Southern Silver Exploration Announces Updated PEA on Cerro Las Minitas: US$501M

Vancouver, British Columbia–(Newsfile Corp. – June 10, 2024) – Southern Silver Exploration Corp. (TSXV: SSV) (“Southern Silver”) reports results from its Preliminary Economic Assessment (‘PEA”) on its 100% owned Cerro Las Minitas project (“CLM”).

PEA Highlights (all figures in $US unless otherwise noted):

• Robust Project Economics – Base Case¹: after-tax NPV5% of $501M (C$682M) and IRR of 21.2% with a 48-month payback;

• Excellent Silver and Zinc Price Leverage – Base-case + 20% Metal Prices²: after-tax NPV5% of $876M (C$1,193M) and IRR of 30.1% with a 37-month payback;

1. Base Case Metal Prices: Ag- $23.00/oz, Au – $1850/oz, Cu – $4.00/lb, Pb – $1.00/lb and Zn – $1.25/lb

2. Base Case +20% metal prices: Ag- $27.60/oz, Au – $2220/oz, Cu – $4.80/lb, Pb – $1.20/lb and Zn – $1.50/lb

The 2024 Preliminary Economic Assessment features:

• A Large-Scale Underground Mining Operation with a 17-year mine life and an annual average plant feed of 14.3 Mozs AgEq³ (inc. 5.8 Mozs Ag) and life-of-mine (LOM) feed totalling 243.2 Mozs AgEq³; (inc. 98.6 Mozs Ag). LOM product sales total 194.3Mozs AgEq³ at an AISC of $13.23/oz AgEq³ sold;

• A High-Revenue Project with gross revenues totalling $4.47B with silver and gold representing 45% of revenues, and zinc representing 35% of projected revenues. The project has an Initial CapEx of $388M, an NPV5%-to-CapEx ratio of 1.3X and a paydown of 48 months on a post-tax basis; and

• A Well-Located Project in a mining friendly jurisdiction with excellent infrastructure in southeast Durango state, Mexico;

3. AgEq is calculated on a (contained metal x metal price)/ Ag price basis

In comparison to the earlier 2022 economic model, the updated PEA now:

• Increases the Life of Mine (LOM) production by 5Mt, representing an approximate 20% increase;
• Increases daily mine production capacity to 5300 tonnes per day (“tpd”), representing an approximate 18% increase;
• Extends the mine life by 2.6yrs;
• Increases the LOM Revenue by $765M, representing an approximate 17% increase in revenues.
• Increases the after-tax NPV5% by 45% to $501M; and
• Similarly, increases the post-tax IRR by 3.3% to 21.2%

Lawrence Page. K. C. President, said: “This latest economic update of Cerro Las Minitas represents a new milestone in the ongoing evolution and development of the project which is the culmination of a number of smaller technical improvements, developed over the last 18 months, which together result in a significant increase in the value of the Cerro Las Minitas asset. This includes the addition of new mineral resources from the North Felsite zone as first reported in March 2023; the standardization of the metallurgical recoveries and charges across each of the deposits, including the addition of gold revenues into the project cash-flow; improvements in the mine scheduling and optimization both the Operating and Capital costs of the project.”

“Since acquisition of the property in 2010 and subsequent identification of the mineral resources, a very profitable and valuable mine has been modelled in the results of the PEA disclosed today. Total acquisition, exploration and development costs are approximately US$28 million and significantly, the property is not burdened with royalties, presenting potential financing opportunities for additional drilling and development work on the property. This presentation of the results of the PEA marks a significant milestone in the development of the property and the best is yet to come.”

PEA SUMMARY:

Study support

• The study is based on an updated Mineral Resource (“Resource”) by KGL, as of March 20^th 2024, using a $60NSR/t cut-off:
  • Indicated – 13.3Mt averaging 102g/t Ag, 0.07g/t Au, 0.17% Cu 1.3% Pb, and 3.1% Zn totaling 43.4Moz Ag, 32Koz Au, 49Mlb Cu, 374Mlb Pb and 921Mlb Zn; and
  • Inferred – 23.4Mt averaging 111g/t Ag, 0.14g/t Au, 0.21% Cu, 1.1% Pb and 2.1% Zn totaling 83.4Moz Ag, 104koz Au, 111Mlb Cu, 582Mlb Pb and 1,106Mlb Zn. 
    (see Appendices for Resource details, price and recovery assumptions)
• The PEA project team included Kirkham Geosciences Ltd. (“KGL”), Ausenco Engineering USA South Inc and Ausenco Sustainability ULC. (“Ausenco”), Entech Mining Limited (“Entech”), and MPC Metallurgical Process Consultants Limited (“MPC”);
• PEA metal price assumptions: Ag = $23.00/oz, Au = $1850, Cu = $4.00/lb, Pb = $1.00/lb, Zn= $1.25/lb;
• Terms: Net Present Value at a 5% discount (“NPV5%”); Internal Rate of Return (“IRR”); Operating Costs (“OpEx”); and Capital Costs (“CapEx”), All-in Sustaining Costs (“AISC”)

Cautionary Statement

The PEA is preliminary in nature, it may include mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as…