TABLES

FIGURES

NOTE REGARDING FORWARD LOOKING INFORMATION

This Technical Report Summary contains statements that constitute “forward looking information” and “forward-looking statements” within the meaning of U.S. and Canadian securities laws. All statements other than statements of historical facts contained in this Technical Report Summary, including statements regarding Mineral Resource and Reserve estimates, potential cash flow and cash distributions, life of mine, net present value, operating costs, capital costs, economic analysis, production, cash flows, mill throughput rates, viability of modifications and projects to improve efficiency, and expected mining methods, are forward-looking statements. Forward-looking statements are based on beliefs, assumptions, current expectations about future events and on information currently available. Such statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements including without limitation, commodity prices, foreign exchange rates, changes in laws or regulations, failure to obtain or retain permits and licenses, achievement of ramp development rates, requirements to alter mining methodologies, dewatering the mine in a cost-effective manner, opposition to mining that may arise, labour interruptions, uncertainties due to health and safety considerations, risks and uncertainties set out in this Technical Report Summary, other general risks associated with mining operations, and such other risks and uncertainties described in the Gatos Siver, Inc.’s (Gatos Silver, Inc, is referred to herein as the “Company” or “GSI”) filings with the U.S. Securities and Exchange Commission and Canadian securities commissions including its 2022 annual report filed on form 10-K and subsequent 10-K reports, also available on the Company’s website on gatossilver.com. Further, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended that could cause actual actions, events or results to differ materially from those described in forward-looking statements.

The Company expressly disclaims any obligation or undertaking to update the forward-looking statements contained in this Technical Report Summary to reflect any change in its expectations or any change in events, conditions, or circumstances on which such statements are based unless required to do so by applicable law. No assurance can be given that such future results will be achieved, and as such, readers should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of this Technical Report Summary.

The operating Cerro Los Gatos (CLG) underground mine and processing facilities are approximately centered on Latitude 27° 34’ 17” N, Longitude 106° 21’ 33” W, located approximately 7 kilometers (km) from the town of San José de Sitio, within the Municipality of Satevó in the State of Chihuahua, Mexico. The mine is approximately 120 km south of the state capital of Chihuahua City and approximately 100 km north/northwest of the historical mining city of Hidalgo del Parral (Figure 1.1). In this Technical Report Summary (TRS), Cerro Los Gatos (CLG) is defined as the underground mine, processing facilities, Tailings Storage Facility (TSF), and supporting onsite infrastructure as well as the known extents of the Cerro Los Gatos Mineral Reserve and Mineral Resource. The Esther deposit is an undeveloped Mineral Resource located approximately 4km south-west of CLG.

Figure 1.1: Cerro Los Gatos Location Map

The CLG life of mine (LOM) plan which is based on the Mineral Reserves has:

The CLG life of mine plan (LOM Plan) described in this TRS covers the period starting July 1, 2023, through to the end of the reserve life in 2030, with closure and reclamation activities expected to occur during 2031 through 2034.

The Los Gatos Joint Venture (LGJV) holds concessions through its Mexican subsidiary, Minera Plata Real, S. de R.L. de C.V. (MPR). MPR is 70% owned by Gatos Silver, Inc. and 30% owned by Dowa Metals & Mining Co., Ltd. MPR is the owner of mineral rights held in seventeen titled concessions, covering approximately 103,000 hectares (Ha). MPR has purchased surface lands covering the known extents of the CLG and Esther Resource areas, totalling approximately 5,189 hectares, and has negotiated and ratified an access agreement with the community of San José del Sitio for the use of the access road.

Environmental baseline data collection began in May 2010, to prepare for the development of future environmental studies (EIS) required for the project. The Environmental Impact Study (Manifestación de Impacto Ambiental) for the development of the Cerro Los Gatos project was filed with the Mexican Environmental Regulatory authorities (SEMARNAT) on December 12, 2016, and was approved in 2017. A positive Feasibility Study (FS) was completed on CLG in 2017 (Tetra Tech, 2017). The CLG mine was constructed in 2018 and commissioned in mid 2019. The CLG mine produces concentrates containing silver, lead, zinc, and gold, which are shipped to smelters for processing.

The CLG and Esther deposits are embedded within andesites of the Lower Volcanic Series (LVS) of the Sierra Madre Occidental (SMO) volcanic province. On the LGJV concessions, the LVS is exposed in a horst feature that stretches from the CLG deposit approximately 25 km to the northwest to the edge of the concession package.

CLG is an intermediate sulphidation epithermal vein developed within a listric fault zone. Mineralization at CLG is characterized by silver, lead, zinc, and copper sulphides and their corresponding oxides, along with fluorite, manganese, barite, and traces of gold associated with quartz and calcite veins. The veins vary in orientation from West-Northwest to North-Northwest and vary in thickness up to 25 meters (m).

A plan view of the local geology and location of mineralization is provided in Figure 1.2.

Figure 1.2: Surface Geological Map of the Cerro Los Gatos Deposit Area

The Cerro Los Gatos deposit is a listric-shaped mineralized horizon hosting steeply to shallowly dipping mineralized-shoots at depth. Mineralization of interest occurs for approximately 1,800 m in length, between an elevation varying roughly between 700 masl and 1,400 masl. The top of the mineralized horizon at Cerro Los Gatos is generally located at an elevation of 1,400 masl. The natural topographic surface is in the order of 1,570 masl ± 50 masl.

Figure 1.3 provides a typical cross-section view of the CLG deposit.

Figure 1.3: Geologic Model, Section Looking Northwest through the Central Zone Showing the Lithological Sequence at Los Gatos Deposit

The veins at Cerro Los Gatos contain silver, zinc, and lead. Lower concentrations of gold and copper are also associated with the veining.

Silver mineralization occurs dominantly as acanthite (argentite) and native silver.

Zinc mineralization occurs as sphalerite, zinc silicates and zinc carbonates of variable grain sizes disseminated in quartz vein material, as open-space filling in cavities, and as replacements in the andesitic and dacitic flow units. Sphalerite ranges from yellow to brown in color and is deposited in a similar style but is not always associated with the galena mineralization. Zinc oxides after sphalerite also exists down along fault structures through the deposit.

Lead mineralization occurs primarily as galena and lead oxide minerals of varying grain sizes that are disseminated in quartz vein material, as open-space filling in cavities, and as replacements in the andesitic and dacitic flow units.

Copper mineralization occurs dominantly as chalcopyrite disseminated within quartz veins.

Gold mineral species have not been identified visually but are present in small quantities in assay results.

Exploration at CLG by MPR has been completed primarily by diamond drilling (DD) and limited non-drilling exploration activities, including surface geochemical assay, geophysics, surface mapping, and structural studies.

The Mineral Resource estimate uses geological and geochemical data that has been collected up until March 31, 2023, for CLG and July 31, 2022, for the Esther deposit. As of March 31, 2023, total drilling with assays available for the CLG Mineral Resource estimation is approximately 1,466 holes, totalling 282,904 m. The CLG Mineral Resource incorporates an additional 32,057 meters of surface resource drilling in 51 holes and 29,462 meters of underground definition drilling in 284 holes since the 2022 Technical Report. The Mineral Resource for Esther is unchanged since 2022.

The sample collection and preparation, assaying and security procedures implemented by MPR use methodologies in accordance with internal and mining industry standards and were continuously monitored to ensure the integrity of the data collected.

Material factors that may cause actual results to materially vary from the conclusions, estimates, designs, forecasts, or projections, include any significant differences in any one, or more, of the material factors, or assumptions, set out in this subsection, this report, and as set out above in the note regarding forward looking information, including geological and grade interpretations and controls, as well as assumptions and forecasts associated with the establishment of the prospects for economic extraction.

Mineral Resources were estimated using exploration and definition drilling and associated sampling data available for CLG.

The estimation is based on a 3D geological model built using implicit modeling to characterize the structures and establish the geometry and continuity of the veins that form the estimation domains.

Exploratory Data Analysis (EDA) and geostatistical analysis were completed on the raw and composite datasets to help define the interpolation parameters and Mineral Resource classifications. Estimation was completed using Ordinary Kriging (OK) using nested passes with outlier data constraints, variography, and estimation plan defined per each estimation domain.

The Mineral Resource classification in this disclosure is based on drill hole spacing grids, the closeness to mine infrastructure (production drifts), and the level of geological confidence for the continuity and grade of each vein.

Mineral Resources were constrained based on a stope optimization that considered economic Net Smelter Return (NSR) cut-off value, price, mining costs, infrastructure constraints, and mining licenses. For the cut-off definition a NSR calculation was used for generation of the stope optimization shapes. The parameters applied to the calculation of NSR in the block model (including metal values, recovery factors, transportation costs, etc.) were provided by MPR and reviewed and considered reasonable by WSP.

