GR Silver Secures $20M to Fund Major Resource Expansion

• GR Silver Mining Ltd. (TSXV: GRSL) closed a $20 million bought deal financing on December 17, 2025, strengthening its treasury to approximately $28.8 million to execute an aggressive resource expansion campaign at its wholly-owned Plomosas Project in Mexico.
• The financing, priced at $0.30 per unit with warrants exercisable at $0.42, was completed as silver prices exceeded $60 per ounce amid persistent supply dislocations, reflecting strong institutional confidence in the company's growth strategy.
• The company holds 134 million ounces of silver equivalent resources yet trades at significant valuation discounts to silver development peers, with current market capitalization of $146.5 million representing substantial rerating potential.
• Management pursues parallel pathways of expanding high-grade resources at San Marcial discovery area through step-out drilling while advancing bulk sampling test mining at the fully permitted Plomosas past-producing mine to validate mining methods and economics.
• The funded program targets multiple catalysts including an updated mineral resource estimate incorporating 2025-2026 drilling results and delivery of a preliminary economic assessment in the second half of 2026, providing transparent milestones for investors to track execution.

Introduction: Silver Supply Crisis Creates Development Window

The silver market entered December 2025 confronting structural supply deficits that pushed spot prices above $60 per ounce. These are levels not seen since the metal's historic highs. According to recent industry analysis, physical inventories at major exchanges contracted while investment demand through ETFs intensified, creating what market observers characterize as persistent dislocation between paper and physical markets. This supply-demand imbalance, driven by declining mine production and surging industrial consumption from solar, electric vehicle, and data center applications, establishes favorable economics for developers advancing significant silver resources toward production.

GR Silver Mining operates at the intersection of this market dynamic and geological opportunity. The company controls the Plomosas Project in Sinaloa, Mexico. This district-scale land package encompasses a formerly producing underground mine with existing infrastructure and a separate discovery area where drilling continues to intersect wide, high-grade silver mineralization. The December financing provides the capital runway to aggressively test exploration targets that management believes could materially expand the current 134 million ounce silver equivalent resource base.

For investors evaluating junior silver developers, GR Silver presents a differentiated risk-reward profile: fully funded exploration at a discovery with expansion potential, de-risking activities at a permitted past-producer, and a management team with track records at SilverCrest Mines, Coeur Mining, and major investment banks. The company's $146.5 million market capitalization values its resources at approximately $1.09 per silver equivalent ounce in the ground. This represents a significant discount to development-stage peers trading above $2.00 per ounce.

Company Overview: Mexican Silver Developer with District-Scale Opportunity

GR Silver Mining holds 100% ownership of the Plomosas Project, located in Mexico's prolific Sierra Madre Occidental silver belt approximately 100 kilometers from several operating mines including Vizsla Silver's Panuco project. The project comprises two distinct resource areas separated by five kilometers: the Plomosas Mine Area, a past-producing underground operation that generated approximately 8 million ounces of silver between 1986 and 2000, and the San Marcial Area, where exploration since 2019 has delineated substantial silver-rich hydrothermal breccia mineralization hosted in a largely untested geophysical anomaly.

The company's current NI 43-101 compliant mineral resource estimate, published in May 2023, reports 85 million ounces of indicated silver equivalent and 49 million ounces of inferred silver equivalent across the three deposit areas. San Marcial accounts for 52 million ounces in the indicated category at an average grade of 162 g/t silver equivalent, reflecting the discovery's high-grade bulk-tonnage character. The Plomosas Mine Area contributes 31 million ounces indicated at 200 g/t silver equivalent, demonstrating the quality of mineralization accessible through existing underground development. Critically, the resource remains open in multiple directions, with drilling through 2025 intersecting mineralization beyond the modeled envelope.

Management's operational strategy centers on two parallel value-creation pathways: resource expansion through step-out drilling at San Marcial where 80% of identified geophysical anomalies remain untested, and technical de-risking at Plomosas Mine through bulk sampling test mining to validate mining methods and metallurgical recoveries. This approach leverages the company's fully permitted status at Plomosas, including a five-year drilling permit granted in September 2025, while pursuing discovery upside at San Marcial where recent holes intersected 75 meters at 293 g/t silver equivalent and confirmed mineralization continuity 100 meters beyond the existing resource boundary.

Key Development: $20 Million Financing at Premium to Market

GR Silver announced completion of its bought deal financing on December 17, 2025, issuing 66,666,832 units at $0.30 per unit for gross proceeds of $20,000,049.60. The offering included full exercise of the underwriters' over-allotment option, which added 8,332,833 units representing approximately $2.5 million in additional proceeds. Research Capital Corporation acted as sole bookrunner and co-lead underwriter alongside Red Cloud Securities Inc., both firms with significant institutional distribution networks in the natural resources sector.

