GR Silver Minings President/CEO Talks About Its Recent Acquisition and Answers Audience Questions

0:02 Hi, everyone. My name is Bianca Shola from 6 and welcome to the GR silver mining virtual investor summit to kick things off. I'd like to introduce you to GR silver mining and emerging silver gold mining company that controls district scale assets in the Rosario Mining District in Mexico. The company's focus is to quickly and cost-effectively add ounces to the company's inventory. GRSilver is well on its way to achieving its goal of becoming a significant silver player in Mexico with its recent acquisition of the Flamosus project from 1st Majestic Silver. I'd also like to take this opportunity to introduce you to the team behind GR Silver, starting with Marcio Fonseca. Marcio is the President and CEO of GR Silver Mining. He is a Brazilian-Canadian geologist engineer and banker with 25 years of international mining experience as well as banking experience in Europe and in Canada.

0:56 Mr. Fonseca was the architect of 1st Majestic's acquisition of Silvercrest Mines in 2015, a transaction value of $155 million Canadian. Also joining us today is Trevor Wolf, who acts as VP Corporate Development and Exploration. Trevor is a geologist with 25 plus years experience in the mining industry in Australia and in Latin America, having held positions with Placer Dome, Newcrest and has acted as managing director for various ASX listed companies for over 10 years. For today's summit I will hand it off to Marcio and Trevor who will give you a company update and overview, and then we'll be answering questions at the end. Please submit all of your questions in the chat on the right-hand side of your screen. And without further ado, Marcio, take it away.

1:43 Thank you, Bianca, for the introduction, and thank you, POSIX, for the organization of this webinar.

1:49 GR Silver Mining, for those who are not familiar with GR Silver Mining, we are a resource expansion development stage company in Mexico, in the state of Sinaloa, in the Rosario Mining District. And today we are going to present the recent acquisition of the Plomoza Silver Project, which we acquired from 1st Majestic, and today 1st Majestic is the largest shareholder in this company, 19.9%. The first slide here is just a 3D view, a drawn view of the PLOMOSOS project, the infrastructure and the geomorphology and the location. So as we said, it's a resource expansion in one of the most prolific mining districts in Mexico.

2:31 For the record, GR Silver mining is in compliance with all the regulations and recommendations by the Mexican and Canadian health authorities in relation to the COVID-19. We are in isolation from our offices in Canada and Mexico, but it hasn't really interrupted our activities on site.

2:54 Traditional cautionary statements, we've been making some forward-looking statements related to recent and historical data in this presentation. So a snapshot of the capital structure of the company is still a tight capital structure. It reflects the last issue of 17.7 million shares to 1st Majestic, turning 1st Majestic as the largest shareholder above the management that still control now 15.2%. We have 97.1 fully diluted shares. The market cap today in the current market conditions of 16.5 million Canadian close to $2 million in the bank, which is really enough for our activities in Mexico in 2020. Board and management, a lot of experience all over Latin America. Management, a lot of track records of successful transactions in the market and as Bianca said early on, the architecture and really engineering of the Silvercrest transaction with 1st Majestic in 2015.

3:52 We can see here on the right side of the slide that we have a good combination of really well-known mining companies and consultants engineering companies and last year we got a couple of resource funds as part of our sharehold base.

4:13 Why the Rosario Mining District and why we've been very aggressive to consolidate this district. We believe that the Rosario mining district has been under-evaluated, with a lot of concessions being controlled by different companies. And today, this company is the company that control the most important assets, silver and gold assets in this district. As you can see here on the left side of the slide, we have the purple concessions, those are the ones that are related to the Plomossos Silver Project. You can see the Plomossos is just close to the San Marcial on the left side of the map. Everything all together, including the red, the red and the purple, makes the portfolio that GR Silver Mining controls in this district. So the Plamoza Silver Project comes with a lot of data, a lot of information, and a lot of investment.

