AI assistant
GR SILVER MINING LTD. Management Reports 2025
47384_rns_2025-05-30_e67b32a8-2649-482e-975e-2a1fa8481101.pdf
Management Reports
Open in viewerOpens in your device viewer
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
INTRODUCTION
The following Management Discussion and Analysis ("MD&A") provides relevant information on the financial condition and financial results of silver exploration of GR Silver Mining Ltd. (the "Company" or "GR Silver") for the three-month period ended March 31, 2025 at the Plomosas Project, Sinaloa, Mexico.
The purpose of this MD&A is to provide readers with management's overview of the past performance of, and outlook for, GR Silver. The report also provides information to enhance readers' understanding of the Company's consolidated financial statements and highlights important business trends and risks affecting the Company's financial performance. It is intended to complement and supplement the Company's consolidated financial statements, but it does not form part of those consolidated financial statements. This MD&A should be read in conjunction with the condensed interim consolidated financial statements for the three-month period ended March 31, 2025 (the "Interim Financial Statements") and the audited consolidated financial statements and notes thereto for the years ended December 31, 2024, and 2023 (the "Annual Financial Statements").
All financial information in this document, including the Company's financial position, results of operations and cash flows is prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), unless otherwise stated. Unless otherwise stated, all dollar figures included in this MD&A are expressed in Canadian dollars.
The common shares of the Company trade on the TSX Venture Exchange under the ticker symbol "GRSL", on the OTCQB under the ticker symbol "GRSLF", and on the Frankfurt Stock Exchange under the ticker symbol "GPE". The Company is a reporting issuer in provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario.
All information contained in this MD&A is current as of May 30, 2025, unless otherwise stated.
Forward-Looking Statements
This document contains forward-looking statements, please see section "Forward-Looking Statements".
Qualified Person and Quality Control/Quality Assurance
Marcio Fonseca, M.Sc., D.I.C, P.Geo., the Company's President and Chief Operating Officer and a director and a qualified person as defined by NI 43-101, has supervised the preparation of the scientific and technical information that forms the basis for the mineral property disclosure in this MD&A and has approved the disclosure herein. Mr. Fonseca is not independent of the Company, as he is a shareholder and an officer and director of the Company.
The Company has implemented QA/QC procedures which include insertion of blank, duplicate, and standard samples in all sample lots sent to SGS de México, S.A. de C.V. laboratory facilities in Durango, Mexico, for sample preparation and assaying. For every sample with results above Ag >100 ppm (over limits), these samples are submitted directly by SGS de Mexico to SGS Canada Inc. at Burnaby, BC. The analytical methods are Four Acid Digest and Inductively Coupled Plasma Optical Emission Spectrometry with Lead Fusion Fire Assay with gravimetric finish for silver above over limits. For gold assays the analytical methods are Lead Fusion and Atomic Absorption Spectrometry Lead Fusion Fire Assay and gravimetric finish for gold above over limits (>10 ppm).
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
DESCRIPTION OF BUSINESS
The Company is in the business of silver exploration in Mexico. Consistent with the Company's business purpose, its focus is on the San Marcial Property and the Plomasas Property, which are collectively known as the "Plomasas Project". Together these properties comprise a core land package, with numerous mineralized zones, past producing mine sites, and historical workings, located approximately 90 to 100 kilometres east-southeast of Mazatlán, Sinaloa, Mexico (Figure 1). The Plomasas Project is located in a prolific mining area, the Rosario Mining District, with nearby historical precious metal producers. The Company has identified multiple epithermal veins and hydrothermal breccias on the Plomasas Project (Figure 2).
The Company's main business activities include the evaluation and exploration of mineral exploration properties to define economic precious metals (silver) and base metals deposits aiming for potential development. The Company is currently focused on resource expansion at the San Marcial Property, on the Plomasas Project.
The Company is a British Columbia corporation. The Company's corporate office address is 1500 – 409 Granville Street, Vancouver, British Columbia, V6C 1T2.
Figure 1 – Plomasas Project Location, Sinaloa, Mexico
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
Figure 2 – Plomosas Project Areas, including deposits, showings, and drill hole collar locations (pink)
March 31, 2025 Management Discussion and Analysis
4 | Page
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
CORPORATE ACTIVITIES – THREE MONTH PERIOD ENDED MARCH 31, 2025, AND TO DATE OF MD&A
The Company raised $1,775,778 from the exercise of 11,838,520 warrants with an exercise price of $0.15 per warrant. Additionally, the Company raised $8,000 from the exercise of 100,000 warrants with an exercise price of $0.08 per warrant.
On January 6, 2025, the Company granted a total of 145,452 DSUs to the Company's non-executive directors for director's fees relating to the calendar quarter ended December 31, 2024, which DSUs will vest one year after their date of grant in accordance with TSXV policies.
On March 3, 2025, the Company announced the resumption of field exploration and step out drilling targeting potential resource expansion at the San Marcial Area of the Plomosas Project¹.
On April 2, 2025, the Company granted 154,836 deferred share units (“DSUs”) to non-executive directors relating to the calendar quarter ended March 31, 2025, which DSUs will vest one year after their date of grant in accordance with TSXV policies.
On April 2, 2025, the Company granted 860,000 stock options to employees and consultants exercisable at a price of $0.155 for a period of five years and fully vested on the date of grant. The Company also granted 400,000 options to certain executive officers exercisable at a price of $0.155 for a period of five years vesting 1/3 on the grant date, and 1/3 on each of the first and second anniversaries of the grant date.
On April 9, 2025, the Company announced the temporary pause of field work at the Plomosas Project to allow time for the Government of Mexico to increase security and stability in the project region².
On May 20, 2025, the Company announced the resumption of field work at the Plomosas Project due to improved conditions regarding the security situation in the project region³. Management will continue to closely monitor the security situation.
On May 27, 2025, the Company closed a non-brokered private placement of 14,190,000 units at a price of $0.13 per unit for gross proceeds of $1,844,700. Each unit consisted of one common share of the Company and one-half of one common share purchase warrant and each whole warrant is exercisable into one common share of the Company at an exercise price of $0.19 per warrant until May 27, 2027. The Company paid cash finder’s fees of $104,442 and issued 803,400 agent warrants. Each agent warrant is exercisable into one common share at an exercise price of $0.19 per share until May 27, 2027.
¹ https://www.newswire.ca/news-releases/gr-silver-mining-resumes-field-exploration-and-step-out-drilling-at-the-san-marcial-area-plomosas-silver-project-sinaloa-mexico-885613031.html
² https://www.newswire.ca/news-releases/gr-silver-mining-announces-temporary-plomosas-silver-project-field-work-pause-802139472.html
³ https://www.newswire.ca/news-releases/gr-silver-mining-announces-resumption-of-plomosas-silver-project-field-work-886571491.html
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
OPERATIONAL HIGHLIGHTS
Property and Resource Highlights
During the three-month period ended March 31, 2025, the Company continued to advance the review and modeling of exploration data related to the discoveries of wide high-grade silver mineralized hydrothermal breccias in the San Marcial Property, SE Extension, supporting definition of priority drill targets for upcoming drilling (Figure 3). The integration of all exploratory data using modern software processing tools has been a successful step in the advancement of understanding of silver mineralization controls in a new geological setting in the San Marcial Property, particularly related to the drill hole SMS22-10 which intersected 101.6 m at 308 g/t Ag. This wide high-grade silver predominant mineralization has delineated new areas for resource expansion and provided key geological information to support step-out and resource expansion drilling planned for 2025.
Figure 3 – General View of the San Marcial Area, including the SE Extension Discovery Area, outlining the geological setting
The analysis of the exploratory data reviewed and integrated in a 3-D model comprised of:
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
| Data Type | Number of Samples | Notes |
|---|---|---|
| Drillholes | 16074 | 164 Drillholes |
| XRF Lithogeochem | 15158 | Samples integrated in the database and 3D modelled |
| XRF Soils | 4889 | Samples integrated in the database and 3D modelled |
| XRF Channel Samples | 88 | Samples integrated in the database and 3D modelled |
| Trenches | 2774 | 52 Trenches reloged |
| Rocks Laboratory Assays | 374 | Samples reviewed to define new targets |
| Geophysics Lines DCIP and Mag | 41 | 35 lines 2 - 2.5 km in length, 6 lines 500m in resource area. 73.8 km total data reviewed |
| Geophysics Point Readings DCIP and Mag | 1649 | Data integrated in a 3D model |
| Underground Samples | 320 | Samples integrated in the database and 3D modelled |
The Company has integrated multi-disciplinary data using modern processing tools and 3D modelling. This exercise has yielded the delineation of mineralization controls and key geological settings, which have allowed for the completion of a new geological map, and 3D modelling and the definition of new exploratory drilling targets proximal to the current NI 43-101 San Marcial mineral resource area. The areas defined as priority for step-out and resource expansion drilling are named NW Extension, SE Chargeability Anomalies, New Hydrothermal Breccias and SE Extension (Figure 3).
