SCZ.V · 2017-03-24 12:00:00

Santacruz Silver Reports 2016 Annual Production Results and 2017 Update

Production Results

TSX.V: SCZ

FSE: 1SZ

March 24, 2017

Vancouver, B.C. – Santacruz Silver Mining Ltd. (TSX.V:SCZ) (the “Company” or “Santacruz”) reports its

operating results from the Rosario project in Charcas, San Luis Potosi, Mexico and the Veta Grande project in

Zacatecas, Mexico for the fourth quarter (“Q4”) and year ended December 31, 2016 and provides an update

on the respective projects.

The Company produced a total of 970,332 silver equivalent ounces (1) in fiscal 2016, including fourth quarter

production of 242,048 silver equivalent ounces (1) from its two operating projects. Production levels for the

fourth quarter of 2016 were impacted by ongoing development and optimization activities at both the Rosario

and Veta Grande projects which may allow for increased production levels in 2017.

“We are excited to see the results of our efforts over these past months coming to fruition with an anticipated

production increase in fiscal 2017,” stated Arturo Préstamo, Santacruz’s President and CEO. “This expected

increase in production will be the resul t of significant development work completed at the Veta Grande and

Rosario projects in the fourth quarter of 2016, which has set the stage for more robust 2017 operations.

Although our focus on these development activities had the effect of reducing our fourth quarter 2016

production total, I am pleased to advise that the Company is now well positioned to steadily advance our

production levels throughout the year.”

Project Updates

Rosario project

At the Cinco Estrellas property, the Company has completed development work on Levels 1, 2 and 3.

Approximately 2855 tonnes of mineralized material was mined and processed from the property in the fourth

quarter of 2016 with an estimated head grade of 3.3 g/t Au and 88 g/t Ag . To date in 2017 approximately 4950

tonnes of mineralized material has been mined and processed from the property . The mineralized material

mined in the fourth quarter and to date in 2017 has been sourced from mine development workings.

Importantly, development of the first production stope has just been completed. The stope is approximately 18

metres high, with vein widths ranging from 1 .5 to 3.0 metres for approximately 150 metres. Chip samples

collected from the top of the stope range up to 6.0 g/t Au and 120 g/t Ag as compared to the bottom of the

stope that range up to 19 g/t Au and 220 g/t Ag. Management expects to mine this stope at approximately 250

tpd.

In addition to the Cinco Estrellas property, the Company is evaluating other nearby properties which cou ld be

integrated into the Rosario project in order to leverage on Rosario´s milling capacity (app roximately 600 tpd).

The Companys objective is to use the Rosario mill as a central processing facility for numerous mining

projects in the nearby area.

Veta Grande project

During the fourth quarter of 2016, significant mine development occurred at the Veta Grande project,

including approximately 1,400 metres of level development and 480 metres of main access ramp development

completed at the Guadalupana mine, and approximately 350 metres of level development in addition to 120

metres of main haulage ramp development completed at the Garcia mine. Importantly, during the fourth

quarter mineralized material from previously mined stopes within the Veta Grande vein was identified and

accessed from old workings below Level 3 at the Garcia mine. This preparation work took place at these areas

and during the months of January and February approximately 17,170 tonnes of material was extracted and

processed from these previously mined stopes with an estimated head grade of 166 g/t Ag, 1.67% Zn, 1.33%

Pb and 0.42 g/t Au.

Mineralized material from the previously mined stopes at the Garcia mine will be a primary source of millfeed

to the Veta Grande milling facility in 2017, combined with mineralized material from other mine working faces

recently developed at the Garcia mine. In connection with this matter during the first half of 2017 the Company

plans to drive an access ramp for a vertical depth of 120 metres from the current workings at the Veta Grande

vein, the largest of the vein systems contained within the Garcia mine.

In concert with the current optimized mine plan, the Company is deferring the installation of the 1,250 tonne -

per-day ball mill and 4,000 tonne-per-day crushing circuit until the second half of 2017.

CONSOLIDATED OPERATIONAL RESULTS

Summary of Production Results 2016 Q4 2015 Q4 2016 Yr 2015 Yr

Material Processed (tonnes milled)

46,587

25,927

121,804

79,249

Silver eqv. ounce production

242,048

268,319

970,332

832,284

Silver production (ounces)

100,199

143,937

486,136

471,893

Gold production (ounces)

251

103 569

336

Lead production (tonnes)

348

254

991

780

Zinc production (tonnes)

768

673

3,039

1,895

Average Head Grade (g/t Ag Eqv.)

