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Sierra Madre shares to resume trading June 5

2023-06-02 18:15 ET - News Release

Mr. Alexander Langer reports

SIERRA MADRE TO RESUME TRADING ON TSX VENTURE EXCHANGE ON MONDAY JUNE 5, 2023

Sierra Madre Gold and Silver Ltd.'s common shares will resume trading at the market open on Monday, June 5, 2023. Shares were halted from trading following the announcement of the definitive acquisition of La Guitarra project from First Majestic on May 25, 2022. In addition to relisting on the TSX Venture Exchange, the company intends to quickly take the necessary steps to requalify for OTCQX to provide increased liquidity to its U.S. shareholders.

Recent highlights:

  • Closing of the acquisition of La Guitarra from First Majestic gives the company a 100-per-cent interest in a fully permitted, past-producing silver-gold mine in Mexico;
  • First Majestic is now the largest shareholder of Sierra Madre;
  • Closed $10.3-million financing.

"We are excited to be publicly traded once again and would like to thank existing shareholders, new shareholders and First Majestic for their patience during the lengthy process to relist Sierra Madre on the TSX Venture," stated Alex Langer, chief executive officer of Sierra Madre. "We have a lot of news to share over the coming months, including drill results from both the Tepic and La Tigra projects in Nayarit, Mexico, and numerous updates from La Guitarra. We have been very active at site since January at La Guitarra, as we continue to fast-track components of the project vital for recommencing production. We have begun sourcing and rebuilding underground mining equipment, refurbishing the mill, and commissioned a study to improve the efficiency of the flotation circuit. In the eastern portion of the Temascaltepec mining district, we have initiated a district-scale mapping program. We intend to ramp up our marketing efforts to ensure existing shareholders and potential shareholders are kept informed of the exciting developments underway at Sierra Madre."

La Guitarra highlights:

  • La Guitarra is a high-grade, past-producing underground mine with an on-site process facility that operated up to August, 2018;
  • Historical measured and indicated mineral resources of approximately 7.45 million ounces of silver equivalent and historical inferred mineral resources of approximately 10.03 million oz AgEq, based on 128,671 metres of drilling;
  • Functional and expandable 550 tonnes per day crushing, grinding and flotation facility;
  • The eastern district mapping program has thus far delineated over 40 kilometres of mineralized veins and breccias;
  • It has continued to build on the strong community relations base with the local stakeholders it inherited from First Majestic.

La Guitarra is in the southeast end of the Mexican silver belt with an underground mine operating up until August, 2018, at the site. Past production was in the order of 1.0 million to 1.5 million AgEq ounces annually between 2015 and 2018 (including approximately 610,000 ounces to 945,000 ounces of silver annually). Current infrastructure includes three underground centres, the 550-tonne-per-day flotation mill, permitted tailings facility, multiple work buildings, equipment and related infrastructure.

All permits necessary for the restart of mining operations at the Guitarra, Coloso and Nazareno mines are valid and current, and the underground workings have been well maintained. The processing plant as well has all permits in place for the restart of operations. An MIA (environmental impact permit) has been approved for the construction and operation of a new tailings impoundment with a 5.8-million-tonne capacity.

The company has in its possession the complete project database, which includes 1,407 drill holes, production records for 27 years of operations, survey data and a 3-D model of the underground workings for all three mines, detailed actual operating cost data, and extensive metallurgical recovery data and tests.

This database together with the existing processing plant and equipment on site will allow the company to proceed with a three-prong approach to advancing toward resuming production and realizing the overall potential of La Guitarra and the Temascaltepec mining district at the project;

  1. Resource and reserve estimations:
    1. Complete a National Instrument 43-101 (Standards of Disclosure for Mineral Projects)-compliant resource estimate;
    2. Using the above resource estimate and the extensive La Guitarra operating cost database to evaluate potential reserve estimations with a detailed mine plan and schedule for restarting the Guitarra, Coloso and Nazareno mines;
  2. Advance upgrades to plant and mine:
    1. Rebuild existing mining equipment;
    2. Refurbish and change the flotation plant from two parallel circuits to a rougher-cleaner configuration;
    3. Repair fourth ball mill on site to reach 550-tonne-per-day capacity;
    4. Initiate permitting process for ore leaching;
    5. Upon receipt of leaching permit, define the potential to construct a leaching circuit and begin reprocessing of existing tailings along with ore from the mines;
  3. Eastern Temascaltepec district:
    1. Complete a district-scale mapping program;
    2. Undertake a trenching and surface sampling program;
    3. Underground mapping and sampling program of historic mines;
    4. Drilling of the best targets based on the above work programs.

La Guitarra

La Guitarra property is in the Temascaltepec mining district, 130 km southwest of Mexico City, with road access. The property hosts three underground centres that are on care and maintenance: La Guitarra, Coloso and Nazareno.

La Guitarra site includes current mining and processing permits, an operating licence, a water use permit, an environmental impact authorization (MIA) for La Guitarra and Coloso mines, and exploration permits for the Nazareno, Tlacotal, Trancas, La Guitarra NW, Temascaltepec and San Simon projects. As disclosed in the annual information form of First Majestic for the year ended Dec. 31, 2021, dated March 31, 2022, available for review on First Majestic's profile at SEDAR, the site hosts historical measured and indicated resources of 701,000 tonnes grading 228 g/t silver and 1.22 g/t gold (330 g/t AgEq), for a total of approximately 7.45 million AgEq oz. Historical inferred resources stand at approximately 1.04 million tonnes grading 240 g/t silver and 0.71 g/t gold (299 g/t AgEq), adding approximately 10.03 million oz of AgEq.

From 2012 to 2018, First Majestic completed approximately 128,671 metres of drilling in 689 diamond drill holes. All together, there are 236,294 metres in 1,407 drill holes.

Over 100 epithermal veins at La Guitarra are contained in five main vein systems. These systems make up a belt that covers over 15 km of strike and is an estimated four km wide.

About Sierra Madre Gold and Silver Ltd.

Sierra Madre (TSX Venture Exchange: SM) is a precious metal development and exploration company, focused on the restart of La Guitarra mine in the Temascaltepec mining district, Mexico, and the exploration and development of its Tepic and La Tigra properties in Nayarit, Mexico. La Guitarra mine is a permitted, past-producing underground mine, which includes a 550-tonne-per-day processing facility that operated until mid-2018.

The 2,600-plus-hectare Tepic project hosts low-sulphidation epithermal gold and silver mineralization with an existing historic resource. La Tigra, located 148 km north of Tepic, has been mined historically. Sierra Madre's maiden 2022 drill program at the site intercepted shallow mineralization.

Sierra Madre's management has played key roles for managing exploration and development of more than 22 million oz gold and 600 million oz silver in combined reserves and resources. Sierra Madre's team of professionals has collectively raised over $1-billion for mining companies.

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