New drilling targeting is particularly highlighted by the recognition of a 2 km long untested chargeability anomaly (Figure 4) from an extensive IP ground survey. The focus of the upcoming exploration and drilling aims to further delineate mineralization and grow silver resources in the San Marcial Property.
Figure 4 – Delineation of a chargeability anomaly in the San Marcial Property, a key exploration target
The new geological map (Figure 5) represents a milestone in the advance of knowledge and understanding gained from the SE Extension discovery and 3D data modelling of recent drill discoveries. It highlights the exploration potential of the San Marcial Property in the vicinity of the current resource. This is supported by recent surface mapping of a series of regional faults in the proximity of recently discovered intrusions (diorites and granodiorites), which have been interpreted to be the potential conduits for fluids that distributed wide, high-grade silver mineralization hosted in hydrothermal breccias in the Volcano Sedimentary Unit, directly associated with the 2km long untested geophysical anomaly.
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
The SE Discovery Area intersection, drill hole SMS22-10 101.6 m @ 308 g/t Ag (Figure 6), defined a new style of mineralization on the southwestern edge of the Sierra Madre Occidental. Aside from providing an important proof of concept in extending mineralization in the vicinity of the current San Marcial resource, it defined for the first time the presence of wide high-grade silver mineralization associated with large intrusive units (diorites-granodiorites). The intersection provided important incremental knowledge to advance exploration of the San Marcial Property and, as the cross-section shows, demonstrated that blind mineralization (i.e., with little or no surface expression) can be successfully outlined. The data review identifying the characteristics defining this style of mineralization is at the core of the Company's plans for the upcoming step-out drilling program aiming to continue resource growth at the San Marcial Property.
Figure 5 – New geological map and exploration targets, San Marcial Resource Area and SE Extension Discovery - New Drilling Targets
March 31, 2025 Management Discussion and Analysis
8 | Page
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
Figure 6: Geological Section A-B, SE Discovery Area, delineation of a wide, mineralized silver zone
Plomosas Project NI 43-101 Mineral Resource Estimate
On March 20, 2023, the Company released details of its Plomosas Project NI 43-101 Mineral Resource Estimate, updating resources for the San Marcial, Plomosas Mine and San Juan-La Colorada Areas. On May 3, 2023, the Company filed on SEDAR an independent technical report ("the Report") prepared in accordance with National Instrument 43-101 – Standards of Disclosure of Mineral Projects ("NI 43-101") by Dr. Gilles Arseneau, P.Geo. of ARSENEAU Consulting Services Inc ("ACS"), supporting the updated resource estimate for the Plomosas Project, previously reported in the Company's news release dated March 20, 2023. This Report was filed in accordance with Section 4.2, Sub Section (5)(b) reconciling differences in the silver equivalent ("AgEq") estimation related to the San Marcial Area.
The combined Mineral Resource Estimate consisted of 85 Moz AgEq (Indicated) and 49 Moz AgEq (Inferred). Details of the combined Plomosas Project Mineral Resource Estimate are shown in Table 1, and the Mineral Resource Estimate is broken down by area in Table 2. Parameters for the estimate are shown in Table 3. The combined Mineral Resource Estimate was unaffected by the disposition of Marlin Gold Mining Ltd ("Marlin").
Table 1: Plomosas Project, Mineral Resource Statement, ACS March 15, 2023 by Resource Category
| Mineral Resource Class | Type | Tonnage (Mt) | Average Grade | Contained Metal | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Ag (g/t) | Au (g/t) | Pb (%) | Zn (%) | Cu (%) | AgEq (g/t) | Ag (Moz) | Au (Koz) | Pb (Kt) | Zn (Kt) | Cu (Kt) | AgEq (Moz) | |||
| Indicated | OP | 11 | 138 | 0.07 | 0.3 | 0.4 | 0.01 | 169 | 47 | 22.9 | 31 | 43 | 1 | 58 |
| Inferred | OP | 3 | 105 | 0.13 | 0.4 | 0.5 | 0.02 | 152 | 9 | 10.8 | 11 | 13 | 1 | 13 |
| Indicated | UG | 4 | 62 | 0.48 | 0.8 | 1.2 | 0.07 | 204 | 8 | 61.6 | 33 | 47 | 3 | 26 |
| Inferred | UG | 6 | 66 | 0.49 | 0.8 | 1.2 | 0.04 | 180 | 13 | 97.4 | 53 | 78 | 2 | 36 |
| Total Indicated | 15 | 117 | 0.18 | 0.4 | 0.6 | 0.03 | 179 | 55 | 84.5 | 64 | 90 | 4 | 85 | |
| Total Inferred | 9 | 78 | 0.38 | 0.7 | 1.0 | 0.03 | 171 | 22 | 108.2 | 64 | 91 | 3 | 49 |
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
Table 2: Plomosas Project, Mineral Resource Statement, ACS March 15, 2023 by Area
| Area | Mineral Resource Class | Type | Tonnes (Mt) | Average Grade | Contained Metal | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Ag (g/t) | Au (g/t) | Pb (%) | Zn (%) | Cu (%) | AgEq (g/t) | Ag (Moz) | Au (Koz) | Pb (Kt) | Zn (Kt) | Cu (Kt) | AgEq (Moz) | ||||
| San Marcial | Indicated | OP | 9 | 146 | 0.04 | 0.2 | 0.3 | 0 | 161 | 42 | 10.2 | 16 | 28 | 0 | 47 |
| Inferred | OP | 2 | 127 | 0.03 | 0.1 | 0.2 | 0 | 136 | 6 | 1.4 | 1 | 3 | 0 | 7 | |
| San Marcial | Indicated | UG | 1 | 176 | 0.06 | 0.3 | 0.6 | 0 | 206 | 4 | 1.5 | 2 | 4 | 0 | 5 |
| Inferred | UG | 1 | 164 | 0.03 | 0.2 | 0.4 | 0 | 182 | 8 | 1.6 | 3 | 5 | 0 | 9 | |
| Plomosas | Indicated | OP | 2 | 93 | 0.24 | 1.0 | 0.9 | 0.07 | 193 | 5 | 11.9 | 16 | 14 | 1 | 10 |
| Inferred | OP | 1 | 66 | 0.28 | 1.0 | 1.0 | 0.06 | 174 | 2 | 7.8 | 9 | 9 | 1 | 5 | |
| Plomosas | Indicated | UG | 3 | 35 | 0.57 | 0.9 | 1.3 | 0.08 | 204 | 4 | 58.0 | 30 | 42 | 3 | 21 |
| Inferred | UG | 2 | 38 | 0.57 | 0.9 | 1.1 | 0.06 | 175 | 3 | 39.4 | 20 | 23 | 1 | 12 | |
| San Juan/La Colorada | Indicated | OP | 0.1 | 161 | 0.29 | 0.3 | 0.6 | 0.02 | 211 | 0.4 | 0.8 | 0 | 1 | 0 | 1 |
| Inferred | OP | 0.2 | 103 | 0.24 | 0.5 | 0.8 | 0.02 | 159 | 0.7 | 1.6 | 1 | 2 | 0 | 1 | |
| Indicated | UG | 0.1 | 90 | 0.61 | 1.1 | 0.8 | 0.04 | 199 | 0.3 | 2.1 | 1 | 1 | 0 | 1 | |
| Inferred | UG | 2.6 | 34 | 0.69 | 1.2 | 1.9 | 0.04 | 182 | 2.8 | 56.4 | 31 | 49 | 1 | 15 | |
| Total Indicated | 15 | 117 | 0.18 | 0.4 | 0.6 | 0.03 | 179 | 55 | 84.5 | 64 | 90 | 4 | 85 | ||
| Total Inferred | 9 | 78 | 0.38 | 0.7 | 1.0 | 0.03 | 171 | 22 | 108.2 | 64 | 91 | 3 | 49 |
Numbers are rounded
- AgEq is calculated from the metal prices and recoveries using the equation AgEq = ((Au grade+Au price+Au Recovery) + (Ag grade+Ag Price+Ag Recovery) + (Pb grade+Pb Price+Pb Recovery) + (Cu grade+Cu Price+Cu Recovery) + (Zn grade+Zn Price+Zn Recovery)) / (Ag Price+Ag Recovery)
(1) Mineral Resources which are not Mineral Reserves, do not have demonstrated economic viability
(2) The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues
(3) The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration
(4) The Mineral Resources were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM Council
Table 3: Summary parameters adopted for resource estimation and mineral resource reporting - Plomosas Project (2023)
| Plomosas Project | |||
|---|---|---|---|
| Metal Prices | Gold US$/oz | $1,750 | |
| Silver US$/oz | $22.00 | ||
| Lead US$/lb | $1.10 | ||
| Zinc US$/lb | $1.30 | ||
| Copper US$/lb | $4.20 | ||
| Area | San Marcial | Plomosas Mine | |
| Metallurgical Recoveries*** | Gold | 0 | 86% |
| Silver | 94% | 74% | |
| Lead | 59% | 69% | |
| Zinc | 80% | 75% | |
| Preliminary Cost Assumptions | |||
| Mineral Resource Reporting*** | Open Pit ("OP") | 30 US$/t | 30 US$/t |
| Underground ("UG") | 60 US$/t | 60 US$/t |
*** Based on preliminary metallurgical testwork completed in 2021 with samples from both areas investigating potential production of precious metal-rich concentrate
*** Preliminary cost assumptions adopted in the Whittle assessment and MSO are based on similar type deposits in Mexico where underground and open pit operations are in progress for a throughput capacity of 1,000 tpd
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
The Resource Estimate filed on May 3, 2023, was completed by ACS and Mr. S. T. Crowie (Sr. Metallurgist with JDS Energy & Mining Inc.), both of Vancouver, British Columbia, Canada, and integrates resources for the San Marcial, Plomosas Mine and San Juan-La Colorada Areas within the Plomosas Project.
