Guanajuato Silver Announces C$8,010,000 "Bought Deal" Private Placement of Units

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

VANCOUVER, BC / ACCESSWIRE / July 20, 2023 / Guanajuato Silver Company Ltd. (TSXV:GSVR)(AQUIS:GSVR) ("Guanajuato Silver" or the "Corporation") is pleased to announce that it has entered into an agreement with Cantor Fitzgerald Canada Corporation to act as sole underwriter (the "Underwriter"), pursuant to which the Underwriter has agreed to purchase, on a bought-deal private placement basis, 22,250,000 units of the Corporation (the "Units") at a price of C$0.36 per Unit (the "Offering Price") for gross proceeds of C$8,010,000 (the " Offering").

James Anderson, Chairman & CEO, said, "Over the last two and a half years, Guanajuato Silver has purchased four Mexican silver mines as part of a strategy to grow our business through acquisitions; we are confident in our ability to identify and acquire additional mining assets that would immediately prove accretive to our shareholders. We are therefore strengthening our balance sheet at a time when the challenging market environment has created what we believe are favorable conditions for the procurement of additional opportunities within Mexico's mining community."

Each Unit will consist of one common share of the Corporation (a "Unit Share") and one common share purchase warrant (a "Warrant"). Each Warrant will entitle the holder to acquire one common share of the Corporation for 18 months from the closing of the Offering at a price of C$0.55.

The Corporation shall grant the Underwriter an option to purchase up to an additional 3,337,500 Units at the Offering Price for additional gross proceeds of up to C$1,201,500 (the "Underwriter Option") exercisable at any time up to 48 hours prior to the closing of the Offering.

The Corporation shall pay to the Underwriter a cash commission equal to 6.0% of the gross proceeds of the Offering and 6.0% broker warrants based on the number of Units sold in the Offering.

The net proceeds from the Offering will be used for working capital and general corporate purposes.

It is anticipated that closing of the Offering will occur on or about August 10, 2023, or such other date or dates as the Corporation and the Underwriter may agree. The Offering is subject to the satisfaction of certain conditions, including receipt of all applicable regulatory approvals including the approval of the TSX Venture Exchange. The securities to be issued under the Offering will have a hold period of four months and one day from the applicable closing date in accordance with applicable securities laws.

To the extent that any directors and/or officers of Guanajuato Silver participate in the Offering such participation will constitute a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company expects any participation by directors and/or officers (collectively the "Insiders") in the Offering will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) of MI 61-101 based on the fact that neither the fair market value of the Units subscribed for by the Insiders, nor the consideration for the Units to be paid by the Insiders, will exceed 25% of the Company's market capitalization.

This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful, including any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act") or any state securities laws and may not be offered or sold within the United States or to, or for account or benefit of, U.S. Persons (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is available.

About Guanajuato Silver

Guanajuato Silver is a precious metals producer engaged in reactivating past producing silver and gold mines in central Mexico. The Company produces silver and gold concentrates from the El Cubo Mines Complex, Valenciana Mines Complex, and the San Ignacio mine; all three mines are located within the state of Guanajuato, which has an established 480-year mining history. Additionally, the Company produces silver, gold, lead, and zinc concentrates from the Topia mine in northwestern Durango. With four operating mines and three processing facilities, Guanajuato Silver is one of the fastest growing silver producers in Mexico.

ON BEHALF OF THE BOARD OF DIRECTORS

"James Anderson"
Chairman and CEO

For further information regarding Guanajuato Silver Company Ltd., please contact:

JJ Jennex, Gerente de Comunicaciones, T: 604 723 1433
E: [email protected]
Gsilver.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Regarding Forward-Looking Information

This news release contains certain forward-looking statements and information, which relate to future events or future performance including, but not limited to, the total proceeds to be raised under the Offering, the timing for closing thereof and the intended use of proceeds therefrom, the potential participation of certain Insiders of the Company in the Offering and the amounts thereof, the ability of the Company to identify and successfully acquire additional mining assets that would immediately prove accretive to the Company's shareholders, the outcome of future exploration, development and/or production activities at the Company's current silver mining operations; and the Company's status as one of the fastest growing silver producers in Mexico.

