Mr. Arturo Prestamo reports

SANTACRUZ SILVER REPORTS SECOND QUARTER FINANCIAL RESULTS

Santacruz Silver Mining Ltd. has released its financial and operating results for the second quarter of 2023. The full version of the financial statements and accompanying management discussion and analysis can be viewed on the company's website or on SEDAR+.

Q2 2023 highlights:

• Processed 443,969 tonnes of material in the quarter and 926,466 tonnes in the first half of 2023;
• Produced of 5,569,535 silver equivalent ounces in the quarter and 11,213,918 silver equivalent ounces in the first half of 2023;
• Cash cost per silver ounce sold of $19.34 in the quarter and $18.29 in the first half of 2023;
• AISC (all-in sustaining cost) per silver ounce sold of $22.89 in the quarter and $21.80 in the first half of 2023;
• Revenue of $63,854,000 in the quarter and $129,232,000 in the first half of 2023;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $9,138,000 in the quarter and $21.74-million in the first half of 2023.

Arturo Prestamo, executive chairman and interim chief executive officer of Santacruz, commented, "The company had another solid performance during the second quarter, with production, costs and sales relatively in line with the previous quarter." Mr. Prestamo continued: "We believe there is potential to upgrade our operations and are currently focusing on areas where we see opportunities for further improvement. By doing this, we aim to make processes more efficient, reduce costs and get the most out of each of our valuable assets."

Selected consolidated financial and operating information for the quarter ended June 30, 2023, are presented in the attached tables. All financial information is prepared in accordance with international financial reporting standards (IFRS), and all dollar amounts are expressed in thousands of U.S. dollars, except per-unit amounts, unless otherwise indicated.

Production

During the quarter, the company processed 443,969 tonnes and silver equivalent ounces produced were 5,569,535. During the same period last year, 435,119 tonnes of material were processed and 4,922,055 silver equivalent ounces were produced. While total material processed was relatively consistent when comparing Q2 2023 with Q2 2022, the larger proportion of production originating from higher-grade operations, especially San Lucas, resulted in an increase in silver equivalent ounces produced.

When compared with the previous quarter, there was a slight decrease in material processed. Silver equivalent ounces produced of 5,569,535 included 1,786,461 ounces of silver, 2,824 tonnes of lead, 22,281 tonnes of zinc and 297 tonnes of copper. The slight decrease in material processed was offset by an increase in silver production from San Lucas, which resulted in silver equivalent ounce production being in line with the previous quarter.

Cash cost of production per tonne

Consolidated cash cost of production per tonne of mineralized material processed was $88.61 in Q2 2023, compared with $110.06 for the same period last year. Since acquiring the Bolivian assets, the steady increase in unit production costs at Zimapan has been offset by significant decreases in unit production costs at the Bolivian operations for a net reduction cash costs of 11 per cent per tonne.

When compared with the previous quarter, consolidated cash cost of production per tonne of mineralized material processed increased slightly due to the increase in unit production costs at Zimapan, which produced fewer feed tonnes due to a two-week haulage stoppage that took place in June. This occurred when a trucking contractor imposed a temporary work stoppage over a contract dispute, which reduced ore extraction from the Monte mine. In addition, Zimapan experienced higher costs due to several compounding factors, including an unfavourable exchange rate and issues with concentrate quality. The concentrate quality issues have been subsequently resolved and are not expected to affect production in Q3 2023.

Cash cost per silver equivalent ounce sold

Cash cost per silver equivalent ounce sold in Q2 2023 was $19.34 and was $15.40 for the same period last year. In Q2 2022, the company sold stockpiled concentrate due to the new offtake agreement terms for zinc concentrate effective Q2 2022 that changed the shipping terms from free on board (FOB) to delivered at place unloaded (DPU) basis, which resulted in revenue from the stockpiled ore being recognized in Q2 2022. In addition, some mining costs associated with the stockpile ore was incurred in Q1 2022. The combination of these factors reduced the cash cost per silver ounce sold.

Consolidated results for Q2 2023 show a 12-per-cent increase in cash costs per silver equivalent ounce sold compared with Q1 2023. This increase is primarily a result of 7 per cent lower ounces sold because of the lower metal production in Q2 2023.

All-in sustaining cash cost (AISC) per silver equivalent ounce sold

Q2 2023 AISC per silver equivalent ounce sold was $22.89 and in Q2 2022 was $17.14. The amount of stockpiled concentrate sold in Q2 2022 as explained herein had a positive effect on AISC per silver equivalent ounce sold in that quarter.

Consolidated AISC per silver equivalent ounce sold increased 10 per cent quarter over quarter to $22.89, mainly a result of the 7-per-cent decrease in silver equivalent ounces sold. Bolivian consolidated AISC per silver equivalent ounce sold increased slightly versus Q1 2023; however, the increase at Zimapan resulting from lower sales volume due to lower production increased the consolidated Q2 2023 AISC per silver equivalent ounce sold.

About Santacruz Silver Mining Ltd.

Santacruz Silver is engaged in the operation, acquisition, exploration and development of mineral properties in Latin America. The Bolivian operations comprise Bolivar, Porco and the Caballo Blanco group, which consists of the Tres Amigos, Reserva and Colquechaquita mines. The Soracaya exploration project and San Lucas ore sourcing and trading business are also in Bolivia. The Zimapan mine is in Mexico.

We seek Safe Harbor.