A total of 70 GR Silver drill holes (10,500 metres) were added to the 52 holes used in the previous resource estimate, totalling 122 holes (~19,000 metres) for the San Marcial Area including the SE Discovery Area. At the Plomosas Mine Area, a total of 223 drill holes (16,380 metres) were drilled in specific areas of the existing underground historical mine as part of the infill drilling program. A total of 424 drill holes (60,020 metres) comprises the Plomosas Mine Area database supporting the Resource Estimate. The Company has been successful with expansion of resources since acquisition of the San Marcial and Plomosas Areas (Figure 7).
The Plomosas Project Resource Estimate adopts the key parameter of having a reasonable prospect of economic extraction, utilizing a combination of open pit and underground assumptions. Capping was applied to the original assay values prior to compositing in the mineral resource estimation process.
Highlights of the Resource Estimate (Table 1) including comparison to the previous mineral resource estimates⁴ are:
- 72% increase in indicated mineral resources from 32 Moz to 55 Moz Ag
- 21% increase in inferred mineral resources from 18.6 Moz to 22.5 Moz Ag
- 83% increase in indicated mineral resources from 46.4 Moz to 85 Moz AgEq
- 48% increase in inferred mineral resources from 33.0 Moz to 49 Moz AgEq
San Marcial Area
- Indicated mineral resources of 10 Mt at 166 g/t AgEq
- Inferred mineral resources of 3 Mt at 151 g/t AgEq
- 88% of the value of the San Marcial Resource Estimate is comprised of silver
- San Marcial resources are potentially amenable to underground mine development with the opportunity for low-cost bulk mineable underground methods due to the wide geometry of the mineralized zone, and resource growth opportunity.
- True width of the modelled San Marcial mineralization averages 22 metres, while the SE Area discovery averages 53 metres in thickness.
Plomosas Mine Area
- 2022 infill drilling resulted in an increase of 137% in the indicated mineral resource tonnage
- 260% increase in indicated mineral resources from 9 Moz to 31 Moz AgEq and AgEq grade increased by 30% and 52%, respectively, in indicated and inferred mineral resources in relation to the previous resource estimate
- Ag ounces represent 20% of total indicated mineral resources at the Plomosas Mine Area
- Ag ounces represent 26% of total inferred mineral resources at the Plomosas Mine Area
- True width of modelled mineralization at the Plomosas Mine Area averages 20 metres, supporting potential for low-cost bulk mineable open pit and/or underground mining methods
- 46% of the value of the Resource Estimate at the Plomosas Mine Area is comprised of precious metals
⁴ San Marcial 2019 resource (see News Releases dated February 7, 2019 and June 12, 2020); Plomosas Mine and San Juan 2021 resource (see News Release dated August 23, 2021)
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
Key Statistics
- GR Silver has successfully expanded resources at the Plomasas Project (Figure 7) at a low cost of exploration and acquisition (US$0.25/oz)
- Since previous resource estimates in 2019 and 2021, the Company has achieved an estimated exploration cost of US$0.23/oz AgEq discovered
- Indicated Ag ounces have increased 189% since the Company's inception
- Inferred Ag ounces have increased 220% since the Company's inception
- Indicated AgEq ounces have increased 236% since the Company's inception
- Inferred AgEq ounces have increased 408% since the Company's inception
- The proportion of total indicated resources (oz Ag), now represents 63% of total resources at the Plomasas Project (Tables 1 and 2).
Figure 7: Resource growth at the Plomasas Project
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
GR Silver has been actively and efficiently drilling the Plomosas Project since the consolidation of all three areas - San Marcial, Plomosas Mine and San Juan-La Colorada. GR Silver owns five drill rigs, which allow flexibility and cost efficiency in its drilling programs. Third party drilling contractors are sourced as needed. The following Figure 8 illustrates the cumulative metres of drilling already completed by GR Silver in the Plomosas Project.
GR Silver carried out drilling programs on the Plomosas Project from 2019 to 2022. GR Silver's own rigs, used during the latter stages of this period, were operated by contract and GR Silver employees. GR Silver also contracted third-party drilling companies that drilled the Plomosas and San Marcial Properties during that period. GR Silver also re-drilled some of the IMMSA historical holes replacing a total of 133 historical holes from the database in the Plomosas Mine Area and it also removed 32 IMMSA historical drill holes from the San Juan-La Colorada Area database.
Since first drilling by GR Silver in 2019, the Company has completed 522 drill holes on the Plomosas Project, for a total of approximately 48,000 metres (Figure 8). Of this total, 108 holes were drilled on the San Marcial Property for a total of approximately 12,000 metres. At the Plomosas Mine and immediate surrounds, the Company has completed 283 holes for a total of approximately 25,000 metres. At San Juan-La Colorada, up until the end of Q1/2023, GR Silver had drilled 60 holes for a total of approximately 5,285 metres. A total of 71 holes have been drilled on other exploration targets within GR Silver's Rosario Mining District, up until the end of 2022, for a total of approximately 6,215 metres.
Figure 8: Annual Drilling Programs Completed at the Plomosas Project by GR Silver Mining Ltd.
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
PLOMOSAS PROJECT
History and Background
GR Silver has, over several years, assembled a portfolio of mining concessions, which are wholly owned but subject to various royalties, in the Rosario Mining District, Sinaloa State, Mexico. The key properties which comprise the Plomosas Project, cover 78 square kilometres, encompass a past producing mine and two camps, and feature excellent road access and power to multiple locations. Plomosas Project concessions and their applicable royalties are detailed in Tables 4 and 9, respectively.
From 1976 to 2000, IMMSA drilled 485 holes totalling 85,989 m in the Plomosas Project. From these, 221 holes totalling 42,607 m were drilled in the immediate area of the Plomosas Mine Area – 37,240 m from surface and 5,367 m from underground platforms. There were 166 holes drilled at the San Juan-La Colorada Area totalling 26,990 m. 98 drill holes were completed by IMMSA in other regional exploration targets. Gold-Ore carried out drilling from 2000 to 2002, drilling six holes in 2000 for 602 m and 17 holes in 2002 totalling 2,528 m targeting the San Marcial Area in the NW portion of the Mineral Resource. Aurcana drilled seven holes in the Plomosas Mine Area between 2007 and 2008; three from underground and four from surface platforms, for a total of 1,872 m. Silvermex drilled between 2008 and 2010, completing 29 holes for 5,826 m targeted at the NW portion of the San Marcial mineralization.
In March 2020, GR Silver completed the acquisition of 100% of Minera La Rastra S.A. de C.V. ("MLR"), the company holding the Plomosas Property and other concessions, from First Majestic Silver Corp. The Plomosas Property includes the past-producing Plomosas Mine - a shallow underground mine from which Grupo Mexico historically produced 67,600 t of lead concentrate and 31,400 t of zinc concentrate, with silver - gold credits, between 1986 and 2000. This mine was closed in 2001 due to then prevailing low commodity prices. As a result of the mine's continuous care and maintenance since that time, 7.4 km of underground tunnels and developments have remained in good condition, providing immediate access for exploration and potential future mining activities. MLR also owns 349 hectares of land covering most of the underground mine and vicinity at the Plomosas Mine. As the Plomosas Mine is a past producer, valid surface rights agreements, as well as some other essential permits, remain in place for current and future use by the Company.
