Mr. Frederick Davidson reports

IMPACT SILVER ANNOUNCES FULL YEAR 2023 RESULTS

Impact Silver Corp. has released its financial and operating results for the year ended Dec. 31, 2023. The company is recognized as an intermediate miner with strength across the value chain including production, growth and exploration potential. The company is evolving from being a near pure play on silver with continuing production across an extensive mining district at its Royal Mines of Zacualpan silver district in central Mexico. In 2023, the company acquired Mineral Latin America Zinc (MLAZ), a Mexican entity which owns and operates the Plomosas high-grade zinc-lead-silver mine in northern Mexico; Impact brought limited production back on line in late 2023 with the goal of reaching full design capacity in late 2024, leading to meaningful high-grade zinc production going forward.

The company reported $20.8-million in revenue in fiscal year 2023, an increase of 27 per cent compared with revenues of $16.3-million in revenue in 2022, primarily due to a 178-per-cent increase in gold sales and a 22-per-cent increase in lead sales over 2022. Most of the revenue was generated from the company's silver-producing assets at the Royal Mines of Zacualpan. The mine's operating loss before amortization and depletion in 2023 was ($600,000) compared with mine operating earnings of $1.2-million in 2022, and was negatively impacted due to strong inflationary cost pressures across the operation in 2023, as well as a strong Mexican peso. This included operating costs of $2.1-million related to the rehabilitation of the Plomosas mine which impacted profitability, as those costs were required to be treated as expenses on the income statement rather than capitalized on the balance sheet. At Dec. 31, 2023, the company had cash of $8.3-million, working capital of $7.6-million and no debt.

Fred Davidson, president and chief executive officer of Impact, stated: "In 2023, we were able to leverage our silver-producing assets and add meaningful new gold production resulting in strong revenue growth on a year-over-year basis. We integrated the acquisition of the Plomosas mine and are in the process of bringing it back on line and expect this high-grade zinc operation to meaningfully add to the company's financial results going forward. Notwithstanding, inflationary pressures across the operation and throughout the supply chain, continued to negatively Impact profitability. Nonetheless, the company was able to maintain a strong balance sheet with over $8-million in cash and no debt at year-end. Our dual-pronged strategy focusing on maintaining production grade from existing and new development sites while simultaneously improving efficiencies at our mill, allowed for an overall successful year in 2023 despite the challenging operating environment."

In 2023, Impact carried out greenfield and brownfield exploration programs at Zacualpan where the company holds a large 211-square-kilometre package. As well, we initiated drilling activity at Plomosas where management expects to ramp up to full design capacity in late 2024. Continuing exploration at Zacualpan is expected to result in improved feed for the nearby Guadalupe processing facility while drilling at Plomosas includes development drilling and brownfield activity to expand the resource size over time.

With nearly 13 million ounces of silver produced since 2006, generating over $261-million in revenue and investing over $82-million in capital expenditures to date, the company is proud of its 2023 achievements amidst a challenging cost environment and looks forward to returning to profitability and production growth in 2024.

2023 financial overview

• Revenue in 2023 was $20.8-million, a 27-per-cent increase from $16.3-million in 2022
• After investing $8.5-million in exploration expenditures and mining assets during the year, the cash position remained strong at year-end at $8.3-million with working capital of $7.6-million.
• Net loss in 2023 was $7.6-million (which included $2.3-million incurred by MLAZ to bring operations on line, as well as deferred income tax expenses of $2.0-million), compared with $3.2-million in 2022.
• The company has no long-term debt.

2023 production overview -- Zacualpan

• 2023 full year silver production was 637,514 ounces (2022 -- 632,862 ounces);
• Silver sales of 636,655 compared with 644,843 ounces in 2022. Gold sales of 780 ounces in 2023 increased 178 per cent compared with 281 ounces in 2022;
• Average mill silver feed grade was 160 grams per tonne (g/t) for 2023 which was comparable with 2022;
• Throughput at the mill was 147,444 tonnes milled in 2023, down 4 per cent from 152,862 tonnes in 2022, for an average of 404 tonnes per day for the year.

Given the evolving cost profile and fluctuating commodity prices during the year, the goal at the Guadalupe silver processing plant at Zacualpan in 2023 was to focus on lower-cost, higher-grade production. Lower but steady production tonnes allowed the company to focus on mining higher-margin areas in lower-cost situations. Revenue per tonne sold improved by 30 per cent to $136.62 in 2023 from $105.39 in 2022 due in part to the substantial increase in gold production.

Direct costs per production tonne were $130.58 in 2023, an increase of 34 per cent from $97.49 during the same period in 2022, due to inflationary pressures and a strong Mexican peso which increased 18 per cent over the Canadian dollar. Management expects costs to stabilize in 2024 but with less volatility in Mexican peso.

