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Summary

The San Rafael property hosts a zinc-lead-silver deposit and is located approximately 8km north of the Company's Los Braceros process plant.�

The San Rafael Project is expected to deliver average annual production of 1.0 million ounces of silver, 50 million pounds of zinc and 20 million pounds of lead over a 6 year initial mine life at negative AISC based on current reserves. The project has a pre-tax IRR of greater than 80% using current silver, zinc and lead prices.[1]

Geology�

San Rafael is a brownfield development that will utilize certain existing infrastructure at the Cosal� Operations and is expected to have an initial capital cost of approximately $20 million using current exchange rates.[2] The Company targets commercial production in Q3 2017 following stockpiling of development ore starting in Q2 2017. The project is permitted for development and Environmental Impact Statement (EIS) approval has been received for an underground operation. Road access has already been completed and portal construction has begun.�

San Rafael-type mineralization consists of massive sulfides that occur at an unconformable contact between what is believed to be Tertiary volcanic tuff and Cretaceous limestone. Most of the massive sulfide mineralization appears to be hosted in the volcanic tuff. San Rafael contains silver, lead, and zinc mineralization with minor gold and copper. The main minerals are pyrite, pyrrhotite, sphalerite, and galena with minor marcasite, chalcopyrite, and magnetite. In the San Rafael Main Zone, this mineralization is often associated with quartz, sericite and pyrite alteration minerals. It has also been suggested that San Rafael displays many similarities to volcanogenic massive sulfide deposits, such as those found in the Guerrero Terrane in central Mexico. At San Rafael, a dacite tuff is the primary host for the mineralization. Part of the same area, the 120 Zone of San Rafael in contrast is hosted by skarn zones developed along dykes cross-cutting the underlying limestone units.

The San Rafael Prefeasibility Study is available here by clicking on the link and at www.sedar.com. A summary is available in the Company's Annual Information Form for the year ended December 31, 2015.