Mr. N. Eric Fier reports

SILVERCREST ANNOUNCES RESULTS OF UPDATED INDEPENDENT TECHNICAL REPORT

Silvercrest Metals Inc. has released the results from an updated independent technical report for Las Chispas operation in Sonora, Mexico, prepared by Ausenco Engineering Canada Inc. with the assistance of several other independent engineering companies and consultants. The report will be filed on SEDAR+ within 45 days of the date of this news release. All amounts herein are presented in U.S. dollars unless otherwise stated.

The effective date of the measured and indicated mineral resource and mineral reserve estimate is June 30, 2022. The financial model and life-of-mine production plan, factoring in the processed and depleted ore up to Dec. 31, 2022, starts on Jan. 1, 2023. The results announced in this news release are compared with those disclosed in a prior technical report dated Jan. 4, 2021, filed on SEDAR Feb. 2, 2021, titled "NI 43-101 Technical Report & Feasibility Study on The Las Chispas Project." In this report, silver equivalent references are based on an updated silver to gold ratio of 79.51 to 1 (formerly 86.9 to 1 in the 2021 FS). The 2021 feasibility study is no longer current, and the 2021 feasibility study results are no longer supported by the results in the report and should not be relied upon.

Updated technical report highlights:

• Robust production profile with strong net present value of $549.9-million at base case: The report has confirmed strong economics for an eight-year operation generating average annual production of 57,000 ounces per year Au and 5.5 million oz per year Ag (10.0 Moz per year AgEq) during the first seven full years. Using a 5-per-cent discount rate and average gold and silver prices of $1,800 per oz and $23 per oz, respectively, as the base case, Las Chispas generates a posttax net present value (5 per cent) of $549.9-million.
• Strong cash flows, debt free and healthy balance sheet: The operation is estimated to generate average annual posttax free cash flow of approximately $84.3-million from 2023 to 2029 at the base case. Silvercrest has paid off 100 per cent of its $90-million debt since commercial production was announced in November, 2022, and at the end of second quarter 2023, had accumulated a treasury asset (1) balance of $59.0-million.
• Report details supported by current operational performance: The report is based on actual operating data from the mine and process plant, including cost models supported by actual operating costs, completion of more than 16 kilometres of underground development (January, 2021, to December, 2022) and recovered metal of 17.8 koz Au and 1.74 Moz Ag (3.2 Moz AgEq) since process plant start-up in early June, 2022, until the end of 2022.
• Updated mineral reserve estimate: The updated proven and probable mineral reserve estimate of 78.6 Moz AgEq (3.4 million tonnes grading 4.08 grams per tonne Au and 395 g/t Ag, or 719 g/t AgEq), is a 13-per-cent reduction in AgEg ounces from the 2021 FS. This reduction incorporates the updated gold to silver ratio, updated modelling for narrower and more widely dispersed veins than originally modelled, increase in cut-off grades due to increased industry costs, revised geotechnical standards, and mining method changes.
• Simplified underground production plan: The updated production plan reaches slightly above 1,200 tonnes per day in 2026 and is largely supported by long-hole stoping (77 per cent) with the balance being cut and fill (17 per cent), and resue (6 per cent). This approach significantly simplifies the mine plan through the reduction of working faces, equipment and labour, while also addressing safety and productivity issues. The use of this bulk mining method, when combined with narrower veins, has led to a reduction in LOM mined grade of approximately 18 per cent.
• Metallurgical recoveries improved: The report is based on actual achieved process plant metallurgical recoveries of an estimated 98.0 per cent Au and 97.0 per cent Ag, both improved from the recoveries of 97.6 per cent Au and 94.3 per cent Ag estimated in the 2021 FS.
• Higher sustaining capital reflects increased costs and expanded mine footprint: LOM sustaining capital of $219.9-million has increased by 77.5 per cent compared with the 2021 FS as development unit costs and the amount of infrastructure required increased due to the expanded mine footprint.
• Lowest-quartile (2) all-in sustaining costs remain: The report estimates all-in sustaining costs (3) to average $11.98 per AgEq payable oz over the LOM, exclusive of corporate-level general and administrative and sustaining exploration costs. For the period of second half 2023 through 2024, the AISC is estimated to average approximately $13.50 per AgEq payable oz, which is the highest cost period in the LOM due to an accelerated spend in sustaining capital to support ramp-up of mine throughput.
• Immediate and longer-term growth opportunities: Immediate growth will be targeted through a $10-million exploration program focused on targeting 40 per cent of the updated inferred mineral resource (1.3 Mt grading 566 g/t AgEq or 24.1 Moz AgEq) for conversion to M&I mineral resources for future mineral reserve consideration. The focus is on higher-grade mineral reserve replacement targets proximal to current and planned infrastructure. Earlier-stage exploration opportunities at Las Chispas will be pursued in parallel.