Table 4: Plomosas Project (San Marcial and Plomosas Properties)
| AREA | No. | MINING CONCESSIONS | OWNERSHIP* | TITLE | AURFACE AREA (ha) |
|---|---|---|---|---|---|
| San Marcial Property | 1 | Mina San Marcial | Minera San Marcial | 180998 | 119.0000 |
| 2 | Ampliacion San Marcial | Minera San Marcial | 211650 | 1131.0000 | |
| Plomosas Property | 3 | Plomosas | Minera La Rastra | 168698 | 12.0000 |
| 4 | Segunda Ampl. de Plomosas | Minera La Rastra | 168699 | 100.0000 | |
| 5 | Continuacion de Plomosas | Minera La Rastra | 168700 | 12.0000 | |
| 6 | La Rastra 2 | Minera La Rastra | 183443 | 25.4275 | |
| 7 | San Juan | Minera La Rastra | 188174 | 24.5725 | |
| 8 | La Estrella | Minera La Rastra | 202188 | 261.6800 | |
| 9 | Plomosas 3 | Minera La Rastra | 209251 | 23.2700 | |
| 10 | Plomosas 2 | Minera La Rastra | 210152 | 83.5000 | |
| 11 | La Rastra | Minera La Rastra | 214304 | 5396.0027 | |
| 12 | Plomosas 4 | Minera La Rastra | 225024 | 420.9633 |
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
| AREA | No. | MINING CONCESSIONS | OWNERSHIP^{P} | TITLE | SURFACE AREA (ha) |
|---|---|---|---|---|---|
| 13 | Los Arcos | Minera La Rastra | 226222 | 214.1300 |
In addition, the Plomosas Property includes mineralization at the San Juan-La Colorada Area, located approximately three kilometres west of the Plomosas Mine, and near the eastern margin of a small, third-party held concession currently being mined for gold. Artisanal workings are present, as well as shallow underground workings developed on a breccia, known as the San Juan Breccia.
On May 6, 2021, following a successful three-year period of exploration and resource expansion under an option agreement, GR Silver acquired Compañía Minera San Marcial S.A. de C.V., which owns the San Marcial Property.
The Company has now integrated the historical databases for the Plomosas Project, obtained through the aforementioned acquisitions, into a single regional database. The Company’s Plomosas Project lies in one of the most prolific geological settings for the discovery of high-grade silver-gold epithermal mineralized systems in Mexico, along the western edge of the Sierra Madre Occidental. A number of world class deposits have been discovered in this setting, including the San Dimas deposit, just 125 kilometres north of the Plomosas Project, and the El Rosario Mine which historically produced millions of ounces of precious metals.
Following successful drilling in 2022, the Company completed an updated mineral resource estimate on March 20, 2023, covering the San Marcial, Plomosas Mine and San Juan-La Colorada Areas. The Report was filed on May 3, 2023, including updates on the estimation of AgEq for the San Marcial Area.
The Company announced on July 17, 2024, that a private, arm’s-length Canadian company active in Mexico acquired from the Company 100% of the issued and outstanding shares of Marlin and its Oro Gold subsidiary. GR Silver retains a 0.5% NSR Royalty on the Concessions owned by Oro Gold and a 10-year first right of refusal on any disposition of the Concessions by the private company.
Mining History
Mining at the historical Plomosas Mine took place from 1986 to 2000. A total of 2.5 Mt of ore were processed through a 600 tpd crushing-milling flotation circuit (Table 5). During the 14 years of operation, lead and zinc concentrates were the main products, with reported high-grade silver and gold credits. The historical reports indicate annual average grades for each commodity within the following ranges: zinc (1.85% to 2.66%), lead (1.19% to 3.37%), silver (79 g/t to 338 g/t) and gold (0.76 g/t to 1.74 g/t). The room and pillar underground operation selectively mined to only 260 metres depth of a polymetallic hydrothermal breccia hosted in a shallow-dipping regional fault. Extensive historical and current drilling data show additional continuity down dip and along strike as well as new mineralized zones on the footwall and hanging wall of the main zone.
March 31, 2025 Management Discussion and Analysis
15 | Page
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
Table 5: Plomasas Mine – Production History 1986-2000
| Plomasas Historic Production Table 1986-2000 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Historic Production. During mining operations, in the Plomasas–La Cruz mine, they extracted lead and zinc minerals with variable silver, gold and copper content, as well as lead and zinc concentrates as shown in the table below. | ||||||||||||||||
| Production Years | ||||||||||||||||
| Concept | Unit | 1986 | 1987 | 1988 | 1989 | 1990 | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 |
| ORE MILLED | tonnes | 65,133 | 164,974 | 164,239 | 147,611 | 194,279 | 202,976 | 193,739 | 188,227 | 172,983 | 178,282 | 185,026 | 189,611 | 180,884 | 187,471 | 94,381 |
| MILL FEED | ||||||||||||||||
| Au | g/l | 0 | 0 | 0 | 0 | 0 | 0 | 0.64 | 1.74 | 1.61 | 1.06 | 0.94 | 0.63 | 0.75 | 0.56 | 1.17 |
| Ag | g/l | 338 | 334 | 309 | 220 | 204 | 197 | 195 | 177 | 111 | 97 | 116.9 | 79.77 | 88.73 | 96.87 | 103 |
| Pb | % | 2.62 | 1.19 | 1.4 | 1.83 | 2.47 | 3.08 | 3.13 | 3.37 | 2.25 | 2.25 | 2.15 | 1.79 | 1.88 | 1.96 | 1.67 |
| Cu | % | 0.18 | 0.11 | 0.13 | 0 | 0.12 | 0 | 0.16 | 0.22 | 0.15 | 0.13 | 0.11 | 0.16 | 0.16 | 0.13 | 0.19 |
| Zn | % | 1.58 | 0.97 | 1 | 1.22 | 1.4 | 1.83 | 2.66 | 2.28 | 2.28 | 2.17 | 1.85 | 2.02 | 2.42 | 2.08 | 2.57 |
| METAL CONTENT | ||||||||||||||||
| Au | g | 0 | 0 | 0 | 0 | 0 | 0 | 124 | 327 | 279 | 189 | 174 | 120 | 135 | 105 | 110 |
| Ag | g | 32,135 | 55,101 | 50,750 | 32,474 | 39,633 | 39,986 | 37,777 | 33,316 | 19,201 | 17,293 | 21,608 | 15,130 | 16,050 | 18,161 | 9,674 |
| Pb | t | 2,492 | 1,963 | 2,299 | 2,701 | 4,799 | 6,252 | 6,064 | 6,343 | 4,359 | 4,011 | 3,976 | 3,404 | 3,399 | 3,670 | 1,572 |
| Cu | t | 171 | 181 | 214 | - | 233 | - | 310 | 414 | 259 | 232 | 205 | 312 | 291 | 247 | 177 |
| Zn | t | 1,503 | 1,600 | 1,642 | 1,801 | 2,720 | 3,714 | 4,262 | 5,007 | 3,944 | 3,869 | 3,425 | 3,836 | 4,185 | 3,907 | 2,429 |
| RECOVERY | ||||||||||||||||
| Au in Pb, Cu, Zn Concentrate | 0-0-0 | 0-0-0 | 0-0-0 | 0-0-0 | 0-0-0 | 0-0-0 | 48-0-8 | 0 | 48-0-9 | 36-0-14 | 40-0-12 | 36-0-15 | 40-0-18 | 55-0-44 | 0 | |
| Ag in Pb, Cu, Zn Concentrate | 52-0-0 | 67-0-0 | 40-0-0 | 61-0-0 | 67-0-0 | 69-0-0 | 56-0-9 | 56-0-3 | 46-0-12 | 40-0-16 | 40-0-32 | 34-0-19 | 38-0-29 | 49-0-18 | 0 | |
| Pb in Pb Concentrate | 49.5 | 62 | 34.5 | 70 | 79 | 67 | 58 | 59 | 56 | 54 | 56 | 57 | 58 | 64 | 0 | |
| Cu in Cu Concentrate | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Zn in Zn Concentrate | 0 | 0 | 0 | 0 | 0 | 0 | 21 | 15 | 36 | 44 | 50 | 51 | 51 | 52 | 0 | |
| CONCENTRATE PRODUCTION | t | |||||||||||||||
| Pb | 2,856 | 3,269 | 4,308 | 4,995 | 8,886 | 9,865 | 6,915 | 2,407 | 3,983 | 3,484 | 3,650 | 3,371 | 3,280 | 4,138 | 2,240 | |
| Bulk | 181 | 56 | 56 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Zn | 0 | 0 | 0 | 0 | 0 | 0 | 2,190 | 1,629 | 3,155 | 3,884 | 4,116 | 4,366 | 5,053 | 4,200 | 2,466 |
Numbers are rounded
*Source: Internal IMMSA reports
The drilling data also indicate high-grade silver and gold mineralization in unmined hanging wall and footwall zones around the mineralized hydrothermal breccia. The Company confirmed the multicommodity nature of the mineralization and high-grade silver and gold zones through its re-examination of the extensive drilling database, its re-logging and re-sampling work, and its delineation of new mineralized zones outside of the historically mined area as a result of its 15,944-metre surface and underground drilling program during 2020 and early 2021 (see News Release dated July 7, 2021).
