Diablillos

Visualization of October 2022 Mineral Resource Estimate at Oculto Deposit

October 2022 Mineral Resource Estimate

Oculto Mineral Resource Estimate – As of October 31, 2022

Zone	Category	Tonnes (000 t)	Ag (g/t)	Au (g/t)	AgEq (g/t)	Contained Ag (k oz Ag)	Contained Au (k oz Au)	AgEq (k oz AgEq)
Oxides	Measured	18,092	101	0.85	171	58,655	496	99,280
	Indicated	30,226	49	0.71	107	47,502	688	103,852
	Measured & Indicated	48,318	68	0.76	130	106,157	1,184	203,132
	Inferred	2,090	31	0.50	72	2,085	33	4,788
Transition Zone	Measured	1,244	50	1.21	149	1,979	49	5,992
	Indicated	1,752	22	1.13	115	1,235	64	6,477
	Measured & Indicated	2,996	33	1.17	129	3,214	113	12,469
	Inferred	127	7	0.80	73	29	3	275
Total	Measured	19,336	98	0.88	170	60,634	544	105,190
	Indicated	31,978	47	0.73	107	48,737	752	110,329
	Measured & Indicated	51,314	66	0.79	131	109,370	1,297	215,520
	Inferred	2,216	30	0.51	72	2,114	37	5,144

Notes for October 2022 Mineral Resource Estimate: 

1. Mineral Resources are not Mineral Reserves and have not demonstrated economic viability.
2. The Mineral Resource is reported inside a conceptual Whittle open pit shell derived using US $25.00/oz Ag price, US $1750/oz Au price, 73.5% process recovery for Ag, and 86% process recovery for Au. The constraining open pit optimization parameters used were $3.00/t mining cost, $24.45/t processing cost, $2.90/t G&A cost, and average 54-degree open pit slopes. 
3. The formula for calculating AgEq is as follows:   Silver Eq Oz = Silver Oz + Gold Oz x (Gold Price/Silver Price) x (Gold Recovery/Silver Recovery)
4. The Mineral Resource Estimate has been categorized in accordance with the CIM Definition Standards (CIM, 2014).
5. All figures are rounded to reflect the relative accuracy of the estimates. Minor discrepancies may occur due to rounding to appropriate significant figures.
6. The Mineral Resource was estimated by Mr. Peralta, B.Sc., FAusIMM CP(Geo), an independent Qualified Person within the meaning of NI 43-101.
7. The mineralisation estimated in the Mineral Resource is sub-horizontal with sub-vertical feeders and a reasonable prospect for eventual economic extraction by open pit methods.
8. A cut off grade of 35 gt AgEq was used for the Mineral Resource
9. The Mineral Resource models used Ordinary Kriging grade estimation within a three-dimensional block model and mineralized zones defined by wireframed solids, which are a combination of lithology and alteration domains. Constrained by a Whittle open pit shell. The 1m composite grades were capped where appropriate.
10. All tonnages reported are dry metric tonnes and ounces of contained gold and silver are troy ounces.
11. In-situ bulk density were assigned to each model domain, according to sample averages of each lithology domain, separated by alteration zones and subset by oxidation.
12. Mining recovery and dilution factors have not been applied to the Mineral Resource estimates.
13. Mr. Peralta is not aware of any environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues that could materially affect the potential development of the Mineral Resource.
14. Totals may not agree due to rounding.

October 2022 Mineral Resource Estimate

The October 2022 Mineral Resource estimate was completed by Luis Rodrigo Peralta, B.Sc., FAusIMM CP(Geo), Independent Consultant, in accordance with Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards incorporated, by reference, and in compliance with National Instrument NI 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”), and has been reviewed internally by AbraSilver.  The October 2022 Mineral Resource estimate is the result of 104,888 metres of drilling in 457 drill holes. The Mineral Resource is based only on the Oculto deposit within the broader Diablillos property and is reported inside a Whittle open pit shell with a cutoff grade of 35g/t silver equivalent, based on the economic parameters outlined in the Supporting Technical Disclosure section below.  

Gold and silver grades were estimated into the block model using Reverse Circulation Drill holes (RC), Diamond Drill holes (DDH) including the recent drilling between 2019 to July 30^th, 2022. It was estimated applying industry-standard estimation methodology: Ordinary Kriging (OK) and bias was reviewed using an Inverse Distance squared estimate (ID²) for comparison. Drill hole intervals have been composited to a length of 1 m, which is the average sampling length for core sampling. Grade capping has been applied to composited grade intervals on a case-by-case basis within each estimation domain. The estimation domains were defined using a combination of lithology domains, alteration domains, and oxide / sulphides state, defining a set of 18 domains for gold and silver.

