Sierra Madre Gold and Silver Ltd. provided an in-depth update of its activities at the 100% owned past-producing La Guitarra Silver-Gold Mine Complex ("La Guitarra") in Estado de Mexico, Mexico, 130 km southwest of Mexico City. The Company's objectives are to complete a new resource estimate by year-end, followed up by a Mine Restart Study, which would include a cost study, mine plan, and a reserve estimate. Underground and plant rehabilitation, as well as a rebuild and refurbishment program of mine and plant equipment have also begun.

The Company anticipates that, given adequate funding and assuming project execution tracks internal projections, restart of production at La Guitarra could be feasible within 20-22 months. The following programs are underway: The La Guitarra database consists of 1,408 drill holes totaling 236,000 metres of drilling; containing over 86,300 assays and 12,668 channel and mine samples. Raise and stope sample data, along with the actual production results are also being compiled to assure confidence in grade and width projections for the in-situ veins.

The electronic database also contains 3-D surveying data with corresponding imaging of the underground workings and stopes at the La Guitarra, Coloso and Nazareno mines. Underground 3-D laser surveying is currently underway to augment and check the existing survey data. Surface surveying of historic drill hole collars is ongoing as part of the database audit.

The resource estimation will consist of computer-generated block models of the larger deposits and polygonal block estimations on long sections, the latter being typical of mines operating in narrow vein type mineralization with distinct ore shoots. The three open pit deposits contained historic reserves of 6.8 million tonnes grading 0.75 g/t gold and 81 g/t silver at a combined strip ratio of 8:1, waste to ore. The geologic model used to generate the estimate was built from mineralized zone wireframed solids and an economic pit shell was used to generate the open pit estimates.

The approach and methods used in the calculation of the historic estimate are reasonable for the period in time the estimates were compiled. The historic estimate cannot be verified by a Qualified Person and is historic in nature, the Company is not treating this historic estimate as a current mineral resource or reserve, and it should not be relied upon. Sierra Madre has determined that permitting for underground operations has a shorter time frame when compared to open pit mining and underground mining costs will compare favourably to those associated with an 8:1 open pit strip ratio.

Previous operators have effectively used underground long-hole bulk tonnage mining at La Guitarra. Drill hole and mine samples in the three open pit areas have been reviewed to identify areas of mineralization which might possess the proper geometry and grade continuity needed to use long-hole drilling equipment. Priority was given to areas where minimal additional underground development would be required.

Company staff and consultants have reviewed the underground mine and plant equipment to determine operational status. Maintenance and repair staff have been hired, all of which previously worked at the mine and are familiar with the equipment. The Company has five scoop trams, used to load and haul ore, in inventory, two of which are currently operational.

Two dual arm jumbo drills for use in blasting production drives and haulage ways are also on-site. A rebuild/repair work program has begun on this equipment. The Company's Mining Department, composed of personnel who operated the mine for First Majestic, believes this equipment has the capacity to support a 500 tonne per day operation when fully operational.

New explosive storage areas are being constructed underground in locations that will be more operationally efficient. Preventative ground stabilization work has been completed in a critical section of the main San Rafael haulage way. Much of the other equipment needed to resume operations is on site.

Stationary air compressors and electrical substations are installed and functional. The current inventory includes approximately 30 jackleg drills and related equipment for use primarily in narrow vein production stopes. Electrical motors in the flotation processing plant, including 3 of the 4 ball mills, have been power tested and found to be operational.

The crushing circuit was recently tested with 3 tonnes of waste rock and functioned as designed. The main operations water storage tank has been drained and repaired. Scaling and rust removal in the flotation cells has begun along with an evaluation of pumps and piping.

While some pieces of equipment (long hole drill and haulage trucks) still need to be purchased or leased, the majority of the equipment needed to potentially restart the mine is in place and functional. The Company believes that building on the existing equipment and infrastructure, the La Guitarra mine could be restarted for a significantly lower cost compared to building a new processing plant and developing a new underground mine. All additional capital expenditures needed for the mine and processing plant will be determined when the cost portion of the Mine Restart Study is completed.