Key Highlights – Infill drilling and mine rehabilitation at Reliquias

Hole SMR97BQ-23-SCS

• 9.45 m @ 75.63 g/t Ag, 1.99% Pb, 3.09% Zn, 0.22% Cu and 0.22 g/t Au
  •  Including 1.95 metres at 118.43 g/t Ag, 2.67% Pb, 5.05% Zn, 0.87% Cu and 0.18 g/t Au

Hole SMR103BQ-23-MTS

• 1.00 m @ 17.80 g/t Ag, 0.08% Pb, 3.09% Zn, 0.01% Cu and 28.30 g/t Au
  • And 0.80 m @ 482.00 g/t Ag, 1.10% Pb, 3.10% Zn, 0.34% Cu and 4.02 g/t Au

Hole SMR118BQ-23-PAS

• 0.60 m @ 629.00 g/t Ag, 1.20% Pb, 2.60% Zn, 0.08% Cu and 1.14 g/t Au

Hole SMR126BQ-23-PER

• 1.75 m @ 773.17 g/t Ag, 1.31% Pb, 1.28% Zn, 0.14% Cu and 5.23 g/t Au

11.37 km of tunnels have been rehabilitated to date, representing 77.7% of the overall program.

Silver Mountain Resources Inc. (TSX-V: AGMR) (OTCQB: AGMRF) is pleased to announce results from 32 drill holes completed between December 2022 and May 2023 as part of the first phase of infill and resource expansion drilling program at its 100% owned Reliquias mine, central Peru. These drill holes are not included in the current mineral resource estimate announced on April 12^th, 2023. The Company also provides an update on its ongoing mine rehabilitation program, aimed at a future re-start of production from this historic silver-zinc-lead deposit, located in one of the most prolific metallogenic belts in the world.

The Company has successfully completed a first phase, 55 hole and 3,500 metre underground drill program at Reliquias, focusing on both infilling the high-grade portions of the current resource, and stepping out along strike of the highest-grade veins identified to date. Ongoing mine rehabilitation remains on track, with 11.37 kilometres completed so far. The Company plans to complete, before the end of 2023, the rehabilitation work of all main ramps and tunnels necessary to re-start production. Drilling continues with 3 rigs working on underground drill pads, and results will be announced as they come in.

Alvaro Espinoza, CEO of Silver Mountain, commented, “These drilling results are very encouraging and, together with the rapid progress of our mine rehabilitation program, provide us with a clear way forward at Reliquias. We are working on a two-pronged strategy, infilling and expanding our resource base, and getting the historical mine workings ready for a quick re-start once a new resource is completed, full permits are received, and funding is secured. The high-grade gold results obtained in hole SMR103BQ-23-MTS are particularly encouraging and support the concept that the Reliquias vein systems host high grade gold as well as the polymetallic mineralization it is well known for. We are also pleased with the results from the Perseguida vein system, where we have hit some of the best silver-gold mineralization found to date, proving once again that Reliquias´ mix of base and precious metals mineralization makes it one of the most exciting projects in central Peru.”

Mr. Espinoza continued, “Silver Mountain´s crews have rapidly advanced the Reliquias project over the past 12 months. As a first step, the Company published a National Instrument 43-101 compliant resource estimate on April 12^th 2023 (see https://agmr.ca/silver-mountain-delivers-initial-ni-43-101-compliant-mineral-resource-estimate-for-reliquias-mine/) which focused on confirming a portion of the historical resources and provides the resource base for the initial phase of future production. Some of the historical resource at Reliquias remains outside of the current resource estimate, as it was not drill tested by us. The Company plans to incorporate those resources into a current mineral inventory at Reliquias as soon as practicable. Furthermore, once the tunnel rehabilitation program is completed, the Company will start the engineering work needed to ready the existing processing facility for future production. Finally, Company geologists will continue to explore the multiple outcropping veins found on our 60,000 hectares land package. We look forward to updating our shareholders on the timeline of this work once the underground rehabilitation phase is completed.”

Discussion on the results from the Reliquias deposit

The first phase of infill and resource expansion drilling began in December 2022 and consisted of 3,500 metres of BQ diameter drilling from underground drill platforms, with the final 1,805 metres of BQ diameter drilling, from 32 drill holes, along the Sacasipuedes, Meteysaca, Matacaballo, Pozo Rico, Vulcano, Perseguida and Pasteur (“PAS”) veins or vein systems, reported here. This drilling is in addition to the approximately 13,600 metres of drilling completed by November 2022 which were used for the current mineral resource estimate. Drilling recoveries were, on average, above 85% for all drill holes. Figure 1 shows the location of the reported drill holes, and Table 1 details the results and the veins targeted by each drill hole.