5:04 Close to $50 million US dollars of investment in this project. More than 500 drill holes, 100,000 meters of drill hole data, 30 kilometers or more of mineralized vein structures, 16 permit drill targets that we can look. 6 areas that we can really move forward into resource estimation very quick. The Summer Seel Silver Project, very close to the Plamosas, 5 kilometers. You, And already we are drilling there now and we are doing underground development. This is all part of the big plan to really do more resource and expand the resource inventory, the ounces that we control in the Rosario Mining District. Another project that we recently named is the Rosario Silver Gold Project. Why we are naming this project today is because as part of the transaction, we acquired 100% of concessions exactly in the middle of the Fresnillo project that's around the Rosario multimillion ounce gold silver mine. So a very strategic concession that can really help the company to grow in the Rosario mining district, which has a lot of infrastructure, which is important for the development of the mine, of any mine.

6:24 Talking a little bit about geology and about the importance of the Rosario Mining District and how this district compares with all the multimillion ounce districts in Mexico. If you look on the left side of the slide, there is a purple line here that shows approximately the edge of the Sierra Madre Occidental. That's a major topographic feature that runs all over Mexico. A lot of multimillion ounce mining districts, such as the San Dimas, which you can see on this map, are located on the edge of this Sierra Madre Occidental. The Palmosa San Marcial and the Portfolio that you control in that area, you look at the lower position in the map, is located in the same geological setting as the San Dimas mine, which is the flagship mine and operations for 1st Majestic.

7:17 We believe today that Plomosas, which is the third map on the right side of the slide, has a lot of similarities, not only about the structures, the veins, the breccias. You can see on the map here the red lines are the veins and the branches that you know today, but also all the faults, the structures that bring mineralization, similar to what has been reported at San Dimas. And today we believe that not only we have the Northwest system, but probably evidence that the east-west that carries a lot of gold and silver, that's very common and high-grade at San Dimas, is present at the Plomozas. And Plomozas is very close to San Marcial, as you can see on the Plomozas-San Marcial map. The concessions are contiguous, and we believe we can integrate this and really with all the synergies and make a joint project with a multimillion ounce inventory of gold and silver and gold in this area.

8:19 Talking a bit more about in detail about Diplomazas and San Marcial now. Talking a bit more in detail about the Plomozas and San Marcial now. When we talk about US$50 million of investment, plus US$50 million in all the projects altogether, in these 2 projects, Formosa A and San Marcial B, we are talking about probably $18 million invested by Grupo Mexico and Forza Majestica in drilling, aerogel physics, surface exploration, all the key points that are important to define targets. So we are not going to do early stage exploration at Plomossos, we are going to do resource delineation. That's what GRC1Mining is going to do. But again, as part of the $50 million, Plomossos comes with 8,000 meters of underground development.

9:05 We don't need to start underground development to access ore or to do more underground drilling to expand resource if you want at the Plomossos mine site. It comes with 60 kilometers of power line ready to use, camps, warehouses, truck shops, all these are there. That makes probably close to 30 million US dollars of investment. And today, the transaction that was announced recently where we issued 17.7 million shares to 1st Majestic, plus $100,000 Canadian dollars of payment and gave a royalty of 2% with a buyback of 1% for 1 million, shows that we've got a very attractive transaction at low cost for the shareholders and investors. So we are going to integrate San Marcial and Plomozas and continue to delineate resources at both, because we believe they can work really well together.

9:55 Important to say here, in Mexico, it's very important to have all the permits, all the documentation to do all the exploration, the reading work, but also to get a mine, a project, to turn a project into a mine. As Plumos is a pest producer, most of the permits and authorizations are in place. So that can save a material amount of time and de-risk the growth of this company in the next 12-24 months. I'm going to ask Bianca to play a video that's important to show the 6 areas that we are talking about with the 500 drill holes so we can have an idea about the dimension and the location of all these drill holes.

10:42 This is to give a snapshot of all these 6 areas with all the drilling. We have most of the core and a lot of the documentation. That's why we are comfortable that we can start releasing some of these holes. The first one here is the Pomossas area, where is the only mine that was operated here, a shallow mine. You can see all the drill holes, a lot of them outside of the underground development, showing that we can have opportunities for resource expansion. And you can see by the colors here, we can have a couple of kilos of silver and some tens of grams per ton of gold in areas outside of the mine. The second one here is another one that we expect to do a resource in 2020 is the Sun 1. No mine here, just a small underground development, close to 100 drill holes, different directions, And our study so far is indicating that we have not only the polymetallic tipical mineralization of promoster, but high-grade silver and gold in an east-to-west trend with very attractive grades for potential resource delineation.

