GSVR.V · 2025-08-27 12:00:00

Mine Operating Income Tops US$8.2M in First Half of 2025 GSilver Posts 5th Consecutive Quarter of Positive Mine Operating Income

Production Results

Mine Operating Income Tops US$8.2M in First Half of 2025

GSilver Posts 5th Consecutive Quarter of Positive Mine Operating Income

August 27th, 2025 – Vancouver, British Columbia – Guanajuato Silver Company Ltd. (the “ Company” or

“GSilver”) ( TSXV:GSVR) (OTCQX:GSVRF) is pleased to announce ﬁnancial information and production

results for the six months ended June 30, 2025. The Company’s condensed consolidated interim ﬁnancial

statements for the second quarter of 2025 and Management’s Discussion and Analysis (“MD&A”) thereon

can be viewed under the Company’s proﬁle at www.sedarplus.ca. All dollar amounts are in US dollars

(US$) and prepared in accordance with IFRS Accounting Standards (IFRS) as issued by the International

Accounting Standards Board. Production results are from the Company’s wholly owned El Cubo Mines

Complex (“ El Cubo ”), Valenciana Mines Complex ( “VMC”), and the San Ignacio Mine (“ San Ignacio ”)

located in Guanajuato, Mexico, and the Topia Mine (“Topia”) located in Durango, Mexico.

Selected Q2 2025 Highlights:

 Mine operating income of $ 3.38M was the fifth consecutive positive quarter; mine operating

income totaled US$8.2M for H1 2025. Adjusted EBITDA* of $1.89M was also positive for the

fifth consecutive quarter.

 Working capital deficiency improved by 56% or $8.7M during H1, 2025; down from -$15.4M to

-$6.7M.

 The average realized silver price for the quarter was $3 3.58 per ounce, up 5.2% from Q1. The

average realized gold price for the quarter was $ 3,278 per ounce. Guanajuato Silver is a primary

precious metals producer with over 90% of the Company’s revenue derived from the production

and sale of silver and gold.

 Production for the quarter was 659,237 silver equivalent ounces ** (“AgEq”), production

consisted of 321,990 ounces of silver, 2,913 ounces of gold, 683,163 pounds of lead, and 853,646

pounds of zinc.

James Anderson, CEO & Chairman, said, “Guanajuato Silver’s operations in Mexico continue to generate

positive quarterly mine operating income and positive EBITDA; our mines are generating operating

income, and we remain highly leveraged to the price of silver and gold. Our team has done a great job of

rejuvenating a portfolio of producing assets over a very short period; moving into the second half of the

year, “grade will be king ,” as we focus on the quality of the ounces we produce rather than simply the

quantity. The full potential of our assets will be unlocked through diligent planning , optimization,

development, and exploration of our mine s as we aim to drive better eﬃciencies that maximize our

operating margins.”

-$1,933,352

-$1,655,603

$947,433

$515,576

$2,662,682

$4,845,773

$3,400,000

-$3,000,000

-$2,000,000

-$1,000,000

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025

Mine Operating Income ($USD)

Recently appointed Senior Vice -President, Rick Trotman, added, “All the components for success are

present and readily available for us at Guanajuato Silver. Going forward we will be emphasizing grade over

tonnes, and margin over total ounces, as we establish a future-focused mining culture that is centered on

discipline and growth. I am excited by the opportunity to help build Mexico’s next mid-tier precious metals

producer.”

*EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), Adjusted EBITDA, AISC and

working capital are non -IFRS ﬁnancial measures with no standardized meaning under IFRS, and

theref ore they ma y not be compar able t o similar measures present ed by other issuers. F or further

information and detailed reconciliation s of Non -IFRS ﬁnancial measures to the most directly

comparable IFRS measures see “Non-IFRS Financial Measures” in this News Release.

WORKING CAPITAL

Working capital is a non -IFRS measure that is a common measure of liquidity but does not have any

standardized meaning. The most directly comparable measure prepared in accordance with IFRS is current

assets net of current liabilities. Working capital is calculated by deducting current liabilities from current

assets. Working capital should not be considered in isolation or as a substitute for measures prepared in

accordance with IFRS. The measure is intended to assist readers in evaluating the Company’s liquidity.

