Guanajuato Silver Company Ltd. (TSX-V:GSVR)(OTCQX:GSVRF) is pleased to announce that it has closed the first tranche of its non-brokered private placement offering of up to 16,000,000 units at a price of C$0.55 per Unit first announced on November 18 (see Guanajuato Silver news releases dated November 18, 2021 & November 29, 2021). The Company has issued a total of 14,957,672 Units for gross proceeds of $8,195,920; each Unit consists of one common share of the Company and one half of a common share purchase warrant. Each Warrant entitles the holder to purchase an additional common share of the Company at a price of C$0.75 for a period of two years from of closing, subject to acceleration in certain events.

James Anderson, Chairman & CEO, commented, “Participation from all of our largest shareholders – Endeavour Silver Corp., Myrmikan Capital LLC., VBS Exchange PTY Ltd., – in this strategic financing affirms the tremendous value and potential of our precious metals mines, while also endorsing our vision for growth and expansion within the Guanajuato Mining District. With a healthy treasury now in place, we will continue to focus on successfully completing the ramp-up at El Cubo, which is intended to see increasing mined tonnage, higher precious metal grades, overall improved recoveries, and above all, consistent silver-gold concentrate sales.”

Certain directors and officers of the Company also purchased, directly or indirectly, an aggregate of 2,712,400 Units totalling C$1,491,820 of the Offering.

The net proceeds from the Offering will be used to fund the ongoing exploration, development, and expansion of the Company’s El Cubo mine and mill complex and El Pinguico silver and gold project, and for general corporate and working capital purposes.

The Company has paid finder’s fees in connection with the first tranche of the Offering totalling approximately $80,700 cash and finder warrants to purchase up to 78,144 common shares of the Company on the same terms as the Warrants in accordance with the policies of the TSX Venture Exchange.

The Company also announces that it has issued an additional 901,224 common shares to Endeavour Silver Corp. at a deemed price of C$0.55 per share in settlement of Mexican value added tax totalling C$495,573 (US$396,000) payable to Endeavour in connection with the Company’s early payment of the US$2.5 million promissory note issued pursuant to the Company’s acquisition of the El Cubo mine and mill complex as announced November 16, 2021.

All securities issued in connection with the first tranche of the Offering and the VAT Settlement are subject to a four month hold period expiring April 1, 2022.

The acquisition of Units in the Offering by Endeavour and certain directors and officers of the Company and the issuance of common shares to Endeavour pursuant to the VAT Settlement constitute “related party transactions” as defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. In completing such transactions, the Company has relied upon exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) thereof on the basis that neither the fair market value of the Units issued to the Insiders under the Offering nor the fair market value of the VAT Settlement with Endeavour, in either case, exceeded 25% of the Company’s market capitalization.

About Guanajuato Silver Co. Ltd.:

GSilver mines and processes silver and gold concentrate from its El Cubo mine and mill. The Company continues to delineate additional silver and gold resources through underground drilling at El Cubo and its nearby El Pinguico project. Both projects are located within 11km of the city of Guanajuato, which has an established 480-year mining history.