(1) Treasury assets is a non-international financial reporting standard measure. At the end of second quarter 2023, treasury assets include cash of $53.4-million and bullion purchases held at current market value of $5.6-million.

(2) Source: Company Reports, S&P Global Market Intelligence, FactSet, Analyst Estimates.

(3) AISC is a non-IFRS measure.

Pierre Beaudoin, chief operating officer, commented: "The results from the report confirm our confidence in Las Chispas, which has also been demonstrated through strong operational performance since commissioning was undertaken in Q2 2022. The report reflects updated costs and production expectations, and although these have changed since the 2021 feasibility study, we view them to be executable, particularly as they are supported by recent operating experience. We thank our operations team and numerous independent consultants who advanced this work, while also simultaneously executing at the Las Chispas operation."

N. Eric Fier, chief executive officer, stated: "The release of the results from the report is a significant milestone and the latest of a long list of derisking events for our company. Given the current worldwide inflationary environment and site-specific changes, our updated mineral resources and reserves, production, and costing estimates better reflect the current operating parameters at Las Chispas. The operational performance and cash flow generated to date at Las Chispas support the findings of the report, which outline a high-margin operation that generates significant free cash flow. The recent success of the operation has allowed us to repay all $90-million of debt since commercial production was achieved in November of 2022, while also building a strong treasury assets balance of $59.0-million at the end of Q2 2023. We look forward to releasing full details of our Q2 2023 operational and financial performance next week. We are very encouraged to now be able to refocus the company's human and financial resources to the next phase of growth and responsible capital allocation."

Mineral resource estimate

The updated mineral resource estimate is provided herein. This estimate was completed for underground mining of in situ vein deposits at the Babicanora and Las Chispas areas and for surface extraction of stockpiles from historical and current operations. All drilling, surveying and assay databases were provided by Silvercrest, including data up to the cut-off date of June 30, 2022, for M&I resource estimates and March 21, 2023, for the inferred mineral resource estimate.

The updated mineral resource estimate benefited from the improved understanding of the deposit gained through Silvercrest's 18 months of development and production mining. Incorporating this knowledge and data led to several key changes in the company's approach to mineral resource modelling as discussed below.

The mineral resource estimate model was updated to reflect: narrower veins located over a larger area, thus requiring increased underground development; increased constraints on geologic, statistical and geostatistical modelling assumptions resulting in reductions in resources mainly in Babicanora Main and Babicanora Norte Main veins; and increased resources in the Babi Vista vein, including the Babi Vista splay. Additionally, there is an increase in the number of mineral resource veins, and the veins are more widely dispersed. The updated inferred mineral resource estimate is reduced from the 2021 FS due to conversion to M&I mineral resources and application of the same stricter constraints as applied to M&I mineral resources.

Mineral reserve estimate

The mineral reserve estimate is provided herein. The estimate was completed for underground mining of in situ vein deposits at the Babicanora and Las Chispas areas and for surface extraction of stockpiles from historical and current operations. All drilling, surveying and assay databases were provided by Silvercrest, including data up to the cut-off date of June 30, 2022, for measured and indicated mineral resources.