Q2 2025 OPERATING AND FINANCIAL HIGHLIGHTS

The following table summarizes the Company’s consolidated operating and ﬁnancial results for the three

months ended June 30, 2025 as compared to the three months ended March 31, 2025. The Company

wishes to highlight that 78% of its net loss in Q2 is attributable to non -cash accounting items, primarily

non-cash derivative losses related to the gold loan credit facility with Ocean Partners , and unrealized

foreign exchange losses driven by the strengthening of the Mexican peso.

June 30, December 31,

2025 2024

$ $

Current assets 23,931,996 20,688,229

Current liabilities 30,677,717 36,077,408

Working capital (6,745,721) ( 15,389,179)

As at

1. **Silver equivalents are calculated using a 97.58:1 (Ag/Au), 0.03:1 (Ag/Pb) and 0.04:1 (Ag/Zn) ratio for

Q2 2025; and an 89.68:1 (Ag/Au), 0.03:1 (Ag/Pb) and 0.04:1 (Ag/Zn) ratio for Q1 2025, respectively.

Cash cost per silver equivalent ounce includes mining, processing, and direct overhead. See

Reconciliation to IFRS in the Non-IFRS Financial Measures section of this news release.

Consolidated June 30,

2025

March 31,

2025 % Change

Operating

Tonnes mined 113,299 123,604 (8%)

Tonnes milled 112,107 128,060 (12%)

Silver ounces produced 321,990 380,406 (15%)

Gold ounces produced 2,913 3,347 (13%)

Lead produced (lbs) 683,163 699,294 (2%)

Zinc produced (lbs) 853,646 909,029 (6%)

Silver equivalent (“Ag/Eq”)

ounces produced(1) 659,237 738,006 (11%)

Silver ounces sold 312,867 376,995 (17%)

Gold ounces sold 2,948 3,429 (14%)

Lead sold (lbs) 652,382 722,168 (10%)

Zinc sold (lbs) 686,621 918,693 (25%)

Ag/Eq ounces sold(1) 648,313 742,969 (13%)

Cost per tonne ($)(5) 125.64 109.19 15%

Cash cost per Ag/Eq ounce ($)

(1)(2)(5) 21.67 19.19 13%

AISC per Ag/Eq ounce ($) (1)(3)(5) 26.38 23.41 13%

Financial $ $

Revenue 18,458,010 21,330,483 (13%)

Cost of Sales 15,077,872 16,484,710 (9%)

Mine operating income 3,380,138 4,845,773 (30%)

Mine operating cashflow before

taxes(7) 4,760,683 6,331,995 (25%)

Net loss (3,682,223) (2,271,554) (62%)

EBITDA(4)(5) (430,380) 1,065,775 (140%)

Adjusted EBITDA(4)(5) 1,898,951 4,104,669 (54%)

Realized silver price per ounce(6) 33.58 31.88 5%

Realized gold price per ounce(6) 3,278.96 2,842.80 15%

Realized lead price per pound(6) 0.88 0.89 (1%)

Realized zinc price per pound(6) 1.19 1.29 (8%)

Working capital(5) (6,745,721) (17,811,805) 62%

Shareholders

Loss per share – basic and

diluted $ (0.01) $ (0.00) 100%

Weighted Average Shares

Outstanding 473,222,722 472,186,711 0%

Three months ended

2. AISC per AgEq oz includes mining, processing, direct overhead, corporate general and administration

expenses, on-site exploration, reclamation, and sustaining capital. See Reconciliation to IFRS in the

Non-IFRS Financial Measures section of this news release.

3. See Reconciliation of earnings before interest, taxes, depreciation, and amortization in the Non -IFRS

Financial Measures section of this news release.

4. Mine Operating Cash ﬂow Before Taxes, Cash cost per silver equivalent, cost per tonne, AISC per AgEq

ounce, EBITDA, Adjusted EBITDA and working capital are non -IFRS ﬁnancial measures with no

standardized meaning under IFRS, and therefore they may not be comparable to simila r measures

presented by other issuers. For further information and detailed reconciliations of non-IFRS ﬁnancial

measures to the most directly comparable IFRS measures see “Non -IFRS Financial Measures” in the

Non-IFRS Financial Measures section of this news release.

