Mr. Alexander Langer reports

SIERRA MADRE ANNOUNCES LA GUITARRA EXPANSION PLANS

Sierra Madre Gold and Silver Ltd. has provided the details of a planned two-stage expansion at its La Guitarra silver-gold mine complex located in Estado de Mexico, Mexico.

These planned expansions would increase the site's nameplate processing capacity by 50 per cent to a range of 750 dry tonnes per day to 800 tpd by second quarter 2026. The site is currently operating at a rate of 500 tpd. This first expansion would involve the construction of a paste fill and thickener plant, the addition of a fourth ball mill, and a second cone crusher, as well as an increase in the conveyor circuit's material-handling capacity.

Subsequently, construction of a new, fully permitted, dry stack tailings storage facility and addition of a second crushing circuit would increase processing capacity to a range of 1,200 tpd to 1,500 tpd by third quarter 2027.

The company currently has access to the capital to complete these expansions, which it anticipates financing from the company's treasury and cash flow, eliminating the need for further near-term capital raises.

Alex Langer, chief executive officer, commented: "With commercial production achieved at La Guitarra only nine months ago, we are excited to be planning our next two major milestones, which would drive significant capacity expansion at the site over the next 24 months. Once all production expansions are fully operational, these two staged expansions would allow us to more than double throughputs from current levels, while also driving cost savings from realized economies of scale. Finally, with the closing of a $19.5-million private placement in July, we expect to fully self-fund this expansion from our treasury and cash flow."

Greg Liller, chief operating officer and executive chairman, added: "This staged expansion does not require any additional permits, and we have started sourcing and procurement for the second cone crusher and ball mill with equipment deliveries expected in November, 2025, for the first phase. With a strong operating team at Guitarra, we expect to complete this expansion on time and on budget with a combination of contractors and in-house personnel, and look forward to providing updates as we start receiving equipment and installing components."

Throughout the expansion periods, the plant and mining activities will have significant downtime periods. The company will do its best to mitigate these disturbances and will prioritize continuing plant and tailings maintenance works during these down periods. As an example, Sierra Madre recently replaced the main tailings pumping circuit with a new higher-capacity and more efficient system. During this period, the plant was off-line for only 36 hours.

Expansion to 750 tpd to 800 tpd in Q2 2026

A key part of the first expansion will be the construction of a new paste fill plant to conserve tailings storage capacity as the new dry stack TSF is planned to be built out in the second phase. The current conventional tailings storage facility has storage capacity until approximately September, 2027, assuming a processing rate of 500 tpd. As part of the planned first phase of the expansion, Sierra Madre would build a paste fill plant to divert approximately 300 tpd of the 750 tpd to 800 tpd planned production into open mine workings for storage, preserving tailings capacity in the current conventional facility.

At the process plant, the current capacities include 516 wet tpd in the milling circuit, 640 tpd at the crushing circuit and 1,200 tpd for flotation. To increase capacity to the 750 tpd to 800 tpd level, Sierra Madre plans to add a second cone crusher, increase the conveyor circuit's material handling capacity and install a new ball mill. The ball mill, which will be oversized to accommodate the 1,200 tpd to 1,500 tpd expansion, would be added early in the construction schedule to provide the company with spare capacity and to allow for regular maintenance of the four mills.

Expansion to 1,200 tpd to 1,500 tpd in third quarter 2027

Once the elements from the first phase of the planned expansion are complete, Sierra Madre anticipates building the new, 5.8-million-tonne capacity dry stack phase 4 TSF. The company anticipates that the TSF would be commissioned in Q3 2027.

At the plant, Sierra Madre would also add a second crushing circuit and replace a smaller capacity ball mill to allow operations to run at this increased throughput level.

Both the 2026 and 2027 crushing circuit additions would be designed to produce a finer product: one-fourth inch versus three-eighth inch currently. This in turn would allow the ball mills to produce a finer grind, leading the way for improved recoveries starting in second quarter 2026. The smaller one-fourth-inch feed should also increase the daily throughput capacity of the ball mills.

Qualified person

Gregory Smith, PGeo, director of Sierra Madre, is a qualified person as defined by National Instrument 43-101, and has reviewed and approved the technical data and information contained in this news release. Mr. Smith has verified the technical and scientific data disclosed herein.

About Sierra Madre Gold and Silver Ltd.

Sierra Madre is a precious metal development and exploration company focused on the Guitarra mine in the Temascaltepec mining district, Mexico, and the exploration and development of its Tepic property in Nayarit, Mexico. The Guitarra mine is a permitted underground mine, which includes a 500 tpd processing facility that operated until mid-2018 and restarted commercial production in January, 2025.

The 2,600-hectare Tepic project hosts low-sulphidation epithermal gold and silver mineralization with an existing historic resource.

Sierra Madre's management team has played key roles in managing the exploration and development of silver and gold mineral reserves and mineral resources. Sierra Madre's team of professionals has collectively raised over $1-billion for mining companies.

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