Sierra Madre to Resume Trading on TSX Venture Exchange on Monday June 5, 2023 - Seite 2

La Guitarra is in the southeast end of the Mexican Silver Belt with an underground mine operating up until August 2018 at the site. Past production was in the order of 1.0 million to 1.5 million AgEq ounces annually between 2015 and 2018 (including approximately 610 thousand ounces ("koz") to 945koz of silver annually). Current infrastructure includes three underground centres, the 550 tonnes per day ("t/d") flotation mill, permitted tailings facility, multiple work buildings, equipment, and related infrastructure.

All permits necessary for the restart of mining operations at the Guitarra, Coloso and Nazareno mines are valid and current and the underground workings have been well maintained. The processing plant as well has all permits in place for the restart of operations. An MIA (environmental impact permit) has been approved for the construction and operation of a new tailings impoundment with a 5.8 million tonne capacity.

The company has in its possession the complete Project database which includes 1,407 drill holes, production records for 27 years of operations, survey data and a 3-D model of the underground workings for all three mines, detailed actual operating cost data and extensive metallurgical recovery data and tests.

This database together with the existing processing plant and equipment on site will allow the Company to proceed with a three-prong approach to advancing toward resuming production and realizing the overall potential of La Guitarra and the Temascaltepec mining district at the Project;

1. Resource and Reserve Estimations
   1. Complete a National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") compliant resource estimate
   2. Using the above resource estimate and the extensive La Guitarra operating cost data base to evaluate potential reserve estimations with a detailed mine plan and schedule for restarting the Guitarra, Coloso and Nazareno mines
2. Advance Upgrades to Plant and mine
   1. Rebuild existing mining equipment
   2. Refurbish and change the flotation plant from two parallel circuits to a rougher-cleaner configuration
   3. Repair 4th ball mill onsite in order to reach 550 t/d capacity
   4. initiate permitting process for ore leaching
   5. upon receipt of leaching permit, define the potential to construct a leaching circuit and begin reprocessing of existing tailings along with ore from the mines

3. Eastern Temascaltepec District