Mr. Pierre Beaudoin reports

SILVERCREST REPORTS FOURTH QUARTER 2022 OPERATIONAL RESULTS AND PROVIDES LAS CHISPAS MINE UPDATE

Silvercrest Metals Inc. has provided its fourth quarter operational results and an update on activities at the company's Las Chispas mine located in Sonora, Mexico. All currency amounts herein are presented in United States dollars, unless otherwise stated.

Q4 2022 highlights:

• Commercial production was declared on Nov. 1, 2022, marking Q4 2022 a ramp-up quarter.
• In the quarter, recovered metal, including inventory, was 11,940 ounces (oz) of gold (Au) and 1.20 million oz of silver (Ag), or 2.23 million oz of silver equivalent (AgEq). Metal poured totalled 10,896 oz Au and 1.06 million oz Ag, or 2.01 million oz AgEq.
• Powerline was fully completed in November, 2022, and the mine is now energized by national grid power with improved stability.
• Underground mining averaged 700 tonnes per day (tpd) below the 2021 feasibility study forecast of 750 tpd, but in line with the revised forecast of 600 to 700 tpd (see news release dated Sept. 14, 2022).
• Processing plant operating metrics exceeded the 2021 feasibility study for tonnage milled, plant availability and metallurgical recoveries with December, 2022, average throughput of 1,318 tpd at 95.5-per-cent availability (in line with design of 1,250 tpd at 91.3-per-cent availability).
• At the end of 2022, the ore stockpiles were estimated at 261,600 tonnes below the 2021 feasibility study estimate of 311,200 tonnes due to a combination of higher processing rates and offset by lower mining rates than planned.
• An updated technical report remains on schedule for Q2 2023 and will form the basis for updated cost and production guidance. The 2021 feasibility study was based on Q3 2020 costs which have been impacted by inflation and may also be impacted by changes to the mine plan.
• Exploration at Las Chispas focused on assisting operations with database management, grade control, drilling on new vein targets and delineation drilling of planned mining stopes.
• There was a notable improvement in the company's 2022 lost-time injury frequency rate (LTIFR) to 0.42 from 0.63 in 2021.
• Local community-based multiyear projects have advanced with a focus on water and sewage infrastructure.
• The company released its Task Force on Climate-Related Financial Disclosure (TCFD) and water stewardship reports, with an inaugural ESG (environmental, social and governance) report to follow in 2023.
• Its financial position remains strong with debt refinancing completed at a lower rate and a reduction of debt outstanding by $40-million. It exited 2022 with $50.8-million in cash and $50-million in debt.

Pierre Beaudoin, chief operating officer, remarked: "Two thousand twenty-two was a pivotal year for Silvercrest with construction completed slightly ahead of schedule and under budget which is a rare achievement in this industry. This milestone set the positive tone for the ramp-up and declaration of commercial production in Q4 2022. We are currently working on optimization of Las Chispas operations and we expect to complete its updated technical report in Q2 2023 to provide the foundation for production and cost guidance going forward."

N. Eric Fier, CPG, PEng, chief executive officer, stated: "We are very pleased with our progress at Las Chispas. Within five months of our first metal pour we declared commercial production, refinanced our previous project financing facility, which we did not fully draw, and reduced our total debt outstanding from $90-million to $50-million. As we begin 2023, our focus is on generating revenue and using established cost controls to maximize free cash flow and pursue growth opportunities."

Metal recovered and produced

The combination of better-than-expected throughput and processing recoveries led to greater recovered and produced metal (poured metal) than planned. The variance between metal recovered and produced relates to metal inventory both in the plant and plant refinery and is largely a function of the plant ramp-up and is expected to become negligible as the company stabilizes the operation.

Since starting the processing plant in late May, 2022, recovered metal has totalled 17,768 oz Au and 1.74 million oz Ag, or 3.29 million oz AgEq which compared to the 2021 feasibility study of 12,249 oz Au and 1.18 million oz Ag, or 2.25 million oz AgEq. A total of 15,041 oz Au and 1.44 million oz Ag, or 2.75 million oz AgEq, have been produced in 2022, which compares with the 2021 feasibility study plan of 10,449 oz Au and one million oz Ag, or 1.91 million oz AgEq.

