Santacruz Silver Produces 977,679 Silver Equivalent Ounces in the Third Quarter
TSX.V: SCZ
FSE: 1SZ
October 26, 2020
Santacruz Silver Produces 977,679 Silver Equivalent Ounces in the Third Quarter
Vancouver, B.C. – Santacruz Silver Mining Ltd. (TSX.V:SCZ) (the “Company” or “Santacruz”) is pleased to
announce that total production in the third quarter of 20 20 reached 977,679 silver equivalent ounces (“AgEq”),
representing a 38% increase from Q2 2020 as operations returned to normal. During Q2 2020, Mexico's Ministry
of Health issued a federal decree requiring all non-essential businesses, including mining, to temporarily suspend
activities for 42 days in response to the global pandemic.
Highlights:
• Zimapan Mine AgEq production increased by 44% compared to Q2 2020 and 52% compared to Q3 2019.
• Rosario AgEq production decreased by 20% compared to Q2 2020 and 57% to Q3 2019.
• Consolidated AgEq production continues to improve quarter over quarter despite lower production at
Rosario:
o Production was 38% higher compared to Q2 2020 due to the resumption of normal throughput,
and 3% higher compared to Q3 2019.
o Q3 2019 results included only 50% of Zimapan and 100% of Veta Grande production, whereas
Q3 2020 results reflect 100% of Zimapan and the discontinuance of operations at Veta Grande
(Q3 2019 production of 214,284 AgEq oz),
Mr. Carlos Silva, CEO, stated; “During Q2 2020 when operations were suspended due to the Mexican Ministry of
Health´s federal decree , we took the opportunity to make certain structural and management adjustments . As
demonstrated by our third quarter result s, these adjustments positioned us for improved performance. With the
closing of our recent private placement (see news release dated October 16, 2020), we added seven new
scooptrams (5 at Zimapan Mine and 2 at Rosario Mine), which will allow us to further increase production at the
Zimapan Mine and move the Rosario Mine towards budgeted production. After taking these matters into account
together with continued strong precious metals prices and a stronger balance sheet, man agement believes Q4
2020 will be a turning point in the success of Santa cruz as we continue the trend of quarter over quarter
improvements. We are very excited about the future of the Company as we continue to execute our production
plans aiming for solid production results for Q4, and a strong start to 2021.”
2020 Third Quarter Consolidated Production Results
Summary of Production Results 2020 Q3 2020 Q2 2019 Q3
Material Processed (tonnes milled) 176,640 116,799 148,288
Silver eqv. ounce production(1) (2) 977,679 709,765 952,835
Silver production (ounces) (2) 304,123 216,034 256,878
Gold production (ounces) (2) 59 57 273
Lead production (tonnes) (2) 1,080 761 916
Zinc production (tonnes) (2) 3,041 2,199 2,393
Copper production (tonnes) (2) 395 308 316
Average Head Grade (g/t Ag Eqv.)(1) 231 248 278
Development (metres) 2,103 1,094 2,588
2020 Third Quarter Zimapan Mine Production Results
Summary of Production Results 2020 Q3 2020 Q2 2019 Q3
Material Processed (tonnes milled)(2) 164,846 106,725 82,242
Silver eqv. ounce production(1) (2) 920,985 639,021 606,589
Silver production (ounces)(2) 282,760 181,836 151,464
Silver head grade (g/t) 73 75 75
Gold head grade (g/t) - - -
Lead head grade (%/t) 0.72 0.72 0.59
Zinc head grade (%/t) 2.40 2.55 2.28
Copper head grade (%/t) 0.33 0.42 0.48
Silver recovery (%) 72.3 70.4 76.6
Lead production (tonnes)(2) 1,048 692 463
Zinc production (tonnes)(2) 2,841 2,021 1,492
Copper production (tonnes)(2) 395 308 316
Average Head Grade (g/t Ag Eqv.)(1) 234 249 286
Development (metres) 1,701 659 745
2020 Third Quarter Rosario Project Production Results
Summary of Production Results 2020 Q3 2020 Q2 2019 Q3
Material Processed (tonnes milled) 11,794 10,074 22,048