Geology
The Plomasas Project is located in the southwestern edge of the Sierra Madre Occidental (SMO), which formed as the result of Cretaceous–Cenozoic magmatic and tectonic episodes related to the subduction of the Farallon Plate beneath North America, and to the opening of the Gulf of California. The local geology at the Project can be subdivided into two distinct underlying rock types: the first distinct rock type comprises bimodal volcanic rock units, dominated by andesitic pyroclastic units, tuffs, and extrusive flows. The bimodal volcanic rock units are underlain by a basal volcaniclastic sedimentary rock unit that is possibly of older Jurassic age.
Mineralization on the Plomasas Property can be described as intermediate- to low-sulphidation epithermal, which occurs at the San Marcial Area, the Plomasas Mine Area and the San Juan–La Colorada Area. Several episodes of mineralization have been identified and are intricately connected to the tectonic and structural evolution of the SMO during the Tertiary.
The San Marcial Property displays indications of a low-sulphidation epithermal system, with four multiphase mineralizing events, as identified by minerographic studies, rich in silver, lead, and zinc. In the San Marcial Property, a number of mineralization styles have been identified, including three main breccia types: a hematitic hydrothermal breccia—hematite + calcite + quartz; a siliceous hydrothermal breccia—chlorite + quartz + pyrite; and a tectonic breccia.
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
The San Marcial breccia-hosted deposit is strongly associated with a NW-SE-oriented structural trend, and possibly affected by other crosscutting structural features. While the San Marcial deposit is best considered a silver deposit, minor zinc and lead are closely associated with silver.
The SE Area discovery at the San Marcial Property, drill hole SMS22-10, confirmed the extension of breccia mineralization along the NW-SE target contact zone, approximately 250 metres to the southeast of the original resource. The SE Area hosts hydrothermal breccia-style mineralization. The host rocks differ from those hosting silver mineralization on the NW portion of the San Marcial Mineral Resource, consisting of a wide chlorite-rich volcano-sedimentary unit which consists of brecciation and stockworks more than 100 metres thick in places and flooded by hematite-calcite-quartz. The mineralization is silver-rich with lesser Pb-Zn-Au. The Company is investigating the potential continuity of this mineralization further to the southeast along the target contact.
At the Plomosas Mine Area, a hydrothermal polymetallic breccia mineralization (Pb-Zn-Au-Ag) mainly occurs as massive to close-spaced disseminated sulphides, with veins, stockworks, and sulphide stringers hosted in brecciated sequences of rhyolite and andesite tuffs. The breccia is hosted in a mainly N-S-oriented shallow-angle fault, dipping west. Quartz and calcite are the main gangue minerals in the breccia. Sulphide mineral assemblages include galena, sphalerite, pyrite, chalcopyrite, and bornite. Silver-rich minerals such as acanthite and argentite are common. Late-stage Ag-Au-rich epithermal quartz veining in high-angle faults is commonly observed overprinting Pb-Zn-Ag mineralization in the hydrothermal breccias and enriching the mineral body with Ag-Au or defining precious metals-only mineralized zones.
At the San Juan-La Colorada Areas in the Plomosas Property, a large intermediate- to low-sulphidation epithermal gold-silver system is hosted predominantly by high-angle faults, whereas the Pb-Zn-Ag mineralization is preferentially in NW-SE-oriented, east-dipping, shallow-angle faults.
Exploration Year ended 2024
Exploration activities in the year ended December 31, 2024, focused on data re-processing, geological and data integration – modelling using existing data, and permitting activities, to support exploration of the new drill targets in the vicinity of the San Marcial Resource.
Resource
The Mineral Resource Estimate ("MRE") filed on May 3, 2023, represents GR Silver's second MRE for the San Marcial, Plomosas Mine, and San Juan-La Colorada Areas, within the Plomosas Project. The MRE incorporates GR Silver drilling to January 4, 2023, on San Marcial, January 20, 2023 on Plomosas Mine and March 3, 2023 on San Juan, and previous drilling completed by First Majestic, Silvermex, Gold-Ore, Aurcana, and IMMSA.
The San Marcial Area MRE is based on 122 drill holes totaling 19,451 m. The Plomosas Mine Area MRE is based on 60,349 m of drilling from 432 validated drill holes. In all, 133 historical IMMSA drill holes—those which were only partially sampled—were removed from the database because nearby recent drilling indicated that the mineralized zone was wider than depicted by the old IMMSA partially sampled holes. The San Juan-La Colorada Area MRE includes 54,823 m of drilling from 294 holes. Other areas have historical drill holes that have not been incorporated in this update of the NI 43-101 MRE for the Plomosas Project.
March 31, 2025 Management Discussion and Analysis
17 | Page
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
The reasonable prospect of eventual extraction was defined by generating a Whittle-optimized pit shell based on the metal prices and recoveries given in Table 6, and assuming a total open pit mining cost and processing cost of US$30/t supported by data collected from similar deposits and operations in Sinaloa State. Underground resources were restricted to shapes defined by stope optimizer software assuming combined underground mining and processing costs of US$60/t supported by data collected from similar deposits and operations in Sinaloa State.
Table 6: Recoveries for the San Marcial, Plomasas Mine, and San Juan–La Colorada Areas
| Metal | Price (US$)* | Recoveries (%) | ||
|---|---|---|---|---|
| San Marcial | Plomasas | San Juan–La Colorada | ||
| Copper | 4.20/lb | 80 | 80 | 26 |
| Lead | 1.10/lb | 59 | 69 | 58 |
| Zinc | 1.30/lb | 80 | 75 | 47 |
| Gold | 1,750/oz | 80 | 86 | 79 |
| Silver | 22.00/oz | 94 | 74 | 71 |
Notes: *Metal prices are derived from Energy & Metals Consensus Forecasts long-term pricing (December 2022); oz = troy ounce.
The independent QP estimates that the Plomasas Project contains combined Indicated Mineral Resources totalling 15.0 Mt grading 0.18 g/t Au, 117 g/t Ag, 0.4% Pb, and 0.6% Zn; and 9.0 Mt of Inferred Mineral Resources grading 0.38 g/t Au, 78 g/t Ag, 0.7% Pb, and 1.0% Zn.
OUTLOOK
Our Primary Objective for 2025: Expansion of the Mineralization Footprint at San Marcial
Management recognizes that the Company’s greatest value driver is exploration of the highly prospective San Marcial system with its silver-dominant, wide and continuous mineralization and discoveries. GR Silver is conducting detailed data modelling studies in conjunction with CODES, the globally regarded Centre for Ore Deposit and Earth Sciences at the University of Tasmania. This partnership with Dr. Paula Montoya unlocks key information to assist the Company to define new mineralized zones potentially comparable with other major silver districts in the Sierra Madre Occidental. Importantly, fine-tuning of the geological model at San Marcial has yielded several high-priority targets for further drilling. Four of these targets are currently selected for new step-out and exploration drilling (news release dated March 3, 2025).
The Company has continuously increased resources at the San Marcial Property since its acquisition. The Company believes the studies in progress, in particular with CODES, may catalyze the further expansion of the resource to the northwest and southeast as well as sub-parallel zones. Step-out drilling after the 2023 MRE continued to demonstrate wide, silver dominant mineralization at relatively shallow depths, extending the mineralized footprint as much as 500 m to the southeast. We believe that follow up drilling to depth and to the southeast is highly prospective at San Marcial.
The identification of the controls on mineralization at San Marcial resulted in the recognition of the presence of the wide mineralized SE Discovery zone at a shallow depth but not outcropping. Geological interpretation, lithogeochemical sampling, and geophysical modelling together with the analysis of key structural corridors provides a template for new exploration and drilling, recognizing that mineralization can be blind, i.e., not obvious at surface.
GR Silver has been engaged in securing the necessary permits for expanded drill programs on the San Marcial Property. As we await these additional permits, our geologists have been active in surface exploration, analyzing data, and deposit modeling while based in our offices in El Rosario. Drill programs
March 31, 2025 Management Discussion and Analysis
18 | Page
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
have been designed, and details will be provided as programs are initiated. The first phase of 2025 drilling has commenced with approximately 1,300 metres planned in up to seven shallow holes targeting near surface, high-grade silver mineralization.
On April 9, 2025, the Company announced the temporary pause of field work at the Plomosas Project to allow time for the Government of Mexico to increase security and stability in the project region⁵.
On May 20, 2025, the Company announced the resumption of field work at the Plomosas Project due to improved conditions regarding the security situation in the project region⁶.
Surface exploration efforts continue with the support of data modelling and mineral prospectivity assessment along the major regional structures in the San Marcial Property. Initial reconnaissance of silver mineralized hydrothermal breccias outcropping in the northwest and southwest areas on the edge of a large geophysical anomaly (chargeability) has encouraged the Company to continue surface exploration. To date, only 25% of the footprint defined by coincident geophysical and geochemical anomalies (Figure 4), and highlighted by the drill hole SMS22-10 intercept that cut 101 m averaging 308 g/t Ag including 0.8 m grading 7,139 g/t Ag at shallow depth, has been tested.
