GSVR.V · 2021-12-21 12:00:00

~ GSilver Drills 17.4m of 327 gpt AgEq at El Cubo ~ ~ Exploration at El Pinguico Continues ~

Drill Results

TSX-V: GSVR OTCQX: GSVRF

~ GSilver Drills 17.4m of 327 gpt AgEq at El Cubo ~

~ Exploration at El Pinguico Continues ~

December 21, 2021 – Vancouver, British Columbia – Guanajuato Silver Company Ltd. (the “Company” or

“GSilver”) ( TSXV:GSVR)(OTCQX:GSVRF) is pleased to provide drilling results from its ongoing

diamond drill program s at its 100% owned El Cubo m ine and its 100% owned El Pinguico exploration

project, located east and south, respectively, of the city of Guanajuato, Mexico.

Highlights include:

• 0.6 metres of 538 gpt AgEq drilled at El Cubo (Drill Hole CEB21-003).

• 25.85 metres of 235 gpt AgEq drilled at El Cubo (Drill Hole CEB21-004).

• 0.55 metres of 228 gpt AgEq drilled at El Pinguico (P21-015).

• Over 24,000 metres of core drilling committed for 2022.

El Cubo Mine Infill (Grade Control) & Expansion Drilling:

Both drill holes CEB21- 004 and VPO21-01 cut through long i ntervals of the Villalpando vein, and other

vein structures, within the Villalpando area. Especially significant is drill hole CEB21-004, which drilled

into the Cebolletas stope area of the Villalpando vein system; this drill hole returned 17.40m of 1.91 gpt Au

and 174 gpt Ag or 327 gpt AgEq (silver equivalent), within a broader interval of 25.85m of 1.38 gpt Au and

124 gpt Ag or 235 gpt AgEq. High grade intervals of 0.55m of 1,025 gpt AgEq and 0.65m of 1,069 gpt AgEq

within the longer interval shows the potential of this area of the El Cubo mine to deliver high grade results.

James Anderson, Chairman and CEO said: “ We are pleased with the results and pace of our initial drilling

at El Cubo; our drill program at El Cubo is in-line with our development schedule , and within our

expectations for grade and vein width in the Villalpando area. Over the past few months, we have established

greater grade control for mining while at the same time we have expanded the footprint surrounding our

known resources. The New Year will see a marked increase in exploration drilling, especially in the Dolores

and Santa Cecilia areas, where previously under -explored and potentially higher -grade silver and gold

bearing transverse veins strike at 90 degrees to the main NW-SE Villalpando/Dolores structures.”

El Cubo: Cebolletas Stope and 1850 Stope (1)

Drill Hole

From

(m)

Interval

(m)

Estimated

True Width

(m)

gpt

AgEq

gpt

CEB21-002 58.80 61.5 2.70 2.00 1.01 85 166

(including) 60.95 61.5 0.55 0.40 0.93 202 277

CEB21-003 6.95 7.55 0.60 0.45 4.33 192 538

CEB21-004 74.70 100.55 25.85 3.87 1.38 124 235

(including) 80.65 98.05 17.40 2.61 1.91 174 327

(including) 81.20 81.75 0.55 0.10 6.80 481 1025

(including) 87.35 88.00 0.65 0.12 5.80 605 1069

CEB21-005 50.50 53.15 2.65 1.40 0.37 99 128

CEB21-006 115.8 118.45 2.65 1.33 0.88 42 112

CEB21-007 1.20 2.50 1.30 0.88 0.27 104 126

and 57.65 58.85 1.20 0.79 0.74 108 168

(1) Due to a lack of easily accessible drill stations, CEB21-04 was drilled obliquely along the Villalpando

vein; the true width of the vein in this area is estimated to be less than 4.0m.

GSilver is currently drifting towards the Cebolletas stope and expects to begin mining mineralized material

from this area in the first quarter of 2022. Approximately 800 meters of development work has been

completed to date - 500 meters in mineralized material and 300 meters in waste - with an additional 300

meters of additional stope development work needed before this area will commence active mining.