Mineral Resource estimates, for CLG and Esther deposit are shown in Table 1.1 and Table 1.2, respectively, and are reported exclusive of Mineral Reserves and are summarized on a 100% ownership basis. The effective date of the Mineral Resource estimate is July 1, 2023.

Table 1.1: CLG Mineral Resource Estimate, Exclusive of Mineral Reserves

Notes:

Table 1.2: Esther Mineral Resource Estimate, Exclusive of Mineral Reserves

Notes:

The mine design, scheduling, and mineral reserve estimate were prepared by the technical services department at CLG and verified by the QP responsible for these estimates.

Material factors that may cause actual results to materially vary from the conclusions, estimates, designs, forecasts, or projections, include any significant differences in any one, or more, of the material factors, or assumptions, set out in this subsection, this report, and as set out above in the note regarding forward looking information, including metal prices, mining methods, mining dilution and recovery, labor costs, consumables costs, metal recoveries and transportation costs.

CLG employed procedures recognized in the mining industry to estimate Mineral Reserves. The method consists of converting Measured and Indicated Mineral Resources to Proven and Probable Reserves by identifying material that exceeds the NSR cut-off values while conforming to the geometrical constraints determined by the mining method and applying modifying factors such as dilution and mining recovery.

The conversion of Mineral Resources to Mineral Reserves involves the application of modifying factors. The economic modifying factors used in estimating the Mineral Reserve are metal prices, NSR values, and NSR cut-offs, while the mining modifying factors used in the estimate are dilution and mining recovery.

The metal prices used in the Mineral Reserve estimate are based on three-year trailing average monthly prices from April 2020 to April 2023 and long-term analyst consensus estimates.

As CLG is a polymetallic deposit, it is more practical to assess the viability of mining the resource in terms of monetary unit values rather than grades or equivalent grades, as is typically the case at mines having a single predominant metal. This value is estimated as the NSR that is expected to be received for each tonne of ROM material mined and processed. The NSR value refers to the value of a tonne of ROM material as concentrates as

final product at the end of the CLG processing plant. This is calculated as the price received for metal in saleable concentrate less costs for transportation, smelting, and refining.

The viability of mining a tonne of diluted resource material is determined by comparing its NSR value to its NSR cut-off. The NSR cut-off consists of all on-site operating costs to mine and process a tonne of the material, including general and administration up to the point of production of final concentrate. If the material’s NSR value exceeds the NSR cut-off, it is potentially a candidate for inclusion in the Mineral Reserve. The Mineral Reserve estimate uses six NSR cut-offs according to the three mining methods, cut-and-fill, sill, and longhole, and two cost allocation approaches to each mining method, full cost and incremental.

For longhole open stoping (LHOS), dilution is estimated in terms of equivalent linear overbreak slough (ELOS), which increases with the width of the vein and is higher for stopes dipping less than 70˚. Mining recovery is lower for wider veins and those that dip less than 70˚. The dilution and recovery factors for vein widths up to 8 m apply to longitudinal LHOS, while those for widths exceeding 8 m apply to transverse LHOS. The mine design parameters for longitudinal LHOS specify a minimum mining width of 2.0 m, representing an additional source of dilution for narrow veins.

For cut-and-fill (CAF), the dilution is estimated as a percentage of the resource material, which is included as waste in the ore. Dilution is higher and recovery lower for longitudinal CAF compared to transverse CAF. In addition, dilution is higher for both mining methods in stopes near the Los Gatos fault. The mine design for CAF stopes applies a minimum mining width of 3.5 m, representing an additional source of dilution for narrow veins.

The Mineral Reserve estimate includes additional dilution from backfill in stopes mined with LHOS. It is estimated as a percentage of the resource material according to the backfill type and whether the LHOS version is longitudinal or transverse. Dilution is higher for cemented rockfill (CRF) than for paste backfill (PF).

Mineable Shape Optimizer (MSO) embedded in Deswik mine design software was used to determine the mineable portion of the Mineral Resource. The application generates and evaluates potentially mineable shapes in the geological block model to define optimal stope designs that maximize the economic value of the orebody.

The Mineral Reserve available for mining and processing as of July 1, 2023, includes the in-situ tonnes defined on Table 1.4 plus 8.6 kilotonnes of mined material sitting on the stockpile on surface awaiting processing. Table 1.3 presents the Mineral Reserve for CLG at July 1, 2023.

Table 1.3: 2023 CLG Mineral Reserve as at July 1 2023 ^{(1,2,3,4,5,6,7,8,9,10)}

Notes:

The average value of the Mineral Reserve is $193/t, which is well above the NSR cut-off cost for the longhole mining method and the cut-and-fill mining method. Therefore, it is concluded that the NSR cut-off has a low impact on the Mineral Reserves.

The CLG orebody is an epithermal vein-type deposit containing polymetallic mineralization. It extends approximately 1,800 m along strike, and its exploited veins average 5 m to 30 m in true width and dipping in excess of 55 degrees.

The deposit consists of four zones called the Northwest (NW), Central (CZ), Southeast Upper (SEU), and Southeast (SE) zones.

The ground conditions in parts of the deposit are adversely affected by proximity to a major hangingwall fault called the Los Gatos fault. This major basin boundary fault ranges from centimetres to tens of metres in width. While the fault itself does not host mineralization, in areas where the mineralized veins are located adjacent to the structure, mining and ground support methods need to be adapted to limit mining dilution and increase mining recovery.

Geotechnical engineers at the CLG mine have developed a rock support system which is applied to development headings (ramps and drifts), cut-and-fill stopes, longhole stopes, and pillars. The WSP QP has engaged a highly experienced geotechnical engineer to review the rock support designs and who has visited the mine to observe

installed rock support and the behaviour of the standing rock mass. Discussions have been held with CLG technical staff to investigate rock mechanics challenges, and identify and mitigate excavation risks.

Various combinations of rock bolts, welded-wire fabric (mesh), shotcrete and cable bolts are utilized in the mine (see Section 13.2). In addition, stope voids are backfilled with cemented backfill to provide support for remnant pillars and stope spans (see Section 13.6 and Section 15.5).

Rock support in the CLG Mine is complicated by major fault structures intersecting the mineralized veins at oblique and high angles. Engineers have applied specific mining methods and rock support techniques to provide secure and safe mine openings (see Section 13.0).

The unmined rock above the uppermost stopes is referred to as the crown pillar. At CLG the crown pillar has been evaluated for stability, probability of failure and likelihood of surface subsidence (Section 13.2). Since the mineralized veins peter out many tens of meters from the topographic surface, there is very little to no likelihood of crown pillar failures, nor of surface subsidence, along the strike of the deposit.

The QP is of the opinion that the rock support designs and installation protocols employed by CLG are adequate to manage the natural and induced stresses in the rock mass and are consistent with observed rock support strategies in mines of similar mining techniques and rock conditions.

The CLG deposit is characterised by the Los Gatos Fault (LGF) and a number of cross faults. Of the six identified hydrogeological units (HGUs) identified at CLG, the central gouge zone of the LGF and less-fractured rock masses distal to the fault zones are considered to be of low permeability. The fractured rock masses on either side of the LGF and areas where cross faults intersect the LGF are considered to be of high water permeability.

Water flows into the mining area from two sources – rainwater through epiclastics and fracture zones, and upswelling thermal waters via the Lower Gatos Fault.

The strategy for managing water at CLG is to draw down the water table and thus minimize the inflow of water. The original topographic surface of the Cerro Los Gatos deposit ranges from 1571 to 1624 meters above sea level (masl). The natural water table was at 1400 masl and inflows occur below 1450 masl. A series of 18 wells were drilled from surface to establish dewatering wells and piezometer stations. Once underground, additional wells were drilled to intercept water before it flowed into the mine for the dual purpose of lowering the water table and reducing the temperature gradient in the mine. Wells have been drilled and pumps installed in the NW and CZ zones with more planned as the mine deepens (see Section 13.3).

The QP observes that mining productivity and mine development rates increase when the water table has been drawn down below the mining horizon in advance of excavations.

The Mineral Reserve estimate is based on a mine design and schedule which was prepared in Deswik software. The development parameters used for mine design and planning include the cross-sections of drifts and ramps, the diameters of ventilation raises, and the advance rates for the diverse headings. The production parameters include mining methods, pillar thicknesses, dip constraints, minimum mining widths, stope dimensions, and production rates.

Criteria for Mining Method Selection

CLG uses the following mining methods and approaches:

CLG considers the following criteria when selecting the mining method or mining methods for a zone:

Dip: Longhole stoping (LHS) is used in those parts of the deposit that dip at 55° or greater from the horizontal, and cut-and-fill (CAF) is used where veins dip at less than this inclination.

