Preparation Begins For Reliquias Mine National Instrument 43-101 Resource Update

TORONTO - Silver Mountain Resources Inc. reported on the status of its exploration campaign at the Company's Reliquias silver mine in Huancavelica, central Peru. The main focus of the 2022 work program is the investigation of the Reliquias silver-polymetallic deposit from existing underground workings. Since the start of the drill campaign in April of this year, 69 drill holes with a total meterage of more than 16,500 m have been completed. Most of the bore holes tested the three principal veins known at Reliquias, called Matacaballo, Sacasipuedes, and Meteysaca vein.1 Drill platforms were prepared in available mine workings, mostly on the lowest existing levels of the Reliquias mine (390 m and 415 m-levels). Drill holes predominantly targeted historic resource blocks defined by the previous operator, in close proximity to existing haulage levels. Visual observation of several drill holes designed to test the depth extension of the main structures showed that well-developed mineralization extends to at least 150 m below current mine levels.

Over 5,000 drill core samples were collected so far, while multi-element assay results have been received for 2,810 samples. Approximately 2,200 drill core samples are still at the laboratory, with results expected to be released. Additionally, various batches of samples were sent for determination of rock density, mineralogical studies, and for initial metallurgical tests.

To complement the drill campaign and to facilitate the conversion of additional historic resources into National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101) compliant resources, an extensive underground mapping and sampling program was initiated in June 2022. Several existing drifts, sublevels, and raises were mapped and systematically sampled in channels cut every 4 m across the exposed veins. So far, approximately 1,700 rock channel samples were sent for assaying, with results reported for 700 samples.

In August 2022, the Company decided to reallocate the exploration funds originally earmarked for a 13000-m surface drilling campaign. Instead, the ongoing underground drill program was increased from the originally planned 12000 m to approximately 17500 m. More drill holes were carried out to extend previously recognized mineralization in the main veins along strike. Additionally, several holes were added to the program to test the Pozo Rico, Perseguida, and Vulcano vein systems. The last two bore holes of this extended campaign will be collared from drill platform C12 and are expected to be completed by early December.

Furthermore, the redesigned work plan for H2 2022 included an increase in the underground channel sampling program. To allow the detailed evaluation of additional areas where well-developed mineralization has been indicated by historic drilling, the rehabilitation of historic mine workings was accelerated. In turn, this will also facilitate the mine development tasks in 2023, aiming for an expedited production start-up in late 2023.

Based on geological information compiled from all 2022 drill core as well as from the underground mapping, the preparation of lithological, mineralogical, and alteration models of the Reliquias deposit has started. Historical data available from previous project operators is also incorporated into the three-dimensional analysis of the main veins and several smaller structures or vein splays. This in-house geological model as well as all other relevant information (drill hole deviation measurements, topographic surveys, sample certificates, QA/QC procedures, etc.) will be reviewed by an independent consultant, starting this week. Work on an updated resource estimation is to commence in late November. The main objective of this review is to establish a NI 43-101 compliant mineral resource in Q1 2023 that will form the basis of our production decision in H2 2023.