AbraSilver Announces Robust PEA of Diablillos Including After-Tax NPV of US$364M Economics Demonstrate Potential for a Highly Economic Oxide Silver-Gold Development Project

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AbraSilver Announces Robust PEA of Diablillos Including After-Tax NPV of US$364M

Economics Demonstrate Potential for a Highly Economic Oxide Silver-Gold Development Project

Toronto – November 29, 2021: AbraSilver Resource Corp. (TSX.V:ABRA; OTCQX: ABBRF)

("AbraSilver" or the “Company”) is pleased to announce the results of a Preliminary Economic

Assessment (“PEA”) for its wholly-owned Diablillos project (“the Project”) in Salta Province, Argentina.

The PEA is based on the Mineral Resource estimate, recently reported in a Technical Report titled

“NI 43-101 Technical Report Mineral Resource Estimate – Diablillos Project”, effective October 28, 2021.

All dollar ($) figures are presented in US dollars unless otherwise stated. Base Case metal prices used

in this analysis are $1,650 per gold (“Au”) ounce (“oz”) and $24.00 per silver (“Ag”) oz.

PEA Study Highlights:

 Robust Economics:

o Pre-Tax NPV 5% of $678.5 Million (CAD$ 882.1 Million) with an Pre-Tax IRR of 44.3%

(Base Case);

o After-Tax NPV 5% of $364.0 Million (CAD$ 473.2 Million) with an After-Tax IRR of 30.2%

(Base Case).

 7,000 tonnes per day (“tpd”) production rate with an initial mine life of up to 16 years.

 Average annual production:

o Average annual production in first 5 years of 8.0 Moz Ag and 44.3 koz Au, or 11.4 Moz

AgEq;

o Average Life-of-Mine (“LOM”) production of 4.2 Moz Ag and 52.0 koz Au, or 8.5 Moz AgEq.

 Low cash operating costs:

o All-in Sustaining Cash Costs (“AISC”) during first 5 years of $10.41/oz AgEq;

o All-in Sustaining Cash Costs (“AISC”) during average Life-of-Mine (“LOM”) of $11.97/oz

AgEq.

 Initial Capital Expenditure of $255.0 million, with payback period of 2.6 years.

 Several potential opportunities have been identified that may significantly further enhance the

economic returns as detailed later in this release.

John Miniotis, President and CEO, commented, “We’re very pleased with the results of this PEA which

demonstrates that Diablillos is a stand-out, economically robust silver-gold project with significant upside

potential. Importantly, this assessment is just a snapshot of the potential value of Diablillos. Our ongoing

Phase II exploration program continues to intersect multiple high-grade results which are expected to

add significant incremental value. Moreover, we have identified several opportunities to further expand

and optimize the PEA case, which we intend to evaluate as we proceed towards a Feasibility Study.”

Table 1 – Commodity Price Sensitivity Analysis

Economic Parameters Downside

(-15%) Base Case Upside

(+15%)

Silver Price ($/oz) $20.40 $24.00 $27.60

Gold Price ($/oz) $1,400 $1,650 $1,900

After-tax NPV (5%, US$ million) $190 $364 $538

After-tax NPV (5%, CAD$ million) $247 $473 $700

After-Tax IRR (%) 20% 30% 39%

1Note: Based on USD/CAD F/X rate of: 1:30 : 1

The PEA presents a range of metal pricing scenarios on an after-tax basis to evaluate economics of both

upside and downside price scenarios. The economics of the Diablillos Project are very robust and offer

significant leverage to both silver and gold price, with an after-tax NPV5% of $538.2 Million (+51%) if prices

rise 15% from the Base Case (Table 1).

The PEA was prepared in accordance with National Instrument 43-101 Standards of Disclosure for

Mineral Projects (“NI 43-101”). The PEA was led by Mining Plus Peru S.A.C. with contributions from

Hanlon Engineering & Associates Inc. (a subsidiary of GR Engineering Services Limited) and SAXUM

Engineering LLC locally in Argentina.

