La Guitarra Project

Overview

• Acquired 100% interest in La Guitarra in an all-share US$35 million purchase from First Majestic Silver – transaction closed March 30, 2023
• High-grade, past-producing underground mine La in the southeast end of the Mexican Silver Belt with on-site 500 t/d mill that operated up to August 2018
• Fully permitted for underground mining – on care and maintenance currently
• Past production on the order of 1 million to 1.5 million AgEq oz annually between 2015 and 2018
• Exploration potential over 15km of known, untested structures
• Test mining and processing of mineralized rock from the Guitarra mine started July 2024: Plan to move to commercial mining and processing rate of 500 tpd before year-end

• Temascaltepec mining district, 130km SW of Mexico City, Road access from Temascaltepec (5 km), from Tejupilco (30 km) and from the metropolitan areas of Toluca (70 km) and International airports located in México City and Toluca.
• Local infrastructure and services available in Temascaltepec
• Main source of mine power is the Mexican national power grid
• Positive community relations with local stakeholders

Geology and Mineralization

The property hosts +100 NW to EW trending intermediate sulphidation epithermal veins that contain silver, gold, and some lead and zinc.

• Located at the southern intersection of the Sierra Madre Occidental with the Faja Volcanica Transmexicana (FVTM)
• The company´s mining concessions, covering 39,714 hectares, cover the entire Temascaltepec mining district and contain numerous Spanish Colonial, 19th, and early 20th-century mines.
• Over 100 epithermal veins at La Guitarra are contained in five main vein systems. These systems make up a belt that covers over 15 km of strike and is an estimated 4 km wide.
• Individual veins pinch and swell; vary in width from 10s of centimetres to +20 metres; shoots in the veins are usually 1 to 4 metres wide.
• From 2012 to 2018, First Majestic completed approximately 128,671 metres of drilling in 689 diamond drill holes.

Exploration Potential

Following the closing of the La Guitarra acquisition, on November 1, 2023, Sierra Madre announced its first project-wide Resource Estimate for the La Guitarra silver-gold mine and the Temascaltepec mining district. Concurrently, the company is evaluating historic cost data that would feed into a Mine and Restart Plan that is expected in Q1 2024.

Sierra Madre has also completed the first-ever district-wide mapping exercise of the Temascaltepec mining district. To date, surface mapping has delineated nearly 53 km of mineralized quartz veins, breccias, and stockwork zones.

Mapping in the Eastern District has delineated over 37.9 km of veining. Mapping has been completed over a significant portion of the West district. Thus far, over 15 km of veins have been located at the surface. While the principal vein systems, Guitarra, Coloso, and Nazareno, have been exploited, the vein swarm north of Guitarra has yet to be drill tested despite having numerous old shafts, adits, and prospect pits.

The eastern portion of the district was host to large high-grade mines that were significant producers during the Spanish colonial period. This area has only seen limited modern drilling and exploration even though it is host to hundreds of old mines, prospects, workings, and veins.

Over 1,400 drill holes (236,000 metres) have been completed at the La Guitarra property, with multiple historic resource reports.

2023 Resource Update

In November 2023, Sierra Madre announced its first project-wide Resource Estimate for La Guitarra and the Temascaltepec Mining District.

The La Guitarra 2023 Mineral Resource Estimate features a 373% increase in Measured and Indicated silver-equivalent resources, to 27.2 million ounces, and a 204% increase in inferred silver-equivalent resources, to 20.2 million ounces.

Table 1: Summary La Guitarra 2023 Mineral Resource Estimate, David G. Thomas P. Geo (Effective Date: October 24, 2023)

1. See Notes following Table 3

The tabulation of the 2023 La Guitarra Mineral Resource Estimate by Classification and Area is presented below.

Table 2: Indicated Mineral Resource Estimate

Table 3: Inferred Mineral Resource Estimate

(1) Notes for 2023 La Guitarra Mineral Resource Estimate:

TechSer Mining Consultants Ltd. ("TechSer") of Vancouver B.C. prepared the Mineral Resource Estimate, David Thomas, P.Geo. and QP Geology and Cristian Garcia, P.Eng. and QP Mining. The following tabulates the La Guitarra estimated Mineral Resources.