Vein width: For LHS, the vein is mined longitudinally if it is narrower than 8 m and transversely if it is wider. For CAF, the vein can be mined longitudinally in a single pass if the vein is narrower than 8 m, while wider veins are mined by drifting through the ore using a technique referred to as drift-and-fill.

Ground Conditions: When mining a vein with challenging geotechnical conditions using CAF, CLG will prefer to apply the transverse version of the mining method as it limits the exposure of the hangingwall to the cross-section of the drifts. Where challenging ground conditions occur in a vein dipping greater than 55°, CLG may choose to use CAF instead of LHS.

Cost and Productivity: Where possible, CLG prioritizes LHS in preference to CAF because of its higher productivity and lower cost.

CLG selects the mining method or methods for each zone by comparing its characteristics with the criteria described above.

The method for handling ore and waste at CLG is ramp haulage. Mine trucks with a 40-tonne payload haul ore and waste via a system of ramps. Trucks are loaded by underground loaders (LHDs), which muck the ore from the stopes or waste rock from development headings in the mine.

CLG is a mechanized mine, and access to the underground workings is provided by a system of ramps. The main ramp extends from the portal to the 1420 level, where it branches into two ramps, one accessing the NW zone and the other accessing the CZ zone. CLG is developing a ramp for the SE zone from the CZ ramp. An underground maintenance shop is set up in the NW zone.

Mine ventilation is provided by two fresh air raises, the main ramp, and three return raises. Booster fans and regulators direct air to the active mining levels. CLG has initiated a project to extend the ventilation system for the SEU and SE Zones, consisting of two additional fresh-air raises and a return-air raise.

The ventilation intake for the mine requires cooling due to heat entering the underground workings from hydrogeothermal sources. CLG operates two air-cooling plants, one providing cooling for the NW zone and the other for the CZ zone.

The underground mine has two independent dewatering systems, one for contact water and the other for non-contact water. Contact water is pumped to the main pumping station on the 1384 level from several sumps located in the mine. From this pumping station, it is pumped out of the mine to surface. Non-contact water consists of groundwater drawn from the aquifer by dewatering wells located underground. It is pumped to one of the non-contact water pumping stations, one on the 1330 level and the other on the 1390 level, which are connected in series. The non-contact water is pumped out of the mine to surface from the 1390-level pumping station.

The safety infrastructure at the mine includes an escapeway raise to surface, internal escapeway raises, a permanent refuge station on the 1390 level, and three portable refuge chambers. A truck equipped with a mine rescue hoist is parked adjacent to the collar of the escapeway raise to surface for evacuating personnel from the mine in an emergency.

In 2022 MPR contracted for the supply of 100% renewable energy through a third-party energy provider. Grid electric power is delivered from the San Francisco de Borja substation, which is owned by the Federal Electricity Commission (CFE), located 62 km from CLG Mine. MPR has erected and owns the 115 kV transmission line which delivers power to a substation on the mine site. The capacity of the transmission line is approximately 23.5 MW, which exceeds the current power requirement of approximately 20 MW.

The underground communications system includes a fiber optic trunk line along with leaky feeder, ethernet and WiFi connections for voice and data transmissions. Personnel are equipped with tracking devices and digital radios and plans are in place to establish monitoring of mobile equipment in real-time in addition to existing on-board digital radios.

The mine is serviced by an underground maintenance shop for regularly scheduled maintenance and light breakdown repairs. Major repairs and overhauls are conducted in the surface maintenance facility.

Potable water is delivered to underground refuge stations which are also equipped with fresh air supply and sustenance in case of emergency.

Pipelines have been installed to provide compressed air, service water and paste backfill throughout the mine and to transmit contact and non-contact waters out of the mine.

CLG is a mechanized mine employing rubber-tired diesel equipment for all phases of mining operations. Its mobile mine equipment fleet includes six jumbo drills, seven bolters, one cable bolter, three longhole production drill rigs, nine loaders, seven 40 tonne underground mine trucks, five vehicles for shotcrete and explosives charging, and a number of ancillary vehicles for mine services and personnel. All told, the mine utilizes 97 pieces of mobile equipment. The mine ventilation system takes into consideration the air flow required to remove the exhaust products of internal combustion engines.

The underground mine works two 12-hour shifts, and there are three rosters, working rotations of 14 days on and seven days off. CLG previously used a mining contractor in the underground mine but currently performs all development and production with its own employees.

Production

Table 1.4 presents the LOM underground mine schedule developed in the reserve estimation process. The table includes 8,621 tonnes of ore in the ROM stockpile on July 1, 2023, and the totals coincide with the Mineral Reserve estimate. Economic value of copper is expected to be realized starting in 2025 once grades achieve minimum threshold levels under current contract terms.

Table 1.4: LOM Underground Mine Schedule

Development

Mine development is segmented into lateral and vertical headings due to the difference in methodology, advance rates and costs. Table 1.5 and Table 1.6 depict the schedule of mine development beginning the second half of 2023 and including the decline ramp, crosscuts, ore drives and sublevels. Mine lateral development is scheduled to be substantially completed by 2027.

Table 1.5: Schedule of Lateral Development, meters

Table 1.6: Schedule of Vertical Development, meters

The CLG processing plant employs a conventional design and flotation technology typical of base metal operations. The processing flow sheet is comprised of a crushing and grinding circuit, including jaw crusher, semi-autogenous grinding (SAG) mill and ball mill, which feeds a flotation plant consisting of lead and zinc flotation circuits (including rougher, regrind and cleaner stages), lead and zinc concentrate thickening, and tailings thickening.

Since commencing operations, processing improvements, relative to the 2017 Feasibility Study design, have been achieved through equipment additions and optimized maintenance and operating practices. The actual plant performance from 2019 through to 2023 has been the primary basis for the processing rate and metallurgical predictions in this Mineral Reserves update study. During 2019 to 2023, the main sources of processed material were the Central and NW Zones. While the Central and NW zones make up most of the remaining Reserve there will be increasing contributions from the SE Zone.

There is no indication that the characteristics of the material being mined will change and therefore the throughput and recovery assumptions applied for future processing are considered as reasonable for the LOM. The plant equipment sizing is robust for the throughput projected.

The plant operating practices are consistent with the design, metallurgical testwork described in Section 13.0, and performance predictions that have been used in developing the Mineral Reserve.

The construction design nominal throughput basis for the processing facility was 2,500 t/d, 365 days per year or 912,500 tonnes per year (t/y) of ROM on an operating basis of 92% utilization.

The 2019 to 2023 processing recovery results have been better than the recoveries achieved in the 2016 Feasibility test program. The 2023 LOM Plan is based on average historical monthly metal recoveries after removal of outliers.

CLG produces zinc concentrates with significant silver content, however due to the properties of the feed mineral (type of grain, mineral associations, grade of oxidation, etc.) fluorine bearing minerals are simultaneously recovered which incurs minor financial penalties on the sale to smelters. A fluorine leach circuit was constructed in early 2023 and started operation in June 2023. The fluorine leach circuit is designed to lower the content of the zinc concentrate to approximately 500 ppm fluorine. To date less than 500 ppm fluorine has been steadily achieved. There are minor losses of silver and zinc during the leaching processes that have been accounted for in the processing plant production calculations.

The key process parameters are outlined in Table 1.7.

Table 1.7: Process Parameters

Table 1.8: Life of Mine Projected Processing and Production Summary ^( 1 ,2 )

Notes:

CLG is an operating mine with significant existing infrastructure in place supporting the operation, including offsite and onsite components. Existing offsite infrastructure comprises grid power distribution to the mine and previously completed road upgrades to facilitate heavy equipment transport during construction, material deliveries and concentrate shipments, in addition to worker traffic. On site infrastructure is comprised of office and maintenance facilities, processing facilities, a TSF, backfill plants, a refrigeration plant, a mine ventilation system, and dewatering ponds for sediment settling and water cooling.

The underground mine operates three air extractive fans to exhaust spent air, with fresh air intake via the decline ramp and two downcast fresh air raises equipped with refrigeration plants and air coolers. The current installed capacity of the ventilation system is 1.3 M CFM and plans are in place for an expansion to provide fresh air to the SE Zone.

The mine dewatering system consists of both surface and underground infrastructure. Only two of the eleven dewatering wells drilled from surface are currently active, as the water table is now beneath the bottom of other wells. There are four main underground wells in the NW zone, with a fifth under development. As the mine expands, capital has been allocated for the anticipated additional dewatering infrastructure that will be required to manage the water underground.

Site infrastructure in addition to production-related installations are typical of a mining operation of this scale, located some distance from supporting populations, and include a concrete batch plant, maintenance shops, administration and engineering building, mine dry for underground personnel, warehouse facilities, security guard house and gates, residential camps and cafeterias.