The Company however cautions that the PEA summarized in this press release is preliminary in nature

and is intended to provide an initial, high-level review of the project’s economic potential. The PEA

replaces and supersedes the Company's previous 2018 PEA study.

There is no certainty that the results of the PEA will be realized. Mineral Resources that are not Mineral

Reserves do not have demonstrated economic viability.

Production Summary

The Diablillos Project has been envisioned as a conventional open pit utilizing contractor-operated truck

and shovel operations. The Oculto open pit considered 5 development phases and a total mine life of

approximately 16 years of production. Total material mined (excluding rehandle) is 170.3 Mt (37.4 Mt

mineralized material and 132.9 Mt waste) at a strip ratio of 3.6 (including pre-production) and 3.1 without

pre-stripping included.

The open pit consists of a single pit with a mining sequence to maximize grade. Additionally, it provides

suitable construction material for the project infrastructure, waste, and tailings management facilities.

Limited supplies of mineralized material will be available for commissioning purposes in the pre-

production year. The annual production and grade profile is shown in Figure 1.

Figure 1 – Diablillos Project Annual Silver Equivalent Production and Grade Profile

Processing

Metallurgical test work has been carried out in a range of different laboratories between 1996 and 2021.

Initial test work was supported by subsequent phases of testing which showed that the mineralisation is

amenable to conventional cyanide leaching techniques with the silver and gold extractable from finely

ground samples. However, at coarser crush sizes such as those used for heap leaching, the precious

metal extractions were noted to decrease. Alternative processing routes including gravity recovery and

flotation were also studied.

A conventional silver/gold processing plant flowsheet was developed from the test work results

incorporating crushing, grinding, cyanide leaching with oxygen addition, counter-current decantation

thickeners, Merrill Crowe precious metal recovery from solution followed by on-site smelting to dore bars.

The leached solids are detoxified, thickened and pumped to a tailings storage facility for permanent

disposal.

The design basis for the process plant is 7,000 tonnes of mineralized material per day (“tpd”), or 2.45

million tonnes per annum considering 350 days a year of operation. Alternative throughput options will

be considered in future studies.

This feed rate represents a moderate increase to the prior 2018 study based on additional Mineral

Resources. The plant front-end design has been simplified to a primary crusher and Semi-Autogenous

Ball Mill Crusher (“SABC”) circuit which is better suited to the variability of ore types that will be seen from

time to time.

Recoveries

Test work conducted to date has shown that reasonable precious metal extractions can be achieved

using sodium cyanide leaching for 24 hours of slurries ground to between 50 and 200 microns with

moderate reagent consumptions. The 2021 test program demonstrated no net economic benefit in sizes

less than 150 microns. Future optimization work will determine if a still coarser size further improves

projected economic results. The high silver to gold ratios evident in the Measured and Indicated

Resources and confirmed in the majority of variability samples suggest that following the leaching

process, the precious metals should be recovered by a Merrill Crowe zinc precipitation process rather

than CIP or CIL.

The 2021 metallurgical program at ALS Metallurgy Kamloops on 56 intercepts of quarter core has been

used as the basis of precious metal extraction estimations, together with the representative results of

earlier test programs. The results demonstrated a reasonable relationship between leach residue grades

and leach head grades for both gold and silver and the derived linear regressions have been used to

predict leach extractions of both metals. Some samples have exhibited variable leach behavior, either

consuming more cyanide or oxygen or both, and sometimes resulting in higher leach residue grades.

Such results are not considered refractory as the industry generally uses that term, but further work is

being carried out to understand the causes of these additional consumptions. Using the Mineral Resource

grades and the mining schedule, overall life of mine recoveries of silver and gold have been estimated to

be 73.4% and 86.0% respectively including an allowance for small losses from the Merrill Crowe circuit.