COO Hernan Dorado remarked: " The drill intercepts at Cebolletas are best discussed in the context of the

results of surface holes that were drilled in 2014 by Endeavour Silver Corp. GSilver ’s Cebolletas results so

far validate this stope as a large, highly mineralized zone and are consistent with previous historic surface

drill results shown below. Continuity of the vein itself remains excellent, and we look forward to adding this

significant stope area to our production schedule in the New Year.”

El Cubo: Cebolletas Stope and 1850 Stope previous drill result from Endeavour Silver Corp. (2)

Drill

Hole

From

(m)

Core Length

(m)

True Width

(m)

(g/t)

AgEq

(g/t)

CVS-09 336.50 340.40 3.90 3.80 82 0.45 133

336.50 338.95 2.45 2.39 116 0.64 167

Including 336.50 337.50 1.00 0.97 131 0.88 201

CAS-41 435.35 443.80 8.45 7.39 50 0.71 107

440.05 441.90 1.85 1.62 179 2.85 407

including 440.70 441.60 0.90 0.79 231 3.87 541

CAS-69 404.30 407.20 2.90 2.51 62 0.48 100

404.30 406.40 2.10 1.82 77 0.62 127

Including 404.30 405.25 0.95 0.82 100 0.78 162

CAS-76 373.00 376.60 3.60 3.29 108 0.92 182

373.75 376.60 2.85 2.60 131 1.12 221

including 373.75 374.50 0.75 0.69 111 2.58 317

CAS-80 354.65 356.55 1.90 1.71 152 0.46 189

Including 354.65 355.15 0.50 0.45 358 0.96 425

CAS-82 381.50 382.70 1.20 1.04 121 0.68 175

380.90 382.70 1.80 1.56 90 0.52 132

Including 381.85 382.35 0.50 0.43 142 0.71 199

(2) These results are historical and have not been verified by GSilver’s qualified person and should not be

relied upon.

Additional recent drilling at El Cubo has focused on the main Villalpando structure in the 4-1500 stope area

that connects Cebolletas with the 2175 stope:

El Cubo Villalpando / 4-1500 Stope Area

Drill Hole From (m) To

(m)

Interval

(m)

Estimated

True

Width

(m)

gpt

AgEq

gpt

VPO21-01 105.80 117.35 11.55 6.35 0.69 65 120

and 124.00 124.75 0.75 0.41 0.85 66 134

114.50 117.35 2.85 1.57 0.88 98 168

VPO21-02 No significant results

VPO21-03 72.9 73.25 0.35 0.18 0.75 100 159

and 82.65 83.2 0.55 0.28 0.36 127 156

VPO21-04 90.8 91.4 0.6 0.32 0.48 104 143

133.95 134.9 0.95 0.51 1.07 88 174

136.45 137.95 1.50 0.81 0.69 72 127

VPO21-05 279.65 280.20 0.55 Assays Pending

VPO21-06 Currently Drilling

Note: All silver equivalent (AgEq) values are calculated based on a long-term gold to silver price ratio of

80:1 as used by mineral industry advisors, Behre Dolbear and Company (USA), Inc., in the Company’s NI

43-101 Preliminary Economic Assessment report dated May 6, 2021 (effective date: January 31, 2021) ; a

copy of which is available for review on SEDAR.

El Pinguico Project - Maiden Resource Drilling Program:

Drilling at El Pinguico in 2021 represented the first-ever modern drilling campaign at this historically high-

grade mine. GSilver’s drilling program in early 2021 started well with significant intercepts encountered at

both the San Jose vein and the better known and understood El Pinguico vein. Later in the year, progress

was hampered by extremely slow assay results from commercial laboratories used by the Company, and by

mechanical breakdowns of GSilver’s drill rig. An effort to intercept additional vein structures NE of the El

Pinguico and San Jose veins in drill holes P21-011 and P21-012 met with limited success, while an attempt

to intercept the southern extension of the El Pinguico vein returned no significant results from d rill holes

P21-017 and P21-018. However, the drill rig is now operating at full capacity, and will soon to be moved to

an area further north within the El Pinguico mine. The transition of the drill rig to a more favourable position

combined with the ability of the Company’s newly constructed assay lab to aid in the rapid return of assay

information, is anticipated to accelerate drilling results at El Pinguico in 2022.

