REG - Guanajuato Silver Co - Guanajuato Silver Provides Operations Update

Guanajuato SilverAnnouncement

05/10/2023 13:45

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RNS Number : 8485O  Guanajuato Silver Company Ltd.  05 October 2023

 

Guanajuato Silver Provides Operations Update

 

Guanajuato Silver Company Ltd. (the "Company" or "GSilver")
(TSXV:GSVR)(AQUIS:GSVR)(OTCQX:GSVRF) is providing an operations update and
revised 2023 production guidance for the Company's four wholly owned producing
silver mines: the El Cubo Mines Complex ("El Cubo"), Valenciana Mines Complex
("VMC") and San Ignacio mine ("San Ignacio") in Guanajuato, Mexico, and the
Topia mine ("Topia") located in Durango, Mexico. The Company has, and will be,
implementing a number of operational changes to enhance profitability as each
mine continues to ramp-up production.

 

James Anderson, Chairman and CEO, said, "The numerous mineralized systems in
the Guanajuato district have exhibited high grades for over 450-years; with
this in mind, we are adjusting a number of our operational strategies in order
to focus on mining higher grade material at abridged volumes. At Valenciana,
we continue to add infrastructure improvements to allow for the targeting of
higher-grade areas of the mine; at El Cubo we are completing the dewatering of
sections of the mine known to hold high-grade vein areas; at San Ignacio, a
new ventilation raise will allow us to target the area of the mine that
generated one of our best drill intercepts to date - Drillhole 6, which
intercepted the Melladito vein and returned almost five meters of over 1200
grams per tonnes AgEq (See Guanajuato Silver news release dated February 23,
2023 (https://pr.report/6gxYvcWB) ); and at Topia, we are now transitioning to
a new business model where we will engage exclusively in the mineral
processing of third party ore, which we believe will prove significantly more
profitable. We are convinced that these changes will enhance operations across
all our silver producing assets; with a number of these initiatives expected
to take the remainder of the year to implement, we expect the implementation
of these changes will influence total silver-equivalent production for 2023."

 

Valenciana Mines Complex

The Company continues to demonstrate marked progress at the Valenciana Mines
Complex. Since commercial restart at VMC in January 2023, steady production
improvements, aided by the refurbishment of both the Cata shaft and a new
underground locomotive system, have enabled the Company to achieve production
at the Cata Mill averaging over 20,000 tonnes per month from material sourced
from Valenciana and San Ignacio. The Company is now working to access the more
northern areas of the mine, such as the Guanajuatito zone, where higher-grade
material has been identified; furthermore, the recovery of higher-grade
mineralized material from old pillars has and will continue to contribute to
monthly throughputs.

 

El Cubo Mines Complex

Located to the east of the city of Guanajuato, the Company's El Cubo operation
is now milling at the rate of approximately 22,000 tonnes per month; this rate
represents approximately half of the total capacity at the mill. The Company
is implementing a number of operational upgrades designed to minimize dilution
and maximize higher grade vein material, such as:

 

§ Utilizing more targeted mining practices, such as using mine explosives
within tighter limits of the various vein structures.

§ Reducing the processing of mineralized back-fill due to the high volatility
in grades found within this material; henceforth, the Company will mine and
process only virgin vein material from the Villalpando and Santa Cecilia areas
of El Cubo.

§ Continuing to expand the number of production stopes; over the past
quarter, development work has been conducted at El Cubo with the objective
that the number of production stopes increase from 12 to 20.

§ Within the next two months, completing dewatering that will allow access to
higher-grade areas located deeper within the Villalpando mine area.

 

San Ignacio Mine

The Company, in conjunction with the Secretaria De Trabajo (the Federal
Ministry of Labour), have been working to improve safety and security
conditions at the mine in response to the unfortunate fatality that occurred
in August 2023.  After curtailing some mineral extraction activities for a
period of 15 days, the mine is again fully operational. Improvements to the
ventilation system have been installed, which will allow for development and
exploitation of the Melladito vein and other associated high-grade veinlets in
Q4.

 

Topia Mine

The mineralized systems currently being mined at Topia are extraordinarily
high grade yet are associated with higher extraction costs because of the
narrow nature of the vein structures. With the goal of improving profitability
at Topia, the Company intends to dramatically transform its operations through
the exclusive use of local mine contactors. With this new business model,
GSilver will curtail most of its mining activities and focus almost entirely
on acquiring and processing mineralized material from these contractors.
Additional cost-saving measures are in the process of being implemented,
including staff reductions, as the Company moves to position the Topia mine
for long-term sustainability and profitability.

 

James Anderson added, "At Topia, throughout 2023, we have significantly grown
the business of acquiring high-grade mineralized material from local miners.
We have determined that this business model is more profitable than having our
own mining crews as it provides us with higher margins, more revenue, and more
potential profit than does our previous owner-operator model. This is
particularly true when working with Topia's high-grade but very narrow vein
structures."

 

AgEq Production Guidance

The Company now anticipates that full year AgEq 2023 production will range
from 3.4 million to 3.6 million ounce(1).

 

The purpose of the production guidance is to assist investors, shareholders,
and others in understanding certain metrics relating to expected 2023
production for evaluating the performance of the Company's business and is
dated as of the date of this press release. This information may not be
appropriate for other purposes. Information about the Company's guidance,
including the various assumptions underlying it, is forward-looking and should
be read in conjunction with "Forward-Looking Statements" in this press release
and the related disclosure and information about various economic,
competitive, and regulatory assumptions, factors, and risks that may cause the
Company's actual future financial and operating results to differ from what it
currently expects.

 

(1) Silver equivalents were calculated using an 81.33:1 (Ag/Au), 0.04:1
(Ag/Pb) and 0.05:1 (Ag/Zn) ratio for Q2 2023, an 83.4:1 (Ag/Au) ratio for Q2
2022; an 82.51:1 (Ag/Au), 0.04:1 (Ag/Pb) and 0.06:1 (Ag/Zn) ratio for YTD
2023,  an 82:22:1 (Ag/Au) ratio for YTD 2022, respectively and an 83.78:1
(Ag/Au), 0.04:1 (Ag/Pb) and 0.06:1 (Ag/Zn) ratio for Q1 2023.

 

Technical Information

Reynaldo Rivera, VP of Exploration of GSilver, has approved the scientific and
technical information contained in this news release. Mr. Rivera is a member
of the Australasian Institute of Mining and Metallurgy (AusIMM - Registration
Number 220979) and a "qualified person" as defined by National Instrument
43-101, Standards of Disclosure for Mineral Projects.

For further information regarding Guanajuato Silver Company Ltd., please
contact:

 

JJ Jennex, Gerente de Comunicaciones, T: 604 723 1433

E: jjj@GSilver.com

Gsilver.com

 

VSA Capital - AQSE Corporate Adviser

T: +44 (0) 20 3005 5000

Simon Barton - Corporate Finance

Thomas Jackson - Corporate Finance

Andrew Monk - Corporate Broking

David Scriven - Corporate Broking

 

About Guanajuato Silver

GSilver is a precious metals producer engaged in reactivating past producing
silver and gold mines in central Mexico. The Company produces silver and gold
concentrates from the El Cubo Mine Complex, Valenciana Mines Complex, and the
San Ignacio mine; all three mines are located within the state of Guanajuato,
which has an established 480-year mining history. Additionally, the Company
produces silver, gold, lead, and zinc concentrates from the Topia mine in
northwestern Durango. With four operating mines and three processing
facilities, Guanajuato Silver is one of the fastest growing silver producers
in Mexico.

 

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