The CLG TSF has been constructed and tailings have been deposited in the facility since 2019. Regular dam raises have been conducted to increase the volume of the TSF.The material used in the dam construction is mostly rockfill with some screened filter material. All TSF stages are built using local borrow materials, primarily rockfill excavated and blasted from foundation material within the TSF. The TSF uses downstream construction methods.

The tailings dam has a composite liner consisting of geosynthetic clay liner (GCL) overlain by a 1.5 mm (60-mil), Linear Low-density Polyethylene (LLDPE) geomembrane. This lining system also covers the entire impoundment. The lining system is placed on a 0.15-m thick bedding fill.

The original permitted TSF design consists of four Stages (I to IV) with an ultimate crest elevation of 1638.0 m. However, due to a change in the tailings delivery rate to the TSF with the commissioning of the paste plant in the fourth quarter of 2022, the ultimate TSF will have a maximum crest elevation of 1633.0 m (Stage III) which is adequate for the revised and reduced volume of tailings to be stored based on the Mineral Reserve and LOM Plan.

To date, four dam raises have been constructed to the existing crest elevation of 1628.0 m. The LOM Plan requires two additional raises to be built during 2025 and 2028 to a final maximum crest elevation of 1633.0 m.

The 2023 TSF dam height assessment allowed for 8.2 Mt of material processed from July 2023 onwards (more than the final reserve of 8.08 Mt), which included 0.66 Mt of concentrate and 7.54 Mt of tailings. It is projected that 40% of the tailings produced by the Process Plant will be sent to the Paste Plant, for use as underground backfill,

while the remaining 60% will be sent to the TSF. As a result, tailings accumulated in the TSF are estimated at 7.47 Mt (2.94 Mt stored until June 2023 and 4.53 Mt from July 2023 until mine closure).

The TSF design criteria were established based on the facility size and risk using applicable dam safety and water quality regulations and industry best practice for the TSF embankment on a standalone basis. The dam has a blanket drain in the foundation to control and reduce the water level in the dam due to any infiltration that could occur. Incorporating the blanket drain will improve the stability of the embankment in the event of liner failure.

The TSF has an Operations, Maintenance, and Surveillance (OMS) Manual that describes operating and monitoring procedures to confirm the condition of the embankment, foundation, and performance of the impoundment. Regular TSF inspections are completed, including annual inspections by the Engineer of Record.

Mexico has established environmental laws and regulations that apply to the development, construction, operation and closure of mining projects, and the Company has management systems in place to ensure ongoing regulatory compliance. Of particular importance are the air, surface water and groundwater quality monitoring programs. An environmental compliance report is submitted annually to the Mexican environmental authority. The last compliance report submission resulted in a request for clarification, which has been provided.

The Company has all material permits for the current operations. The Company is waiting on final resolution documents for three permits: the modification of the environmental permit that added the fluorine leach plant to the metallurgical process (the Company considers that this permit has been presumptively granted under Mexican law); a permit for land occupied by the tailings facility (permitting fees have been established with the regulator and have been paid); and a permit regarding the use of treated water from the personnel camp sewage treatment facilities.

MPR has produced several social baseline studies that collected information from official statistical sources, as well as interviews and participatory workshops with stakeholders and the local communities in the area of direct influence. The information obtained has been used to identify social impacts in the communities, as well as social risks for the mining operations. Prevention and mitigation plans were developed for the Community Social Management Plan, which is updated from time to time and monitored against.

The MPR community relations team has had a presence in the region since the mineral exploration phase and has established communication and collaboration channels based on transparency of information. The objective of the MPR Community Relations Policy is to establish the guidelines for institutional work with the neighboring communities and for MPR social interaction projects. Projects are to promote social development, either independently or through strategic alliances with various institutions (public or private), that are aimed at addressing health, education, culture, and basic infrastructure, based on respect for human rights, beliefs, and local characteristics.

The Community Relations Model is based on methods to prevent and reduce risks and socio-environmental impacts and is used to develop the social and environmental investment portfolio. MPR carries out continuous monitoring of the identified social risks, as well as stakeholder mapping. The social and environmental investment portfolio is made up of 12 programs divided into six capital analysis areas: natural, infrastructure, economic, social, relational, and community relations management. MPR has established strategic alliances with stakeholders at the state, municipal and local levels for the execution of its projects.

MPR has established a community relations office in the nearby town of San José del Sitio, which allows for a permanent point of contact between the communities and the mine. MPR has established various commitments

for the hiring of local labor, as well as in the acquisition of services during the life of the project, through agreements with stakeholders. A total of 153 direct employees from the area of influence work for CLG, including 70 from San José del Sitio.

A conceptual closure strategy was presented in the closure plan (Tetra Tech, 2018) that was submitted to the Mexican environmental authority. The closure cost was estimated at $14.9M.

Operating cost estimates were developed based on recent actual costs with minor specific adjustments for business improvement initiatives that are currently being implemented. They were prepared on an annual basis using a detailed build-up of individual cost centres and considering specific mine site activity levels and cost drivers. Operating costs at CLG have been reviewed by WSP and found to be reasonable for a mechanized mine utilizing the cut-and-fill and bulk longhole mining methods and associated processing plant for the production of saleable concentrates. The plant has demonstrated typical operating costs for a facility of its size.

Operating cost expenditures for the LOM Plan are estimated at $716.7 million from July 1, 2023, to the planned end of the LOM in 2030, equivalent to $88.67 per tonne milled. Table 1.9 summarizes the expected site operating expense projected to the end of mine life to mine and process the defined Mineral Reserve, segmented by major cost centre of Mining, processing which includes TSF operations, and General and Administrative.

Table 1.9: LOM Operating Costs

There are no expansion plans requiring development capital in the LOM Plan. CLG will require sustaining capital for continuing underground mine development and two additional raises of the TSF dam, as well as other miscellaneous equipment and infrastructure projects.

Table 1.10 summarizes the capital expenditures planned for the balance of the mine life. Sustaining capital is estimated in 2023 dollars with no inflation or escalation considered. The QPs have reviewed the planned annual expenditures and agree that they are reasonable.

Table 1.10: LOM Sustaining Capital

The economic analysis for this TRS was performed by Gatos Silver, Inc. (GSI) using the GSI financial model. Key inputs to the financial model include the Reserve LOM Plan inclusive of operating and capital costs, commodity prices and exchange rate assumptions.

The LOM Plan economic analysis supports the declaration of Mineral Reserves. Golder reviewed the LOM Plan and economic model components relevant to the LOM Plan in detail.

Economic assumptions are based on historic pricing and analysts’ long-term consensus forecasts as of April 2023 (see Table 1.11).

Table 1.11: Economic Assumptions

The LGJV mill produces two products, a lead concentrate and a zinc concentrate. Payable metals are evaluated using the recovery parameters described in Section 10.0 as well as management’s estimates of treatment and refining charges for each concentrate based on a marketing consultant’s input and current market conditions.

The Mineral Reserve LOM Plan begins on July 1, 2023, with operations continuing through to the end of 2030 (7.5 years). The financial model includes closure costs of $14.9 M over the 2031-2034 period. The Reserves LOM Plan includes in-process mineralized material of 8,621 tonnes as of June 30, 2023.

The economic analysis uses a 5% discount rate and on an unlevered basis. Corporate administration, management fees, interest expense, and exploration activities are excluded from the economic analysis used to support the Mineral Reserves.

The Reserves LOM Plan assumes a 2,949 t/d processing rate for a total of 8.08 Mt of mineralized material through the mill at average ROM grades of 217 g/t silver, 4.32% zinc, 2.20% lead, and 0.25 g/t gold over a 7.5-year period. The Reserve LOM Plan supports the Mineral Reserves as it demonstrates economic viability via projected revenues exceeding all projected operating, sustaining capital, and closure costs.

Table 1.12 summarizes the economic analysis of Cerro Los Gatos Mine based on the projected cash flow generated by the mining and processing of the stated Mineral Reserves. The economic analysis considers applicable mining and corporate income taxes which have rates of 7.5% and 30%, respectively.

Table 1.12: LOM Financial Summary

Note:

The post-tax Net Present Value (NPV) of the Cerro Los Gatos mine is $462 M using a discount rate of 5%. Annual after-tax cash flow is expected to average $75 M over the 7.5 years of operations. The Cerro Los Gatos mine remains economic under a wide range of commodity prices and has Cash Costs after by-product credits of $3.05 and All-in Sustaining Costs (AISC) of $6.61 per ounce of silver payable (also net of by-product credits) over the Reserve LOM Plan. The main drivers of the low AISC are lower go-forward sustaining capital requirements and significant by-product credits.

Throughout the exploration, development, and mining of the deposit a sound knowledge and understanding of the geological controls on the mineralization has been acquired, which are adequately expressed in the Resource Model.

The deposit has logging data from subsurface workings and surface and underground drilling that has been adequately reviewed and validated which allows it to be used with sufficient confidence in the construction of a long-term resource model.