Pinguico

Drill Holes P21-001 – P21-010 were previously released (See Guanajuato Silver news

release dated May 3, 2021, and July 7, 2021).

Drilled from Adit #4 Portal Drill Station (3)

Drill Hole From (m) To

(m)

Interval

(m)

g/t

AgEQ

g/t

P21-001 79.50 80.10 0.60 0.46 81 118

84.73 85.23 0.50 0.15 48 60

87.96 88.46 0.50 0.25 50 70

93.76 95.25 1.49 0.28 34 56

P21-002 79.65 80.20 0.55 0.11 27 36

82.30 83.00 0.70 0.11 13 22

116.25 117.00 0.75 0.17 15 29

P21-003 87.90 88.40 0.50 0.38 88 118

97.95 102.00 4.05 0.68 62 116

including 99.15 100.15 1.00 1.50 122 242

106.80 107.35 0.55 2.11 505 674

P21-004 105.75 106.55 0.80 0.03 2 4

Drilled from San Joes Cross Cut #1 Drill Station

P21-005 172.90 173.40 0.50 0.42 29 63

P21-006 151.25 153.00 1.75 0.68 35 89

P21-007 82.25 84.65 2.40 0.30 12 36

P21-008 102.25 103.90 1.65 2.45 125 321

169.20 177.15 7.95 1.35 39 147

169.70 170.45 0.75 8.81 208 913

176.15 177.15 1.00 1.65 45 177

P21-009 91.20 91.85 0.65 0.49 38 77

165.05 165.70 0.65 0.65 51 103

P21-010

107.55 115.65 8.10 1.00 93 173

including 113.00 113.90 0.90 5.96 476 953

P21-011 5.1 6.4 1.30 0.51 37 78

P21-012 68.50 79.75 11.15 0.03 5 8

P21-013 185.30 186.90 1.60 0.44 20 55

P21-014 203.05 204.20 1.15 0.23 2 21

P21-015 135.25 138.20 2.95 0.62 21 70

136.75 137.30 0.55 1.91 75 228

P21-016 169.15 170.05 0.90 0.23 14 33

P21-017 No significant results

P21-018 No significant results

P21-019 Assays Pending

P21-020 Assays Pending

P21-021 Currently Drilling

(3) No attempt has been made by the Company to establish the true width of veins at El Pinguico reported in this

news release as the Company has determined that it would be premature to do so.

2022 Drilling Plans:

Guanajuato Silver plans to conduct over 24,000 metres of core drilling in 2022. Encompassing a combination

of infill drilling, grade control drilling, resource expansion and exploration drilling; GSilver’s drill programs

will be executed with a blend of Company owned drill equipment and personnel and external drill contracting

teams. The planned division of drilling is as follows:

At the El Cubo Mine

Villalpando/Dolores 8,000 metres

Santa Cecelia/San Nicholas 9,300 metres

At the El Pinguico Exploration Project

El Pinguico/San Jose 5,300 metres

Veta Madre 1,600 metres

Beginning in February 2022, GSilver intends to focus on El Cubo’s Santa Cecelia area where high grade

material has historically been developed and mined. Mineralization within transverse vein s in this area

contain proportionately higher grades of gold over silver, and Company geologists have identified Santa

Cecelia as being particularly underexplored with ample opportunities for resource expansion.

Beginning in January 2022, the drill at El Pinguico will be moved north within the mine to target extensions

of the El Pinguico vein adjacent to high-grade areas that were mined in the early 1900s. This drilling is part

of the Company’s methodical exploration program designed to establish a maiden resource at this historic

high-grade mine.