Mineral Resource Estimate Sensitivity

A table showing sensitivities to the cut-off grade for the October 2022 Mineral Resource in the Measured and Indicated category is provided below.

Cut Off (AgEq)	Tonnage Oxides (000 t)	Silver Grade (g/t)	Gold Grade (g/t)	Silver Equivalent Grade (g/t)
10	105,215	38	0.44	75
20	75,228	50	0.58	98
30	57,492	61	0.72	120
35	51,314	66	0.79	131
40	46,206	71	0.85	141
50	38,212	81	0.96	160
60	32,254	91	1.07	179

Supporting Technical Disclosure

• Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
• The Mineral Resource incorporates geological and structural constraints and is constrained by an optimized Whittle open pit containing a total of 51.3 Mt of M&I Mineral Resource and 234.0 Mt of waste.
• Individual metals are reported at 100% of in-situ grades.
• Sensitivity cut-offs reported are a subset of the in-pit Mineral Resource.
• The effective date of the Mineral Resource is October 31, 2022, and is based on drilling through July 30^th, 2022.
• There are no known legal, political, environmental or other risks that could materially affect the potential development of the Mineral Resource.
• Key Assumptions are outlined below (all figures are in US dollars unless otherwise noted):
  • Commodity prices:
    • Note: Commodity price assumptions were guided by the NI 43-101 requirement for the Mineral Resource to have ‘reasonable prospects’ of eventual economic extraction.
  • Metallurgical recoveries: metallurgy recoveries were assumed as 73.5% for silver and 86% for gold, as demonstrated in the Company’s Preliminary Economic assessment  in respect of the Diablillos property dated January 13, 2022.
  • Operating cost assumptions: Mining costs of $3.00/t; processing costs of $24.45/t; and G&A costs of $2.90/t.
  • Open pit slopes: Open pit shell slope angles have been re-designed, based on recent geotechnical drilling and modelling. Six geotechnical sectors have been defined. The average inter-ramp angle assumed for open pit shell generation was 54 degrees.
• The formula for calculating AgEq is as follows:   Silver Eq Oz = Silver Oz + Gold Oz x (Gold Price/Silver Price) x (Gold Recovery/Silver Recovery)
• A full Technical Report in respect of the October 2022 Mineral Resource will be prepared in accordance with NI 43-101 and will be filed on SEDAR

Qualified Persons and Technical Information

The site visit, review of various geological aspects including sampling, drill core, logging, assay laboratory, independent check sample and October 2022 Mineral Resource estimate were done by Mr. Luis Rodrigo Peralta, B.Sc., FAusIMM CP (Geo). Mr. Peralta is an independent Qualified Person (“QP”) as defined by the NI 43-101.

Visualization of Large-Scale JAC Zone

New High-Grade JAC Zone

The Company announced results from the first drill hole in the new Southwest zone, DDH 22-019,  on August 3, 2022.  That discovery hole intercepted 87 metres at 346 g/t Ag and 0.15 g/t Au in oxides from a downhole depth of only 89 metres.   Subsequently, the Company completed the highly-successful Phase III drill program, consisting of over 22,000-metres, which achieved all of its key objectives, namely:

• Systematically grid drilling the silver-dominant mineralisation at the JAC zone in order to estimate Measured and Indicated Mineral Resources which can be incorporated into the planned overall Diablillos MRE update and PFS.
• Delineate the margins of the JAC zone and conduct geotechnical drilling necessary for a conceptual open pit design.
• Conduct reconnaissance drilling at other targets on the Diablillos land package, including the Fantasma, Alpaca and JAC North zones.

Highlights of selected high-grade drill results at JAC reported from the Phase III drill program are summarized in the Table below:

