Mr. Frederick Davidson reports

IMPACT SILVER CONTRACTS BELL INTERNACIONAL TO PROVIDE TESLA BATTERY ENERGY SYSTEM WITH SOLAR AT THE PLOMOSAS MINE

Impact Silver Corp.'s Plomosas high-grade zinc mine, located in the state of Chihuahua in northern Mexico, has entered into a managed services contract with Bell Internacional de Mexico/TTN Energia for the planning, design, construction and operation of Tesla Corp.'s commercial battery with solar, energy efficiency platform, expected to meaningfully reduce its operating costs and eliminate nearly all carbon emissions associated with round-the-clock, diesel-powered generators.

The platform will provide a sustainable and green energy efficiency solution, using off-grid, photovoltaic (solar) green electrical energy generation and AI-controlled (artificial intelligence) battery storage systems, that will cut nearly 90 per cent the annual 2,400 metric tonnes of carbon dioxide emissions from diesel fuel combustion, thereby dramatically reducing Impact's carbon footprint at Plomosas.

About the Tesla battery system with solar

Clean electricity from a 2,200-kilowatt solar plant will be supplied to an intelligent software controlled microgrid, equipped with a Tesla Megapack 2 XL four-hour, 960-kilowatt battery energy storage system (BESS) and continuously delivered to the load centres of the Plomosas mine, for current and future power demand requirements. The system will offer substantial power and expansion capacity for a near doubling of production from current design capacity levels.

Existing diesel generators will be kept on site and activated automatically for occasional power generation support on consecutive cloudy or rainy days and emergency backup. Notwithstanding, the battery's charge, which will be topped up regularly throughout daylight hours year-round, will be able to provide non-stop, clean power for up to 24 hours per day under current mine operation capacity.

Financial implications

Immediate cost savings will take effect as contract pricing is based on a percentage of savings linked to the reduction of annual diesel usage, with minimum saving safeguards established to protect Impact should the price of diesel decline below an agreed-upon baseline price that would otherwise reduce the amount of diesel cost savings to the company.

Along with labour, diesel fuel is one of the largest operating costs at the Plomosas mine. No material capex (capital expenditure) is required by the company for this project and savings are expected to amount to approximately 30 per cent to 45 per cent of the company's current annual diesel input costs at Plomosas once the system is fully operational.

The company anticipates the project to be fully integrated across the operation, providing nearly all the required power requirements to the Plomosas mine and plant by mid Q2 2024.

President and chief executive officer Fred Davidson said: "We are thrilled to partner with world-class contractors, including Bell Internacional and TTN Energia, backed by the world-leading innovators at Tesla as we become the first truly green mining project. Shareholders can look forward to substantial cost savings and improving profit margins as we solidify our position as a high-grade, low-cost zinc producer. Our first-mover advantage will allow Impact to meaningfully reduce its carbon emissions while attracting the attention of potential partners, including some [of] the world's most significant mining companies as we focus on growing production and exploration activity in 2024."

About Impact Silver Corp.

Impact Silver is a successful producer-explorer with two mining projects in Mexico.

Plomosas zinc-lead-silver district

Plomosas is a high-grade zinc producer in northern Mexico with exceptional exploration upside potential. The company recommenced operations in late 2023 and has plans for expansion in 2024. Exploration potential at Plomosas is exceptional with only 600 metres of the six-kilometre-long structure having been explored to date. This is in addition to other exploration targets on the 3,019-hectare property, including untested copper-gold targets with indications of high-grade material from surface. Regionally, Plomosas lies in the same mineral belt as some of the largest carbonate replacement deposits in the world.

Royal Mines of Zacualpan silver-gold district

Impact owns 100 per cent of the 211-square-kilometre Zacualpan project in central Mexico, where four underground silver mines and one open-pit mine feed the central 500-tonne-per-day Guadalupe processing plant. To the south, the Capire project includes a 200-tonne-per-day processing pilot plant adjacent to an open-pit silver mine with a National Instrument 43-101 inferred mineral resource of over 4.5 million ounces silver, 48 million pounds zinc and 21 million pounds lead (see Impact news release dated Jan. 18, 2016, for details and qualified person statement). The company's engineers are reviewing Capire for a potential restart of operations to leverage improving commodity prices. Over the past 17 years, Impact has developed multiple exploration zones into commercial production and has produced over 12 million ounces of silver, generating revenue more than $256-million.

Qualified person and NI 43-101 disclosure

George Gorzynski, PEng, a director and officer of Impact Silver, is a qualified person within the meaning of NI 43-101 and has approved the technical information in this news release.

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