Growth doesn’t always come from new projects.

Key Concepts

• Brownfields Exploration: Exploration activities conducted near existing mines to extend their operational life.
• Reserve Life: The estimated time a mine can remain operational based on proven and probable mineral reserves.
• Concessions: Legal rights to explore and extract minerals from a specific geographic area.
• Feasibility Study: A comprehensive analysis used to determine the economic and technical viability of a mining project.
• Resource Estimation: The process of calculating the quantity and quality of mineral deposits within a specific area.

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Exploration Strategy and Project Updates

The company is currently executing an aggressive "brownfields exploration" strategy across its primary assets—Guanaceví, Copa, Tayoltita, and La Luz—with the primary goal of extending mine life and optimizing resource extraction.

1. Guanaceví: Extending Mine Life

• Current Status: The mine currently holds a two-year reserve life of high-grade silver.
• Strategy: The company is actively drilling on concessions under its control. A significant focus is placed on transitioning away from mining on third-party concessions, which currently incur significant royalty payments, toward company-owned concessions to improve margins.

2. Copa: Resource Validation

• Historical Context: The project has a historical resource estimate of approximately 118 million ounces of silver, established in 2024.
• Objective: The current drilling program aims to prove out this resource. The company expects to release an updated resource estimate by the end of the year, which is anticipated to align closely with the historical figure.

3. Tayoltita: Long-term Expansion

• Feasibility Study: The initial feasibility study projected a 10-year reserve life. However, management maintains a long-term outlook, anticipating operations to continue for 15 to 25 years.
• Methodology: Because the mine is underground, the company is utilizing drilling to explore both "along strike" (horizontally along the mineralized vein) and "to depth" (vertically into the deposit). Results from this campaign are expected later this year.

4. La Luz: Operational Efficiency

• Objective: Drilling is being conducted below the existing mine workings.
• Goal: The primary purpose is to develop a more robust and efficient mine plan, ensuring that extraction processes are optimized for the specific geological conditions of the site.

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Synthesis and Outlook

The company’s exploration strategy is heavily reliant on active drilling programs to convert potential resources into proven reserves. By focusing on extending the life of existing assets (Guanaceví and Tayoltita) and validating historical data (Copa), the company aims to secure long-term production stability. The management emphasizes that these efforts are designed to improve operational efficiency and reduce reliance on third-party royalty-bearing concessions. Stakeholders can expect a series of updates and results from these drilling campaigns throughout the remainder of the year.