Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Security

Environmental Achievements

• Implementing ongoing monitoring programs and reporting results to regulatory authorities.
• Maintaining zero surface water discharge from tailings storage facilities.

Social Achievements

• Hiring locals to work on the project, reducing unemployment and increasing the standard of living.
• Ongoing discussions with local communities to improve living standards.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Limited tailings storage capacity (approximately 1-2 years) and the intention to increase throughput.
• High acid-generating potential of mine tailings.
• Security concerns in the State of Guerrero.
• Metallurgical challenges related to high organic carbon content, soluble lead, fine liberation size, and high iron content.

Mitigation Strategies

• Revising water balance program to ensure zero surface water discharge.
• Implementing robust embankment design with water management strategies for tailings storage facilities.
• Employing a private security firm and military support.
• Conducting further metallurgical studies to optimize recoveries and mining activities.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Intense rainfall events

Transition Risks

• Changes in environmental laws

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: NI 43-101

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Health & Safety
• Environmental Stewardship
• Community
• Governance

Environmental Achievements

• Implemented a water reutilization system in Campo Morado, and plans to implement the same system at Tahuehueto.
• Actively advancing green energy initiatives, evaluating the benefits of installing solar power at Campo Morado and planning natural gas generator installation at Tahuehueto to cut carbon emissions.
• Tahuehueto is exploring solar panel installation to reduce reliance on generators for daytime electricity needs.

Social Achievements

• Assisted local authorities to establish and equip the first school and medical clinic in the Tahuehueto area.
• Contributed to enhancing infrastructure including electricity, water supply, filtration systems and sanitation in the Tahuehueto communities.
• Local hiring and procurement policies to benefit local communities. Campo Morado employs over 200 locals directly and supports local suppliers for contractors.
• Tahuehueto mine currently employs approximately 150 people, directly supporting the local community.

Governance Achievements

• Governance policies in place including a Corporate Disclosure policy, Insider Trading policy, Code of Conduct, and a Whistleblower policy.
• The Company’s board is diverse with individuals from varied backgrounds and expertise with 2 of the Company’s senior directors being Mexican nationals.
• The Company regularly interacts with employees, investors, communities and regulators to understand their concerns and incorporate their feedback in the decisions made.

Climate Goals & Targets

Environmental Challenges

• The Company generated a mine operating profit of $1,469, a net loss of $14,996 and negative cash flows from operating activities of $641, and has an accumulated deficit of $91,090 and current liabilities that exceed its current assets by $50,716 as at December 31, 2023. These factors give rise to material uncertainties that may cast significant doubt about the Company’s ability to continue as a going concern.
• Fluctuations in metal prices
• Strengthening Mexican peso against US and Canadian dollars
• Higher operating costs due to inflationary pressures
• Lower ounces produced
• Power outages impacting production
• Planned reduction in throughput to improve metallurgical recoveries
• Risks related to conducting business in Mexico (political, economic, social, security risks)
• Climate change related risks (regulatory changes, physical risks)
• Community relations
• Transportation and refining risks
• Title risks
• Indigenous rights claims
• Amendments to the Mexican Federal Mining Law
• Reputational risk
• Competition in the mining industry
• Environmental regulations
• Tailings storage facilities and permits
• Difficulties managing and integrating acquisitions
• Litigation
• Difficulty in obtaining and retaining qualified personnel
• Cyber security risks
• Natural disasters
• Equipment shortages, access restrictions and lack of infrastructure
• Dependence on key personnel
• Foreign currency fluctuations, bank failures and inflationary pressures
• Conflicts of interest among directors
• Dilution to shareholders due to funding and property commitments

Mitigation Strategies

• Extending payment terms with suppliers and settling certain liabilities through the issuance of the Company’s common shares.
• Discussions with existing and new lenders about amending existing debt arrangements or obtaining new debt financing and may also consider raising additional equity financing.
• Implementing the Campo Morado Improvement Project (CMIP) to improve metallurgical performance and concentrate grades.
• Engaging international engineering consultants to optimize the Campo Morado processing plant.
• Implementing new procedures for ore blending and optimized reagent dosing for improved recoveries.
• Phased equipment upgrades for the mine and mill.
• Debt restructuring transaction with Trafigura and Urion.
• Debt settlement with Latapi.
• Construction of the Tahuehueto mine and mill.
• Installation of a second ball mill at Tahuehueto.
• Installation of tailings filter presses at Tahuehueto.
• Construction of the second stage of the tailings embankment at Tahuehueto.
• Engaging security personnel at mining operations.
• Implementing a Code of Conduct to promote legal and ethical business conduct.
• Implementing safety measures at mining operations.
• Maintaining insurance to protect against certain risks.