Two thousand twenty-two processed grades averaged 3.05 grams per tonne (g/t) Au and 312 g/t Ag, or 577 g/t AgEq, as compared with the 2021 feasibility study plan of 2.53 g/t Au and 254 g/t Ag, or 474 g/t AgEq. The 2021 feasibility study plan for the use of lower-grade stockpile material during the ramp-up was amended in Q4 2022 to include more mined ore as the company benefited from better-than-expected recoveries, thereby allowing for more information to be gathered on the mine to plant grade reconciliation.

Power

At the end of November, 2022, the final permanent connection to the 33-kilovolt (LV) powerline was completed and stability of the line has improved. The total contracted capacity of 7.6 megawatts (MW) is expected to be sufficient to provide power for the life of mine.

Commercial production

Effective Nov. 1, 2022, the company declared commercial production at Las Chispas, based on achieving a continuous two-month period operating the processing plant at a minimum of 80-per-cent capacity for its name plate design of 1,250 tpd or 1,000 tpd and showing a combined gold and silver recovery of greater than 85 per cent.

Underground mining

In 2022, an additional eight kilometres (km) of underground development was completed at the mine. The average mining rate for Q4 2022 was 700 tpd, below original guidance of 750 tpd, but in line with the company's revised guidance of 600 to 700 tpd.

A total of an estimated 201,100 tonnes of ore were mined from development and stoping activities in 2022, below the 2021 feasibility study projection of an estimated 214,400 tonnes. The variance was a result of lower productivity in resue mining stopes due to safety concerns and narrower vein widths in some areas. Long hole mining has progressed well and has achieved production and dilution rates as set out in the feasibility study.

Resue mining represented 22 per cent of the tonnage in the 2022 mine plan and 12 per cent in the 2021 feasibility study life of mine. As previously disclosed, Silvercrest decided to reduce the amount of resue mining utilized at Las Chispas, for safety and productivity reasons. In Q4 2022, Silvercrest began converting resue stopes to cut and fill and expects to eventually convert some to long-hole stopes. This has the potential to increase productivity with a lower cost mining method but could be offset by a potential increase to dilution relative to the resue method. During this period, a total of nine stopes originally designated for resue mining were converted to cut and fill.

In H1 2023, it is expected that underground mining rates will be in the range of 650 to 700 tpd as the company continues to work with the contractor to ramp up the mine and outline the appropriate ramp-up through 2025 for inclusion in upcoming technical report. Underground mining will be focused on capital development which was slightly behind schedule in 2022 due to availability of equipment and labour. Work is under way to rectify these challenges, but it is expected that a readjustment of the mobile fleet will be required with the decrease in resue mining.

Grade reconciliation work is advancing internally and will be included in the updated technical report.

Processing plant

Since commissioning in late May, 2022, the Las Chispas processing plant has performed in line or ahead of 2021 feasibility study expectations on operating metrics.

In Q4 2022, the processing plant continued to perform well as the company continued to ramp up, test and understand the plant's abilities to operate at higher rates. In the quarter, approximately 104,400 tonnes of ore were processed at a grade of 3.67 g/t Au and 382 g/t Ag, or 701 g/t AgEq. The average throughput in Q4 2022 was 1,135 tpd which compared with the 2021 feasibility study plan of 1,143 tpd. Metallurgical recoveries in Q4 2022 were 96.9 per cent for Au and 93.3 per cent for Ag, or 95.0 per cent AgEq, and the plant operated at 92.4-per-cent availability. The main operating challenge during the period was encountered in November, 2022, when only one tailings filter (compared with a planned capacity for two) was available for the month. The issue has been resolved and both filters were operational for December, 2022.

A total of approximately 187,600 tonnes have been processed since May, 2022, start-up, compared with the 2021 feasibility study estimate of approximately 166,800 tonnes. While the increase in tonnes processed relative to plan contributed to a reduction in the stockpile relative to the original plan, the information gained was necessary and valuable during the commissioning process and ahead of the updated technical report, especially for the tonnage fed directly from the mine to the plant as it will add valuable information in the mine to plant grade reconciliation.

Recoveries in 2022 tracked ahead of the planned ramp-up projections. To date, recoveries have tracked above plan in part due to the use of higher consumables. Recoveries may vary in 2023 as Silvercrest begins to process higher-grade stockpiled and mined ore, optimize consumable usage, implement cost controls, and refine operating parameters of the plant.

Plant availability has continued to increase since the start of commissioning, with availability in December, 2022, of 95.5 per cent. The design feasibility study plant availability for this period was estimated at 91.3 per cent.

