San Marcial

San Marcial is a silver resource project, showing potential for future open pit development, with high-grade gold mineralization discovered in recent drilling. The 1,250 ha property is located 98 km* east-southeast of Mazatlan, in the state of Sinaloa, and 5 km south of the Company’s Plomosas Project. The Project currently contains an NI 43-101** resource estimate of 36 Moz AgEq (indicated) and 11 Moz AgEq (inferred), open for future expansion along strike and down-dip, with silver mineralization hosted in wide hydrothermal breccias in a geological setting similar to other multi-million ounce districts in the Sierra Madre Occidental.

Amended NI 43-101 Resource Estimation and Technical Report – June 2020. Click here to see the full technical report.

A pit shell analysis using a base case of US$18.50 silver price and a cut-off value of 30 g/t, provided a pit constrained Indicated resource estimate of 7.5 Mt with an average grade of 118 g/t silver, 0.51% zinc, and 0.32% lead, and additional pit constrained Inferred resource of 2.5 Mt with an average grade of 77 g/t silver, 0.27% zinc, and 0.11% lead. The pit has a 3:1 strip ratio. Under the pit, there is an Indicated resource estimate of 0.1 Mt with an average grade of 79 g/t silver, 0.54% zinc, and 0.26% lead, and additional Inferred resource of 0.9 Mt with an average grade of 131 g/t silver, 0.59% zinc, and 0.09% lead.

The San Marcial deposit remains open along strike and at depth.

Exploration Program Highlights 2020

• Shallow surface drilling and prospecting (underway) for the discovery of new high-grade Au-Ag zones along the 6 km trend of mineralization
• Surface and underground drilling planned to test for high-grade extensions at depth, to an additional 250 m below the San Marcial resource
• Underground development underway extending the existing tunnel, to provide new sites for mapping, sampling and drilling of the mineralized zone at depth
• An XRF litho-geochemical program is nearing completion, and it will provide 25 m x 25 m rock sample coverage of an area of 750 ha along 6 km of mineralized trend. To date, 13,000 samples have been collected, generating multiple targets for follow up exploration, defined by pathfinder anomalies (including Pb, Zn, Ag)
• To date, GR Silver’s exploration program has encountered bonanza-grade silver-gold-intercepts and wide zones, delineating potential for further resource expansion and discoveries

Image Above: Pb-Zn-Ag Pathfinders drive our innovative XRF litho-geochemical program (rock samples taken at 25 m x 25 m spacings over 6 km of mineralized trend)

View images of San Marcial Exploration

View images of underground development

View images of San Marcial Geology

REGIONAL GEOLOGY

The San Marcial prospects lie in an intersection of a major crustal E-W structure with NNW trending structures within the Rosario Mining District, located on the western edge of the Sierra Madre Occidental. The geology at San Marcial can be sub-divided into two distinct underlying rock types: the first being the Upper Volcanic Group of basal conglomerates, rhyolites and dacites occurring in the higher and more mountainous portions of the Project. This unit lies on the erosional surface above the Lower Volcanic Group. The Lower Volcanic Group consists of an epiclastic sequence of lapilli tuffs and volcanic ash, with intercalated dacites and trachyandesites. The known silver prospects at San Marcial are hosted along what appears to be a narrow set of northwest trending fault structures with a 60° NE dip, near the prospective unconformity. The San Marcial resource area hosts a low sulphidation epithermal system, rich in silver and gold.

MINERALIZATION STYLES AT SAN MARCIAL

The area displays low sulphidation epithermal systems rich in silver.

Several different styles of mineralization have been identified at the San Marcial Project including two main types of breccia hosting Ag and Au mineralization:

— Hematitic hydrothermal breccia: hematite + calcite + quartz

— Siliceous hydrothermal breccia: chlorite + quartz + pyrite

The resource area is dominated by the low sulphidation epithermal style environment described above, and the two styles of associated hydrothermal breccia. The San Marcial breccia-hosted deposit is strongly associated with a NW-SE oriented structural trend, and possibly affected by other cross cutting structural features. While San Marcial is best considered a silver deposit, the multi-phase mineralization creates a multi-commodity deposit with zinc and lead closely associated with the silver.

In addition to the breccia and fault hosted mineralization at San Marcial, there are zones of vein and stockwork mineralization, generally peripheral to the breccia-hosting Ag mineralization.

Recent exploration by GR Silver has identified additional occurrences of mineralization in the footwall below the San Marcial fault/breccia package. The volcanics in the footwall display flow banded features typical of a lava dome geological setting and are cut by several dykes. They also possess vein stockwork mineralization in contrast to the breccia mineralization of the main zone, with core assays as high as 1.1 g/t gold related to disseminated sulphide. Silver rich breccia style mineralization, returning grades of up to 1m at 501 g/t silver have been identified in areas outside of the current resource indicating zones for potential drill follow-up.