A new geological model has been constructed of the deposit that integrates the different sources of information through an implicit 3D model. Based on this geological model an estimation of the main grades of the deposit has been performed using Ordinary Kriging (OK) interpolators. The results have been validated in detail by visual and statistical review and against existing production data.

The Mineral Resource categorization uses methodologies and assumptions that allow for adequate consideration of uncertainty and risk.

The Mineral Resources reported in this TRS are reported above a NSR cut-off value, supported by studies, and considers reasonable prospects for economic extraction by optimizing stopes using assumptions and reliable data.

It is the opinion of the QP that the Mineral Resources presented herein are appropriate for public disclosure and comply with the definitions of Mineral Resources as established by S-K 1300 and CIM Definition Standards for Mineral Resources and Mineral Reserves (2014).

The Mineral Reserves for CLG have been re-estimated, and a Mine Plan developed, which is attuned to the deposit and the conditions under which the mineralized material can be mined and processed. The Mineral Reserves have been estimated with consideration for the modifying factors of mining dilution and mining recovery for each mining method, support service costs as well as reasonable assumptions regarding input costs and metal prices.

The Mine Plan will deliver mineralized material to the processing plant of contained metal value well in excess of the NSR cut-off value used to establish economic blocks of mineralized material. The Mine Plan is considered by the QP to be robust and achievable in the current operating environment.

Mine management has responded to challenges presented by each of the structurally controlled zones of the CLG deposit and invested in actions and techniques that will ensure safety of workers and reduce operating costs.

Other conclusions drawn by the Mining QP are:

Identified risks to the Mineral Reserves pertain to:

The following factors represent opportunities to enhance mining operations at CLG:

It is the opinion of the Mining QP that the Mineral Reserves presented herein are appropriate for public disclosure and comply with the definitions of Mineral Reserves, as established by S-K 1300 and CIM Definition Standards for Mineral Resources and Mineral Reserves (2014).

Identified risks to mineral processing pertain to:

The following conclusions were made regarding the site infrastructure:

The mine dewatering system has achieved steady state status – that is, adequate drainage, wells and pumping installations have been installed to draw down the water table around active mining horizons. CLG has made plans and budgeted for additional underground wells to enable the continued removal of groundwaters as the mine is deepened to the SE.

The underground ventilation system requires expansion as the mine activity gravitates to the SE Zone and to depth. Plans, schedules, and budgets are in place to establish adequate air flow to the future mine development areas.

The TSF is a mature structure operating under steady-state conditions and monitored by permanent stations installed throughout the TSF dam structure. As compared to the 2022 Report, the volume of material to be stored in the TSF has been revised to reflect the reduction of tails to be impounded with the advent of the paste backfill plant and with the addition of mineral reserves. There are two more lifts scheduled for the dam to complete its construction for acceptance of the LOM tailings volumes. The TSF is managed by an independent Engineer of Record, Tierra Group International, Ltd., which conforms with Mexican and other industry accepted guidelines such as the International Committee on Large Dams and the Canadian Dam Association.

The following observations and conclusions have been developed based on the site visit and inquiries made by the environmental and permitting QP and review of available information.

The following observations and conclusions are drawn regarding community and social aspects:

The following recommendations are made by the Qualified Persons:

Geology and Mineral Resources:

Mining and Mineral Reserves:

Metallurgy and Mineral Processing:

Infrastructure:

Pertaining to the paste fill plant:

Pertaining to the underground dewatering infrastructure:

CLG is advancing work on several components of the dewatering plan to enable improved dewatering and water management in the operations and have included $15 million in capital projects relating to mine dewatering within the LOM Plan, including the installation of additional wells and pumping infrastructure.

Tierra Group makes the following recommendations with respect to tailings storage:

Environmental and Social:

Gatos Silver, Inc. (“Gatos Silver”) is listed on the New York Stock Exchange and the Toronto Stock Exchange. The company’s corporate office is located at 925 West Georgia Street, Vancouver, BC, Canada V6C 3L2.

This report has been prepared by WSP as a Technical Report Summary to satisfy U.S. Securities and Exchange Commission regulation subpart S-K 1300 (SK-1300) for Gatos Silver. The quality of information, conclusions, and estimates contained herein are consistent with the level of effort involved in consultants’ services, based on; i), information available at the time of preparation; ii), data supplied by outside sources; and iii), the assumptions, conditions, and qualifications set forth in this TRS. The purpose of this TRS is to report Mineral Resources and Mineral Reserves for the CLG Mine, 70% owned by Gatos Silver.

Key Acronyms and definitions for this Report include:

The compilation and estimation of Mineral Resources and Mineral Reserves used public and private data sources. The supply of the private data sources from Gatos Silver included a drill hole database, geological model, internal documentation, laboratory certificates, mine designs, mine plans and other mine planning files.

A detailed list of cited reports is noted in Section 24.0 of this TRS.

WSP has adopted certain provisions from previous Technical Reports authored by Golder (2022), Tetra Tech (2012, 2017, 2020) and Behre Dolbear, as appropriate. Where content from previous Technical Reports have been included, the authors have not relied upon previous authors and are taking responsibility for the sections indicated by the certificates of QPs of this TRS.

Site visits have been conducted by WSP, Golder Associates S.A., Stantec USA, and Transmin Metallurgical Consultants personnel as described on Table 2.1.

Table 2.1: Site Visits of Qualified Persons

The following technical reports have been made publicly available previously:

The operating Cerro Los Gatos (CLG) underground mine and processing facilities are approximately centered on Latitude 27° 34' 17" N, Longitude 106° 21' 33" W, near the town of San José de Sitio, within the Municipality of Satevó in the State of Chihuahua, Mexico. The mine is approximately 120 kilometers (km) south of the state capital of Chihuahua City and approximately 100 km north/northwest of the historical mining city of Hidalgo del Parral (Figure 3.1).

Figure 3.1: Project Location Map

MPR is the owner of mineral rights held by seventeen titled concessions, covering 103,086.8 ha. Under applicable Mexican law, titled mining concessions grant holders exploration and exploitation rights, subject to certain conditions including minimum expenditure requirements. Titled mining concessions exclude surface rights, which are generally separately negotiated. Titled mining concessions are summarized in Table 3.1, collectively the “Project Area”.

Table 3.1: Los Gatos Project Titled Mining Concessions

Figure 3.2 depicts the Los Gatos concessions.

Source: Minera Plata Real S. de R.L. de C.V. (MPR)

Figure 3.2: Los Gatos Concessions Map

MPR has arranged permissions to enter and perform exploration and mining activities on several land properties in the Project Area, including all surface rights necessary to access the CLG operating mine and processing and tailings facilities. Figure 3.3 shows the distribution of communal land and private property, where permissions have been obtained and the nature of such permissions. MPR has purchased surface lands covering the known extents of the CLG, and Esther Resource areas, totalling 5,188.6 ha, as shown in light blue in Figure 3.3.

Source: MPR

Figure 3.3: Surface Rights and Exploration Permissions

MPR has negotiated and ratified an access agreement with the community of San Jose del Sitio for use of the access road through communally owned land shown in light green fill on Figure 4.3. This agreement, the term of which extends to November 6, 2046, allows access through the surface land holdings of the community and is registered with the federal land registry. MPR has worked together with the community since the inception of the exploration project and has enjoyed strong support from the community leaders and Ejido assemblies.

MPR has established a multi-disciplinary team to maintain ongoing communications in the nine most proximate communities to CLG, including San José del Sitio and La Esperanza, as well as the municipality of Satevo. Description on Acquisition of Mineral Rights

The Los Gatos Joint Venture holds concessions through its Mexican subsidiary company, MPR. MPR is 70% owned by Gatos Silver, Inc. and 30% owned by Dowa Metals & Mining Co., Ltd. The Los Gatos concession (title 231498) is held subject to a royalty agreement, described below. Based on its review of available information, MPR’s legal advisors, VHG Servicios Legales, S.C., has advised that all lien collateral registrations with the Public Registry of Mining in connection with the concessions are in the process of being cancelled following the formal ratification of cancellation thereof by the counterparty.

MPR also holds the rights to the concession of Paula Adorada through a Contract of Assignment of Rights duly recorded with the Public Registry of Mining.

Under Mexican mining law, titled concessions must have submitted the required Surveying and Assessment Works to define their precise location and rights against any pre-existing mining claim. Once titled, concession owners have the obligation to submit annual Assessment of Work Reports every year by the end of May for each concession or group of concessions based on minimum investment amounts. All of MPR’s concessions are grouped for legal compliance with requirements by Mexican mining law, except for the Paula Adorada claim, which was acquired later. Non-compliance with these requirements is cause for cancellation only after the authority communicates in writing to the concessionaire advising of any such default, and granting the concessionaire a specified time frame in which to remedy the default. As of the date of this report, MPR concessions are in good standing with respect to this obligation.