The Former Plomosas Mine: An Unrecognized Asset
As previously noted (news release dated March 4, 2024), GR Silver engaged private local operators (mining and milling) to conduct a small-scale BSTM program at the historical San Juan mine site, which is located on a parallel structure several kilometres west of the former Plomosas Mine. The program yielded valuable incremental knowledge related to high-grade modeling and targeting, grade reconciliation, and mineral deposit modeling to define new drill targets. From January to September 2024, 20,620 t of material were mined and 20,430 t milled by the private local operators. A total of 420 t (dry) of lead concentrate were sold, averaging 10.43% Pb, 8,357 g/t Ag, and 8.19 g/t Au, with proceeds contributing to Other Income in the Company's financial statements.
Given the success of the San Juan BSTM program, management is exploring similar options for the former Plomosas Mine. The former Plomosas Mine offers:
- Broad lead-zinc-silver-gold mineralization over average widths exceeding 20m.
- Existing infrastructure including road access, power to site, 7.4km of underground development with excellent ground conditions;
- Mining licences and exploration and exploitation agreements with ejidos in place and fully owned land; and,
- Advanced geological, metallurgical and engineering knowledge from recent studies as well as 15 years of production records by the previous operator (1986 to 2000).
The Company's main focus is exploration at San Marcial, however to generate additional shareholder value, management has signed several Non-Disclosure Agreements and participated in due diligence
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
exercises in support of a potential BSTM at the former Plomosas Mine. Although management is encouraged by our ongoing efforts, there are no guarantees that any of these discussions will come to fruition on a forward-looking basis.
OTHER PROJECTS
GR Silver subsidiaries hold title to the following additional mining concessions (Table 7) and mining concession applications (Table 8) in the Rosario Mining District. Applicable royalties are noted in Table 9.
The Company's non-core concessions remain available for partnership or outright purchase and outreach has been made to encourage potential monetization.
Table 7: Other Mining Concessions
| No. | MINING CONCESSIONS | TITLE | SURFACE AREA (ha) |
|---|---|---|---|
| GOLDPLAY DE MEXICO, S.A. DE C.V. | |||
| 1 | Habal | 246381 | 1738.99 |
| 2 | San Pablo | 236078 | 80.00 |
| 3 | San Pablo 2 | 226963 | 220.00 |
| 4 | Las Dos Chiquitas | 232406 | 278.16 |
| 5 | Baluarte 2 | 226962 | 50.00 |
| 6 | Habal Sur | 243620 | 1406.57 |
| 7 | Tigra Negra Fracc. II | 228755 | 2.70 |
| 8 | Tigra Negra Fracc. III | 228756 | 1.35 |
| 9 | Tigra Negra Fracc. IV | 228757 | 1.35 |
| 10 | Tigra Negra Fracc. V | 228758 | 1.35 |
| 11 | Placer II | 246149 | 11107.24 |
| 12 | Yauco | 246808 | 4518.99 |
| MINERA LA RASTRA, S.A. DE C.V. | |||
| 1 | Rosario 4 | 212656 | 239.78 |
| 2 | Rosario I | 221093 | 406.69 |
| 3 | Rosario II | 228255 | 736.18 |
| 4 | La Chispera | 213510 | 10.00 |
| 5 | La Chispera II | 225866 | 226.07 |
| 6 | Potrero No. 2 | 195916 | 221.00 |
| 7 | El Potrero | 203534 | 100.00 |
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
Table 8: Other Mining Concession Applications
| No. | MINING CONCESSION APPLICATIONS | TITLE | AURFACE AREA (ha) |
|---|---|---|---|
| GOLDPLAY DE MEXICO, S.A. DE C.V. (Applications) | |||
| 1 | Indio Fracc. I | 59/7706 | 32.77 |
| 2 | Indio Fracc. II | 59/7706 | 0.38 |
| 3 | Indio Fracc. III | 59/7706 | 3.89 |
| 4 | La Union 2 Fracc. 1 | 95/13335 | 5549.91 |
| 5 | La Union 2 Fracc. 2 | 95/13335 | 18.86 |
ROYALTIES
A summary of royalties applicable to GR Silver’s mining concessions is included in the following Table 9.
TABLE 9: Royalties applicable to GR Silver concessions
| Name of Concession Owner | Concession & Royalty Details | Details of Buy-Back Rights |
|---|---|---|
| Minera La Rastra | Concessions: “Plomosas”, “Segunda Ampl. de Plomosas”, “Continuación de Plomosas”, “La Rastra 2”, “San Juan”, “Potrero No. 2”, “La Estrella”, “El Potrero”, “Plomosas 3”, “Plomosas 2”, “Rosario 4”, “La Chispera”, “La Rastra”, “Rosario I”, “Plomosas 4”, “La Chispera II”, “Los Arcos” and “Rosario II” |
Royalty: Monthly royalties are payable to Industrial Minera Mexico, S.A. de C.V., depending on the price of zinc (Zn), as indicated below:
(a) 3.5% when the price of Zn is equal or more than US$1.50 per lb;
(b) 3.0% when the price of Zn is equal or more than US$1.20 per lb;
(c) 2.5% when the price of Zn is equal or more than US$1.00 per lb; and
(d) 1.75% when the price of Zn is less than US$1.00 per lb | N/A |
| Minera La Rastra | Concessions: “Plomosas”, “Segunda Ampl. de Plomosas”, “Continuación de Plomosas”, “La Rastra 2”, “San Juan”; “Potrero No. 2”, “La Estrella”, “El Potrero”, “Plomosas 3”, “Plomosas 2”, “Rosario 4”, “La Chispera”, “La Rastra”, “Rosario I”, “Plomosas 4”, “La Chispera II”, “Los Arcos” and “Rosario II”
Royalty: 2.0% NSR royalty payable to Royalty & Streaming Mexico, S.A. de C.V. | Minera La Rastra has the one-time right at any time to buy back half of this royalty (i.e. 1%) for US$1,000,000 plus VAT |
| Minera San Marcial | Concessions: “Mina de San Marcial” and “Ampliación San Marcial”
Royalty: 3.0% NSR royalty payable to Met-Sin Industriales, S.A. de C.V. | Minera San Marcial has the right to buy back this royalty for US$600,000 plus VAT per 1%, which right can be exercised at any time and from time to time in whole or in part. |
| Minera San Marcial | Concessions: “Mina de San Marcial” and “Ampliación San Marcial”
Royalty: 0.75% NSR royalty is payable to EMX Royalty Corporation | Minera San Marcial has the right to buy back this royalty for CAD$1,250,000 plus VAT, which right can be exercised at any time |
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
TABLE 9.1: Royalties applicable to GR Silver concessions (Non-Core Concessions)
| Name of Concession Owner | Concession & Royalty Details – Non-Core Concessions | Details of Buy-Back Rights |
|---|---|---|
| Goldplay de Mexico | Concessions: “Habal”, “San Pablo 2”, “Baluarte 2”, “Las Dos Chiquitas”, “San Pablo”, “Tigra Negra Fracc. II”, “Tigra Negra Fracc. III”, “Tigra Negra Fracc. IV” and “Tigra Negra Fracc. V” | |
| Royalty: 1.0% NSR royalty payable to Camargo. | Goldplay de Mexico has the right to buy back this royalty for US$1,000,000 plus VAT, which right can be exercised at any time. | |
| Goldplay de Mexico | Concessions: “Habal”, “San Pablo 2” and “Baluarte 2” | |
| Royalty: 0.5% NSR royalty payable to Erme Enriquez Minjarrez | Goldplay de Mexico has the right to buy back this royalty for US$1,000,000 plus VAT, which right can be exercised at any time. | |
| Goldplay de Mexico | Concessions: “Habal Sur”, “El Placer II” and “Yauco” | |
| Mining Concession Applications: “La Union 2 Fracc. 1” (File 95/13335) and “La Union 2 Fracc. 2” (File 95/13335) | ||
| Royalty: 1.0% NSR royalty payable to Sandstorm Gold Ltd. (“Sandstorm”) | N/A | |
| Goldplay de Mexico | Concessions: “El Habal”, “San Pablo 2”, “Baluarte 2”, “Las Dos Chiquitas” and “San Pablo” | |
| Royalty: Concessions are subject to an option agreement in which Sandstorm has the exclusive right to acquire a 1% NSR royalty at an exercise price of US$1,000,000 per 0.5% NSR. | N/A | |
| Goldplay de Mexico | Concessions: “Habal Sur”, “El Placer II” and “Yauco” | |
| Royalty: 1.0% NSR royalty payable to Oro Gold de Mexico | N/A | |
| Goldplay de Mexico | Mining Concession Applications: “Indio Fracc. I” (File 59/7706), “Indio Fracc. II” (File 59/7706), “Indio Fracc. III” (File 59/7706), “La Union 2 Fracc. 1” (File 95/13335) and “La Union 2 Fracc. 2” (File 95/13335) | |
| Royalty: 1.0% NSR royalty payable to Oro Gold de Mexico | N/A |
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
SELECTED FINANCIAL INFORMATION AND RESULTS OF OPERATIONS
The following table sets out selected financial information with respect to the Company's Interim Financial Statements for the three-month period ended March 31, 2025. The following should be read in conjunction with the Annual Financial Statements for the years ended December 31, 2024, and 2023.
