Santacruz Silver Delivers Stable Q2 2025 Production Despite Operational Challenges

• Production Output: Delivered 3,547,054 silver equivalent ounces in Q2 2025, including 1,423,081 ounces of silver and 21,148 tonnes of zinc 
• Operational Resilience: San Lucas Group successfully compensated for production shortfalls at Bolivar mine following temporary flooding incident 
• Production Stability: Consolidated throughput remained stable with a 2% increase quarter-over-quarter, demonstrating operational flexibility 
• Recovery Progress: Water overflow issue at Bolivar mine has been resolved, with gradual restoration of access to high-grade silver stopes 
• Strategic Focus: Management prioritising silver production maximisation across all operations to capitalise on favourable price environment

Santacruz Silver Mining Ltd. (TSX.V:SCZ) is a Latin American focused mining company involved in the acquisition, exploration, development, and operation of mineral properties, with a primary focus on silver and base metals production. The company maintains operations across multiple jurisdictions, with its primary assets located in Bolivia and Mexico. In Bolivia, Santacruz operates the Bolivar, Porco, and Caballo Blanco mining complexes, alongside the Reserva mine and San Lucas ore sourcing business. The Mexican operations centre around the Zimapan mine, providing geographical diversification to the company's production base.

The company's business model emphasises operational flexibility through its San Lucas ore sourcing and trading division, which operates under a margin-based approach. The diversified asset base across multiple mines and countries provides natural hedging against localised operational challenges, as demonstrated during the Q2 2025 period when San Lucas operations helped offset production impacts from the Bolivar flooding incident.

Q2 2025 Total Silver Equivalent Production Performance

Santacruz Silver maintained production levels during the second quarter of 2025, achieving 3,547,054 silver equivalent ounces despite facing operational challenges at its key Bolivar mine. The company's diversified production base proved its strategic value during the quarter, with consolidated throughput remaining stable and actually increasing by 2% compared to the previous quarter. This stability was supported by the company's multi-mine portfolio approach.

The 4% decrease in silver equivalent production from Q1 2025 levels was primarily attributed to the temporary flooding event at Bolivar mine, which restricted access to high-grade silver stopes. The company maintained overall stability during this period through its diverse production sources. Executive Chairman and CEO Arturo Préstamo noted that "San Lucas reaffirmed its strategic importance within the Company this quarter, successfully compensating for the slower production from the Bolivar mine."

Management's focus on maximising production across all operations becomes particularly relevant in the current favourable silver price environment. The company's approach to optimising metallurgical recoveries and production efficiency across its asset base positions it well to capitalise on strong silver market conditions. With the water overflow issue now resolved at Bolivar, the gradual restoration of normal operations at the high-grade stopes is expected to support production recovery in subsequent quarters.

Metal Output Breakdown and Asset Performance

Silver production totalled 1,423,081 ounces during Q2 2025, representing an 11% decline from the previous quarter primarily due to the flooding incident at Bolivar mine. The temporary loss of access to the high-grade Pomabamba and Nané silver stopes significantly impacted silver grades and overall production volumes. Despite this challenge, the company maintained production from other assets, with San Lucas Group demonstrating particular strength through increased throughput and stable metallurgical performance.

Zinc production remained relatively stable at 21,148 tonnes, declining only 2% quarter-over-quarter, which demonstrates the consistency of the company's base metal production capabilities. Lead production contributed 2,773 tonnes, whilst copper production added 229 tonnes to the overall metal output profile. This diversified metal production base provides revenue stability through multiple commodity exposure, reducing dependence on any single metal price movement and supporting overall financial performance.

The underground development activities continued at a strong pace with 11,531 metres completed during the quarter. The combination of current production delivery and continued development activities positions Santacruz for sustained operational performance as market conditions remain favourable for precious and base metals.

Consolidated Output from Multi-Mine Operations

Santacruz Silver's multi-mine operational structure across Bolivia and Mexico contributed to the Q2 2025 consolidated production of 3,547,054 silver equivalent ounces. The Bolivar mine operations, representing 45% of consolidated revenues, contributed significantly to overall production despite experiencing some operational adjustments during the quarter. The Porco mine maintained consistent performance with material processed increasing by 3% quarter-over-quarter, whilst silver equivalent production remained stable.

The Caballo Blanco Group, consisting of the Colquechaquita and Tres Amigos mines, increased material processed by 12% during the quarter, with silver equivalent production growing by 4%. The group's improved efficiency was evident as the lower relative growth in production compared to throughput was offset by operational optimisations. The San Lucas Group demonstrated particular strength with material processed increasing by 10% and silver equivalent production growing proportionally, reflecting stable metallurgical performance across the operation.

The Zimapan mine in Mexico maintained stable throughput levels whilst contributing to the diversified metal portfolio with copper production alongside silver, zinc, and lead output. The geographical diversification across Bolivia and Mexico provides operational flexibility and reduces concentration risk within any single jurisdiction. The combined operations across all sites delivered consistent metal production across multiple commodities, supporting revenue diversification and operational stability throughout the quarter.

Conclusion and Outlook

Santacruz Silver's Q2 2025 results demonstrate operational resilience and strategic planning effectiveness, delivering 3.55 million silver equivalent ounces despite facing temporary challenges at its key Bolivar operation. The successful resolution of the flooding incident and the strategic role played by San Lucas Group in maintaining overall production stability highlight the value of the company's diversified asset base. With water management issues now addressed and gradual restoration of access to high-grade stopes underway, the company is well-positioned for production recovery in subsequent quarters whilst continuing to benefit from favourable silver market conditions and its comprehensive Latin American mining portfolio.

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