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 in Estado de Mexico, Mexico, 130 km southwest of Mexico City. Mine Restart Study: The Company has retained TechSer Mining Consultants Ltd., of Vancouver, B.C., to complete the Mine Restart Study ("MRS"). This work will include an estimation of underground mine material for the Guitarra, Coloso and Nazareno mines and the Los Angeles bulk tonnage deposit. Additional evaluations will include an operating cost estimate covering the mine and recovery plant, based on reagent and consumable usage, energy, and diesel consumption, from the 2013 to 2018 operating period which will be updated for current pricing. Labour, staff and management costs will be based on the current wage structure and union labour contracts that have recently been signed. As part of the study, a capital cost estimate will be prepared to cover restart needs and will evaluate a potential throughput expansion within 24 months of commercial production. This data is to be supported by contractor bids and vendor prices. The above data will then be used in an economic evaluation to determine project viability. The MRS is expected to be completed in Second Quarter of this year. Mine and Infrastructure: Work has been ongoing to determine necessary steps for the potential re-start of production. In accordance with recommendations made by officials with the Secretaria de la Defensa Nacional, SEDENA, improvements to the underground powder magazines have been completed. On January 29, 2024, SEDENA approved Guitarra's 2024 explosives permit. This explosives permit must be renewed every year and was a milestone event for any potential resumption of operation. All other operating permits are current and in good standing. Compressed 6-inch air lines have been installed from the stationary compressors near the main San Rafael portal to the La Cruz portal, a distance of over one kilometre with a 240 metre gain in elevation. Compressors and electrical substations have been serviced and are operational. Minimizing initial development costs is one of the key factors being used to develop the near-term plan for advancement of the Project. As areas are identified and scheduled in the development plan, the existing haulage ways, access drives and ramps are being inspected for safety and rock stability, cleaned and readied. Processing Plant: All circuits in the processing plant are undergoing maintenance and rehabilitation work which would be required for the resumption of operations. In the grinding circuit, the three ball mills are being relined, all parts of the central drive shaft mechanisms overhauled, and the motors cleaned and tested. A fourth ball mill with limited capacity will not be rebuilt at this time. Overall, the crushing circuit was found to be in good shape with no costly equipment replacement
or major repair items identified. Normal maintenance and overhaul work is ongoing. The fine ore storage bin has had the interior dividers and portions of the walls replated with heavy steel. Conveyor belts and associated motors have been serviced and wear and tear items have been replaced where needed. The flotation circuit is in good shape. Some piping is being replaced and the pumps are being overhauled and serviced. The Wemco flotation cells are in very good shape, needing only some replating work, along with normal maintenance. No repair work requiring a significant outlay of capital has been identified. The Denver cell circuit will not be needed at this time. The company's plant operations and maintenance team have advanced the preparation work for a potential plant restart within budget expectations. The MRS will study an initial production level of 350 tonnes per day. Additional evaluation will be completed on potentially increasing the grinding circuit's capacity to greater than 500 tonnes per day. As part of the MRS, an assessment was made of the throughput capacity of each circuit in order to determine where bottlenecks might exist in potentially expanding processing throughput using the current plant equipment.