Supply Chain Management

Responsible Procurement

• supports local suppliers for contractors

Climate-Related Risks & Opportunities

Physical Risks

• changes in rainfall rates, rising sea levels, reduced water availability, higher temperatures, changes in seasonal snowpack and extreme weather events

Transition Risks

• increased transitional risks evolve as society and industry work to reduce their reliance on carbon

Opportunities

• increased energy efficiency and technological innovation

Environmental Metrics

ESG Focus Areas

• Health & Safety
• Environmental Stewardship
• Community
• Governance

Environmental Achievements

• Implemented a water reutilization system in Campo Morado, planning to implement the same system at Tahuehueto.
• Actively advancing green energy initiatives, evaluating solar power at Campo Morado and planning natural gas generator installation at Tahuehueto to cut carbon emissions.
• Tahuehueto is exploring solar panel installation to reduce reliance on generators for daytime electricity needs.

Social Achievements

• Assisted local authorities to establish and equip the first school and medical clinic in the Tahuehueto area.
• Contributed to enhancing infrastructure including electricity, water supply, filtration systems and sanitation in the Tahuehueto communities.
• Planning additional improvements such as securing a larger generator to supply electricity to more nearby homes at Tahuehueto.
• Local hiring and procurement policies to benefit local communities. Campo Morado employs over 200 locals directly and supports local suppliers for contractors.
• Tahuehueto mine currently employs approximately 150 people, directly supporting the local community.

Governance Achievements

• Governance policies in place including a Corporate Disclosure policy, Insider Trading policy, Code of Conduct, and a Whistleblower policy.
• The Company’s board is diverse with individuals from varied backgrounds and expertise with 2 of the Company’s senior directors being Mexican nationals.
• The Company regularly interacts with employees, investors, communities and regulators to understand their concerns and incorporate their feedback in the decisions made.

Climate Goals & Targets

Environmental Challenges

• Material uncertainties that may cast significant doubt about the Company’s ability to continue as a going concern due to negative cash flows from operating activities and current liabilities exceeding current assets.
• Issues with its fleet of mobile equipment resulting in 15.5 days of downtime at Campo Morado.
• Contingent liabilities related to tax audits and legal proceedings.

Mitigation Strategies

• Extending payment terms with suppliers and settling certain liabilities through the issuance of the Company’s common shares.
• Discussions with existing and new lenders about amending existing debt arrangements or obtaining new debt financing.
• Considering raising additional equity financing.
• Implementing the Campo Morado Improvement Project (CMIP) to improve metallurgical recoveries and concentrate grades.

Supply Chain Management

Responsible Procurement

• supports local suppliers for contractors

Climate-Related Risks & Opportunities

Physical Risks

• climate change may result in physical risks to a mining company’s operations

Transition Risks

• emerging climate change regulations could result in significant costs

Environmental Metrics

ESG Focus Areas

• Health & Safety
• Environmental Stewardship
• Community
• Governance

Environmental Achievements

• Implemented a water reutilization system in Campo Morado, planning to implement the same system at Tahuehueto.
• Actively advancing green energy initiatives, evaluating solar power at Campo Morado and planning natural gas generator installation at Tahuehueto to cut carbon emissions.
• Tahuehueto is exploring solar panel installation to reduce reliance on generators for daytime electricity needs.

Social Achievements

• Assisted local authorities to establish and equip the first school and medical clinic in the Tahuehueto area.
• Contributed to enhancing infrastructure including electricity, water supply, filtration systems and sanitation in the Tahuehueto communities.
• Local hiring and procurement policies to benefit local communities. Campo Morado employs over 200 locals directly and supports local suppliers for contractors.
• Tahuehueto mine currently employs approximately 150 people, directly supporting the local community.

Governance Achievements

• Governance policies in place include a Corporate Disclosure policy, Insider Trading policy, Code of Conduct, and a Whistleblower policy.
• The Company’s board is diverse with individuals from varied backgrounds and expertise with 2 of the Company’s senior directors being Mexican nationals.
• The Company regularly interacts with employees, investors, communities and regulators to understand their concerns and incorporate their feedback in the decisions made.

Climate Goals & Targets

Environmental Challenges

• Weather events, mechanical breakdowns and changes in major contractor impacted mines and process plants.
• Two major storm events at Campo Morado halted operation for 12 days, impacting road access, flooding surface facilities and lower mine levels. This also impacted the new underground mine contractor's (Cominvi) equipment mobilization.
• Cominvi arrived at Campo Morado with limited equipment, impacting feed to the mill.
• Tahuehueto experienced a catastrophic water supply system failure, disrupting mining and processing for approximately six weeks.
• Ongoing mine equipment constraints and delays in Cominvi’s arrival at Campo Morado with sufficient equipment impacted production capacity.

Mitigation Strategies

• Management has taken steps to manage the Company’s liquidity, including extending payment terms with suppliers and settling certain liabilities through the issuance of the Company’s common shares.
• Management is in discussions with existing and new lenders about amending existing debt arrangements or obtaining new debt financing and may also consider raising additional equity financing.
• Tahuehueto completed construction of a third filter press to increase production capacity.
• Campo Morado is implementing the Campo Morado Improvement Project (CMIP) to improve metallurgical recoveries.

Supply Chain Management

Responsible Procurement

• supports local suppliers for contractors

Climate-Related Risks & Opportunities

Physical Risks

• extreme weather

Transition Risks

• changes in environmental legislation and regulation