Underground Drilling Continues at El Pinguico

Guanajuato Silver Company Ltd. (TSX-V:GSVR) (OTCQX:GSVRF) is pleased to provide additional drilling results from its ongoing diamond drill program at the El Pinguico project located 7km south of the city of Guanajuato, Mexico.

Results:

Both drill holes P21-09 and P21-10 cut through intervals of both the San Jose and El Pinguico veins from the San Jose #1 drill station. Especially noteworthy, P21-10 was drilled ‘up’ (above the horizon) at a +30-degree angle to test for extensions of vein material above El Pinguico’s previous mining during the early 1900s. This drill hole returned 0.90m of 5.96 gpt Au and 476 gpt Ag or 953 gpt AgEq, within a broader interval of 8.10m of 1.00 gpt Au and 93 gpt Ag.

The Company is modeling variability within the vein system to determine how best to target areas where width and grade become more favourable. The wider thicknesses – 8.10m in P21-10 and 7.95m in previously released hole P21-08 are potentially very attractive mining widths in a typically narrow vein mining jurisdiction.

San Jose #1 Drill Station:

1. Note: Assays for drill hole P21-08 were previously reported on May 3, 2021 in this News Release.
2. Note: All Silver Equivalent values are calculated on a long-term silver to gold price ratio of 80 to 1 as used in the Company’s recently published NI43-101 PEA report written by consultants Behre Dolbear and Company (USA), Inc. No attempt has been made by the Company to establish the true width of veins reported in this news release as the Company has determined that it would be premature to do so.

COO Hernan Dorado remarked: “The main El Pinguico vein structure pinches and swells, occasionally showing widths of more than 8 meters – noteworthy and very attractive in the Guanajuato region. This vein is parallel / sub parallel to the San Jose vein, with the two veins appearing to widen and coalesce at depth. These veins contain varying degrees of silicified breccia and classic banded quartz, quartz-calcite and calcite veining. The veins are generally hosted in a volcanic rhyolite sequence with weak to strong propylic and argillic alteration. Sulphides are present as thin dark grey to black blebs in micro fractures and within the matrix of the rocks”.

Additional Drilling:

GSilver’s drilling progress has been hampered in recent weeks by delays at its principal third party assay lab in Durango, Mexico. The late return of assays necessitated GSilver halting drilling for a period of three weeks in May, to allow our geological data to ‘catch up’ with our drilling. Drilling has recommenced and is again ongoing at El Pinguico. Drill holes P21-11 through P21-14 have been drilled, split, and sent for assay, and will be reported on when received and fully interpreted by our geological staff. P21-15 has been collared and is being drilled as of today’s date.

Veins Coalescing at depth:

New modelling of drill holes P21-08 and P21-13 (drilled on the same section; and at 45 degrees and 60 degrees respectively), suggest that the San Jose vein and El Pinguico veins get closer and may merge at depth. Once assay data has been received for holes P21-11 through P21-14, the Company plans to create plan and section images for its website, to better illustrate for readers its developing understanding of the known vein systems.

Future Drilling:

Now that the general location, apparent widths, and orientation of the San Jose and El Pinguico veins have been established in proximity to the San Jose # 1 drill station, geological staff are designing and budgeting a drill program that will attempt to connect vein material below the #7 adit level, from the San Jose #1 drill station to within 75m of the #7 adit portal – a distance of some 450m. The drill program will consist of approximately 3800m of drilling in approximately 18 drill holes to be completed between now and December 2021. If drilling is successful, the Company plans to engage a third party to initiate an NI 43-101 compliant resource estimate, which will be the first in-situ resource completed at El Pinguico, will complement the already established resources of surface and underground stockpile material and will help inform continued exploration of the El Pinguico project.

Other Exploration Efforts:

The Company has now systematically sampled exposed vein material of the accessible sections of the #7 adit, south of the El Pinguico shaft – a distance totalling approximately 500m. These samples have also been sent out for assay, will be released when received by the Company, and will also aid in targeting further drilling in this area.

Drill Contract for El Cubo:

GSilver is reviewing proposals from several contract drilling companies to begin an infill and exploration drilling program at El Cubo. The Company’s current resources at El Cubo consist of 508,555 tonnes of indicated material grading 2.44 gpt Au and 194 gpt Ag (389 gpt AgEq) and 1,453,000 tonnes of inferred material grading 2.78 gpt Au and 214 gpt Ag (435 gpt AgEq). (Behre Dolbear [USA] Company Ltd., January 2021 PEA as first reported on February 16, 2021).

A program to develop this resource into higher confidence categories as well as expand the size of the resource with exploration and extensional drilling is currently being planned. Details of that program will be shared by the Company when finalized.

Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. There has been insufficient exploration to allow for the classification of the inferred resources at El Cubo as an indicated or measured mineral resource, however, it is reasonably expected that the majority of the inferred mineral resources could be upgraded to indicated or measured mineral resources with continued exploration. There is no guarantee that any part of the mineral resources discussed herein will be converted into a mineral reserve in the future.

Sampling and quality assurance/quality control:

The drill core was first reviewed by a geologist who identified and marked intervals for sampling. The marked sample intervals were cut in half with a diamond saw with half of the core left in the core box and the other half removed, placed in plastic bags, sealed and labeled. Intervals and unique sample numbers are recorded on the drill logs and the samples are sequenced with standards and blanks inserted according to a predefined QA/QC procedure. The samples are maintained under security on site until they are shipped to the analytical lab. The analytical work reported on herein was performed by SGS Mexico, S.A de C.V, Durango, Mexico. SGS is an ISO/IEC (International Organization for Standardization/International Electrotechnical Commission) geo-analytical laboratory and is independent of GSilver and its “qualified person”. Core samples were subject to crushing at a minimum of 70 per cent passing two millimeters, followed by pulverizing of a 250-gram split to 85 per cent passing 75 microns. Gold determination was via standard atomic absorption (AA) finish 30-gram fire assay (FA) analysis, in addition to Silver and 34-element using fire assay and gravimetry termination. GSilver follows industry-standard procedures for the work carried out at the El Pinguico silver-gold project, with a quality assurance/quality control (QA/QC) program. Blank and standard samples were inserted into the sample sequence sent to the laboratory for analysis. Data verification of the analytical results included a statistical analysis of the standards and blanks that must pass certain parameters for acceptance to ensure accurate and verifiable results. GSilver detected no significant QA/QC issues during review of the data and is not aware of any sampling, recovery or other factors that could materially affect the accuracy or reliability of the data referred to herein.

Hernan Dorado Smith, a director of GSilver and a “qualified person” as defined by National Instrument 43-101, Standards of Disclosure for Mineral Projects, has approved the scientific and technical information contained in this news release.

About Guanajuato Silver Co. Ltd.:

GSilver is an exploration and development company engaged in reactivating past producing silver and gold mines near the city of Guanajuato, Mexico. The Company is focused on the refurbishment of the El Cubo mine and mill, and swift re-commencement of production from the El Cubo and El Pinguico Combined Operation, as well as delineating additional silver and gold resources through underground and surface drilling on its projects located in this 480-year-old mining camp. The Company’s El Pinguico project is a significant past producer of both silver and gold located just 7 kilometers south of the city, and 8km by road from its El Cubo Mill.