Geology
The La Negra property is located in the Sierra Gorda range of central Mexico. Mineralization at La Negra is hosted within a polymetallic skarn system and is classified as a lead-zinc-silver skarn with associated copper.
The principal minerals at La Negra consist of sphalerite (marmatite), galena and chalcopyrite, with silver present as hessite (Agâ‚‚Te) in association with galena, as well as argentite and pyrargyrite.
Despite a long history of production and more than 230,000 metres of drilling, mineralization remains open along strike, at depth and toward surface.
Mineral Resource Estimate
The current La Negra Mineral Resource Estimate has an effective date of July 1, 2026 and was prepared by Allan Armitage, Ph.D., P.Geo. of SGS Geological Services, an independent Qualified Person as defined by NI 43-101.
At an 80 g/t AgEq cut-off grade, the MRE comprises:
| Mine | Resource Class | Tonnes (MT) | Grade | Contained Metal | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Ag (g/t) | Pb (%) | Zn (%) | Cu (%) | AgEq (g/t) | Ag (Moz) | Pb (Mlbs) | Zn (Mlbs) | Cu (Mlbs) | AgEq (Moz) | |||
| La Negra Mine | Indicated | 15.23 | 106 | 0.59 | 1.81 | 0.47 | 201 | 51.9 | 199 | 608 | 158 | 98.2 |
| Inferred | 2.26 | 92 | 1.00 | 1.92 | 0.21 | 174 | 6.72 | 49.7 | 95.7 | 10.6 | 12.6 | |
Notes:
- The effective date of the La Negra Mineral Resource Estimate (“MRE”) is July 1, 2026.
- The MRE was prepared by Allan Armitage, Ph.D., P.Geo. of SGS Geological Services, an independent Qualified Person as defined by NI 43-101. Dr. Armitage completed site visits to the project on March 23-24, 2026 and June 12-13, 2026.
- The classification of the current MRE into Indicated and Inferred is consistent with current 2014 CIM Definition Standards - For Mineral Resources and Mineral Reserves.
- All figures are rounded to reflect the relative accuracy of the estimate and numbers may not add due to rounding.
- The MRE is presented undiluted and in situ, constrained by continuous 3D wireframe models, and are considered to have reasonable prospects for eventual economic extraction. The MRE is exclusive of mined out material.
- Mineral Resources which are not mineral reserves do not have demonstrated economic viability. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
- The La Negra MRE is based on a validated database which includes data from 39,471 surface and underground drill holes and channels totaling 320,458 m. The resource database totals 50,456 assay intervals representing 102,803 m.
- The MRE for La Negra is based on 30 three-dimensional (“3D”) mineral resource models and 18 mine as-built depletion models.
- Grades for Ag, Pb, Zn and Cu were estimated for each mineralization domain using 2.00 m capped composites assigned to that domain. To generate grade within the blocks, the inverse distance squared (ID2) interpolation method was used for all domains. An average density value was assigned to each domain.
- Underground Mineral Resources are reported at a base case cut-off grade of 80 g/t AgEq. The underground Mineral Resource grade blocks are quantified above the base case cut-off grade and within the constraining mineral resource domains (considered mineable shapes).
- AgEq Cut-off grades consider metal prices of $38.00/oz Ag, $4.80/lb Cu, $0.90/lb Pb and $1.35/lb Zn and metal recoveries 80.2% for Ag, 79.2% for Cu, 80.3% for Pb and 80.7% for Zn.
- The underground base case cut-off grade of 80 g/t AgEq considers a mining cost of $42.00/t rock and processing, treatment and refining, transportation, and G&A cost of $32.00/t mineralized material.
- The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
The MRE is based on a validated database that includes 39,471 surface and underground drill holes and channels totaling 320,458 metres.
The resource database includes 50,456 assay intervals representing 102,803 metres.
The MRE is exclusive of mined-out material.
Exploration
La Negra has seen limited exploration over the past two decades.
Mineralization remains open along strike, at depth and toward surface. The Company is conducting surface and underground exploration to test additional mineralization within and around the existing mine area.
A 15,000 metre surface and underground drill program is underway.
Current exploration targets include:
- Near-mine high-grade silver mineralization
- Extensions of known mineralization
- A potential higher-grade carbonate replacement deposit (“CRD”) system
- Additional targets across the broader land package
The Company will continue to evaluate opportunities to expand the Mineral Resource base as new drill data becomes available.
Mineralization
Mineralization at La Negra is structurally and geologically controlled.
The deposit comprises multiple mineralized zones and has been developed and mined over several decades. The current MRE incorporates geological and structural controls in the estimation of mineralization.
Historical Exploration
La Negra has a long history of exploration and underground development, with more than 230,000 metres of drilling completed over the history of the operation.
Despite this extensive historical work, modern exploration across the broader property has been limited over the past two decades.