Silver eqv. ounce production(1) 56,693 70,744 131,962
Silver production (ounces) 21,363 34,198 43,020
Silver head grade (g/t) 66 113 65
Gold head grade (g/t) 0.24 0.25 0.25
Lead head grade (%/t) 0.31 0.77 0.40
Zinc head grade (%/t) 2.06 2.04 2.04
Silver recovery (%)(2) 85.9 93.2 93.2
Gold production (ounces) 59 57 134
Lead production (tonnes) 32 70 83
Zinc production (tonnes) 200 178 383
Average Head Grade (g/t Ag Eqv.)(1) 183 247 213
Development (metres) 402 435 975
2020 Third Quarter Vetagrande Project Production Results
Summary of Production Results 2020 Q3 2020 Q2 2019 Q3
Material Processed (tonnes milled) - - 43,999
Silver eqv. ounce production(1) - - 214,284
Silver production (ounces) - - 62,394
Silver head grade (g/t) - - 99
Gold head grade (g/t) - - 0.24
Lead head grade (%/t) - - 1.45
Zinc head grade (%/t) - - 2.11
Silver recovery (%) - - 44.6
Gold production (ounces) - - 139
Lead production (tonnes) - - 370
Zinc production (tonnes) - - 519
Average Head Grade (g/t Ag Eqv.)(1) - - 294
Development (metres) - - 869
(1) AgEqvOz = (Au*Pau)+(Ag*Pag)+(Pb*Ppb*2205)+(Zn*Pzn*2205) +(Cu*Pcu*2205)
(Pag)
Metal Prices 2020: Ag $17.85, Au $1,480, Pb $0.92, Zn $1.09, Cu $2.80
Metal Prices 2019: Ag $15.25, Au $1,281, Pb $0.94 , Zn $1.20, Cu $2.92
(2) Q3 2019 production results at the Zimapan Mine reflect 50% of total production whereas the Q2 and Q3 2020 results reflect 100%.
Investor Relations Engagement
Santacruz Silver wishes to announce that it has retained the services of Vancouver -based Ma rs Investor
Relations Corp. (“Mars”), a full-service investor relations and consulting services company focused on the junior
mining sector. Under the terms of the engagement agreement, the Company will compensate Mars $144,000 for
the 12 -month initial t erm of the Agreement and has granted Mars stock options exercisable to acquire an
aggregate of 300,000 common shares at a price of C$0.30 per share for 60 months . The Options shall vest
quarterly over a period of 12 months, with 25% vesting each quarter. The Options and any shares issuable upon
exercise thereof are subject to a hold period of four mont hs and one day . In addition, Mars and or its affiliates
currently hold 4,313,700 shares, however Mars may from time to time acquire or dispose of securities of the
Company through the market, privately or otherwise, as circumstances or market conditions warrant. Mars is at
arm’s length to Santacruz Silver and has no other relationship wit h the Co mpany, except pursuant to the
Agreement.
About Santacruz Silver Mining Ltd.
Santacruz is a Mexican focused silver company that currently owns and operates the Rosario Project. The
Company also owns 100% of Carrizal Mining S.A. de C.V. Carrizal Mining holds a 20% working interest in the
Company’s Veta Grande Project and has the right to operate the Zimapan Mine until December 31, 2020 under a
mining lease agreement. On July 28, 2020 the Company announced that it had reached agreement with Miner a
Cedros, S.A. de C.V. (“Minera Cedros”), a wholly owned subsidiary of In dustrias Peñoles, S.A.B. de C.V., to
acquire outright the Zimapan Mine for US$20 .0 million (plus applicable IVA of US$3.2 million ), subject to a
number of conditions, including receip t of all necessary regulatory approvals including approval of the TSX
Venture E xchange (" TSXV") to the transaction which will constitute a "Fundamental Acquisition" pursu ant to
TSXV Policy 5.3.
The Company is managed by a technical team of professionals with proven track records in developing, operating
and discovering silver mines in Mexico. Our corporate objective is to become a mid-tier silver producer.
‘signed’
Arturo Préstamo Elizondo,
Excutive Chairman
For further information please contact:
Arturo Prestamo
Santacruz Silver Mining Ltd.