11:47 That's the location of all these holes that we are going to release in the next couple of weeks and months for the PLOMOSAS project and also the drilling program that we have at San Marcial. At this point I'm going to hand the presentation to Trevor Wolf, our VP of Corporate Development and Exploration, who is going to show us the synergy and geological combination between Plomozas and San Marcial.

12:15 Thanks, Márcio. Just to reiterate what Márcio has just been talking about, here we're looking at the integration and the upside potential of the integration of Plomozes and San Marcial, which are only 5 kilometres away from each other. We can see on the top of that map on the left-hand side, the 6 areas that Marcio was just talking about, these 6 areas that have a lot of drilling already. And these are the 6 areas that we expect to do resource estimations over the next year or 2. And in the bottom part of that map we've got Sarmarcial. So you can see here the importance of the structures between the 2 systems here. We've got Sarmarcial at the bottom and Plomoses at the top. We've got all of those red lines, which are veins that have been identified.

13:06 We've got yellow lines there as well, which are other important structures. And we can see that these important structures link the plamosas in the north to San Marcial in the South. In the work that we've done in San Marcial over the last couple of years, we've taken the project from a resource of 30 million ounces of silver equivalent, and we've almost doubled that to 47 million ounces of silver equivalent. That's located in the red circle in the bottom there and some RCL that's the location of the resource. The work that we've done in the last 12 months has also been to identify an additional 8 targets. These are drilling targets, drill-ready targets in San Marcial, and these are shown with the yellow circles.

13:52 So in addition to what we've got at San Marcial, we're adding the 6 areas that Marcio just talked about that we're going to be doing resource estimation on, but we've also got at least 16 exploration targets in Plymouths. So in total, we've got at least 24 exploration targets that are drill ready, in addition to the 6 resource areas in Plymouths and the resource area in San Marcial. Important to note also that in Saint-Martial, we're getting visible gold. This area previously has been discussed only as being a silver project, but the work we've done over the last 12 months has identified gold in Saint-Martial as well. You can see the photo of some visible gold on the right hand side. This is from the Nava target just to the west of Saint-Martial.

14:45 So I'm just going to zoom in on the next slide into that resource area. And the, sorry, just 1 2nd. And we can see here, I'm going to just take that drawing off there. We can see here in the red, that is the breccia. That's the 500 meters of strike of the breccia that hosts the San Marcial resource. The arrows and dots on the right-hand side are the 52 drill holes that make up the 47 million ounces silver equivalent resource that we have. And we have a lot of potential to expand the resource still. This is not closed off, it's open along strike and it's open down dip as well. So we've already done some work along strike, we've got geochemical anomalies that are rich in gold as well as silver.

15:32 And for example, I talked just before about the gold potential of Saint-Martial with the first drill hole that we put in last year at the northwestern end of the resource. We drilled through the breccia and we tested the gold target area and we got 1 meter at 204 grams per tonne gold. So this is becoming a real gold silver well silver gold project here at Saint-Martial. The gold potential really hasn't been validated totally yet. And there's a lot of potential there. What I'm going to do now is I'm going to show you where a cross section. So we're going to do a cross section through the resource here. Sorry, that just broke off. So we're doing a cross-section through here and I can show you where we're going to be doing some drilling.

16:25 Just take those off for now. Go through those one at a time. So The breccia here is the host mineralization. This is different than other Mexican silver deposits, which tend to be narrow, high-grade vines with high cost underground. This is a very wide system. It can be up to 40 and 50 meters wide in places. It's a breccia host, not a vein host. And we've got good grades as well. You can see that at surface we have 13 meters of almost 500 grams per tonne silver. Some of the drill holes that we have as we go down through that breccia, we have 3 meters at 1,127

17:05 grams per tonne silver. We've got 5.6 meters at 1.2 kilos of per tonne of silver. The lowest drill hole on this section and on most sections of the deposit we have we finish in high-grade mineralization. On this on this particular section, we've got 1.5 meters at 1.2 kilos of silver per ton in the deepest drill hole. So this provides us with real upside potential to expand the resource here at St Martial. You can see here also that we have 1 tunnel that goes into the mineralization. At the moment, it goes 170 meters into the breccia. What we're doing at the moment is extending that 100 metres further so that we can gain access to areas to drill at depth. So we're hoping to drill at depth here where you can see that pink line. We're going to be drilling the depth extensions here of the mineralisation to expand the resource. So we see some real good upside potential to increase the size of the resource here at San Marcial.