While the processing plant ramp-up has generally been trending favourably when compared with the 2021 feasibility study ramp-up projections, minor modifications have been required through the circuit. The main changes were related to lower dissolved oxygen and premature failure of components in the tailing filters. While the Ausenco construction mandate was completed, it, along with the equipment suppliers, has been supportive in correcting these operational issues.

Costs

Two thousand twenty-two was a construction and ramp-up year and, having only reached commercial production on Nov. 1, 2022, accordingly, operating costs are not representative of a mature and optimized operating mining company. It is expected that unit operating costs will start being reported in 2023 financials and MD&A (management's discussion and analysis).

Throughout the transition to commercial production, costs across the operation have been impacted by the global inflation trend. Since the 2021 feasibility study estimated costs from a Q3 2020 basis, Mexico has experienced inflation of approximately 18 per cent in the last nine quarters, however, many areas of the operation have seen higher levels of inflation. The areas most impacted by inflation to date have been plant consumables and labour which have seen, in some cases, well above average cost increases. Mine operating costs may also be impacted by changes to underground mining methods, including the decrease in utilization of the resue mining method.

Stockpiles

At the end of 2022, the stockpiles were estimated at 261,600 tonnes below the 2021 feasibility study estimate of 311,200 tonnes due to a combination of higher processing rates offset by lower mining rates than planned.

The surface stockpiles remain a unique asset that will comprise a significant amount of the tonnage going to the plant in the early years of the mine life. The stockpiles provide flexibility during the ramp-up of the underground mine. The updated stockpile plan will be determined in conjunction with the rate of tonnes mined and the conclusions will be released in the updated technical report.

Updated technical report

Silvercrest continues to advance the work required to complete the updated technical report in Q2 2023. This report will incorporate updated mineral resources and reserves, updated metallurgical results, mine to plant reconciliation (mine, stockpile and plant), including comparison with the 2021 feasibility study mineral resource estimate, a revised mine plan, and updated operating and sustaining costs arising from any potential changes to the mine plan and the impact of inflation from the Q3 2020 cost base used in the 2021 feasibility study.

Safety, COVID-19 and community

Safety remained a top priority at Las Chispas throughout 2022 and this focus resulted in an improvement in its main safety metrics, LTIFR and total recordable injury frequency rate (TRIFR). Silvercrest exited 2022 with an LTIFR of 0.42 and TRIFR of 3.58 per 200,000 work hours, an improvement from the end of 2021 rates of 0.63 and 4.11, respectively.

In Q4 2022, the company released its TCFD report and water stewardship plan. These reports focused on identifying and managing the key risks and opportunities for the company's stakeholders and helped in developing a multiyear major water infrastructure project that is focused on improving the sewage system and the water infrastructure for the local community, ranching and farming industries. This investment, which began in 2022, includes upgrades to three main infrastructure areas which were considered priorities in discussion with the local community and will continue in 2023.

Q4 2022 and 2023 exploration

In the quarter, exploration at Las Chispas focused on assisting operations with database management, grade control, drilling on new veins targets and delineation drilling of planned mining stopes. El Picacho exploration focused on surface generative work on new vein targets.

For 2022, exploration at Las Chispas focused on the transition to production through further infill and delineation drilling of planned mining stopes. Results of drilling completed to the end of July, 2022, will be included in the mineral reserve estimate for the updated technical report. There are currently four surface and underground exploration drills active at Las Chispas. Picacho exploration focused on expansion and infill drilling of current areas for potential mineral resources. There are currently no drill rigs active at Picacho.

The company's 2023 exploration budget will remain conservative until details from the updated technical report emerge and will be evaluated on a half-year basis. The H1 2023 budget is approximately $4-million and will focus on mapping and sampling unexplored areas around Las Chispas and Picacho to generate new targets for drilling consideration in H2 2023. Limited drilling has been completed outside of the known mineralized zones, as Silvercrest remains focused on prudent capital allocation during ramp-up. Results for 2022 exploration work will be announced in H1 2023.

Financial position

As of Dec. 31, 2022, Silvercrest had cash and cash equivalents of $50.8-million. During Q4 2022, Silvercrest refinanced its $90-million project finance facility with a lower rate bank facility and used $40-million of cash to reduce the total debt outstanding to $50-million. Quarterly repayments on this facility will begin in June, 2023. The company also has access to a $70-million revolving credit facility.

The qualified person under National Instrument 43-101 (Standards of Disclosure for Mineral Projects) for this news release is Mr. Fier, CPG, PEng, chief executive officer for Silvercrest, who has reviewed and approved its contents.

About Silvercrest Metals Inc.

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

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