Plomosas

Following the acquisition of the Plomosas high-grade zinc-lead-silver mine in April, 2023, the company embarked on an aggressive rehabilitation and upgrading program to bring the mine back on line, which is expected to be completed in late 2024. During Q4 2023, there was limited production of 3,774 tonnes milled with an average mill head grade of 13.8 per cent for zinc, with revenue per tonne of $141.51 milled

IFRS (international financial reporting standards) accounting rules stipulate that costs related to the start-up period of bringing the mine and plant back on line be expensed on the income statement, rather than capitalized on the balance sheet and as a result, costs are not representative of a more normalized operating environment. As the company reaches design capacity in 2024, costs per tonne are expected to decrease.

Historical mining makes Plomosas one of the highest-grading zinc mines with approximately 2.5 million tonnes mined since 1943 grading 15 to 25 per cent zinc, 2 to 7 per cent lead and 40 to 60 g/t silver with low deleterious elements. The 3,019-hectare property covers extensive carbonate replacement deposit type (CRD) zinc-lead-silver mantos (beds) mainly hosted in carbonates (limestones, marbles). The previous operator reported an historic Australian JORC (Joint Ore Reserves Committee) compliant mineral resources of 215,000 tonnes grading 13.5 per cent zinc, 6.3 per cent lead and 34.0 g/t silver (indicated), and 772,000 tonnes grading 13.1 per cent zinc, 3.0 per cent lead and 19.0 g/t silver (inferred), at a 3-per-cent zinc cut-off at December, 2021.

Going forward

Going forward, the company intends to continue to invest resources in exploration and development at both of its mine sites. At the Zacualpan project, the company is optimizing silver and gold production and continues to evaluate the restart of its Capire open pit silver mine to take advantage of strong silver pricing.

Impact crews are continuing to explore some of the 5,000-plus old mine workings and prospects in the Zacualpan and Capire districts as well as exploring new areas to define drill targets. Exploration targets are defined and prioritized using a very large computer database complied over many years from historical maps and other technical data on the project.

At Plomosas, exploration activity is planned across the property with a target of expanding the size of the resource. Field work to date suggests that the high-grade portion of the known deposit extends and is open in all directions. On Jan. 17, 2024, subsequent to 2023 year-end, Impact announced first drill results from surface exploration drilling at Plomosas including 6.9 metres (true width) of 10.22 per cent zinc, 5.43 per cent lead and 27.7 g/t silver on the south extension of the Tres Amigos zone. Drilling is continuing to explore the Tres Amigos zone with plans for initial drill programs on other explorations targets on the property in 2024.

Capire VMS open pit mine

The Capire open pit silver mine and 200-tonne-per-day processing plant is a separate operating unit located 16 kilometres south of the Guadalupe processing plant. The Capire unit is currently on care and maintenance but the company is carrying out studies toward bringing it back into production. Previous National Instrument 43-101 mineral resource studies on the Capire deposit have been evaluated with an in-house review using the experience of a small test mining open pit operation in 2014. Other studies are being conducted with regard to critical infrastructure to determine optimum plant size for Capire operations and a 1,400-kilogram sample from the Capire open pit was tested using state of the art X-ray transmission (XRT) preconcentration processing technology with encouraging results. XRT technology is a process that recognizes and sorts rocks based on the specific atomic density of the material. XRT sorts economic grade material, from waste reducing the amount of material to be processed during the milling process as well as tailings. The company is currently evaluating the potential Impact of XRT preconcentration upon capital and operating costs, recoveries and the ultimate mineable size of the deposit and the current pilot plant.

A recorded conference call reviewing the financial and production results of the year ended Dec. 31, 2023, will be available on the company website on April 17, 2023.

The information in this news release should be read in conjunction with the company's audited condensed consolidated financial statements and management's discussion and analysis, available on the company website and on SEDAR+. All amounts are stated in Canadian dollars unless otherwise specified.

Qualified person and NI 43-101 disclosure

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

About Impact Silver Corp.

Impact Silver is a successful producer-explorer with two mining projects in Mexico. Royal Mines of Zacualpan silver-gold district: Impact owns 100 per cent of the 211 square km Zacualpan project in central Mexico where three 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 tpd processing pilot plant adjacent to an open pit silver mine with an NI 43-101 inferred mineral resource of over 4.5 million ounces silver, 48 million pounds zinc and 21 million lb lead (see Impact news release dated Jan. 18, 2016, for details and QP statement). Company engineers are reviewing Capire for a potential restart of operations. Over the past 18 years, Impact has placed multiple zones into commercial production and produced over 13 million ounces of silver, generating revenues over $261-million, with no long-term debt. Plomosas zinc-lead-silver district: Impact has begun preliminary mining and processing operations at its 100-per-cent-owned Plomosas high-grade zinc mine in northern Mexico. Exploration upside potential is exceptional where only 600 m of the six km long structure have seen modern exploration 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.

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