The mineral reserve has a 48,000-tonne increase and a 12.3-million-ounce-silver-equivalent (13 per cent) decrease between the 2021 FS and 2023 mineral reserve estimates as shown herein. It should be noted that when comparing mineral reserve estimates with the 2021 FS, the reduction in AgEq oz incorporates the updated gold to silver ratio change (minus 3.8M AgEq oz) as noted herein. Also, the reduction incorporates: updated resource modelling for narrower and more widely dispersed veins than originally modelled, an increase in cut-off grades due to increased industry costs, revised geotechnical standards, and mining method changes. Despite the reduction in ounces, the operational data allow for increased confidence on a go-forward basis.

The processed and depleted ore, from July 1, 2022, to Dec. 31, 2022, was deducted from the mineral reserve in the LOM financial model.

Reconciliation

The company implemented a mineral reserve to plant global reconciliation program when the plant began operations in June, 2022. The updated reserve estimate was compared with actual plant production from June, 2022, to April, 2023, which reconciled to within 5 per cent of the 6.8 Moz AgEq ounces processed. The reconciliation results indicate the mineral reserve estimate is well represented and is within an acceptable range for a narrow and high-grade vein deposit. Using this 10-month period from the effective date of the mineral reserve estimate to test the assumptions in the model alongside actual mine and plant production has further derisked Las Chispas.

Underground mine

The report outlines a ramp-up. For 2023, the report estimates an average underground mine production of 778 tonnes per day, in line with current operational performance and expectations. The mining rate will start increasing in first quarter 2024 and is expected to average approximately 1,000 tpd throughout 2024. Starting in 2026, the mining rate is expected to reach above 1,200 tpd. This rate is expected to be maintained through to 2029. This new design allows for a more conservative use of the surface stockpiles that supplement ore mined from the underground. The balance of the Las Chispas current mineral reserve is expected to be exhausted in 2030, during which time mining rates are expected to reduce considerably as production areas are depleted.

Learning from 18 months of ramp-up production has helped to simplify the mine plan to a safer and more sustainable operation by reducing cut and fill and resue mining methods and relying more on the long-hole mining method.

As previously disclosed in November, 2022, Silvercrest's current operational plan reduced the use of the resue mining method. This method was originally incorporated to limit dilution; however, safety and productivity issues resulted in diminished operational and economic performance. The new LOM significantly reduces the use of resue mining and will be primarily replaced by the lower cost and more productive long-hole mining method. The trade-off is increased dilution, which can be seen by the lower head grade. The balance of stoping production will use the cut and fill mining method in areas of poor ground conditions.

The impact of the new LOM is a less complex operation with fewer working faces, less equipment and labour, increased productivity, and a reduction in per-tonne mining costs. The trade-off is more dilution and a related reduction in head grade.

The mining schedule incorporates development rates of 34 metres per day in second half 2023, a level that is similar to Q2 2023 performance. In 2024, the development rate is expected to increase to approximately 43 metres per day. This increased development rate will be possible with the recent establishment of a third portal at Las Chispas area.

Process plant

Las Chispas process plant has been designed to achieve nominal throughput of 1,250 tpd. The operating results to date indicate that this throughput rate can be achieved with better than initially expected metallurgical recoveries. The report includes updated and improved recoveries of 98.0 per cent Au and 97.0 per cent Ag over the LOM. The simplified plant process diagram has stopped the use of the flotation circuit, which was determined to be unnecessary to achieve the improved recoveries. The process plant performance to date has also provided confidence that it can efficiently operate with a wide range of grade and clay content. The process plant is expected to operate at an average throughput of 1,200 tpd from 2023 to 2029.

