Deal Economics and Structure

James Anderson, CEO of Guanajuato Silver (TSX.V:GSVR – OTCQX:GSVRF), joins me to highlight their recently announced transformational acquisition of the Bolanitos Gold-Silver Mine from Endeavour Silver, and to review the key takeaways from Q3 2025 operations and financials.  We also end the discussion getting his technical outlook on the recent price action, and supply/demand fundamentals for silver.  

On November 24th Guanajuato Silver announced that it had entered into a definitive agreement to acquire the Bolanitos gold-silver located in Guanajuato, Mexico, from Endeavour Silver Corp. (TSX:EDR) for total consideration of up to US$50 million, consisting of (i) upfront consideration at closing of US$40, which is comprised of US$30 million in cash and US$10 million of Guanajuato Silver common at a deemed price of US$0.2709413 (Cdn$0.3815) per share. (ii) In addition to the Upfront Consideration, Guanajuato Silver will make two contingent payments to Endeavour, each being US$5 million, upon achieving production of two million ounces of silver-equivalent and four million ounces of silver-equivalent, respectively. Each Contingent Payment will be satisfied 50% in cash and 50% in Guanajuato Shares.

Bolanitos Acquisition Highlights

• Bolanitos will be Guanajuato Silver's 5th producing precious metals mine in Mexico. Upon the completion of the Transaction, the Company will operate three primary silver mines (Topia, Valenciana, and El Cubo) and two primary gold mines (Bolanitos and San Ignacio).
• 2024 Production at Bolanitos totaled 2,471,027 silver-equivalent (AgEq) ounces from 427,646 tonnes grading 39 g/t silver and 1.98 g/t gold for 452,627 ounces of silver and 25,230 ounces of gold. Silver and gold recoveries were 84.4% and 92.7% respectively. AgEq calculated at 80:1 silver to gold ratio (see Endeavour MD&A for the year ended December 31, 2024).
• The acquisition of Bolanitos significantly increases Guanajuato Silver's resource base, adding in approximately 25 million silver equivalent ounces.
• The incorporation of the San Ignacio Mine into the Bolanitos Mines Complex is expected to rapidly generate improved economics and expanded mine life; mineralized material mined at San Ignacio will now be transported to the nearby 1,600 tonnes per day Bolanitos flotation plant; as Bolanitos and San Ignacio are contiguous to one another, this is expected to dramatically reduce transportation costs and increase utilization at the Bolanitos mill.
• The Transaction also includes the acquisition of the historic Cebada mine, which is located contiguous and to the north of theCompany's Valenciana Mines Complex (VMC). The Company intends to reactivate Cebada, which is currently on care and maintenance, as an important exploration and development project.

Selected Q3 2025 Operational and Financial Highlights:

•  Working capital improved over the quarter by $11.3M or 168% compared to Q2; working capital for Q3 2025 was $4.6M compared to negative $6.7M in Q2 2025.
• The Company reported positive operating cash flows of $3,065,567 for the first nine months of 2025; in Q3 the Company generated positive cash flow from mining operations of $712,271 with realized metal prices of $39.03 for Silver and $3,441 for gold.
• Production for the quarter of 457,525 silver-equivalent ounces (AgEq) comprising 245,369 ounces of silver, 2,025 ounces of gold, 597,269 pounds of lead and 741,595 pounds of zinc. Silver equivalents are calculated using an 87.70:1 (Ag/Au), 0.02:1 (Ag/Pb) and 0.03:1 (Ag/Zn) ratio for Q3 2025.
• Increased capital expenditures over the quarter are expected to generate improved efficiencies into 2026. Capital expenditures were 97% higher in Q3 over Q2. The investments included additions to the mining fleet, relining of Mill 3 at El Cubo, continued work to install a Falcon gravity concentrator at the Topia plant designed to further increase gold recoveries in concentrates, pre-development work at Pinguico, and dewatering programs at both Valenciana and El Cubo.

Wrapping up James and I discuss the continued bullish technical setup in the silver price, closing this last Friday at an all-time high, and breaking well above long-term resistance at $50, and even more intermediate-term resistance around $54.   James lays out the fundamental supply/demand environment for silver, and why the framework is there to keep seeing elevated silver prices moving forward.   James also gives listeners an update on the gold:silver ratio, putting current pricing in the context of historical patterns.

If you have any follow up questions for James on Guanajuato Silver, then please email them into me at Shad@kereport.com.

• In full disclosure, Shad is a shareholder of Guanajuato Silver at the time of this recording and may choose to buy or sell shares at any time.

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