5. Based on provisional sales before ﬁnal price adjustments, before payable metal deductions,

treatment, and reﬁning charges.

6. Mine operating cash ﬂow before taxes is calculated by adding back depreciation, depletion, and

inventory write-downs to mine operating loss. See Reconciliation to IFRS in the Non -IFRS Financial

Measures section of this news release.

NON-IFRS FINANCIAL MEASURES

The Company has disclosed certain non -IFRS ﬁnancial measures and ratios in this MD&A, as discussed

below. These non-IFRS ﬁnancial measures and non-IFRS ratios are widely reported in the mining industry

as benchmarks for performance and are used by Management to monitor and evaluate the Company's

operating performance and ability to generate cash. The Company believes that, in addition to ﬁnancial

measures and ratios prepared in accordance with IFRS, certain investors use these non- IFRS ﬁnancial

measures a n d r a ti o s t o e v a l u a t e t h e C o m p a n y ’ s p e r f o r m a n c e . H o w e v e r , t h e m e a s u r e s d o n o t h a v e a

standardized meaning under IFRS and may not be comparable to similar ﬁnancial measures disclosed by

other companies. Accordingly, non-IFRS ﬁnancial measures and non-IFRS ratios should not be considered

in isolation or as a substitute for measures and ratios of the Company’s performance prepared in

accordance with IFRS.

Non-IFRS ﬁnancial measures are deﬁned in National Instrument 52-112 – Non-GAAP and Other Financial

Measures Disclosure (“NI 52 -112”) as a ﬁnancial measure disclosed that (a) depicts the historical or

expected future ﬁnancial performance, ﬁnancial position or cash ﬂow of an entity, (b) with respect to its

composition, excludes an amount that is included in, or includes an amount that is excluded from, the

composition of the most directly comparable ﬁnancial measure disclosed in the primary ﬁnancial

statements of the entity, (c) is not disclosed in the ﬁnancial statements of the entity, and (d) is not a ratio,

fraction, percentage or similar representation.

A non-IFRS ratio is deﬁned by NI 52-112 as a ﬁnancial measure disclosed that (a) is in the form of a ratio,

fraction, percentage, or similar representation, (b) has a non-IFRS ﬁnancial measure as one or more of its

components, and (c) is not disclosed in the ﬁnancial statements.

MINE OPERATING CASH FLOW BEFORE TAXES

Mine operating cash ﬂow before taxes is a non-IFRS measure that does not have a standardized meaning

prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers.

Mine operating cash ﬂow is calculated as revenue minus production costs, transportation and selling costs

and inventory changes. Mine operating cash ﬂow is used by management to assess the performance of

the mine operations, excluding corporate and exploration activities, and is provided to investors a s a

measure of the Company’s operating performance.

EBITDA

EBITDA is a non-IFRS financial measure, which excludes the following from net earnings:

• Income tax expense;

• Finance costs;

• Amortization and depletion.

Adjusted EBITDA excludes the following additional items from EBITDA:

• Share based compensation;

• Non-recurring impairments (reversals);

• Loss (gain) on derivative;

• Unrealized foreign exchange (gain) loss relating to ARO

• Significant other non-routine finance items.

Adjusted EBITDA per share is calculated by dividing Adjusted EBITDA by the basic weighted average

number of shares outstanding for the period.

Management believes EBITDA is a valuable indicator of the Company’s ability to generate liquidity by

producing operating cash flow to fund working capital needs, service debt obligations, and fund capital

expenditures. Management uses EBITDA for this purpose. EBITDA is also frequently used by investors and

analysts for valuation purposes whereby EBITDA is multiplied by a factor or “EBITDA multiple” based on

an observed or inferred relationship between EBITDA and market values to determine the approximate

total enterprise value of a Company. Management believes that Adjusted EBITDA provides useful

information to investors and others in understanding and evaluating our operating results because it is

consistent with the indicators management uses internally to measure the Company's performance and

is an indicator of the performance of the Company's mining operations.