Such forward-looking statements and information reflect management's current beliefs and expectations and are based on information currently available to and assumptions made by the Company; which assumptions, while considered reasonable by the Company, are inherently subject to significant operational, business, economic and regulatory uncertainties and contingencies. These assumptions include: our estimates of mineral resources and/or mineralized material at El Cubo, Valenciana Mines Complex, San Ignacio and Topia and the assumptions upon which they are based, including geotechnical and metallurgical characteristics of rock conforming to sampled results and metallurgical performance; available tonnage of resources and mineralized material to be mined and processed; resource grades and recoveries; assumptions and discount rates being appropriately applied to production estimates; the ability of the Company to ramp up processing of resources and mineralized material at its existing mills and processing facilities at the projected rates and source sufficient high grade mineralized material to fill such processing capacity; prices for silver, gold and other metals remaining as estimated; currency exchange rates remaining as estimated; improved efficiencies and benefits to be derived from the Company's development and operational activities being achieved as anticipated; the continued availability of funds for the Company's projects and to satisfy current liabilities and obligations including debt repayments; capital cost estimates; decommissioning and reclamation estimates; prices for energy inputs, labour, materials, supplies and services (including transportation) and inflation rates remaining as estimated; no labour-related disruptions; no unplanned delays or interruptions in scheduled construction and production; all necessary permits, licenses and regulatory approvals are received in a timely manner; and the ability to comply with environmental, health and safety laws. The foregoing list of assumptions is not exhaustive.

Readers are cautioned that such forward-looking statements and information are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results, level of activity, production levels, performance or achievements of GSilver to differ materially from those expected including, but not limited to, market conditions, availability of financing, future prices of gold, silver and other metals, currency rate fluctuations, elevated inflation and interest rates, actual results of production, exploration and development activities, actual resource grades and recoveries of silver, gold and other metals, availability of third party mineralized material for processing, unanticipated geological or structural formations and characteristics, geopolitical conflicts including wars, environmental risks, operating risks, accidents, labor issues, equipment or personnel delays, delays in obtaining governmental or regulatory approvals and permits, inadequate insurance, and other risks in the mining industry. There are no assurances that GSilver will be able to identify and successfully acquire additional mining assets with the net proceeds of the Offering that will prove immediately accretive to the Company's shareholders or otherwise beneficial to the Company. Further, there are no assurances that the Company will be able to successfully discover and mine sufficient quantities of high grade resources and/or mineralized material at El Cubo, VMC, San Ignacio and Topia for processing at its existing mills to increase production, tonnage milled and recovery rates of gold, silver, and other metals in the amounts, grades, recoveries, costs and timetable anticipated. GSilver's decision to process mineralized material from El Cubo, VMC, San Ignacio and Topia is not based on a feasibility study of mineral reserves demonstrating economic and technical viability and therefore is subject to increased uncertainty and risk of failure, both economically and technically. Mineral resources and mineralized material that are not Mineral Reserves do not have demonstrated economic viability, are considered too speculative geologically to have the economic considerations applied to them, and may be materially affected by environmental, permitting, legal, title, socio-political, marketing, and other relevant issues. There are no assurances that the Company's projected production of silver, gold and other metals will be realized or that the Company will meet its production forecasts or generate the anticipated operational efficiencies and cash flow from operations to satisfy its scheduled debt payments or other liabilities when due or meet financial covenants to which the Company is subject or to fund its exploration programs and corporate initiatives as planned. There is also uncertainty about the continued spread and severity of COVID-19, the ongoing war in Ukraine, elevated inflation and interest rates and the impact they will have on the Company's operations, supply chains, ability to access mining projects or procure equipment, supplies, contractors and other personnel on a timely basis or at all and economic activity in general. Accordingly, readers should not place undue reliance on forward-looking statements or information. All forward-looking statements and information made in this news release are qualified by these cautionary statements and those in our continuous disclosure filings available on SEDAR at www.sedar.com including the Company's annual information form for the year ended December 31, 2021. These forward-looking statements and information are made as of the date hereof and the Company does not assume any obligation to update or revise them to reflect new events or circumstances save as required by law.

SOURCE: Guanajuato Silver Company Ltd.