Kuya Silver Corporation (CSE: KUYA) (OTCQB: KUYAF) (FSE: 6MR1) is pleased to announce it has signed a Letter of Intent to acquire 100% of Sociedad Minera de Responsabilidad Limitada Camila 2008, the owner of the permitted Planta de Procesos Camila the conventional floatation plant that is currently processing Kuya Silver’s mineralized material to produce silver and other metal concentrates on a toll-milling basis. The plant is currently operating at 150 metric tonnes-per-day with plans to increase production capacity to 300 to 350 tpd, which Kuya Silver expects to undertake after closing the acquisition.

The plant is located 164 km from the Company’s flagship Bethania Silver Project and only 48 km to the major city of Huancayo in Junín, Peru.

This milestone transaction advances Kuya Silver’s strategy to develop in-house processing capacity to vertically integrate its operations, capture operating synergies, de-risk and expand its platform for silver production growth, while improving margins in the current strong silver price environment. Concurrently, Kuya Silver is advancing parallel cost optimization of the previously developed detailed engineering plan for its on-site Bethania process plant. This dual-track approach ensures optimal capital allocation, maximizes future processing optionality, and provides the potential to expand total processing capacity significantly beyond the current Phase 1 target of 350 tpd.

Strategic Rationale and Potential Benefits:

• Direct Path to Vertical Integration: Securing the Camila plant would provide a clear and expedited path to bringing processing in-house, immediately eliminating future toll-milling costs and associated scheduling uncertainties.
• Immediate Capacity Expansion and Metallurgical Optimization: The plant’s existing flotation circuit is well-suited as a foundation for processing Bethania’s silver-rich polymetallic ore. Following acquisition, Kuya Silver’s immediate plan is to commence work on targeted modifications to not only optimize metallurgical recoveries for silver, (as well as lead, zinc, copper and gold) but also to expand the plant’s throughput capacity to at least 300 tpd before year end. This acquisition opportunity provides scalable, in-house processing headroom that can be scaled as production from the Bethania mine increases.
• Operational Control, Scale, and Cost Efficiency: Direct ownership of the plant is expected to deliver a multifaceted strategic advantage. It provides Kuya with full control over processing schedules and ore blend strategies (enhancing flexibility and plant availability), creates immediate economies of scale, and unlocks continuous optimization opportunities. This operational control is the foundation for reducing per-tonne processing costs, which should have a positive impact on operating cash flow, margins, and the overall economic performance of the project.
• Strategic Location and Proven Suitability: The Camila plant is strategically located on the key transport corridor between the Bethania mine and Lima, where concentrate is shipped to port. The facility is already connected to the regional hydroelectric grid and has a demonstrated history of successfully processing ore from the Bethania deposit, yielding positive metallurgical results. This combination of ideal location, existing infrastructure, and proven performance with Bethania’s specific ore type significantly de-risks the integration timeline and operational ramp-up.

LOI Overview and Next Steps:

Under the terms of the LOI, Kuya Silver has agreed to purchase 100% of SMRL Camila, the company that owns the Camila plant for $7.8 million, subject to standard conditions precedent. The primary condition is the satisfactory completion of confirmatory legal, financial, environmental, and technical due diligence, which is underway by Kuya Silver’s team of advisors.

Preliminary analysis indicates a clear and capital-efficient path to expanding the plant’s capacity from 150 to 300-350 tonnes per day. Based on internal estimates provided by Camila and reviewed by Kuya Silver, this expansion is projected to require an additional capital investment in the range of $0.7 million to $1.0 million. These estimates are to be validated by a third-party engineering firm following the completion of the transaction.

The Company will provide further updates upon the signing of a definitive share purchase agreement, subject to the satisfactory completion of due diligence.

About Kuya Silver Corporation

Kuya Silver is a Canadian‐based mineral exploration and development company focused on acquiring, exploring, and advancing precious metals assets in Peru and Canada. Its flagship Bethania Silver Project in Peru was a historic producer of silver, lead and zinc. The Bethania Mine was officially re-started in May 2024.