| Summary of Operations | Three months ended | |
|---|---|---|
| March 31, 2025 | March 31, 2024 | |
| $ | $ | |
| Total expenses | (1,475,538) | (4,536,768) |
| Net loss for the period | (1,471,048) | (5,137,411) |
| Loss per share - basic and diluted | (0.00) | (0.02) |
| Balance Sheet Summary | March 31, 2025 | December 31, 2024 |
| --- | --- | --- |
| $ | $ | |
| Current assets | 1,953,575 | 1,406,503 |
| Non-current assets | 8,306,328 | 8,313,801 |
| Total assets | 10,259,903 | 9,720,304 |
| Current liabilities | 1,456,881 | 1,372,351 |
| Non-current liabilities | 526,120 | 526,120 |
| Total liabilities | 1,983,001 | 1,898,471 |
| Working capital | 496,694 | 34,152 |
During the three-month period ended March 31, 2025, the Company had a net loss of $1,471,048 (March 31, 2024 – $5,137,441). Total expenses decreased to $1,475,538 (March 31, 2024 – $4,536,768) a decrease of $3,061,230 or 67%. The decrease in net loss for the three-month period ended March 31, 2025, was primarily attributed to reduced expenditures in relation to the disposition of Marlin Gold Mining Ltd. ("Marlin") which closed July 16, 2024. During the three months ended March 31, 2025 the Company recorded concession fees of $291,697 (March 31, 2024 – $3,516,292) a decrease of $3,224,595 or 92% due to the disposition of the La Trinidad project held by Marlin.
The Company's operations for the three-month period ended March 31, 2025, were focused on the continued exploration of the San Marcial Area of its Plomasas Project in Mexico. The Company also successfully improved its financial condition through the exercise of warrants raising proceeds of $1,783,778.
Summary of significant Balance Sheet items for the period ended March 31, 2025
The primary factors affecting the changes to the balance sheet items were as follows:
- Cash increased to $1,716,701 (December 31, 2024 - $1,162,225) an increase of $554,446, primarily due to the exercise of warrants, which raised proceeds of $1,783,778.
- Raised gross proceeds of $1,783,778 the exercise of warrants. A total of 11,838,520 warrants were exercised at a price of $0.15 raising proceeds of $1,775,778 and 100,000 warrants were exercised at a price of $0.08 raising proceeds of $8,000.
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
- Cash of $1,229,332 was utilized in operating activities for operations and exploration activity.
- Value added taxes (“VAT”) receivable increased to $246,807 (December 31, 2024 - $208,316) in relation to VAT incurred during the period in Mexico.
- Accounts payable and accrued liabilities decreased to $575,694 (December 31, 2024 - $631,496) a decrease of $55,802 or 9%.
- Mining concession fees payable increased to $881,187 (December 31, 2024 - $740,855) an increase of $140,332 which was primarily related to the non-core Goldplay concessions.
Discussion of results – Three-Month Period Ended March 31, 2025
The Company’s net loss for the three-month period to March 31, 2025, was $1,471,048 (March 31, 2024 – $5,137,411). During the period the Company’s total expenses were $1,475,538 (March 31, 2024 – $4,536,768). Significant fluctuations during the three-months included the following:
The Company incurred concession fees of $291,697 (March 31, 2024 - $3,516,292). The reduction was as a result of the Company’s disposition of Marlin, and a corresponding reduction of concession fees related to the La Trinidad Project.
Consulting of $42,943 (March 31, 2024 - $22,415) related to fees for accounting, project investigation, and other operational services from independent contractors.
Depreciation of $45,964 (March 31, 2024 - $87,838) related to depreciation of the Company’s equipment. The Company disposed of certain exploration equipment in the prior year therefore there was a corresponding decrease in depreciation.
Exploration expenditures were $379,739 (March 31, 2024 - $381,680) as per the table below:
| March 31, 2025 | March 31, 2024 | |
|---|---|---|
| $ | $ | |
| Community relations | 26,637 | 23,169 |
| Drilling | 122,782 | - |
| Environmental / reclamation | - | 3,176 |
| Field | 101,985 | 125,915 |
| Geochemistry | - | 215,031 |
| Geological | 128,335 | 4,764 |
| Topography | - | 9,625 |
| Total | 379,739 | 381,680 |
Exploration activities during the quarter focused on recommencement of drilling, with data re-processing, geological modelling, and data integration to support exploration of the new targets in the vicinity of the San Marcial discovery and resource.
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
Investor relations of $122,406 (March 31, 2024 - $20,835) related to the Company's engagement with ICP as the Company's Market Maker, as well as the Company's participation and presentations at corporate investor events.
Office expense of $84,327 (March 31, 2024 - $72,648) related to general corporate administration, office supplies, and rent.
Professional fees of $86,977 (March 31, 2024 - $152,170) were related to Audit, legal, and accounting services. The decrease can be attributed to lower transactional activity during the current period as the Company was engaged in strategic activities such as the sale of Marlin Gold Mining Ltd. and the Waiver and release entered with Mako Mining Corp.
Salaries of $231,387 (March 31, 2024 - $239,999) related to salaries paid to the CEO, COO and employees in Mexico.
Share-based compensation of $142,339 (March 31, 2024 - $6,128) related to the vesting of certain equity instruments, including stock options, deferred share units, and performance share units. In the current period a higher number of equity instruments vested relative to the prior period.
Transfer agent and filing fees of $23,963 (March 31, 2024 - $17,143) related to transfer agent, TSX-V sustaining fees, OTCQB fees, and SEDAR+ filing fees.
Accretion expense on reclamation provision was $Nil (March 31, 2024 - $1,765). No incremental accretion expense was required for the period.
Foreign exchange loss of $16,070 (March 31, 2024 – loss $869,365) was related to the translation of the Company's Mexican operations from Mexican pesos to Canadian dollars as well as foreign currency variances recorded upon the settlement of certain foreign currency-denominated transactions. As a result of the disposition of Marlin the Company is less exposed to foreign currency fluctuations.
Loss on sale of equipment of $Nil (March 31, 2024 – loss of $5,374) related to the disposition of non-essential exploration equipment.
Other income of $18,978 (March 31, 2024 - $268,963) related to the rental of the Company's equipment in Mexico. In the prior comparative period other income related to income from bulk processing of material by contract mining operators on the Company's non-core mineral concessions as well as equipment rental income.
LIQUIDITY AND CAPITAL RESOURCES
The Company's approach to managing liquidity risk is to forecast cash flows required for its planned operating, investing and financing activities so that it will have sufficient liquidity to meet liabilities when due. Management expects that cash flows related to operating, general and administrative, and exploration and evaluation activities will be funded by the Company's cash on hand. While the Company's current cash is sufficient to settle its current liabilities, it may be insufficient to finance all currently proposed, planned or anticipated general and administrative and exploration, evaluation and resource development program activities, and the Company could have to seek additional financing in order to further fully evaluate its projects, or modify its planned programs as appropriate. The Company will
March 31, 2025 Management Discussion and Analysis
25 | Page
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
continue to forecast its cash flows and investigate opportunities to obtain further financing, if necessary, through transactions to maintain liquidity, such as equity placements, debt or joint venture arrangements. The quantity of funds to be raised and the terms of any equity financing that may be undertaken will be negotiated by management as opportunities to raise funds arise. There can be no assurance that such funds will be available on favorable terms, or at all.
As of March 31, 2025 the Company had a working capital of $496,694 (December 31, 2024 – working capital of $34,152). After March 31, 2025, the Company raised gross proceeds of $1,844,700 in a non-brokered private placement financing of 14,190,000 units at a price of $0.13 per unit. Included in current liabilities is $743,456 in relation to Mexico concession fees payable for the Company's Goldplay concessions. The Goldplay concessions are considered non-core and the Company does not expect to make these payments during the fiscal 2025 year.
During the three-month period ended March 31, 2025, the Company completed the following equity transactions:
- Issued 11,838,520 common shares upon the exercise of $0.15 warrants for proceeds of $1,775,778.
- Issued 100,000 common shares upon the exercise of $0.08 warrants for proceeds of $8,000.