Each unit comprises one common share and one-half warrant, with full warrants exercisable at $0.42 per share until December 17, 2028. This three-year exercise window provides potential additional treasury inflows if silver prices and the company's equity valuation trend higher through resource expansion and development milestones. The pricing at $0.30 per share represented a premium to the company's recent trading range and reflects what management characterizes as strong institutional demand. Insiders participated in the financing, purchasing 60,700 units for $18,210. This was a modest allocation subject to regulatory hold periods but demonstrating management alignment with new investors.

Marcio Fonseca, President and CEO, GR Silver Mining mentioned:

"This Milestone financing comes in an environment where the silver price exceeds US$60 per ounce. The Company is now financially capable (with more than $28.5M in its treasury), to carry-out an aggressive step-out and exploration drilling campaign at San Marcial Area, Plomosas Project, with the goal to significantly increase the NI 43-101 Mineral Resource Estimate, followed by a planned Preliminary Economic Assessment Report in the second half of 2026."

The statement establishes clear capital allocation priorities and defines specific catalysts that investors can monitor to assess execution against the funded business plan. The timing of the raise coincides with silver prices reaching multi-year highs, positioning the company to advance projects when metal prices support favorable project economics in future studies.

Strategic Significance: Positioning for 2026 Resource Update and PEA

The capital raise positions GR Silver to execute what management describes as a "game-changing year" in 2026, with three primary catalysts identified: an updated mineral resource estimate incorporating 2025 drilling results, advancement of bulk sampling test mining engineering studies at Plomosas Mine, and assessment of alternatives for a pilot processing plant. These milestones represent sequential steps toward the preliminary economic assessment that would provide investors with initial project economics and development timelines. This information remains currently absent from the company's technical disclosure.

The San Marcial drilling campaign carries particular significance for resource expansion potential. Geological modeling indicates the current resource envelope represents the upper portion of a substantially larger epithermal system hosted along the edge of a regional porphyry intrusive. Recent drilling in 2025 identified multiple mineralized zones below and peripheral to the existing resource, including drill hole SMS25-09 which intersected 75 meters at 293 g/t silver equivalent with sub-intervals exceeding 1,000 g/t. The company's December 2025 presentation indicates plans for 15,000 meters of step-out drilling in the first half of 2026, targeting structural extensions and parallel zones identified through geophysical surveys.

At Plomosas Mine, the bulk sampling initiative builds on successful test work completed in 2024 at the nearby San Juan mine, where GR Silver processed 20,430 tonnes of material through a third-party mill and generated 420 tonnes of lead-silver-gold concentrate. That program validated mining methods for accessing remnant mineralization in historic stopes and provided metallurgical data supporting silver recoveries above 70%. Application of similar methodology at Plomosas, where 21 underground areas remain accessible for sampling, would generate additional cash flow to partially fund exploration while de-risking the mining and processing assumptions underlying future economic studies.

Current Activities: Active Drilling & Technical Studies

GR Silver maintains two drill rigs operating at San Marcial as of December 2025, focusing on extensions beyond the current resource boundary where geophysical data indicates favorable structural settings for high-grade silver mineralization. The company's systematic approach tests multiple targets simultaneously: southeast extensions down-plunge of known mineralization, northwest step-outs into previously untested geophysical anomalies, and parallel breccia zones identified through detailed geological mapping. This multi-target strategy reduces single-hole risk while generating data to refine the geological model ahead of resource update work.

Engineering activities related to bulk sampling test mining at Plomosas Mine progressed through 2025, with the company targeting program commencement in early 2026 pending completion of preliminary studies. Metallurgical testing remains in progress to optimize processing parameters for the polymetallic mineralization that characterizes Plomosas resources. These silver-lead-zinc-gold assemblages generated multiple revenue streams during historic operations. The company owns 100% of the surface rights at Plomosas Mine, providing flexibility for potential infrastructure development including processing facilities, though management has not yet disclosed capital cost estimates or development timelines for mining scenarios.

Permitting status provides operational flexibility unavailable to earlier-stage projects. GR Silver's five-year drilling permit covers both the Plomosas Mine Area and San Marcial Area, enabling unrestricted exploration activities through 2030 without additional regulatory approvals. The Plomosas Mine retains full operating permits from its historic production period, though reactivation would require updated environmental and safety plans consistent with current Mexican mining regulations. This permitted status reduces timeline risk and regulatory uncertainty compared to greenfield development scenarios that can face multi-year approval processes.