Project Capital Costs

The initial capital expenditures for the project are summarized in Table 2. Capital expenditures to be

incurred after the start-up of operations are assigned to sustaining capital and are projected to be covered

by operating cash flows.

Initial capital costs are estimated at $255.0 million, including $51.6 million in pre-stripping and

contingencies of $26.5 million. Importantly, pre-stripping costs have seen a material reduction of

approximately 45% from $93.3 million in the 2018 PEA study. The amount of initial waste stripping

material is now estimated at 15.9 million tonnes (compared to 28.7 million tonnes previously). Ongoing

drilling continues to intersect shallow gold dominant resources extending close to the surface, which may

result in a further improvement to reduce prestrip volumes and increase Resources.

Table 2 – Summary of Capital Cost Estimates ($ Million)

Description 2018 PEA

Study

Updated

Estimate

(2021 PEA)

Change

2018 PEA >> 2021 PEA

$ M $ M % Change $ Change

Surface Mining 93.3 51.6 -45% -41.7

Processing 69.2 76.9 11% 7.7

Site Infrastructure 35.2 53.7 53% 18.5

Owners Costs & Indirect Costs 63.0 46.3 -27% -16.7

Contingency & Other Provisions 32.3 26.5 -18% -5.8

Initial Capital Costs 293.0 255.0 -13% -38.0

Sustaining Capital 5.0 15.2 204% 10.2

Closure 13.0 8.2 -37% -4.8

Total Capital Costs 311.0 278.4 -10% -32.5

Notes on capital cost variations:

 Surface Mining: Discovery and definition of a shallow mineralization has greatly reduced pre-

stripping requirements and contributed to an increase in Mineral Resources.

 Processing: The 2021 PEA process plant includes addition of a coarse ore stockpile and extra

equipment for the grinding area, such as a SAG Mill, a Pebble crusher and three conveyors.

 Site Infrastructure: The 2021 PEA considers additional ancillary buildings and an increase of

$13.2 M in comparison to capital breakdowns from the 2018 PEA. This includes Water

Treatment, Truck Shop, Warehouse, Security Guard Gate, Explosive Storage, Laboratory,

Infirmary, Sewage Treatment, Hazardous Waste, Sample Storage and Reagent Storage.

Additionally, another major variance is the temporary camp construction in the 2018 PEA costed

at $0.4 M while current estimates accommodate 700 workers at a cost of $3.2 M.

 Owners Costs & Indirect Costs: The difference in cost is largely due to EPCM costs. The

2018 PEA capital breakdowns reviewed considered $26.4 M with additional costs of $6 M for

Processing, Infrastructure and Mining. A total of $32.4 M in contrast to the current estimate of

$19.5 M. Secondly in the 2018 PEA spare parts and first fills were considered Owners Costs.

The 2021 PEA considers these expenses as indirect costs.

 Contingency & Other Provisions: The contingency percentage set in the 2018 PEA was 18%,

meanwhile after greater definition this has been reduced in the 2021 PEA to 15%.

 Sustaining Capital: The increases in cost are due to a difference in the second stage of the

tailing storage facility ($4.9 M in 2018 PEA versus $7.6 M currently). In addition, the 2021 PEA

considers a miscellaneous allowance of $0.5 M per year of operation.

 Closure: The closure cost was estimated a 5% of direct cost. Due to lower direct costs the

amount has also been reduced.

Operating Costs

The operating cost estimate is based on a contractor-operated truck and shovel mining operation,

conventional processing facility, and Tailings Storage Facility. Mine operating cost estimates are provided

in Table 3 and unit costs per ounce produced is shown in Table 4. The PEA estimates that the operating

costs will average $9.8/oz of AgEq (or US$816/oz of AuEq).