June 30, March 31, December 31, September 30, J une 30, March 31,

2025 2025 2024 2024 2024 2024

$ $ $ $ $ $

Revenues 18,458,010 2 1,330,483 19,038,311 18,309,105 20,551,139 17,764,983

Production cost (14,085,257) ( 13,983,060) (14,400,672) (14,826,181) (16,220,357) (16,141,925)

Transportation and other support cost (653,856) ( 607,516) (628,913) (315,167) (747,727) (754,652)

Inventory changes 1,041,786 ( 407,912) (66,950) 132,282 304,868 492,118

Mine operating cash flows before taxes 4,760,683 6, 331,995 3,941,776 3,300,039 3,887,924 1,360,523

Three months ended

EBITDA is intended to provide additional information to investors and analysts. It does not have any

standardized definition under IFRS and should not be considered in isolation or as a substitute for

measures of operating performance prepared in accordanc e with IFRS. EBITDA excludes the impact of

cash costs of financing activities and taxes, and the effects of changes in operating working capital

balances and therefore is not necessarily indicative of operating profit or cash flow from operations as

determined by IFRS. Other companies may calculate EBITDA and Adjusted EBITDA differently.

Cash Cost per Ag/Eq Ounce, All-In Sustaining Cost per Ag/Eq Ounce and Production Cost per Tonne

Cash costs per silver equivalent oz and production costs per tonne are measures developed by precious

metals companies in an effort to provide a comparable standard; however, there can be no assurance

that the Company’s reporting of these non-IFRS measures and ratios are similar to those reported by other

mining companies. Cash costs per silver equivalent ounce and total production cost per tonne are non -

IFRS performance measures used by the Company to manage and evaluate operating performance at its

operating mining unit, in conjunction with the related IFRS amounts. They are widely reported in the silver

mining industry as a benchmark for performance, but do not have a standardized meaning and are

disclosed in addition to IFRS measures. Production costs include mining, milling, and direct overhead at

the operation sites. Cash costs include all direct costs plus royalties and special mining duty. Total

production costs include all cash costs plus amortization and depletion, changes in amortization and

depletion in finished goods inventory and site share-based compensation. Cash costs per silver equivalent

ounce are calculated by dividing cash costs and total production costs by the payable silver ounces

produced. Production costs per tonne are calculated by dividing production costs by the number of

processed tonnes. The following tables provide a detailed reconciliation of these measures to the

Company’s direct production costs, as reported in its consolidated financial statements.

AISC is a non -IFRS performance measure and was calculated based on guidance provided by the World

Gold Council (“WGC”). WGC is not a regulatory industry organization and does not have the authority to

develop accounting standards for disclosure requirement s. Other mining companies may calculate AISC

differently as a result of differences in underlying accounting principles and policies applied, as well as

differences in definitions of sustaining capital expenditures. AISC is a more comprehensive measure than

June 30,

2025

March 31,

2025

December 31,

2024

September 30,

2024

June 30,

2024

March 31,

2024

$ $ $ $ $ $

Net loss per financial statements (3,682,223) (2,271,554) (2,413,440) (4,863,549) (2,749,933) (7,381,691)

Depreciation and depletion – cost of sales 1,380,545 1,486,222 1,279,094 2,784,463 2,940,490 3,016,127

Depreciation and depletion – general and

administration 23,086 37,416 40,261 41,114 41,773 42,567

Interest and finance costs (income), net 1,032,037 1,139,341 1,439,282 1,575,092 1,775,577 1,544,130

Current income tax 816,175 674,350 1,911,341 - - -

EBITDA (430,380) 1,065,775 2,256,538 (462,880) 2,007,907 (2,778,867)

Share based compensation 280,708 97,767 118,490 214,129 259,208 540,783

(Gain) loss on derivatives 747,585 2,846,930 159,997 1,663,209 1,488,929 1,350,446

Unrealized foreign exchange (gain) loss 1,390,067 95,834 (784,643) (1,446,722) (1,833,882) 263,979

Other finance items, net (89,029) (1,636) 59,907 (22,891) (16,203) (452,933)

Endeavour Silver contingent payment - - - 1,000,000 - -

Other expenses - - (60,207) (52,568) 10,974 (13,726)

VAT write-off - - - - - 161,303

Adjusted EBITDA 1,898,951 4,104,669 1,750,081 892,277 1,916,933 (929,015)

Three months ended

cash cost per ounce and is useful for investors and management to assess the Company’s operating

performance by providing greater visibility, comparability and representation of the total costs associated

with producing silver from its current operations, in conjunction with related IFRS amounts. AISC helps

investors to assess costs against peers in the industry and help management assess the performance of

its mine.