Market Context: Silver Supply Dislocation Supports Price Outlook

The broader silver market environment provides important context for evaluating GR Silver's development timeline and potential project economics. Industry analysis indicates that physical silver markets remain structurally dislocated, with supply constraints and rising demand contributing to elevated price levels. Movement of metal between exchanges reflects logistical positioning rather than true supply expansion, while ETF growth and inventory reductions have further constrained available metal for immediate delivery.

Long-term supply deficits stem from inadequate mine supply relative to rising demand, with structural deficits building over several years as new mine development lagged and existing production declined. Industrial demand from electronics, solar panels, electric vehicles, and AI data centers continues to increase silver consumption structurally. The growth in electricity-intensive applications supports sustained long-term demand that underpins project economics for developers like GR Silver bringing new supply to market.

Investment demand impact has intensified as surging investor interest through ETFs and physical accumulation pressures available supply. The relatively small size of the silver market, approximately 1 billion ounces annually, means modest investment flows can meaningfully move prices. Lower interest rate expectations and potential liquidity support from central banks have tilted investor preferences toward precious metals. This macro environment suggests support for elevated silver prices through GR Silver's development timeline, though volatility remains inherent in commodity markets.

The Investment Thesis for GR Silver Mining

• Current $146.5M market cap values 134Moz AgEq resources at $1.09/oz versus peer average above $2.00/oz for development-stage silver projects.
• 2026 resource update and PEA delivery creates multiple rerating opportunities as project economics become transparent to institutional investors.
• Silver prices above $60/oz improve project economics while persistent deficits support sustained elevated pricing through development timeline.
• 80% of San Marcial geophysical anomaly remains untested with recent drilling confirming high-grade continuity beyond resource boundaries.
• Bulk sampling program at permitted Plomosas Mine generates near-term production data while validating technical assumptions for larger development.
• Team track record includes $150M SilverCrest acquisition, Fortuna San Jose discovery, and senior roles at Coeur Mining and Macquarie Bank metals division.

GR Silver Mining emerges from its December 2025 financing with balance sheet strength to execute a multi-phase value creation strategy independent of additional equity dilution through the 2026 catalyst period. The $28.8 million treasury provides substantial cushion above the capital requirements for planned drilling, engineering studies, and corporate operations. This represents critical financial security that differentiates the company from peers facing near-term funding pressures. For investors seeking silver development exposure, this financial position eliminates a primary source of execution risk while providing optionality to accelerate programs if drilling results warrant expanded activity.

The valuation disconnect between GR Silver's enterprise value and comparable developers reflects several factors: earlier development stage relative to peers advancing toward construction decisions, jurisdictional concerns regarding Mexican mining policy despite the country's established production history, and limited analyst coverage driving institutional awareness. These gaps represent opportunity for investors willing to underwrite exploration success at San Marcial and technical validation at Plomosas Mine ahead of broader market recognition. The company's 71% year-to-date share price appreciation through December 2025 demonstrates emerging momentum as drilling results and financing completion attract investor attention, though current valuation metrics remain attractive relative to resource endowment and peer comparisons.

Risk factors warrant consideration in any investment analysis. Exploration-stage companies face geological risk that drilling may not expand resources as anticipated, though GR Silver's systematic approach and successful discovery track record at San Marcial partially mitigates this concern. Jurisdictional risk in Mexico persists despite stable operations for major producers, requiring investors to monitor regulatory developments and political dynamics that could affect mining sector operations. Metallurgical complexity in polymetallic deposits introduces processing risk, though historic production at Plomosas and ongoing test work provide technical data supporting recovery assumptions. Silver price volatility represents market risk, though current supply fundamentals suggest support for elevated pricing levels through the company's near-term development timeline and into potential production scenarios.

TL;DR

GR Silver Mining closed $20M financing in December 2025, bringing treasury to $28.8M to fund aggressive resource expansion drilling at its San Marcial silver discovery in Mexico. The company holds 134Moz AgEq resources valued at significant discount to peers, with 2026 catalysts including updated resource estimate and preliminary economic assessment. Recent drilling confirmed high-grade silver mineralization beyond current resource boundaries while bulk sampling studies advance at the permitted Plomosas past-producing mine. Current $146.5M market cap represents compelling entry point for investors seeking leveraged exposure to silver prices above $60/oz amid persistent supply deficits, with funded drilling program offering discovery upside and clear catalyst timeline through H2 2026.

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