In Mexico, there are no limitations on the total amount of mining concessions or on the amount of land that may be held by an individual or a company.

A second obligation that holders of mining concessions must meet is the bi-annual payment of mining duties. As of the date of this report, MPR has complied with the payment of mining duties payable in connection with its concessions including in respect of 2020, 2021, 2022 and 2023. As result, MPR’s concessions are in good standing as concerns this obligation.

On May 8, 2023, a Decree was published in the Official Gazette of the Federation amending, adding to, and repealing several provisions of the Mining Law, the National Water Law, the General Law of Ecological Balance and Environmental Protection and the General Law for the Prevention and Integral Management of Waste, regarding mining and water concessions.

As a result of the Decree, with respect to concession tenors, the term of any new concession will be 30 years, with the option of a single 25-year term extension subject to certain conditions. At the end of such extension, the concession holder may participate on a priority-basis in the bidding of the concession for another 25 years. Under the Decree, all mining concessions granted prior to the entry into force of the Decree retain their existing durations as reflected in their title documentation. This applies to all concession currently held by MPR.

The Decree, which requires implementing regulations in some instances, also introduces the following new requirements upon full implementation: new concessions would only be granted through a public bidding process; new mining concessions would be granted in respect of specified minerals; the potential to expropriate private land would be discontinued; the approval of transferees of mining concessions would be required; minimum payments of 5% of profits to local communities would be imposed; social impact studies and community

consultation would be required; restoration, closure and post closure programs would be required with financial guarantees; water availability would be a condition for granting new mining concessions; the concept of presumptive approval (afirmativa ficta) for approval matters properly and timely submitted to regulatory agencies would be removed; parastatal entities could be created and would enjoy preferential rights to exploration; environmental obligations and prohibitions would be increased; and water concessions could be significantly modified by governmental authorities in certain circumstances. Although it is not clear in all instances, the amendments under the Decree are generally stated to not have retroactive effect, and as such their most significant impact would be expected to be on new mining concessions rather than existing concessions and operations, including those of the LGJV and Gatos. Certain of the amendments may also apply to existing operations, such as the requirement for approval of any concession transferee, establishing a closure and post-closure program and additional environmental obligations.

There is one current royalty contract that applies to a concession and one royalty contract that previously applied to a concession. The details of the two contracts follow.

A NSR royalty agreement was established in 2015 with the previous owner of the Los Gatos concession (title 231498) (the “La Cuesta Royalty Agreement”). The La Cuesta Royalty Agreement stipulated a 2% royalty on revenue until a threshold of $10 million in payments was reached. Thereafter, the royalty was reduced to 0.5% until $15 million has been paid. To July 27, 2023, $11.54 million has been paid. The remaining 0.5% royalty will be retired upon the payment of $3.46 million after July 27, 2023. Under the La Cuesta Royalty Agreement there is also a production payment of 0.5% NSR on production from lands within a 1-km boundary of the Los Gatos concession which is also subject to the previously referenced $15 million maximum.

A royalty agreement in respect of the Paula Adorada concession (title 223392) was acquired from the Chihuahua-based company Grupo Factor through a Contract of Assignment of Rights effective December 3, 2014. There are no remaining obligations or royalties under this agreement.

Mining operations in Mexico have from time-to-time been subject to illicit community-led blockades. MPR works closely with local communities to mitigate this and other risks. Please see Section 17.0 for further information on social considerations. MPR is not aware of any other material risk factors which could limit or deny access to the CLG Mine.

CLG Mine is accessible by automobile from Mexican Federal Highway 24 to km 81 and then turning west on a newly paved road for 40 km west to the community of San José de Sitio, situated near the southeast-end of the concession block. Travel time by automobile is approximately two hours, either from Chihuahua City from the north or Hidalgo del Parral from the south. The city of Valle de Zaragoza, located on Federal Highway 24, 35 km to the south of the turnoff to San José del Sitio is the nearest significant commercial center.

The climate of the Los Gatos project is typical of desert areas of Northwest Mexico; it is semi-arid, with a maximum temperature in the order of 41.7 degrees Celsius (°C) and a minimum recorded at minus 14°C; annual average temperature is 18.3°C. Annual rainfall averages 363.9 millimeters (mm) over an average of 61 days, mostly during the rainy season of June through September, and relative humidity is 50%, with a dominant northeastward wind. There is abundant sunshine and little cloud cover during most of the year. Snow is a rare occurrence in Southern Chihuahua but has been recorded on occasion. Exploration and mining activities are seldom interrupted by adverse weather conditions, except for short-lived storms producing floods and damage to access roads.

Vegetation is characterized by a semi-desert landscape, with typical low brush vegetation in the slopes including lechuguilla, ocotillo, sotol, yucca, sage, bear grass, and other types of indigenous grasses. Larger brush and trees are common along the main watercourses, with the presence of oak, cypress, cottonwood, poplar, huizache, and mesquite, among others.

The soils of the area are sandy to rocky and are composed of detrital material from the local volcanic and sedimentary rocks classified as lithosols and yermosols. The lack of flat areas with regular water sources and good soils results in only small areas useful for crops, but there is sufficient growth of native grasses and desert plant life to support the principal economic activity of the region, cattle grazing. Land tenure in the municipality of Satevó is 25% communal (Ejido); and 52% private property, with predominantly cattle grazing and other agricultural use.

The Project Area is in the Sierras y Llanuras del Norte Physiographic Province near the boundaries between the Gran Meseta, Cañones, and Sierras, and Llanura Tarahumara Sub Provinces. The general physiography of the Los Gatos area is characterized by low rolling volcanic hills with local escarpments and flat valley floors. Altitudes vary between 1,550 meters above sea level (masl) at the base of the Santo Toribio Creek and 1,780 masl at the top of the Los Gatos Hill, one of the highest peaks of the Project Area. The mine portal elevation is 1,585 masl.

Locally, the surface lands are mostly owned by private individuals as small cattle ranches, with average sizes of 1,000 to 2,000 hectares. Many of these ranches are unimproved grazing lands with no structures; however, a few ranch houses exist in the scattered areas. Some landowners live locally in the community of San José del Sitio or surrounding communities, while others live in the surrounding cities of Zaragoza, Parral, and Chihuahua.

Two communities hold parcels of surface lands as agrarian communes or "Ejidos." These are the communities of La Esperanza and San José del Sitio, which have corporate ownership of their respective surface lands.

CLG is an operating mine. All required infrastructure for the current operation is in place, with some additions required for the LOM Plan as described in Section 15.0.

Infrastructure constructed to support the mining and processing operations at CLG Mine include offsite and onsite components. Offsite infrastructure comprises grid power distribution to the mine and a main access road.

Electrical power to the CLG site is supplied via a 115-kilovolt (kV) utility transmission line which originates from the San Francisco de Borja’ substation in Satevó (Chihuahua).

CLG mine is accessible by existing road, which is used to transport personnel, materials and supplies to the mine and concentrates from the mine. That existing road is owned and maintained by the State and is paved up to the local San Jose del Sitio community and beyond that is a 11km gravel access road through an easement over ejido lands that is maintained by MPR. Railway transport infrastructure does not exist in the vicinity of the mine, nor is there nearby rail access to seaports. Lead and zinc concentrate products are trucked to Manzanillo. The nearest commercial airport is in Chihuahua City.

Water resources in the region are mostly related to the Conchos River Basin, which includes the San Pedro, San Francisco de Borja, and Satevó River sub-basins. A larger supply of surface water is associated with the Conchos River, located 7 km to the South of the main operation areas. The Conchos River is dammed in several locations, including La Boquilla, a major hydro power plant in the region. Scattered ranch houses near and within the Project Area are normally serviced by generators and small wells or capture ponds from surface runoff waters. Make-up water for the operation is sourced from water generated by the underground mining operations.

Onsite infrastructure is comprised of camp facilities, office and maintenance facilities, a processing plant, a tailings storage facility, backfill plants, refrigeration plants, a mine ventilation system, and dewatering ponds for sediment settling and water cooling. An accommodation camp with supporting facilities is operated onsite for workers and contractors. Since the mining industry is well-established in Mexico, and the local population density is relatively low, the vast majority of mine personnel travel to site from across Mexico with most coming from within Chihuahua State. Mine personnel who are not locally resident are required to stay on on-site accommodation.

Section 15.0 discusses infrastructure in more detail.

The Los Gatos area is considered a region with extensive veining but only limited showings of precious and base metals mineralization. It has been the subject of only very limited historical prospecting and mineral exploration. There are small prospect pits and minor historic workings in the Esther, San Luis, Tren/Margarita, and Paula zones. There is no known record keeping from this small-scale production. Surface work by MPR has not uncovered any evidence of modern prospecting activities in the area such as drill hole collars, survey points, or earlier sample locations.

