Funding Acquisition of Three Mexican Silver Mines Proceeding on Schedule

Guanajuato Silver Company Ltd. (TSX-V:GSVR) reports that as of July 15, 2022 it has received subscriptions totaling approximately US$10.3M (C$13.3M) towards its equity financing of subscription receipts announced on June 29, 2022 – “GSilver to Acquire 100% of Great Panther’s Mexican Mining Assets“; and July 7, 2022 – “GSilver Increases Debt and Equity Financing Package to US$15.3M.”

Funds Received:

Of such subscriptions, wire transfers totaling approximately US$7.1M are currently being held in escrow by the Company pending closing. The balance of the Equity Financing – approximately US$3.2M – is expected to settle on July 21 2022, as announced and as per GSilver’s mantra – “on track, on time, on budget“.

• James Anderson, Chairman & CEO, said, “The oversubscription of our brokered private placement is a major endorsement of the quality of the assets that we are purchasing and the ability of our operations team to execute. We look forward to closing the acquisition of Great Panther Mining’s Mexican assets and getting to work on building Guanajuato Silver into a mid-tier precious metals producer.”

Debt Component:

In conjunction with the Equity Financing, GSilver has also signed a concentrate pre-payment facility term sheet with Ocean Partners (UK), a metals off-take and trading firm, to provide US$5.0M of financing towards the purchase price of Great Panther Mining’s Mexican subsidiary, Minera Mexicana Rosario S.A. de C.V. and general corporate and working capital purposes. The OP Facility will be for a term of 24-months, secured by a share pledge over MMR and repayable over a period of 21-months following a three-month grace period. Interest on the OP Facility will be calculated at 12-month LIBOR + 7.5%. Closing of the OP Facility will occur concurrently with the acquisition of MMR.

Upon closing, the gross proceeds of the Equity Financing, less 50% of the Agents’ cash commission, will be deposited in escrow pending satisfaction of certain escrow release conditions including the concurrent closing of the MMR Acquisition and acceptance of the TSX Venture Exchange; the Company expects to close the MMR Acquisition within the next three weeks.

All securities issuable in connection with the MMR Acquisition, the Equity Financing and the OP Facility as previously announced will be subject to a statutory hold period of 4 months and one day from the date of issue. There are no assurances that the MMR Acquisition, the Equity Financing and the OP Facility, which remain subject to TSXV approval, will be completed on the terms contemplated by the Company or at all.

Stock Options:

The Company also announces that its Board of Directors has approved the granting of 5,975,000 stock options, including 3,450,000 options to officers and directors of the Company. The options, which shall vest over a two-year period, are exercisable up to five years from the grant date and have a strike price of C$0.33. These options form part of a total remuneration package for directors, officers, employees, advisors and consultants of GSilver, and are designed to incentivize members of the GSilver team as we embark on our next phase of growth.

About Guanajuato Silver Company 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, Mexico, which has an established 480-year mining history.