Additionally, t he Company has allocated 1 ,600 metres of drilling targeting the Veta Madre or “Mother

Vein”. The Veta Madre is the primary structure within the Guanajuato Mining District; this large multi-pulse

epithermal system is responsible for numerous noteworthy precious metals mines along the length of its

trend. Further details of this drilling will be announced in early 2022.

Laboratory Activation:

The Company has completed the construction of an assay laboratory at El Cubo which will aid significantly

in grade control for El Cubo mining operations, and for the rapid return of exploration assay data from both

the El Cubo and El Pinguico drill programs. The lab is currently capable of assaying approximately 150

samples per day, and will be expanded to a capacity of 200 samples per day shortly.

Sampling and quality assurance/quality control:

Drill core was first reviewed by a Company geologist , who identified and marked intervals for sampling.

The marked sample intervals were then cut in half with a diamond saw; half of the core was left in the core

box and the other half was removed, placed in plastic bags, sealed and labeled. Intervals and unique sample

numbers are recorded on the drill logs and the samples are sequenced with standards and blanks inserted

according to a predefined QA/QC procedure. The samples are maintained under security on site until they

are shipped to the analytical lab. The analytical work reported on herein was performed by Corporacion

Quimica Platinum S.A de C.V., Silao, Guanajuato, Mexico. To validate our assay results and our preparation

procedures, GSilver sends additional random samples representing approximately 20% of all analytical

samples to Bureau Veritas in Hermosillo, Sonora, Mexico. Bureau Veritas is an ISO/IEC (International

Organization for Standardization/International Electrotechnical Commission) geo-analytical laboratory and

is independent of GSilver and i ts "qualified person". In order to further validate our assay results and our

preparation procedures GSilver sent additional random samples representing approximately 10% of all

analytical samples to SGS Mexico, S.A de C.V, Durango, Mexico. SGS is an ISO/I EC (International

Organization for Standardization/International Electrotechnical Commission) geo-analytical laboratory and

is independent of GSilver and its "qualified person". Core samples were subject to crushing at a minimum

of 70 per cent passing two millimeters, followed by pulverizing of a 250 -gram split to 85 per cent passing

75 microns. Gold determination was via standard atomic absorption (AA) finish 30- gram fire assay (FA)

analysis, in addition to Silver and 34- element using fire assay and gravim etry termination. F ollowing

industry-standard procedures, blank and standard samples were inserted into the sample sequence and sent

to the laboratory for analysis. Data verification of the analytical results included a statistical analysis of the

standards and blanks that must pass certain parameters for acceptance to ensure accurate and verifiable

results. GSilver detected no significant QA/QC issues during review of the data and is not aware of any

sampling, recovery or other factors that could materially affect the accuracy or reliability of the data referred

to herein.

Hernan Dorado Smith, a director and officer of GSilver and a "qualified person" as defined by National

Instrument 43-101, Standards of Disclosure for Mineral Projects, has approved the scientific and technical

information contained in this news release.

Private Placement:

Further to the Company’s news release dated December 8, 2021, the Company wishes to clarify that the total

finder’s fees paid in connection with the Company’s recently completed non- brokered private placement

were $120,371 cash and 214,881 finder’s warrants, each finder’s warrant entitling the holder to purchase

one common share of the Company at a price of $0.75 for a peri od of two years, subject to acceleration in

certain events.

About Guanajuato Silver Co. Ltd.:

GSilver mines and processes silver and gold concentrate from its El Cubo mine and mill. The Company

continues to delineate for additional silver and gold resources through underground drilling at El Cubo and

its nearby El Pinguico project. Both projects ar e located within 11km of the city of Guanajuato, Mexico

which has an established 480-year mining history.