JAC Zone – Highlights of Phase III High-Grade Intercepts at JAC

Drill Hole	From (m)	To   (m)	Type	Interval (m)	Ag   (g/t)	Au (g/t)	AgEq1 (g/t)
DDH-22-019	89.0	176.0	Oxides	87.0	346.0	0.15	356.5
DDH-22-044	121.0	179.0	Oxides	58.0	208.8	0.20	222.8
DDH-22-046	123.0	165.5	Oxides	42.5	400.5	0.11	408.2
DDH-22-052	139.5	164.5	Oxides	25.0	754.4	0.12	764.2
DDH-22-053	140.5	168.5	Oxides	28.0	266.4	0.64	318.8
DDH-22-056	110.0	167.5	Oxides	57.5	141.4	0.27	163.5
DDH-22-057	144.0	164.0	Oxides	20.0	498.6	0.10	506.8
DDH-22-060	114.0	154.0	Oxides	40.0	203.4	-	203.4
DDH-22-061	65.0	168.0	Oxides	103.0	138.7	-	138.7
DDH-22-062	119.0	170.0	Oxides	51.0	169.4	0.20	185.8
DDH-22-063	56.0	85.0	Oxides	33.0	143.4	-	143.4
DDH-22-063	135.0	169.0	Oxides	34.0	118.6	0.08	125.2
DDH-22-067	143.0	179.0	Oxides	36.0	463.3	0.71	521.5
DDH-22-067	179.0	206.0	Sulphides	27.0	745.0	1.54	871.1
DDH-22-075	151.0	167.0	Oxides	16.0	604.4	0.82	671.5
DDH-22-076	147.0	169.0	Oxides	22.0	476.8	0.20	493.2
DDH-22-076	169.0	177.5	Oxides	8.5	1,952.8	6.66	2,498.3
DDH-22-077	60.0	92.0	Oxides	32.0	121.9	-	121.9
DDH-22-078	58.0	99.0	Oxides	41.0	103.5	-	103.5
DDH-22-079	144.0	179.0	Oxides	35.0	199.2	0.36	228.7
DDH-22-080	50.0	102.0	Oxides	52.0	125.1	-	125.1
DDH-22-081	128.0	165.0	Oxides	37.0	179.3	-	179.3
DDH-22-082	154.5	181.0	Transition	26.5	311.4	0.43	346.6
DDH-22-083	159.0	184.0	Transition	25.0	773.8	0.28	796.7
DDH-22-086	158.0	167.0	Sulphides	9.0	342.3	-	342.3
DDH-23-002	148.0	165.0	Transition	17.0	288.6	0.14	300.1
DDH-23-003	155.8	161.5	Sulphides	5.8	502.2	-	502.2
DDH-23-004	136.0	150.0	Oxides	14.0	3,024.5	0.21	3,041.7
DDH-23-007	115.0	119.0	Oxides	4.0	2,320.0	-	2,320.0
DDH-23-009	161.0	169.5	Oxides	8.5	479.2	0.15	491.5
DDH-23-010	132.0	177.5	Oxides	45.5	233.4	-	233.4
DDH-23-014	127.0	173.5	Oxides	46.5	185.0	0.50	226.0
DDH-23-017	92.0	104.0	Oxides	12.0	876.1	-	876.1
DDH-23-021	161.5	193.5	Oxides	32.0	530.8	0.60	579.9
DDH-23-024	144.0	161.0	Oxides	17.0	828.9	-	828.9
DDH-23-025	100.0	179.0	Oxides	79.0	237.6	0.15	249.9
DDH-23-036	140.0	150.0	Oxides	10.0	520.0	0.04	523.3
DDH-23-039	105.0	124.0	Oxides	19.0	253.4	-	253.4
DDH-23-046	157.0	160.0	Oxides	3.0	2,070.0	0.27	2,092.1
DDH-23-061	134.0	153.5	Oxides	19.5	272.8	-	272.8
DDH-23-070	41.0	105.0	Oxides	64.0	148.1	-	148.1

Note: All results are rounded. Assays are uncut and undiluted. Widths are drilled widths, not true widths. True widths are estimated to be approximately 80% of the interval widths.

¹ AgEq based on 81.9(Ag):1(Au) calculated using long-term prices of US$25.00/oz Ag and US$1,750/oz Au, and 73.5% process recovery for Ag, and 86.0% process recovery for Au as demonstrated in the Company’s PEA in respect of Diablillos dated January 13, 2022, using formula:  AgEq g/t = Ag g/t + Au g/t x (Gold Price/Silver Price) x (Gold Recovery/Silver Recovery).

Next Steps

All Phase III drill holes from the JAC zone will be incorporated into an updated MRE and will be included in a PFS on the full Diablillos project.

The next phase of drilling (Phase IV) will explore additional targets which will all be prioritized based on distance from the probable porphyry progenitor beneath Oculto and favourability of structural trends reflected in magnetic surveys, with special reference to any historical drill data. Current priority targets in the area west of Oculto include JAC North, Alpaca and Fantasma, with additional targets also being developed to the east and north of Oculto.

Positive Metallurgical Test Results for JAC Zone With Up To 93% Silver Recoveries & 91% Gold Recoveries

The Company reported positive preliminary metallurgical test results for the new JAC zone on June 01, 2023. The program was completed by independent metallurgical consultants, SGS Canada Inc., at their testing facilities in Lakefield, Ontario.  