Drill hole SMR103BQ-23-MTS, an infill hole in the central portion of the Meteysaca (MTS) vein, reports some of the highest gold grades identified to date at Reliquias, confirming the presence of high-grade gold grades in some of the veins.

Drill hole SMR118BQ-23-PAS was drilled along the easternmost segment of the Matacaballo (MTC) vein system drill tested to date and extends the high-grade silver mineralization further east than the current block model. This mineralization remains open to the east and at depth.

Drill hole SMR126BQ-23-PER was drilled on the northwestern extension of the Perseguida (PER) vein and has hit some of the highest grade silver and base metal mineralization found to date. The mineralization remains open to the northwest and at depth.

Infill Drilling on the SCS vein system confirms the current block model and will be used for detailed mine planning in the upcoming engineering phase of project development. Figures 2 and 3 show longitudinal sections along the MTC and PER veins respectively, both of which remain open along strike and at depth.

Operational Update and outlook

Mine crews have continued to rehabilitate the underground workings, preparing them for future mining by the Company. So far, 11.37 km out of 14.63 km of underground workings, including ramps, sublevels, and crosscuts, have been rehabilitated using two scoop trams. The Company expects to complete the remaining 3.26 km of mine rehabilitation by the end of Q4 2023. Table 2 shows the advance percentages in each sector of the mine:

Once the rehabilitation work is completed, the Company will have access to the highest grade blocks from the current resource, as well as the shallower levels our current infill drill program is targeting. Coupled with the existing mine infrastructure, such as processing plant and tailings facilities, these upgraded tunnels position the Reliquias project as a near term producer, with significant exploration upside.

The 2023 drill program consists of two phases: an initial 3,500 metre phase using BQ diameter core (now completed); and a second 12,500 meters phase using NQ and HQ diameter core. Full results from the BQ diameter drilling have now been announced (see also March 29^th news release at https://agmr.ca/delineation-drilling-at-agmrs-reliquias-mine-confirms-high-grade-intercepts/). The second phase of infill drilling started in June 2023 and continues with 3 rigs working in the upper levels of the MTC (Matacaballo), MTS (Meteysaca), and SCS (Sacasipuedes) vein systems, where high grade historical resource blocks remain outside of the current resource estimate. The Company plans to incorporate these high-grade blocks in future resource estimates. Results will be announced as they become available.

The Company will review the full results from its ongoing drilling, channel sampling and rehabilitation programs once it receives them and it looks forward to informing shareholders on its development schedule and the next steps at Reliquias.

Qualified Person

Antonio Cruz Bermudez, , P. Geo. Registered Member MAIG is an independent consultant of the Company and the Qualified Person (within the meaning of NI 43-101) responsible for the MRE, has reviewed and approved the scientific and technical information contained in this news release.

About Silver Mountain 

Silver Mountain Resources Inc. is a silver explorer and mine developer planning to restart production at the Reliquias underground mine and undertake exploration activities at its prospective silver camps at the Castrovirreyna Project in Huancavelica, Peru.

Figure 1: Location of Phase 1 underground drill holes at Reliquias reported in this news release. (CNW Group/Silver Mountain Resources Inc.)

Table 1: Summary of results from the first phase of the 2023 drill program. (CNW Group/Silver Mountain Resources Inc.)

Figure 2: Longitudinal section of the Matacallo (MTC) vein showing current and historical resources and highlighted results from the first phase of infill drilling reported here. Note: a qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and the issuer is not treating the historical estimate as current mineral resources or mineral reserves. (CNW Group/Silver Mountain Resources Inc.)

Figure 3: Longitudinal section of the Perseguida (PER) vein showing current and historical resources and highlighted results from the first phase of infill drilling reported here. Note: a qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and the issuer is not treating the historical estimate as current mineral resources or mineral reserves. (CNW Group/Silver Mountain Resources Inc.)

Figure 4: Longitudinal section of the Matacaballo (MTC) vein showing current rehabilitated mine sections. Note: a qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and the issuer is not treating the historical estimate as current mineral resources or mineral reserves. (CNW Group/Silver Mountain Resources Inc.)