ON BEHALF OF THE BOARD OF DIRECTORS

"James Anderson"

Chairman and CEO

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

JJ Jennex, Communications Manager, +1 (604) 723-1433

Email: [email protected]

Continue to watch our progress at: www.GSilver.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the

policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

This news release contains certain forward-looking statements and information, which relate to future events

or future performance including, but not limited to, the Company’s proposed development and mining plans

at El Cubo, expected areas for future mining operations and the timing thereof, the Company’s proposed

drilling and exploration programs at El Cubo and El Pinguico in 2022 including the total number of meters

to be drilled, the locations thereof and the anticipated results therefrom; the Company’s expectations for

grade and width of certain veins within the El Cubo and El Pinguico mines including prospective high grade

vein locations and opportunities for resource expansion at El Cubo and the establishment of a maiden in-situ

resource at El Pinguico; and the Company’s ability to improve grade control and rapidly process assay results

at its newly constructed assay laboratory at El Cubo. Such forward-looking statements and information

reflect management's current beliefs and are based on information currently available to and assumptions

made by the Company; which assumptions, while considered reasonable by the Company, are inherently

subject to significant operational, business, economic and regulatory uncertainties and contingencies. These

assumptions include: our mineral resource estimates at El Cubo and El Pinguico and the assumptions upon

which they are based, including geotechnical and metallurgical characteristics of rock conforming to

sampled results and metallurgical performance; tonnage of mineralized material to be mined and processed;

resource grades and recoveries; assumptions and discount rates being appropriately applied to production

estimates; success of the Company’s combined El Cubo / El Pinguico mining operation and development

and exploration programs thereon; prices for silver and gold remaining as estimated; currency exchange rates

remaining as estimated; availability of funds for the Company's projects; capital, decommissioning

and reclamation estimates; prices for energy inputs, labour, materials, supplies and services (including

transportation); no labour-related disruptions; no unplanned delays or interruptions in scheduled

construction and production; all necessary permits, licenses and regulatory approvals are received in a timely

manner; and the ability to comply with environmental, health and safety laws. The foregoing list

of assumptions is not exhaustive. Readers are cautioned that such forward-looking statements and

information are neither promises nor guarantees, and are subject to risks and uncertainties that may cause

future results to differ materially from those expected including, but not limited to, market conditions,

availability of financing, currency rate fluctuations, actual results of exploration, development and

production activities, actual resource grades and recoveries of silver and gold, unanticipated geological or

structural formations and characteristics, environmental risks, future prices of silver, gold and other metals,

operating risks, accidents, labour issues, equipment or personnel delays, delays in obtaining governmental

or regulatory approvals and permits, inadequate insurance, and other risks in the mining industry. There are

no assurances that GSilver will be able to successfully ramp-up and maintain production at the El Cubo mill

to process mineralized materials to produce silver and gold concentrate in the amounts, grades, recoveries,

costs and timetable anticipated. In addition, GSilver’s decision to process mineralized material from its

estimated resources at El Cubo and above and underground stockpiles at El Pinguico through the El Cubo

mill is not based on a feasibility study of mineral reserves demonstrating economic and technical viability

and therefore is subject to increased uncertainty and risk of failure, both economically and

technically. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability,

are considered too speculative geologically to have the economic considerations applied to them, and may

be materially affected by environmental, permitting, legal, title, socio-political, marketing, and other relevant

issues. There are no assurances that the results of the Company's recently announced preliminary economic

assessment and projected production of silver and gold concentrate will be realized. There is also uncertainty

about the spread of COVID-19 and variants of concern and the impact they will have on the Company's

operations, supply chains, ability to access El Cubo and/or El Pinguico or procure equipment, contractors

and other personnel on a timely basis or at all and economic activity in general. All the forward-looking

statements and information made in this news release are qualified by these cautionary statements and those

in our continuous disclosure filings available on SEDAR at www.sedar.com. The forward-looking

statements and information are made as of the date hereof and the Company does not assume any obligation

to update or revise them to reflect new events or circumstances save as required by law.

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