Production profile

The LOM schedule has focused first on the foundation provided by a progressive mine ramp-up supported by proven development rates. The stable metal production through the LOM benefits from the flexibility provided by the early mine development and by the reliance on the surface stockpile. The surface stockpile has proved to be a great advantage to stabilize plant feed grade and production, and this flexibility is being maintained under the updated production plan. The new production plan allows Silvercrest to maintain surface stockpiles through the LOM. It is expected that surface stockpiles will provide approximately two months of process plant feed throughout the LOM, which could be processed earlier than scheduled if the mining ramp-up performs better than proposed in the report or provides process plant feed in the event of a mine production shortfall.

Sustaining capital costs

Life-of-mine sustaining costs are estimated to be $219.9-million with 93 per cent of these costs relating to underground mining and infrastructure. This is a 77.5-per-cent increase in cost estimated in the 2021 FS. Total sustaining development over the LOM is expected to be 50.3 kilometres, which represents the core of the sustaining capital for the underground mine ($175.5-million). The cost of underground sustaining development has increased due to a combination of higher development unit rates and additional infrastructure for an expanded mine. The underground infrastructure totals an estimated $28.3-million. The balance of the sustaining capital totals $16.2-million and covers the needs for the surface requirements, including the process plant, the tailings facility and the surface infrastructures.

It is expected that sustaining capital costs will be more elevated in second half 2023 than in first half 2023 as a result of development of underground ventilation infrastructure and the establishment of underground mobile maintenance facilities. The 2024 sustaining capital will increase from 2023 levels as underground development is increased.

Closure costs of $6.8-million are expected to be incurred during the period of 2030 to 2032.

Operating and all-in-sustaining costs

Costs for Las Chispas operation were updated to reflect the revised cost structure, largely based on a Q1 2023 basis. As highlighted prior to the release of the report, a number of areas of the operation have experienced substantial cost inflation with manpower and consumables experiencing the most significant impacts.

Underground mining costs also reflect the change to long-hole mining as the predominant mining method, as well as the utilization of more strict ground control standards and expansion of the footprint of the mine, which require additional operating development metres, equipment, and additional and more expensive staff and labour. Both cut and fill and resue methods require breasting development, which also contributes to higher operating costs.

Process cost increases can be attributed firstly to an increase in maintenance supplies, consumables, and an increase in the number of manpower and wages of this manpower. It is important to note that some of the consumables' increases can be linked to the increase in gold and silver recovery from the plant.

Site general and administrative cost has been updated to reflect increased manpower and increased wages of this manpower. It also reflects the use of the camp through the LOM.

Mining contract discussions were paused in Q2 2023 and will resume in earnest now that necessary details outlined in the report are available. It is expected that these negotiations will be finalized in second half 2023. Costs beginning in 2024 include an allocation for potential cost increased related to these negotiations.

Las Chispas operation economics

Considering three-year trailing prices of $1,800 per oz Au and $23 per oz Ag as the base case, Las Chispas is expected to generate average annual after-tax free cash flow of $84-million from 2023 to 2029. At spot prices as of July 26, 2023, of $1,963 per oz Au and $24.92 per oz Ag, the average annual after-tax free cash flow is estimated to be $97-million over the same time period.

As of Jan. 1, 2023, Silvercrest had $71-million of net operating losses available, which helped reduce taxes payable throughout 2023. It is estimated, at the base case, that these operating losses will be fully utilized by the end of 2023 and, as a result, contribute to the reduction in after-tax free cash flow in 2024.

Las Chispas operation is most sensitive to metal prices; however, the cash flow profile would not be substantially impacted by a decrease in this metric.

The LOM mine-level AISC margin is not significantly impacted by a change in metal prices. At base-case metal prices, the mine-level AISC margin is 48 per cent. An attached table shows the impact on mine-level AISC margin for every 5-per-cent change in metal prices.

Opportunities

The most significant source of upside for Las Chispas remains the potential conversion of indicated and inferred mineral resources to mineral reserves and discovery of additional mineralization that may support future potential mine life growth.