18:08 On that note, I'll pass back to Márcio just to talk about p-evaluations with San Marcial and the Plomozos project with GR Silva. Thank you Trevor. This graph is just to show that this company, GR Silva Mining, is in its infancy of growth. We went public 2 years ago, 6 months after we bought the SummerCL project from SSR. 6 months later, we almost doubled the resource. And as part of the business strategy, recently we acquired another flagship asset that's Diplomosis. And I want to compare here with 2 well-known players. Silvercrest Metals is the yellow bubble here. In 2015, I was still with Silvercrest Mines when Eric Fier bought the Las Chispas project and created a spin-off, Silvercrest Metals, from Silvercrest mines. At that time, the company got a fantastic transaction, a fantastic deal, $4 million or approximately that number, for a district scale, and they discovered 36 veins.

19:13 Today, we believe that we know already 24 targets at Pomossus that can be veins or branches. But after 4 years is a successful story, Silvercrest Metals close to 1 billion market cap and close to developing stage. New Pacific Metals controls a high-grade silver wide intersection silver district in Bolivia, but they've been working in that country, in that district for more than 4 or 5 years. This company has been public for 2, but the acquisition of this fantastic Promoza Silver project is just a couple of weeks old. And now we are getting a project with 500 drill holes, a lot of investments. We believe that very quick, we are going to be able to deliver resource estimations in some of those 6 areas. And also in this environment, that's important to say, we have all the challenges due to the macroeconomic environment.

20:09 This company is well positioned because we don't need to go aggressively spending capital drilling to have news release. With the drill holes that we have at Promossas plus the very low cost drilling that we can do at San Marcial, we believe we are going to supply the market all the news and the updates in weeks and months that are coming.

20:32 So important here is just to give a good summary about the timeline and the milestones, what we are going to be doing in the next 6 months, 12 months, and likely in the 12, 4 months. The first stage here is the 6 months where we believe we can have 1 or 2 resource estimates completed by the Plumasas area and advance our resource expansion at San Marcial. As we work with the data, as we have been noticed, we believe we are going to see more and more opportunities for gold and silver discoveries at both projects. Between 6 and up to 12 months, we believe we can finally be the first company that we are going to define a district-scale low-sufficitation

21:16 silver-gold system in the area because today GR Silver controls most of the low-sufficitation silver-gold systems on this part of the Rosario Mining District. That creates a lot of value and a lot of value with low cost and defining resources and to get the discoveries. It's not early stage exploration, it's resource expansion and potential development because we have the permits and all the necessary documentation to do that. But before that, Still a lot of more work to be done, 12 to 24 months, integrate both projects because of the synergies. They are very close and a lot of similarities, not only geological, but engineering, financial perspectives, how 1 project can help the other and work together. And likely to run some very basic desktop economic studies to understand how we can make a very attractive, potentially high-end PV project, low-cost operator, silver-gold project, underground and open pit integrated at the Rosario mining district.

22:22 So key points to take from this presentation. Today this company controls the key assets in the Rosario mining district.

22:32 We are not early stage exploration, we are resource expansion development stage. The cash position allows us to go through the remaining part of the year. We are drilling, we are doing underground development at San Marcial, we have not stopped. And the amount of data that we received, the drill holes with all the core of the information will allow us for the first time to release most of the 500 drill holes, make them available to the public. A lot of investors have asked me, asked us why nobody ever released those holes. Different corporate strategies, but we have done a very thorough investigation in public domain. We are not able to find any resources to make, neither any press release for any of these drill holes. And based on all the combination of these 2 assets, today this company is the dominant player in the Rosario Mining District.

