface mapping and relogging of historic drill holes in the area have identified a series of northwets-southeast-trending faults with veining and alteration associated with them. Gatos started drilling at the end of the quarter aiming to better understand the structural framework of the area, which is located approximately one km southeast of the SE Deeps zone.

During the second quarter of 2023 Gatos completed drone capture of lidar and detailed air photos for Lince, 22 km northwest of CLG. After interpreting the air photos, the company identified numerous previously unmapped artisanal workings and structures. Gatos is planning for detailed ground mapping of these new structures during the fourth quarter. Drilling for the northwest area of the concession is planned for early 2024 after that information is available.

The LGJV has completed the first stage of a combination magnetotelluric and IP geophysical survey over the CLG area. The company is currently interpreting these data in order to design the second stage of the survey.

New surface mapping continues in the San Luis area, approximately five km northwest of CLG along the Los Gatos fault. A large width of quartz-calcite veining exists in the area with indications of multiple pulses of fluid flow, similar to what is observed in the South-East zone. Gatos is conducting further mapping to better understand the structural framework of the area before proceeding with drilling.

About Gatos Silver Inc.

Gatos Silver is a silver-dominant exploration, development and production company that discovered a new silver- and zinc-rich mineral district in southern Chihuahua state, Mexico. As a 70-per-cent owner of the Los Gatos joint venture, the company is primarily focused on operating the Cerro Los Gatos mine and on growth and development of the Los Gatos district. The LGJV consists of approximately 103,000 hectares of mineral rights, representing a highly prospective and underexplored district with numerous silver-zinc-lead epithermal mineralized zones identified as priority targets.

Quality assurance/quality control

The half core samples from the LGJV's surface exploration drill holes are shipped directly in sealed bags to the ALS Ltd. preparation facilities in Chihuahua City, Mexico. After sample preparation in Chihuahua, sample pulps are shipped to ALS in North Vancouver, Canada, for analysis. The remaining half core is retained on site. Samples sent for analysis are sawn half-core NQ or HQ in diameter and normally two m in length but varied based on geological contacts. Samples are prepared using a method whereby the entire sample is crushed, and a subset is pulverized. Samples are analyzed for base metals and silver using inductively coupled plasma methods. Gold and overlimit silver are assayed using fire assay techniques. Sample batches include intermittent blanks, duplicates and certified standards. The results of the assaying of the QA/QC material included in each batch are tracked to ensure the integrity of the assay data. ALS is a third party independent laboratory.

Qualified person

Scientific and technical disclosure in this press release was approved by Anthony (Tony) Scott, PGeo, senior vice-president of corporate development and technical services of Gatos Silver, who is a qualified person as defined in S-K 1300 and National Instrument 43-101.

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