1. Canadian Institute of Mining Metallurgy and Petroleum ("CIM") definition standards were followed for the resource estimate.
2. The 2023 resource models used nominal cutoff grades which are based on mining and milling costs of US$50 for cut and fill mining, US$38 per tonne for long-hole,
3. A net payable recovery of 70% (historical plant recovery plus an allowance for smelter deductions, refining costs, and concentrate transportation)
4. Silver price of US$22 and a gold price of $1700 and a Gold Silver Ration of 77.27:1.
5. Assays were capped at 825 g/t for silver and 6.55 g/t for gold
6. Variable cut-off by deposit
   1. Nazareno and Coloso - Block Model 135 AgEq cut-off grade (COG) and a 1 m Minimum True Thickness
   2. Guitarra - Polygonals Estimates 135 g/t AgEq COG and a 1 m Minimum Horizontal Width
   3. Los Angeles - Block Model Long Hole Mining 90 g/t AgEq COG
   4. Mina De Agua - East District Polygonal Estimate 135 g/t AgEq COG or 90 g/t AgEq COG and > 2 m Horizontal Width
   5. The tailings used a 30 g/t AgEq COG.
7. Mineral Resources that are not mineral reserves do not have economic viability. Numbers may not add due to rounding.
8. Numbers may not add due to rounding.
9. The estimate of mineral resources may be materially affected by: metal prices and exchange rate assumptions; changes in local interpretations of mineralization geometry and continuity; changes to grade capping, density and domain assignments; changes to geotechnical, mining and metallurgical recovery assumptions; ability to maintain environmental and other regulatory permits and ability to maintain the social license to operate
10. The 2023 resource estimate is prepared by David Thomas P.Geo. and Q.P. and Cristian Garcia P.Eng. and QP, of TechSer in accordance with National Instrument 43-101Standards of Disclosure for Mineral Projects. David Thomas and Cristian Garcia are independent qualified person ("QP’s") as defined by National Instrument 43-101.For additional details, please see this National Instrument 43-101 report titled "La Guitarra Mineral Resource Estimate Guitarra Silver-Gold Project, Temascaltepec, Estado de México, México" that is available atwww.SierraMadreGoldandSilver.comand under the Company's SEDAR+ profile atwww.sedarplus.com.

The 2023 La Guitarra Mineral Resource Estimate above follows on a historic resource estimate, as disclosed in the Annual Information Form of First Majestic for the year ended December 31, 2021 dated March 31, 2022, available for review on First Majestic´s profile at www.SEDAR.com, presented in Table 4 below.

Table 4: La Guitarra Historic Mineral Resource Estimate, Effective December 31, 2020

Notes for Historical Mineral Resource Estimates:

The Historical Mineral Resources for La Guitarra have an effective date of December 31, 2020. The historical estimates were prepared by First Majestic internal "Qualified Persons" (as defined in NI 43-101) who have the appropriate relevant qualifications and experience in geology and resource estimation. The information provided was compiled by David Rowe, CPG, Internal Qualified Person for First Majestic, and reviewed by Ramon Mendoza Reyes, P.Eng., Internal QP for First Majestic. Sample data was collected through a cut-off date of December 31, 2020. Metal prices considered were USD$22.50/oz Ag and USD$1,850/oz Au.

The Historical Mineral Resources were reported in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards on Mineral Resources and Mineral Reserves adopted by CIM (2014 edition) (the "CIM Standards"). All tonnage information has been rounded to reflect the relative uncertainty in the estimates; therefore, there may be small differences in the totals.

In accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") the La Guitarra Historical Mineral Resource Estimates use the terms "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource", having the same meanings ascribed to those terms as in the CIM Standards.

As these mineral resource estimates pre-date the Company´s agreement to acquire La Guitarra, the Company is treating them as "historical estimates" under NI 43-101, but they remain relevant as the most recent mineral resource estimates for La Guitarra. No more recent estimates or data are available to Sierra Madre.

Further drilling and resource modelling would be required to upgrade or verify these historical estimates as current mineral resources for the respective assets and accordingly, they should be relied upon only as a historical resource estimate of First Majestic, which pre-dates the Company´s agreement to acquire La Guitarra.

Mr. Gregory Smith, P. Geo., a director of Sierra Madre, is a "Qualified Person" as defined by NI 43-101 and has reviewed and approved the technical data and information contained in this news release. However, a "Qualified Person" under NI 43-101 has not done sufficient work to classify the historical estimates as current Mineral Resources. Accordingly, a Qualified Person of the Company has not independently verified the Mineral Resources nor the other information contained herein, and the Company is not treating the historical estimates as current Mineral Resources.

Mineral Resources that are not mineral reserves do not have economic viability. Numbers may not add due to rounding.

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