Company Engages MGA for Contract Mining

Guanajuato Silver Company Ltd. (TSX-V:GSVR) (OTCQX:GSVRF) is pleased to announce that crews have begun stockpiling mineralised material from its El Cubo mine in anticipation of the recommencement of operations at the El Cubo mill. In addition, the Company has signed a mine development and production agreement with contract mining group MGA to execute contract mining services at El Cubo until December 31, 2022.

Re-commencement of mining at El Cubo:

GSilver is pleased to announce that mining, mucking, and stockpiling of mineralised material at its El Cubo mine has re-commenced ahead of schedule. Crews have begun removing previously blasted material from the 2175 and 1850 stope areas (Click here and scroll to bottom for latest long section) within the mine. This material is now being stockpiled at the El Cubo mill patio (Click and scroll to bottom for photos). These areas will be two of the three stope areas (the other area being ‘Cebolletas’) where GSilver intends to focus its El Cubo mining efforts for the next 12-18 months.

Reasons for mining 2175, 1850, and Cebolletas Stopes:

• These stopes are readily available with infrastructure consisting of 4x4m wide access and ramps;
  • Crews have cleaned these access routes, installed new lighting and ventilation services, and have cleared and re-established emergency exit routes from within the mine.
• These stopes have previously been drilled and sampled by former owner/operator Endeavor Silver Corp.;
  • GSilver engineers have concluded that ample drilling and sampling has been conducted to date to establish areas to blast mineralised material and begin stockpiling that material on surface. The Company is planning to conduct additional infill and expansion drilling in these areas soon, details of which will be reported on and described in a subsequent news release. Additional drilling will be conducted primarily for grade control purposes.
• These are just a few of the stopes where mining had previously occurred prior to shutdown of the mine in November 2019;
  • There are numerous other areas of the mine where GSilver believes it will be able to take the same approach. The three current areas of interest exist within the main Villalpando vein structure; other areas in which the Company plans to focus its mining in the months and years ahead include the Dolores North, Dolores South, La Loca, San Eusebio, and Asuncion vein structures.

The Company’s engineers believe that the Villalpando Stopes could consistently provide up to 15,000 tonnes of mineralised material per month once mining ramps up to full capacity and milling re-commences in Q4, 2021.

Engagement of MGA Mine Contractors:

GSilver is very pleased to announce that it has signed a comprehensive 17-month contract with MGA Mine Contractors of Durango, Mexico, to be the Company’s primary mine contactor. MGA has over two decades experience in providing quality mine contracting expertise to some of the leading companies in Mexican mining including Grupo Mexico, Goldcorp., Fresnillo PLC., Endeavour Silver, and First Majestic Silver.

Hernan Dorado, GSilver’s Chief Operating Officer commented: “At GSilver we have always planned to use an experienced and specialized mine contracting group as we restart El Cubo. In this way we can defer significant amounts of capital expenditures and rely on the experience of our contracting partners. We plan to have our ‘in-company’ workers commence El Cubo operations in parallel with our contract miners from MGA.”

Hernan Dorado Smith, Chief Operating Officer and 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 a mining development company engaged in reactivating past producing silver and gold mines near the city of Guanajuato, Mexico. The Company is focused on the refurbishment and swift re-commencement of production from its El Cubo mine and mill and its nearby El Pinguico project, as well as the delineation of additional silver and gold resources through underground and surface drilling. Both projects are located within 11km of the city of Guanajuato, which has an established 480-year mining history.