SCZ.V · 2018-03-05 12:00:00

Santacruz Silver Reports 2017 Annual Production Results and 2018 Update

Production Results

TSX.V: SCZ

FSE: 1SZ

March 5, 2018

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

operating results from the Veta Grande Project in Zacatecas, Mexico and Rosario Project in Charcas, San Luis

Potosi, Mexico for the fourth quarter (“Q4”) and year ended December 31, 2017 and provides an operations

update.

The Company produced a total of 865,458 silver equivalent ounces in fiscal 201 7 (2016 - 970,332) including

fourth quarter production of 139,670 silver equivalent ounces (2016 - 242,048). The decreased production is a

result of a number of factors including a delayed production start at the Membrillo Prospect, lower than expected

head grades from the previously mined mineralized material (“chorros”) at the Veta Grande Project and from a

temporary suspension of oper ations at the Veta Grande Project in November 2017 (see press release dated

November 22, 2017). Mining operations were further challenged by a deficiency of working capital.

Arturo Prestamo, Santacruz’s President and CEO stated “In 2017 Santacruz made several positive steps

towards solidifying its operations base including the retirement of the senior JMET debt facility , the negotiation

of the outright acquisition of the Veta Grande Project, the appointment of Carlos Silva as COO, and optioning

20% of the Company’s Zacatecas mineral portfolio to Carrizal Mining, S.A. de C.V .” Mr. Prestamo continued

“Further, as a first step to address the Company’s current working capital needs Santacruz has entered into a

services agreement with Carrizal Mining to provide to it certain min ing related services that will generate

approximately US$1.1 million of monthly cash flow to Santacruz.”

Project Updates

Veta Grande Project

Two important initiatives are currently ongoing at the Veta Grande Project . The first initiative is the expansion

of the Veta Grande mill capacity to 750 tpd which is well advanced. Commissioning of this expansion is expected

to start in late March. The second initiative is the conversion of the source of mineralized millfeed to the Veta

Grande mill from the chorros to in situ vein material from the Veta Grande and Armados veins. In connection

with this matter the first phase of a surface drilling campaign consisting of 6,000 metres is underway on the Veta

Grande vein and a 3,0 00-metre underground drill program on the Armados vein is scheduled to commence

within 10 days. The mill expansion and drilling campaigns are being funded by Carrizal Mining pursuant to the

terms of its 20% earn-in on the Veta Grande mineral portfolio.

Rosario Project

The Company recently has recently taken the decision to consolidate all of its Rosario Project mining operations

to the Membrillo Prospect. Mine development has now reached Level 2 and mine production is increasing.

Once the mine operati ons at the Membrillo Prospect achieve target amounts the Company will recommence

mining operations at the Cinco Estrellas Property.

CONSOLIDATED PRODUCTION RESULTS – 2017 Q4 AND 2017 ANNUAL

2017 Q4 2016 Q4 2017 Yr 2016 Yr1

Material Processed (tonnes milled) 30,975

46,587 181,077

121,804

Silver eqv. ounce production 139,670

242,048 865,458

970,332

Silver production (ounces) 44,316

100,199 313,946

486,136

Gold production (ounces) 239 251 1,431 569

Lead production (tonnes) 94

348 623

991

Zinc production (tonnes) 412

768 2,292

3,039

Average Head Grade (g/t Ag Eqv.) 194

206 161

288

2017 Ag Eq was calculated using metal prices of: Ag $16.00/oz, Au $1,150/oz, Pb $1.00/lb and Zn $1.15/lb.

2016 Ag Eq was calculated using metal prices of: Ag $14.50/oz, Au $1,100/oz, Pb $0.76/lb and Zn $0.71/lb.

1 The Veta Grande Project commenced commercial production October 1, 2016 and as such the 2016 annual production figures

do not include a full year’s production from this project.

VETA GRANDE PROJECT PRODUCTION RESULTS – 2017 Q4 AND 2017 ANNUAL

2017 Q4 2016 Q4 2017 Yr 2016 Yr1

Material Processed (tonnes milled)

17,657

28,562

102,111

28,562

Silver eqv. ounce production

64,987

106,519

423,130

106,519

Silver production (ounces)

25,665

29,843

201,284

29,843

Silver head grade (g/t)

100

Silver recovery (%)

Gold production (ounces)

115

424 115

Lead production (tonnes)

232

466

232

Zinc production (tonnes)

163

382

803

382

Average Head Grade (g/t Ag Eqv.)

183

170

127

170

2017 Ag Eq was calculated using metal prices of: Ag $16.00/oz, Au $1,150/oz, Pb $1.00/lb and Zn $1.15/lb.

2016 Ag Eq was calculated using metal prices of: Ag $14.50/oz, Au $1,100/oz, Pb $0.76/lb and Zn $0.71/lb.

1 The Veta Grande Project commenced commercial production October 1, 2016 and as such the 2016 annual production figures

do not include a full year’s production from this project.

ROSARIO PROJECT PRODUCTION RESULTS – 2017 Q4 AND 2017 ANNUAL

2017 Q4 2016 Q4 2017 Yr 2016 Yr

Material Processed (tonnes milled)

13,317

18,025

78,964

93,242

Silver eqv. ounce production

74,683

135,529

442,328

863,873

Silver production (ounces)

18,652

70,356

112,662

456,293

Silver head grade (g/t)

126

163

Silver recovery (%)

Gold production (ounces)

186

136

1,007

454

Lead production (tonnes)

116

157

759

Zinc production (tonnes)

249

386

1,489

2,657

Average Head Grade (g/t Ag Eqv.)

209

263

205

324

2017 Ag Eq was calculated using metal prices of: Ag $16.00/oz, Au $1,150/oz, Pb $1.00/lb and Zn $1.15/lb.

2016 Ag Eq was calculated using metal prices of: Ag $14.50/oz, Au $1,100/oz, Pb $0.76/lb and Zn $0.71/lb.

Sampling and Laboratory

The reported head grades have been estimated from assay results of samples collected from stockpiles 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 laboratories 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 Membrillo Prospect, and Veta Grande) and two exploration properties, the 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:

Arturo Prestamo

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 pro vided 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, including, but not limited to, assumptions as to the continuation of payments under

the Agreement, the expansion of the Vita Grande Project, the Company's financial condition and development

plans do not change as a result of unforeseen events, third party mineralized material to be milled by the

Company will have properties co nsistent with management's expectations, 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 news rele ase 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, or lower production levels; delays

and/or cessation in planned work; changes in the Company's financial condition and development plans; delays

in regulatory approval; risks associated with the interpretation of data (including in respect of the third party

mineralized material) regarding 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 result s 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 Project

The decisions to commence production at the Rosario Mine, Cinco Estrellas Property and Membrillo Prospect

were 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 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 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.

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