Expands Relationship with OCIM to Enhance Financial Liquidity

Guanajuato Silver Company Ltd. (TSX-V:GSVR) (OTCQX:GSVRF) is pleased to announce that it has signed an indicative term sheet with a Swiss based precious metals trading firm: OCIM Precious Metals S.A. to provide US$7.5m in non-dilutive financing in the form of a silver and gold pre-payment facility to strengthen its balance sheet during the ramp-up phase of the Company’s El Cubo mine and mill complex located approximately 11 kilometers east of the city of Guanajuato in central Mexico.

James Anderson, Chairman and CEO stated: “We are very pleased to be expanding our relationship with OCIM at this time of strong silver and gold prices, which decreases the number of ounces of silver and gold needed to repay the facility. We have a very good working relationship with the team at OCIM and we look forward to working with them in the future with regards to potentially providing additional capital for GSilver’s future growth plans.”

OCIM Pre-Payment Details:

The pre-payment facility is for a term of 18 months, secured against GSilver’s El Cubo assets, and repayable over a period of 12 months (following a six-month grace period) by GSilver delivering a fixed number of ounces of silver and gold monthly. The number of ounces to be delivered will be calculated at a fixed discount to the prevailing LBMA spot metals’ prices on the day of the drawdown of the facility. This financing is subject to various conditions of OCIM including completion of satisfactory due diligence, execution of binding pre-payment documentation and TSXV acceptance, which both parties anticipate finalizing in April 2022.

The Company will use a portion of the facility to repay a majority of its current outstanding debt with OCIM, drawn on July 27, 2021. To date, the Company has repaid 2 months of silver and gold deliveries due under its current facility with OCIM, and it will use partial proceeds of this new pre-payment facility to repay the next 7 months’ deliveries, leaving only the final three months’ deliveries under the existing facility due November 30, 2022, December 30, 2022 and January 31, 2023 totaling 57,228 ounces of silver and 535.2 ounces of gold to be repaid.

As of today’s date, the Company has approximately US$7.2M in cash on hand; the Company anticipates having approximately US$9.0M in cash on hand after the drawn down of this second OCIM facility in early April 2022. Monthly deliveries of silver and gold ounces to OCIM under the new facility are anticipated to commence in October 2022.

About Guanajuato Silver Company Ltd.:

GSilver is a precious metals producer engaged in reactivating past producing silver and gold mines near the city of Guanajuato, Mexico. The Company is currently producing silver and gold from its 100% owned El Cubo and El Pinguico projects, while simultaneously advancing the El Pinguico Mine to restart. Both projects are located within 11km of the city of Guanajuato, which has an established 480-year mining history.