Los Gatos was initially recognized by reconnaissance activities by La Cuesta International Inc. (La Cuesta) and La Cuesta applied for the original Los Gatos concession in 2005.

An initial letter of agreement for exploration work on the project was negotiated between La Cuesta and Los Gatos Ltd., (a former parent company to MPR) in early 2006, and a final contract was ratified in April 2006 between MPR and La Cuesta.

Exploration activities increased from 2008 onwards. Early drilling during 2008 and 2009 was focused on the Amapola area approximately 12km north-west of the CLG deposit. During 2009 and 2010 the Esther and CLG deposits were recognized as significant mineralized zones and exploration activities were advanced at both zones. As the size and scale of CLG was recognized during this time, the drill resources were focused on advancing this deposit.

There are no records of historical Mineral Resource and Mineral Reserve estimates before the involvement of MPR. Any silver, lead, and zinc production that might have been carried out from the Esther and Gavilana (Paula) prospects was probably limited to a few hundreds of tonnes with irregular silver and lead-zinc concentrations. A positive Feasibility Study (FS) was completed on Los Gatos in 2017 (Tetra Tech, 2017) and the project secured financing for construction, commissioning, and start up with first concentrate produced in the second half of 2019.

Table 5.1 depicts CLG Mine production from 2019 through the first half (H1) of 2023.

Table 5.1: CLG Mine Production (2019 – H1 2023)

North-western Mexico geologically consists of a series of accreted arc terranes that are overlain in the area of the Cerro Los Gatos deposit by the thick volcanic sequence of the Sierra Madre Occidental volcanic province (SMO). Figure 6.1 shows the location of the SMO over the older arc terranes (Campa and Coney 1983).

Figure 6.1: Location of the Sierra Madre Occidental volcanic province (Campa and Coney 1983)

The SMO is a middle tertiary volcanic province which extends from the southwestern United States to central Mexico. The average thickness of the flows exceeds 1 km (McDowell and Clabaugh, 1979).

The SMO sequence of volcanic rocks is subdivided into two major units, the Lower Volcanic Series, and the Upper Volcanic Series:

Lower Volcanic Series (LVS): Characterized by a predominant pile of andesitic volcanoclastic rocks. The group is generally massive in nature. While the unit is predominantly andesitic, the upper parts, toward the contact with the Upper Volcanic Series, tend to become more felsic, and thick beds of rhyodacite and rhyolite are found intercalated with andesite and dacite.

Upper Volcanic Series (UVS): Characterized by a thick sequence of felsic volcanoclastic rocks, predominantly ignimbrites, that shows well-defined bedding and tuffaceous horizons. These rocks form most of the high scarps and cliffs that characterize this province.

The Cerro Los Gatos and Esther deposits are embedded within andesitic rocks that are considered to be part of the LVS. The exposed area of andesite that contains the CLG and Esther deposits is considered an uplifted horst feature. These andesites are exposed at surface for approximately 30km to the north-west of the CLG deposit and there are multiple vein outcrops throughout this exposure.

The rhyolites around the andesite horst are considered to be an early (lower) part of the UVS.

The Cerro Los Gatos deposit sits on a range front fault of a tertiary extensional basin known on government maps as the Rio Conchos graben. The graben basin is filled with unconsolidated or partially consolidated sediments. The basin formation and filling likely occurred both contemporaneously and after the mineral deposition of the Cerro Los Gatos deposit. The extensional faulting that formed the basin influences the local dip and fault segmentation of the mineralization.

Both the sediments that fill the tertiary extensional basin and the rhyolites that surround the andesites at surface are considered to overlay the andesite.

The regional geology in the area of the CLG deposit is shown in Figure 6.2.

 Figure 6.2: Regional Geological Map of the Los Gatos Area based on Servicio Geologico Mexico Data

On a regional scale, both West-Northwest and North-Northwest trending large scale structures are observed. The North-Northwest trending faults in the deposit area are extensional and associated with the edges of the graben basin. The West-Northwest trending fault and fracture zones possibly reflect reactivated basement structures.

In the region, epithermal mineralization is associated with both West-Northwest and North-Northwest trending structures.

A stratigraphic column representing the regional geology is shown in Figure 6.3.

The rocks that host the Cerro Los Gatos deposit are a series of andesitic flows and dacitic tuffs. These are locally considered part of the "Lower Volcanic Series" and likely correlative of Tv2 and Tv3 of McDowell 2007. These are the host units of the Cerro Los Gatos deposit.

Intruding and deposited on the entire section are locally important rhyolite flows, flow domes, and dikes that are likely correlative with unit Tv4 of McDowell 2007.

Each of the rocks in the section contains observable hydrothermal alteration, suggesting that mineralization in the area probably occurred late in the history of the development of the volcanic section.

Figure 6.3: Stratigraphic Column of Regional Geology of Los Gatos

Figure 6.4 shows a geological map of the Cerro Los Gatos deposit area and Figure 6.5 depicts cross-section through the deposit, looking Northwest.

Figure 6.4:  Geological Map of the Cerro Los Gatos Deposit Area

Figure 6.5: Geologic Model, Section Looking Northwest through the Central Zone Showing the Lithological Sequence at Los Gatos Deposit

In the Esther to Los Gatos area there are NW-striking faults with major normal (extensional) displacements. These faults tend to be marked by strongly reddened (hematitic) rocks and soils. From SW to NE the principal faults comprise the Esther, Ambar, Cascabel and Los Gatos faults.

The Los Gatos fault is a major North-West trending listric fault zone, generally ranging from 5 to 30m wide that forms the edge of the graben basin. This fault frequently contains fine gouge. The mineralized veins that form the Cerro Los Gatos deposit sit in the footwall of the fault, ranging from immediately adjacent to up to 100m from the fault.

A fault parallel to the Los Gatos fault, known as the Lower Gatos fault, sits within the mineralized veins and is postulated to be an earlier plane of movement for the graben boundary before the primary movement shifted to the Los Gatos fault.

The Los Gatos fault and mineralized zones are cross-cut by two sub-vertical major North-West to North-North-West trending faults known as the Anti-Gatos-1 and Anti-Gatos-2 faults. Anti-Gatos-1 separates the North-West zone from the Central Zone and the Anti-Gatos-2 separates the Central and South-East Upper blocks from the South-East main block.

There are multiple late cross cutting faults trending North-East. Most of these do not have significant movement. The North-East trending Ramp fault does offset the mineralized veins and separates the Central block of mineralization from the South-East Upper block.

Figure 6.6 (WP 243) shows a typical siliceous fault plane, with slickensides, beside non-exposed ground (presumably clay-altered rock).

Figure 6.6: Typical Los Gatos Fault with Reddened Slickensided Fault Plane Cutting Siliceous Rhyolite

The Los Gatos District hosts a series of quartz, quartz-calcite, and calcite veins in at least fifteen separate vein systems that are exposed along a strike length of approximately 30 km and an outcrop belt width of approximately five km.

The veins containing silver, lead and zinc at Cerro Los Gatos are hosted primarily by the andesite rocks immediately above the contact with the dacitic lithic tuff. Vein thickness is variable. Figure 6.7 shows an isometric view of the dacite lithic tuff unit (pink) which marks the position of a NE facing monoclinic fold that is disrupted by brittle deformation along the Lower Gatos and the antithetic Anti-gatos faults (In red: Ag, Pb, Zn Mineralization).

Figure 6.7: Geological Model 3D View Looking South Southeast

Economic mineralized grades are not present at surface; however, epithermal alteration textures are present. The general Northwest trending, Northeast dipping Cerro Los Gatos vein system is persistent with a mapped extension in the order of 10 km, with true widths of as much as 25 m at depth as demonstrated by diamond drilling. Banded quartz veins and breccias are cemented by quartz, calcite, and abundant manganese oxides.

The Cerro Los Gatos deposit is a listric-shaped mineralized horizon hosting steeply to shallowly dipping mineralized-shoots at depth. Mineralization of economic interest occurs for approximately 1,800 m in length, between an elevation varying roughly between 700 masl and 1,400 masl. The top of the mineralized horizon at Cerro Los Gatos is generally located at an elevation of 1,400 masl. The natural topographic surface is in the order of 1,570 masl ± 50 masl.

The veins at Cerro Los Gatos contain silver, zinc and lead. Lower concentrations of gold and copper are also associated with the veining.

Silver mineralization occurs as acanthite (argentite) and native silver and has been detected in thin sections as proustite as small inclusions within galena grains.