Key Highlights Include:

• Overall recoveries at the JAC and Fantasma deposits range between 86% - 93% for silver and 82% - 91% for gold.
• A substantial percentage of the silver at JAC can be recovered by gravity separation which increases overall recoveries.
• Current testwork confirms that the same process flowsheet can be used to process mineralization from the Oculto, JAC and Fantasma deposits. 
• Milling tests have shown that 150 microns is the targeted grind size for the leaching of the mineralized material at a retention time of 36 hours.
• Overall silver and gold recoveries could likely be increased further by grinding finer and with higher cyanide concentrations. Further metallurgical testwork and trade-off studies are now underway.

Favorable Recovery Rates vs. Prior Testwork

At the JAC and Fantasma deposits the silver minerals (chlorargyrite and iodargyrite) are easier to release by grinding, and are more sensitive to cyanide leaching as they occur in argillic alteration, whereas at Oculto they are mostly held more complexly in vuggy silica host rock.

Summary of Metallurgical Testwork Results for JAC and Fantasma Deposits

Target	Silver Recoveries	Silver Head Grades	Gold Recoveries	Gold Head Grades
	%	g/t	%	g/t
JAC & FANTASMA	86 - 93	142 - 172	82 - 91	0.11 - 0.17

Testwork on JAC and Fantasma samples showed that gravity separation before cyanide leaching recovers approximately 9% of the silver and 17% of the gold which, when combined with the subsequent cyanide leaching recoveries, results in total overall recoveries of between 86% and 93% for silver and between 82% and 91% for gold.

The Table below shows gravity plus cyanide leach recoveries at the JAC and Fantasma deposits compared with the Oculto deposit recoveries announced in the PEA announced in January 2022.

Latest Metallurgical Testwork Results vs. Jan. 2022 PEA Study

Recoveries	JAC & Fantasma (May 2023)	Oculto PEA  Study (Jan.2022)1
Gold	82%-91%	86.0%
Silver	86%-93%	73.5%
Comments	Gravity + Cyanidation	Cyanidation Only

¹Recovery rates for Oculto PEA reflect the life of mine average as per the report published on Jan. 13, 2022 titled “NI 43-101 Preliminary Economic Assessment Technical Report – Diablillos Project”

A median of 89.5% recoveries for silver and 86.5% for gold at JAC and Fantasma compare favourably against the 73.5% silver recoveries and 86.0% gold recoveries used for the Preliminary Economic Assessment (“PEA”) at Oculto. The median silver recovery of 89.5% relative to 73.5% for Oculto is particularly relevant because the mineralization at the JAC and Fantasma deposits is predominantly silver.

Median Recoveries at the JAC & Fantasma Deposits Compared with the Oculto Deposit

Metallurgical Overview 

The metallurgical results confirm that the Diablillos project will have a conventional silver/gold processing plant flowsheet incorporating crushing, grinding, gravity concentration and intense cyanidation circuit, cyanide leaching with oxygen addition, counter current decantation (“CCD”) washing thickeners and Merrill-Crowe precious metal recovery from solution followed by on-site smelting to doré bars. A summary of the processing flow sheet for the Diablillos project is shown below.

Simplified Process Flowsheet for the Diablillos Project

The Diablillos property hosts several zones of high-sulphidation epithermal alteration and mineralization with strong supergene overprinting. There are several known mineralized zones on the Diablillos property, with the Oculto zone hosting the principal silver-gold deposit. Oculto is strongly oxidized down to depths in the order of 300 m to 400 m from surface. The precious metal mineralization throughout the deposit occurs as extremely fine grains along fractures and in breccias or coating the inside of vugs and weathered cavities. The dimensions of the optimised Whittle open pit shell measure 1,350 metres in length, 750 metres in width and extends to a maximum depth of approximately 300 metres.

Gold and silver mineralization ascended along steeply dipping feeder structures and was deposited in siliceous breccia zones. Mineralizing fluids also migrated laterally along shallowly dipping favorable permeability horizons where it was deposited along with silicification. Gold is associated with a deeper permeability horizon and with shallow zones associated with the feeder structures, while there is a secondary enriched silver zone related to a weathered horizon. Both steeply dipping and shallowly dipping zones were taken into account in the new Mineral Resource estimate.

The October 2022 Mineral Resource has significantly expanded the high-grade Tesoro zone, which is the highest-grade area within the Oculto deposit.  A series of close-spaced drill holes has resulted in the Tesoro zone expanding to approximate dimensions of 600 metres in length by 350 metres in width, comprising estimated Measured Resource of 19.3Mt @ 98 g/t Ag and 0.88 g/t Au, containing 60.6Moz Ag and over 544koz Au.  

Over US$50 million has been spent on exploration at Diablillos totaling over 100,000 meters of drilling in over 450 holes.

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