There is an estimated 24.1 Moz AgEq (1.3 Mt grading 3.73 g/t Au and 269 g/t Ag, or 566 g/t AgEq) of inferred mineral resources defined in the report. The majority of inferred mineral resources is located in the Babicanora Sur, Babicanora Main and FW, El Muerto splay, and the Babicanora Norte vein NW extension. Focusing on higher probability conversion opportunities, there is an estimated 15.0 Moz AgEq, including 10.0 Moz AgEq which can be immediately drilled as an opportunity for potential higher-grade mineral reserve replacement proximal to planned mining areas for increased mine life or plant throughput. Exploration of several underexplored targets on site is already under way. The additional higher-grade inferred mineral resources will be targeted once additional underground development has been completed.

There is also an estimated 23.3 Moz AgEq of indicated mineral resources that were not included in the mineral reserve or production profile. There is potential for a portion of these ounces to be included with further drilling and engineering studies.

Surface exploration has identified over 23 kilometres of potential vein strike length that remains underexplored, not including targets at depth. Future drilling will focus on stepout drilling within the known mineralization zones and testing deeper host lithologies, parallel veins and newly identified areas. There also remain several blind veins with greater than 100 drill intercepts grading more than 500 g/t AgEq that require further exploration attention.

In addition to exploration opportunities, continued testing of long-hole stoping design (amongst others, Avoca) will evaluate the potential to reduce dilution and include marginal ounces that were not converted in the stope design and selection process. There may also be an opportunity to add ounces by reassessing the geotechnical standards on pillar dimensions through the collection of additional geotechnical data. Other opportunities include further optimization of the mine design to reduce the required development metres and associated costs, and also potential to increase process plant throughput if the mine ramp-up accelerates beyond the current proposed levels.

About the updated technical report

The report, including an updated mineral resource estimate and an updated mineral reserve estimate, will be filed under the company's SEDAR+ profile within 45 days of this news release.

Ausenco managed the report with several other engineering companies and consultants contributing to sections of the report. The firms and consultants which are providing qualified persons responsible for the content of the report are, in alphabetical order, Ausenco Engineering Canada Inc., BBE Group Canada, Entech Mining Ltd., Hydro-Resources Inc., Knight Piesold Ltd., P&E Mining Consultants Inc., WSP Canada Inc. and WSP/Wood Mine Services. The following independent qualified persons with associated firms have reviewed and approved this news release as defined by National Instrument 43-101 (Standards of Disclosure for Mineral Projects):

• Kevin Murray, PEng, Ausenco;
• Patrick Langlais, PEng, Entech Mining;
• Eugene J. Puritch, PEng, FEC, CET, P&E;
• Benjamin Peacock, PEng, Knight Piesold;
• Michael Verreault, PEng, MScA, Hydro-Ressources;
• Wynand Marx, BBE Group Canada;
• Christopher Lee, PEng, WSP Canada;
• Humberto Preciado, PhD, PE, WSP/Wood Mine Services.

This news release has also been reviewed and verified by N. Eric Fier, CPG, PEng, chief executive officer of Silvercrest, a qualified person as defined by National Instrument 43-101 (Standards of Disclosure for Mineral Projects).

Conference call

A conference call to discuss the results of the report will be held Tuesday, Aug. 1, 2023, at 8:30 a.m. ET/5:30 a.m. PT. To participate in the conference call, please dial the numbers below.

Date and time:  Tuesday, Aug. 1, 2023, at 8:30 a.m. ET/5:30 a.m. PT

Telephone:  Toronto: 1-416-764-8624; North America toll-free: 1-888-259-6580; conference ID: 01537394

Webcast:  at the Silvercrest website

About Silvercrest Metals Inc.

Silvercrest is a Canadian precious metal producer headquartered in Vancouver, B.C., with a continuing initiative to increase its asset base by expanding current mineral resources and mineral reserves, acquiring, discovering and developing high-value precious metal projects, and ultimately operating multiple silver-gold mines in the Americas. The company's principal focus is operating its Las Chispas operation in Sonora, Mexico. The company is led by a proven management team in all aspects of the precious metal mining sector, including taking projects through discovery and finance, on-time and on-budget construction, and production.

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