Zinc mineralization occurs as sphalerite, zinc silicates and zinc carbonates of variable grain sizes disseminated in quartz vein material, as open-space filling in cavities, and as replacements in the andesitic and dacitic flow units. Sphalerite ranges from yellow to brown in color and is deposited in a similar style but is not always associated with the galena mineralization. Zinc oxides after sphalerite also exist down along fault structures through the deposit.

Lead mineralization occurs primarily as galena and lead oxide minerals of varying grain sizes that are disseminated in quartz vein material, as open-space filling in cavities, and as replacements in the andesitic and dacitic flow units.

Copper mineralization generally occurs as chalcopyrite disseminated within quartz veins. Azurite and malachite have been observed in oxidized areas of the South-East zone.

Gold mineral species have not been identified visually but are present in small quantities in assay results.

The veins themselves display variable gangue mineralization, depending on the depth of exposure within the epithermal environment. It is common to observe calcite or manganese oxide mineralization at high levels within the epithermal system which transitions to barite, fluorite, and quartz at lower levels.

Within the mineralized portions of the veins, it is common to see quartz and fluorite and occasional minor calcite associated with lead, zinc, silver, copper, and gold mineralization. Fluorite is a significant component of the mineralized zones. The veins are typically rhythmically banded on a scale of 1 mm to 10 mm per band, with repeated pulses of quartz carrying the metals and other gangue minerals.

It is common to see multiple pulses of mineralization where small veins crosscut each other. It is also common to see various coloration of quartz in the multiple pulses, ranging from milky white to vitreous gray to amethystine purple.

It is apparent that most of the economic mineral values are associated with sulfide mineralization. Oxide mineralization is limited but present at depth, and is commonly related to fracture, breccia zones, and open spaces within the veins.

The Los Gatos vein mineralization has a halo of hydrothermal alteration. The distribution of alteration is complex because the halo was subsequently offset by the major listric fault movement.

The Los Gatos footwall rocks are mostly unoxidized. Unaltered mafics and feldspar are common, even as close as 20 m from the fault zone. Approaching the Los Gatos vein(s), magnetite is destroyed and the andesites become pale green. The illite alteration is typical argillic alteration found around epithermal veins. The dacitic tuffs are less affected; they remain siliceous and contain only a minor percentage of illite + pyrite. Illite alteration is seen at depth and at surface. At deeper levels, epidote + chlorite + pyrite alteration is widespread (propylitic) as far as 200 m into the footwall of the South-East zone.

High elevations within the hanging wall, particularly within rhyolite, are affected by massive chalcedony replacement and veinlets of chalcedony. Kaolinite + silica alteration occurs preferentially within the acidic volcanic rocks.

Los Gatos is interpreted as an intermediate sulfidation epithermal vein system.

Veins in the Cerro Los Gatos deposit show textures and gangue mineralogy (local chalcedony and calcite, and quartz-replaced lattice texture calcite) that indicate a relatively high-level hydrothermal system in the boiling environment. Breccia with clasts of vein quartz indicates a protracted hydrothermal system during multiple faulting events.

Mineralization at Cerro Los Gatos is characterized by silver, lead, zinc, and copper sulfides and their corresponding oxides, along with fluorite, manganese, barite, and traces of gold associated with quartz and calcite veins.

The veins vary in orientation from West-Northwest to Northwest to North-Northwest and vary in thickness from 20 cm to 30 m in the mine operation. Study of the veins in hand specimens and thin sections suggest they are epithermal in origin and are likely of intermediate sulfidation composition.

The exploration model for these types of veins was put forward in a paper by Dr. Larry J. Buchanan (1981) that set the basis for the understanding and interpretation of epithermal deposits that has been widely used in exploration; see Figure 6.8.

Source: Buchanan L.J., 1981

Figure 6.8: Idealized Section of a Bonanza Epithermal Deposit

Figure 6.9 shows epithermal textures encountered in CLG drill holes GA-132 at 392 m down the hole on the left, and GA-175 at 273 m down the hole on the right.

 

 

Figure 6.9: Epithermal Textures in Drill Core

Exploration on the LGJV concessions by Minera Plata Real has been completed primarily by core drilling and limited non-drilling exploration activities including surface geochemical assay, geophysics, surface mapping and structural studies.

Results of recent and ongoing drilling programs are intended to define new discoveries and better delineate known deposits to increase confidence of the Mineral Resources and Mineral Reserves estimates as the basis for future organic growth of the business.

The non-drilling exploration work currently being undertaken is attempting to identify new mineralization beyond what is being reported in this technical report.

Detailed mapping and rock geochemistry has been completed during 2022 and 2023 on various exploration targets on the LGJV concession package outside the CLG and Esther zones.

During 2023, the first phase of a Magneto-Telluric study was completed over CLG and the Los Gatos fault to the northwest and southeast. The intent of this survey is to attempt to identify structures within the basin that may indicate accumulations of mineralization similar to South-East Deeps.

Regional scale geologic mapping has been conducted over areas of the Los Gatos concession where the LGJV controls the surface rights utilizing both local staff from MPR and independent contractors. Limited areas of detailed surface mapping exist in the immediate vicinity of the Esther and CLG deposits.

During 2022, MPR commenced detailed mapping programs over the central area of the concessions from Amapola to Wall-e and the area between CLG and Esther.

During 2023 a drone LiDAR and airphoto survey was completed over the Ojito ranch approximately 20 km northwest of the CLG operation. The intent of this survey was to prioritize geological mapping targets.

Detailed mapping was completed during 2023 over Los Torunos, El Valle, La Palma, San Luis, Los Rieles, Lince, Diana and Portigueno targets.

Since the acquisition of Los Gatos by MPR, several drilling campaigns have been carried out with different objectives. As of March 31, 2023, 1,938 drill holes relevant to the LGJV property had been completed by MPR, for a total of 467,535 m drilled. The project database contains surface exploration drilling on other prospects that are not applicable to this report. Table 7.1 shows all drilling campaigns on the LGJV property, tabulated by objective and Figure 7.3 shows a map with spatial distribution of the CLG deposit drilling.

Table 7.1: Drill Hole Count by Purpose

Mineral exploration drilling was initiated at the CLG Project in October 2008 and continued until 2012. Drilling restarted in 2015, following the joint venture agreement with DOWA, with four rigs simultaneously operating until February 2016. Drilling began with a Mexican contractor, Minera Gavilán, but most of the drilling was completed by Major Drilling Company with Major 5000 rigs. Drilling was conducted using a wire line rig with diamond core capabilities. Holes begin with HQ size and are reduced, if necessary, to NQ and very rarely to BQ, only if difficult drilling conditions are encountered. Drilling from the 2015-2016 program were pre-collared with tri-cone bits.

Drilling resumed in connection with underground development in August-December 2018 from designed and excavated chambers within the underground workings. The drilling was conducted by Major Drilling to retrieve NQ size core drilled from the footwall side of the mineralized zone.

Surface drilling has continued since 2019. The surface drilling up until early 2023 was dominantly focused on mineral resource infill to improve geologic confidence. Up until mid-2022, holes were pre-collared with a tri-cone bit and core collected using HQ size, reducing to NQ size if poor drilling conditions were encountered. From mid-2022, the epiclastics have been drilled starting with PQ to control drillhole deviation.

Underground definition drilling commenced in 2019. The underground drilling has utilized small MPR owned “Termite” rigs drilling LTK48 (35mm) diamond core and Boart-Longyear LM-75 rigs drilling NQ core. In late 2022, the termite drilling changed to 42mm diamond core.

Exploration drilling has been undertaken almost yearly at CLG. Drilling specific to the CLG Mineral Resource estimation is approximately 1,466 holes, totalling 282,904.8 m of core.

Table 7.2 shows the summary of the different campaigns throughout the mineral exploration work on the Cerro Los Gatos deposit, by year as of the database cutoff date of March 31, 2023. Figure 7.5 illustrates the drill hole locations.

During 2022 there was a backlog of underground diamond drill core that had been drilled but not logged or sampled. This backlog was resolved during 2022. There are some drillholes shown in Table 7.2 that were drilled during 2021 but not finalized until after the 2022 mineral resource database cutoff date.

Table 7.2: Total of Drill Holes and Meters per Campaign at Los Gatos

Figure 7.1 presents a plan view of drill holes, segmented by surface and underground collar locations.

Figure 7.1:  Distribution of Drill Holes used for Estimation by Type at Los Gatos

As at July 1, 2023, a total of 108 drill holes for 42,374 m have been completed in the Esther area. After the 2022 Mineral Resource model was completed in 2022, a total of 5 drillholes for 1,467 metres were completed outside of the reported mineral resource solid.

Table 7.3 shows the summary of the different campaigns at the Esther area, by year. This table contains the drill holes from the entire Esther area, some of which were beyond the area included in the mineral resource block model. Figure 7.2 illustrates the drill hole locations.

Table 7.3: Total of Drill Holes and Meters per Campaign at Esther up until July 1, 2023