Table 3 – Mine Operating Cost Estimates

Operating Costs $/tonne Basis

Mining - Waste 3.00 tonne mined

Mining - Mineralized Material 3.60 tonne mined

Mining - Total 12.64 tonne milled

Processing 17.87 tonne milled

G&A 2.51 tonne milled

Table 4 – Operating Cost per Ounce Produced

Operating Costs $/oz AgEq $/oz AuEq

Mining - Total 3.61 299.87

Processing 5.11 423.82

G&A 0.72 59.53

Salta Province Royalty 0.39 32.23

Total Operating Cost 9.83 815.45

Taxes and Royalties

Taxes and royalties are based on Argentinean legislated tax rates and reviewed by an independent tax

consultant. The current rates included are:

 Argentina corporate income tax: 35%

 Municipal taxes: 0.6%

 Provincial mining royalty: 3%

 Gold/Silver export duties: 8% / 4.5%

 An additional 1% NSR royalty is payable to EMX Royalty Corporation.

Summary of Economic Results

The table below summarizes the key economic results and parameters of the PEA study.

Table 5 – Summary of Project Economics

Metrics Units Results

Life of mine years 16

Total mineralized material mined M tonnes 37.4

Total contained silver M oz 86.9

Total contained gold k oz 939.8

Strip ratio Waste : ore 3.6

Throughput tpd 7,000

Head grade – silver (first 5 years / LOM) g/t 130.5 / 72.2

Head grade – gold (first 5 years / LOM) g/t 0.65 / 0.78

Recoveries – silver (first 5 years / LOM) % 77.4 / 73.4

Recoveries – gold (first 5 years / LOM) % 85.9 / 86.0

Average Production – silver (first 5 years / LOM) M oz 8.0 / 4.2

Average Production – gold (first 5 years / LOM) k oz 44.3 / 52.0

Operating cash costs LOM – silver equivalent $/oz AgEq 9.83

Operating cash costs LOM – gold equivalent $/oz AuEq 816

AISC (LOM) – silver equivalent (first 5 years / LOM) $/oz AgEq 10.41 / 11.97

AISC (LOM) – gold equivalent (first 5 years / LOM) $/oz AuEq 818 / 993

Initial Capital Costs $ M 255.0

Sustaining Capital Costs $ M 23.4

Pre-Tax NPV5% $ M 678.5

After-Tax NPV5% $ M 364.0

Significant Opportunities to Enhance Value

Several potential opportunities have been identified that may significantly enhance the economic return

outlined in the PEA. Significant opportunities include but are not limited to the following:

 Expansion of Oculto pit to the northeast:

Current modelling suggests the mineralization extends to the Northeast and drilling is ongoing to

quantify the opportunity.

 Expansion of shallow mineralization towards Fantasma:

Specifically, the shallow mineralization appears to extend in the direction of Fantasma. Drilling is

underway to quantify the opportunity.

 Expansion of Mineral Resources at depth:

Additional drilling is being conducted to understand the mineralization at depth.

 Expansion of annualized throughput:

Analysis is currently being undertaken to determine the optimum production that is possible from the

Oculto pit coupled with expanded processing plant throughputs. This may increase again with any

material from satellite pits.

 Inclusion of Fantasma and Laderas pits:

Work is ongoing to quantify these deposits which may also be exploitable by open pit methods.

 Inclusion of other exploration targets:

Delineating additional high-grade Mineral Resources through the ongoing exploration program.

 Mining Costs:

It is expected that stripping costs can be further reduced by defining the upper horizon of

unconsolidated scree that will likely not require blasting. Current analysis likely overestimates the cost

of removing this material.

 Metallurgy:

Increasing metallurgical recoveries with additional test work and optimization of process. This

includes analysis of options for selective processing of the distinct mineralization styles.

 Mining equipment selection:

A flat contract rate is currently being considered with equipment in line with the prior 2018 PEA study.

There is scope with the expansion to look at both different equipment and trade of studies regarding

owner operations.

 Blending and selective processing:

A limited analysis went into stockpile options for this study. Additional work could improve revenues

by processing high grade areas preferentially while stockpiling lower grade material.