23:25 At this point, I would like to thank everybody to attend this webinar. You have all the details here about all the social media vehicles that we use, Facebook, Twitter, LinkedIn. We have all the contact details and I will hand this presentation back to Bianca and I believe there will be some questions. Yes, indeed. So we're now opening the floor to questions. What I recommend you do is go to the chat side on your right hand side of your screen and submit any questions you have in the chat and we'll go through them. We have a question here, a series of questions from Michael Gray from Agentis Capital. The first question is, how long will it take to synthesize all the PLOMOSIS project data and to develop the targets and then rank them?

24:15 The first stage would be to integrate the 6 areas that we have the drilling data. We are already advanced on the first 2 that promote in some 1. That's why the first 6 months we are looking at the first 2. And then we have the remaining 4 for the next year. But in relation to the exploration database, we have already engaged external consultants to synthesize all the work, integrating all the geophysical surveys, soil geochemical survey, rocks, sample, channel samples, mapping in a single document so we can in the next 6 months have a good document that can define the priorities for the next year. This is going to be readily available for the company. Where else outside of the 6 targets we are going to go for drilling.

25:04 Very good. The second question we had was from Michael as well. And it was, what are the key milestones you see as you move forward on the PLOMOSA project over the next 18 months? Of course, the definition of multiple resources, again, is a major milestone because when you think about, we have San Marcial with a 500 meters long area, with 47 million ounces of silver, high-grade open pit. We believe that plomozzos have 6 areas that with similar strike lengths. That can have a material impact and the company's a major milestone how it can potentially multiply the resource by 6 times there. But other is like you asked before, the integration of the historical and recent exploration data based on the $18 million invested is a major milestone because that can open up the definition of the district scale silver gold flow suffocation system in that area.

26:07 And are you focused on open pit targets or underground targets at Plumosa or both, as long as the targets are both high margin?

26:15 We are focused on both because the projects have different geometry, the deposits have different geometries. When we bought some RCR, we bought because we saw at the first time that could be a highly attractive open pit loess preparation project, but like any open pit has some roots that continues underground, but plomozos due to the topography is likely to be mostly underground mines at this stage. And final question from Michael, why has no company been able to consolidate the Rosario mining district before? That goes back probably 20 years of multiple junior mining companies operating in Mexico. As you know, in Canada we have millions, thousands of junior mining companies and the concessions in Mexico are highly fragmented,

27:08 and at some stage becomes expensive for them to pay. In the past, companies had more availability of capital, and They hold a lot of concessions for a long time. I believe we were really fortunate to spot the opportunity and early on in the waking up of the district by other companies. Today we have 3 or 4 players in the district. We were able to consolidate some of the key ones and position ourselves close to great shareholders like 1st Majestic who saw us working and how we've been successful. And we consolidate these in a very cost effective way. Excellent. We now have a question from Alejandro Ehrenberg from Mexico Mining Review. His first question is, what is your assessment of security conditions around Palmosas and San Marcial?

27:57 And what measures are you taking to guarantee optimal security conditions? Thank you, Alejandro. It's a very important question here. Most of the management here has been working in Mexico for more than 15 years. We are not arriving in Mexico today. To be in Mexico it's important to be aware of all the plus and minus, all the challenges. I would not deny that Sinaloa can be an area that can be dangerous in particular areas. We have people constantly monitoring the activity of the individuals or organizations that work in the state. 1 year ago, we had some issues at the area, but since the government took some actions, became really peaceful. It's important to say the company has never had any experience that really stopped us working in that area.

28:51 But the situation is there of challenges. But at the moment we see that it has improved a bit And we just keep monitoring and make sure that our employees are aware. And so far, we are fine with the operations. Other companies in Sinaloa, Sinaloa is a big state, had problems up north, and even the government had problems at the capital of the state, but so far we are fine. Great. And a follow-on question from Alejandro. What are the main elements of your community engagement programs at San Marcial and at Palomosas?