AISC includes total production costs (IFRS measure) incurred at the Company’s mining operation, which

forms the basis of the Company’s total cash costs. Additionally, the Company includes sustaining capital

expenditures, corporate general and administrative expenses, operating lease payments and reclamation

cost accretion. The Company believes this measure represents the total sustainable costs of producing

silver and gold concentrate from current operations and provides additional information of the Company’s

operational performance and ability to generate cash flows. As the measure seeks to reflect the full cost

of silver and gold concentrate production from current operations, new projects capital at current

operations is not included. Certain other cash expenditures, including share -based payments, tax

payments, dividends and financing costs are also not included.

The following tables provide detailed reconciliations of these measures to cost of sales, as reported in

notes to the Company’s consolidated financial statements.

1. Silver equivalents are calculated using 97.58:1 (Ag/Au), 0.03:1 (Ag/Pb) and 0.04:1 (Ag/Zn) ratio for Q2

2025 and an 89.68:1 (Ag/Au), 0.03:1 (Ag/Pb) and 0.04:1 (Ag/Zn) ratio for Q1 2025, respectively.

2. Cash cost per silver equivalent ounce includes mining, processing, and direct overhead.

3. AISC per oz include s mining, processing, direct overhead, corporate general and administration

expenses, on-site exploration, reclamation, and sustaining capital.

4. Production costs include mining, milling, and direct overhead at the operation sites.

El Cubo VMC San Ignacio Topia Consolidated Consolidated

Change

$ $ $ $ $ $

Cost of sales 5,015,766 3,355,114 2,047,273 4,651,776 15,069,930 16,468,334 (8%)

Transportation and selling cost (314,565) ( 62,910) (46,199) (222,240) (645,913) (591,141) 9%

Inventory changes 194,301 194,651 165,937 486,897 1,041,786 (407,912) (355%)

Depreciation (378,772) (368,498) (278,850) (354,425) (1,380,545) (1,486,222) (7%)

Production cost A 4,516,732 3,118,356 1,888,162 4,562,007 14,085,257 13,983,060 1%

Add (subtract):

Government royalties and mining taxes 138,439 29,820 22,435 7,341 198,034 182,840 8%

Total cash cost B 4,655,171 3,148,176 1,910,596 4,569,348 14,283,291 14,165,900 1%

General and administrative - corporate - - - - 2,063,810 1,931,217 7%

Operating lease payments 280,827 3,987 3,351 6,650 294,815 250,437 18%

Sustaining capital expenditures 230,034 283,826 129,906 107,062 750,828 926,948 (19%)

Total All-in sustaining cash cost C 5,166,032 3,435,989 2,043,853 4,683,060 17,392,744 17,274,501 1%

Tonnes milled D 57,656 26,982 14,648 12,821 112,107 128,060 (12%)

Silver equivalent ounces produced E 245,278 106,278 76,947 230,735 659,238 738,006 (11%)

Production cost per tonne A/D 78.34 115.57 128.90 355.82 125.64 109.19 15%

Cash cost per AgEq ounce produced B/E 18.98 29.62 24.83 19.80 21.67 19.19 13%

All-in sustaining cash cost per AgEq

ounce produced C/E 21.06 32.33 26.56 20.30 26.38 23.41 13%

Mining cost per tonne 35.23 5 2.23 94.61 243.39 70.89 65.27 9%

Milling cost per tonne 27.10 22.83 23.63 73.54 30.93 25.97 19%

Indirect cost per tonne 16.01 40.51 10.67 38.89 23.83 17.94 33%

Production cost per tonne 78.34 115.57 128.90 355.82 125.64 109.19 15%

Mining 2,031,191 1,409,386 1,385,792 3,120,534 7,946,904 8,359,053 (5%)

Milling 1,562,344 615,878 346,091 942,814 3,467,128 3,326,219 4%

Indirect 923,196 1,093,092 156,279 498,658 2,671,225 2,297,789 16%

Production Cost 4,516,732 3,118,356 1,888,162 4,562,007 14,085,257 13,983,060 1%

Three months ended June 30, 2025

Three months ended

March 31, 2025

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