Email: [email protected]
Telephone: +52 81 8378-5707
Mars Investor Relations
+ 1(778) 999-4653
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defin ed in the policies of
the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward looking information
Certain statements contained in this news release constitute "forward-looking information" as such term is used in
applicable Canadian securities laws , including the agreement with Minera Cedros and the acqui sition of the
Zimapan Mine by the Company . Forward-looking information is based on pla ns, expectations and estimates of
management at the date the information is provided and is subject to certain factors and assumptions. In making
the forward -looking sta tements included in this news release, the Company has applied several material
assumptions, including that the Company's financial condition and development plans do not change as a result
of unforeseen events, that the Company will receive all required regulatory approvals and that future metal prices
and the demand and market outlook for metals will remain stable or improve. Forward -looking information is
subject to a variety of risks and uncertainties and other factors that could cause plans, estimates and actual
results to vary materially from those projected in such forward -looking information. Factors that could cause the
forward-looking information in this n ews release to change or to be inaccurate include, but are not limited to,
unanticipated delays in obtaining or failure to obtain regulatory or stock exchange approvals; the risk that any of
the assumptions referred to above prove not to be valid or reliable; there can be no assurance that the Company
will be successful in completing the acquisit ion of the Zimapan Mine (including obtaining the necessary funding);
risk of delays or inability to obtain the approval of the TSXV to the acquisition of the Zimapan M ine; market
conditions and volatility and global economic conditions , including increased volatility and potentially negative
capital raising conditions resulting from the con tinued COVID-19 pandemic and risks relating to the extent and
duration of such pandemic and its impact on global markets ; risk of delay and/or cessation in planned work or
changes in the Company's financial condition and development plans; risks associated with the interpretation of
data (including in respect of the third part y mineralized material) regarding the geology, grade and continuity of
mineral deposits; the uncer tainty of the geology, grade and continuity of mineral deposits and the risk of
unexpected variations in mineral resources, grade and/or recovery rates; risks related to gold, silver, base metal
and other commodity price fluctuations; risks relating to env ironmental regulation and liability; the possibility that
results will not be consiste nt with the Company's expectations, as well as the other risks and uncer tainties
applicable to mineral exploration and development activities and to the Company as set fo rth in the Company's
continuous disclosure filings filed under the Company's profile a t www.sedar.com. There can be no a ssurance
that any forward -looking information will prove to be accurate, as actual results and fut ure events could differ
materially from those anticipated in such statements. Accordingly, the reader should not place any undue reliance
on forward-looking information or statements. The Company undertakes no obligation to update forward -looking
information or statements, other than as required by applicable law.
Rosario Project
The decisions to c ommence production at the Rosario Mine, Cinco Estrellas Property and Membrillo Prospect
were not based on a feasibility study of mineral reserves demonstrati ng economic and technical viability, but
rather on a more preliminary estimate of inferred mineral resources. Accordingly, there is increased uncertainty
and economic and t echnical risks of failure associated with this production decision. Production and e conomic
variables may vary considerably, due to the absence of a complete and detailed site analysis according to and in
accordance with NI 43-101.
Veta Grande Project
The decision to commence production at the Veta Grande Project was not based on a feasibility study on mineral
reserves demonstrating economic and technical viability. Accordingly , there is increased uncertainty and
economic and technical risks of fai lure a ssociated with this production decision. Production and economic
variables may vary considerably due to the absence of a complete and detailed site analysis according to and in
accordance with NI 43-101.
Zimapan Mine
Production at the Zimapan Mine is not s upported by a feasibility study on mineral reserves demonstrating
economic and technical viability or any other independent economic study under NI 43-101. Accordingly, there is
increased uncertainty and economic and technical risks of failure associ ated w ith production operations at the
Zimapan Mine. Production and economic variables may vary considerably due to the absence of a complete and
detailed site analysis according to an d in acc ordance with NI 43 -101. There is no assurance that the Company
will be successful in negotiating and completing any acquisition of the Zimapan Mine. Any tran saction to acquire
the Zimapan Mine will be subject to receipt of all necessary regulatory approvals, including Santacruz obtaining
the approval of the TSX Venture Exchange.