29:34 So for those who are not familiar, in Mexico there's a term or a definition of erido, e-rido, they are local farmers that they have the ownership of the land as part of the transfer of the land from the government to these organizations many, many years ago. We have agreements in place with all of them. Of course, San Marcial was the first project. Most of our field workers and employees are from the local Errido, so we provide support for the local community by employment, but we also provide a lot

30:15 of specific support when they request us to fix roads and do some minor infrastructure in the villages nearby. La Rasta is another healer that controls Plomoza. We announced the deal 24 hours ago. So we have all, again, all the agreements in place. It's a good relationship as we are taking over 100% of the control of the Plum Vosges project. We are going to have meetings with them and look at their needs and what the company can really work with them in a good, responsible, social way. Can you hear me, Marcio?

31:20 Yes, I can now. Great. We had a question from Mick Thompson. He said, I noticed a lot of the financing going on in the resource sector at this time. Do you think that GRSilver could be in a position to market time of financing during the next 3 months? It's an alternative. As I said at the beginning, the company has capital based on the efficient cost-effective way to deploy capital to go through this challenging time. Considering the company has now well-known resource funds as shareholders that believe in the business opportunity and how this can become a successful mining company in that district. And recent conversations and presentations that we have done in Toronto, Vancouver or even Europe with other key players in the financing sector, we believe that this can be available to the company, considering that We are not going to be looking to finance an early stage exploration company. It's a resource development stage of projects that can be highly attractive with high margins.

32:28 Another question here from Richard Hunt. Is the end game of the company to build a mine or mines and will you continue to run with it or do you want to sell it? The end game of the of the company is to provide return to investors whatever is the best return. There are 2 avenues here because we have projects that at some stage can give this company control district scale silver and gold systems. But at the same stage, the company is now controlling 100% of a project that has a low risk in the mining business, because we have the permits, we have infrastructure. All these need to be taken into account. So I think More important is the next 12 months to redefine and expand the resource and bring these multi-million ounces of silver and potentially gold to the market and add value.

33:25 And then we will make a decision what's the best opportunity at that time considering where the commodity price is at that stage, where we are in the cycle. Another question here from Bearcat. He's asking, are you looking to do or looking to add additional ground through similar consolidation processes in the same area. What do you expect the costs of your upcoming exploration program to be? Okay, the first part of the question about additional consolidation. From the beginning, we always look at low-cost acquisitions. We have a discussion, a process going on with another concession that's a big package that's next to the San Marcial and Palmasas is the former Trinidad gold mine that shut down last year, is controlled by MECO mining.

34:17 We are doing due diligence, but it's a long process to try to understand and see the opportunity there. Other concessions, as we are the dominant player in the district now, a lot of small miners and local families, Mexican families, comes to our office in Rosario and present opportunities. We keep looking at them. I will not say never, but there'll be more restrictions about how to deploy capital and issue shares at this stage. We are far, we are good for a while, I would say that. In your second question, second point of your question about how much money we are going to invest in exploration, there are 2 pieces here. The first piece is San Marcial, where we raised 3 million Canadian dollars last year, 20 cents common shares. That's when we brought the resource funds.

35:08 It was an oversubscribed finance. The purpose of that finance was to fund, and is to fund, a drilling, underground development, and surface drilling and underground drilling program at San Marcial. At the moment we are in advanced stage of negotiations of drilling companies to have a mix of cash and shares to pay for the underground drilling at San Marcial, so we can save a bit of the cash. So we are planning to do 2,000 meters of drilling underground. So we can multiply that probably 2,000 times $150 per meter. You can get the number, $300,000 Canadian dollars there. The underground is probably going to cost us 250. G&A Mexico is 350,400,000 Canadian a year.

35:56 Management in Canada have made a decision to delay or have an agreement with the company to not be paid in cash or be in a cash and share so we can preserve the cash position of the company in the next 6-12 months if the market conditions continue as it is. I hope I answered your question. Excellent. And I think that's the end of the questions. Are there any more? Oh, wait, there is one more question. Would you be able to have a transcript of this? Yes, for sure. We will be announcing a transcript and also a live replay of this webinar in short order. So without further ado, thank you to everyone for joining us, thank you, Marcio, Trevor, and the GR Silver Mining team. You can contact them if you have any additional questions, but that's it for today.

36:45 Thank you and have a good rest of your day. Thank you all.