206

341

288

352

Note 1 2015 production includes only nine months of the year, since during Q1 operations were suspended at the Rosario project due to

a tailings pipe malfunction. 2015 silver equivalent ounces produced have been calculated as follows:

AgEqvOz=(Au*Pau/31.1035)+(Ag*Pag/31.1035)+(Pb*Ppb*22.05)+(Zn*Pzn*22.05)

(Pag)

Metal Prices: Ag $17.75, Au $1,250, Pb $0.83, Zn $1.09

Note 2 2016 silver equivalent ounces produced have been calculated as follows:

AgEqvOz=(Au*Pau/31.1035)+(Ag*Pag/31.1035)+(Pb*Ppb*22.05)+(Zn*Pzn*22.05)

(Pag)

Metal Prices: Ag $14.50, Au $1,100 Pb $0.76, Zn $0.71

ROSARIO PROJECT OPERATIONAL RESULTS

Summary of Production Results 2016 Q4 2015 Q4 2016 Yr 2015 Yr

Material Processed (tonnes milled)

18,025

25,927

93,242

79,249

Silver eqv. ounce production

135,529

268,319

863,873

832,284

Silver production (ounces)

70,356

143,937

456,293

471,893

Silver head grade (g/t) 126 178 163 194

Silver recovery (%) 96 97 94 96

Gold production (ounces)

136

103

454

336

Lead production (tonnes)

116

254

759

780

Zinc production (tonnes)

386

673

2,657

1,895

Average Head Grade (g/t Ag Eqv.)

263

341

324

352

VETA GRANDE PROJECT OPERATIONAL RESULTS

Summary of Production Results 2016 Q4 2015 Q4 2016 Yr 2015 Yr

Material Processed (tonnes milled) 28,562

28,562

Silver eqv. ounce production 106,519

106,519

Silver production (ounces) 29,843

29,843

Silver head grade (g/t) 56 - 56 -

Silver recovery (%) 58 - 58 -

Gold production (ounces) 115

- 115

Lead production (tonnes)

232

Zinc production (tonnes)

382

Average Head Grade (g/t Ag Eqv.)

170

Management Change

The Company advises that it has appointed Dante Rodriguez as Interim Chief Operating Officer, replacing

Cesar Maldonado as COO. Mr. Maldonado has agreed to remain as a consultant to the Company. The

Company wishes to thank Mr. Maldonado for his valuable contribution to the Company during his tenure as

COO.

Mr. Rodriguez has most recently held the position of Vice- President, Exploration for the Company’s wholly -

owned subsidiary, Impulsora Minera Santacruz, S.A. de C.V.

Sampling and Laboratory

The reported head grades have been estimated from assay results of samples collected from stockpile s of

mined mineralized material. The reported stope grades are of assay results of underground chip samples

collected across the vein and at an average interval of three meters along the strike length of the vein. Blanks,

standards and duplicate control samples are not utilized in the sampling procedure.

Samples collected from the Rosario and Veta Grande projects are assayed at the Rosario and Veta Grande

laboratories, respectively. Both laboratories are owned and operated by Santacruz and the facilities are meant

to serve the mining operations at the projects. The Rosario and Veta Grande laborator ies are not independent

of the Company and do not hold ISO certification. Samples are prepared by drying, crushing, rifle splitting and

pulverizing to <75 microns passing 200- mesh. Samples are analyzed by 3 -acid digestion and Atomic

Absorption Spectrometry. Gold and silver are further analyzed by fire assay with gravametric finish.

Qualified Persons

The technical information included in this statement has been reviewed and approved by Van Phu Bui, P.Geo.

of ARC Geoscience Group who is independent of the Company and is a qualified person, pursuant to the

meaning of such terms in NI 43-101.

About Santacruz Silver Mining Ltd.

Santacruz is a Mexican focused silver company with two producing silver projects (Rosario, including the

Cinco Estrellas property, and the right to operate the Veta Grande silver project and milling facility); and three

exploration properties including the Gavilanes property, Minillas property and Zacatecas properties. 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,

President, Chief Executive Officer and Director

For further information please contact:

Neil MacRae

Santacruz Silver Mining Ltd.

Email: [email protected]

Telephone: (604) 569-1609

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 information

Certain statements contained in this news release constitute "forward- looking information" as such term is

used in applicable Canadian securities laws. Forward- looking information is based on plans, 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 statements included in this news release, the Company has

applied several material assumptions, that the Company's financial condition and development plans do not

change as a result of unforeseen events, that third party mineralized material to be milled by the Company has

properties consistent with management's expectations, that the Company obtains all required regulatory

approvals, and that future metal prices and the demand and market outlook for metals remains stable or

improves. 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 f rom those projected in such forward-looking

information. Factors that could cause the forward- looking information in this news release to change or to be

inaccurate include, but are not limited to, the risk that any of the assumptions referred to prove not to be valid

or reliable, which could result in lower revenue, higher cost, lower production levels, delays, and/or cessation

in planned work, that the Company's financial condition and development plans change, delays in regulatory

approval, risks associ ated with the interpretation of data (including in respect of the third party ore), the

geology, grade and continuity of mineral deposits, the possibility that results will not be consistent with the

Company's expectations, as well as the other risks and uncertainties applicable to mineral exploration and

development activities and to the Company as set forth in the Company's continuous disclosure filings filed

under the Company's profile at www.sedar.com. There can be no assurance that any forward- looking

information will prove to be accurate, as actual results and future 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 Mine

The decision to commence production at the Rosario Mine was not based on a feasibility study of mineral

reserves demonstrating economic and technical viability, but rather on a more preliminary estimate of inferred

mineral resources. Accordingly, there is increased uncertainty and economic and technical risks of failure

associated 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.

Veta Grande Project

The decision to commence production at Veta G rande 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 failure associated 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.

Cinco Estrellas Property

The decision to commence production at the Cinco Estrellas Property 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 failure associated 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.

← Back to feed