Update on Prior Use of Proceeds Disclosure:
| Financing | Principal purpose as previously disclosed to December 31, 2024 | Financing Amount, net of share issue costs $ | Estimated Actual Expenditures $ |
|---|---|---|---|
| Non-brokered private placement February 9, 2024, of 6,700,000 units at a price of $0.10 per unit | General working capital and work programs on the Company’s Plomasas Project | 615,760 | 615,760 |
| Non-brokered private placement September 29, 2024, of 14,807,338 units at a price of $0.16 per unit | General working capital and exploration in the San Marcial Area of the Plomasas Project | 2,220,372 | 2,220,372 |
The table below highlights the Company's cash flows during the periods ended:
| Net cash provided by (used in) | March 31, 2025 | March 31, 2024 |
|---|---|---|
| $ | $ | |
| Operating activities | (1,229,332) | (1,283,433) |
| Investing activities | - | 699,099 |
| Financing activities | 1,783,778 | 615,761 |
| Cash, beginning | 1,162,255 | 100,573 |
| Cash, end | 1,716,701 | 132,000 |
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
SUMMARY OF QUARTERLY RESULTS
The following table sets forth selected quarterly consolidated financial information for each of the last eight quarters:
| March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | |
|---|---|---|---|---|
| $ | $ | $ | $ | |
| Net income (loss) | (1,471,048) | (1,339,307) | 25,735,963 | 25,598 |
| Earnings (loss) per share - basic | (0.00) | (0.02) | 0.08 | (0.02) |
| Earnings (loss) per share - diluted | (0.00) | (0.02) | 0.07 | (0.02) |
| Total assets | 10,259,903 | 9,720,304 | 11,116,943 | 10,215,975 |
| Working capital (deficiency) | 496,694 | 34,152 | 635,851 | (27,358,404) |
| March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | |
| --- | --- | --- | --- | --- |
| $ | $ | $ | $ | |
| Net income (loss) | (5,137,411) | (13,577,529) | (4,281,609) | (3,463,758) |
| Earnings (loss) per share - basic & diluted | (0.02) | (0.08) | (0.02) | (0.03) |
| Total assets | 10,232,676 | 10,723,449 | 23,949,492 | 24,127,557 |
| Working capital (deficiency) | (29,098,544) | (23,706,229) | (25,086,394) | (21,466,771) |
During the quarter ended March 31, 2025, the Company recorded a net loss of $1,471,048. During the quarter the Company's total expenses were $1,475,538, the most significant items were concession fees of $291,697, exploration expenditures of $379,739, investor relations of $122,406, and salaries and director fees of $231,387, and share-based compensation of $142,339.
During the quarter ended December 31, 2024, the Company recorded a net loss of $1,339,307. During the quarter the Company's total expenses were $1,048,822, the most significant items were exploration expenditures of $287,608, professional fees of $124,694, and salaries and director fees of $250,322, and share-based compensation of $144,801. Other items included an incremental a gain on disposition of Marlin of $132,054 related to VAT which was considered impaired at the disposition date, and a provision for VAT of $78,499.
During the quarter ended September 30, 2024, the Company completed a private placement raising gross proceeds of $2,369,174 and had warrants exercised for proceeds of $121,230. The Company recorded a net income of $25,735,963 and incurred expenses of $4,631,301 which included $3,422,935 in concession fees, $446,473 in exploration expenditures, salaries of $222,299, professional fees of $126,942, and share based compensation of $201,649. Other items included foreign exchange expense of $723,347, a gain on disposition of its Marlin subsidiary of $24,266,842, a loss on marketable securities of $113,772, a recovery of VAT of $286,970, retirement of concession fees of $6,496,684, and other income of $149,801.
During the quarter ended June 30, 2024, the Company had warrants exercised for proceeds of $653,377, recovered $623,981 in value added tax and incurred expenses of $2,427,740 which included $374,447 in exploration expenditures, $867,423 in concession fees, salaries of $221,145, professional fees of $348,644, and share based compensation of $395,787. The Company also incurred a foreign exchange gain of $1,957,851 and an unrealized gain on marketable securities of $296,700.
March 31, 2025 Management Discussion and Analysis
27 | Page
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
During the quarter ended March 31, 2024, the Company completed a private placement for gross proceeds of $620,000, recovered $58,838 in value added tax and incurred expenses of $4,536,768, which included $381,680 in exploration expenditures, $3,516,292 in concession fees, salaries of $239,999, professional fees of $170,347 and other of $228,450.
During the quarter ended December 31, 2023, the Company completed an initial tranche of a private placement for gross proceeds of $1,432,511 and incurred expenses of $4,694,620, which included $315,448 in exploration expenditures, $3,728,414 in concession fees, net of retirement of $(4,732,000), salaries of $233,704 and professional fees of $152,170.
During the quarter ended September 30, 2023, the Company completed an initial tranche of a private placement for gross proceeds of $329,875 and incurred expenses $4,371,676, which included $2,609,206 in exploration expenditures, concession fees, net of retirement of $897,804, salaries of $358,076 and professional fees of $75,739.
During the quarter ended June 30, 2023, the Company incurred expenses of $2,900,636, which included $1,279,751 in exploration expenditures, concession fees, net of retirement of $656,780, salaries of $392,368, professional fees of $138,664 and share based compensation of $53,911.
SHARE CAPITAL
Details of the Company’s capitalization are as follows:
| March 31, 2025 | Date of MD&A | |
|---|---|---|
| Common shares | 344,486,533 | 358,676,533 |
| Warrants | 61,446,419 | 69,344,819 |
| Stock options | 9,696,667 | 9,981,667 |
| DSUs | 243,068 | 543,356 |
| PSUs | 1,800,000 | 1,800,000 |
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
RELATED PARTY TRANSACTIONS
Key management personnel compensation for the periods ended was:
| | March 31
2025 | March 31
2024 |
| --- | --- | --- |
| | $ | $ |
| Salary paid to Eric Zaunscherb (CEO) | 25,000 | 25,000 |
| Salary paid to Marcio Fonseca (President and COO) | 65,000 | 65,000 |
| Consulting fees paid to Robert Payment (CFO) | 21,750 | - |
| Salary paid to Alejandro Cano (Country Manager, Mexico) | - | 37,521 |
| Consulting fees paid to Blaine Bailey (Corporate Secretary, former CFO) | - | 19,500 |
| Stock based compensation to Directors and Officers | 142,339 | 6,128 |
| Total | 254,089 | 153,149 |
| Share-based compensation | March 31, 2025 | March 31, 2024 |
| --- | --- | --- |
| Eric Zaunscherb (CEO) | 35,478 | - |
| Marcio Fonseca (President and COO) | 35,478 | - |
| Robert Payment (CFO) | 3,088 | - |
| Blaine Bailey (Corporate secretary, former CFO) | 20,000 | - |
| Trevor Woolfe (Director) | 17,401 | - |
| Larry Taddei (Director) | 12,242 | 6,128 |
| Jessica Van Den Akker (Director) | 9,326 | - |
| Brent McFarlane (Director) | 9,326 | - |
| Total | 142,339 | 6,128 |
These transactions were in the normal course of operations and were measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.
On October 18, 2024, the Company entered into an Independent Contractor Agreement (the "Agreement") with a company controlled by Robert Payment ("the Contractor") for CFO services. As compensation the Contractor is paid a monthly fee of $7,250. The Contractor may terminate the agreement by giving four weeks written notice and the Company may terminate the agreement by giving eight weeks written notice. Other than in the event the Company is insolvent and in the process of, or has filed for bankruptcy protection, if the Company disposes of more than 50% of the Company's voting shares or disposes of all or substantially all of its assets to another non-affiliated entity or entities, acquires all, or substantially all, of the assets of another non-affiliated entity or entities, or merges or amalgamates with another non-affiliated entity or entities, and the Contractor's services are materially reduced or become redundant, the Agreement will be deemed to have been terminated without cause, and the Contractor shall be entitled to receive a sum equivalent to eighteen months of service.
March 31, 2025 Management Discussion and Analysis
29 | Page
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
DISCLOSURE OF MANAGEMENT COMPENSATION
In accordance with the requirements of Section 19.5 of TSXV Policy 3.1, the Company provides the following disclosure with respect to the compensation of its directors and officers during the period:
- During the period ended March 31, 2025, and the year ended December 31, 2024, the Company did not enter any standard compensation arrangements made directly or indirectly with any directors or officers of the Company, for their services as directors or officers, or in any other capacity, with the Company or any of its subsidiaries except as disclosed under "Related Party Transactions".
- During the period ended March 31, 2025, and the year ended December 31, 2024, officers of the Company were paid for their services as officers by the Company as noted above under "Related Party Transactions".
- During the period ended March 31, 2025, and the year ended December 31, 2024, the Company did not enter an arrangement relating to severance payments to be paid to an officer of the Company as noted above under "Related Party Transactions".
ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS
The following table sets out the following material components for the periods presented:
| Period ended March 31, 2025 | Year ended December 31, 2024 | Year ended December 31, 2023 | |
|---|---|---|---|
| $ | $ | $ | |
| Exploration and evaluation assets or expenditures | 379,739 | 1,490,209 | 4,082,583 |
| Expensed research and development | - | - | - |
| Intangible assets arising from development | - | - | - |
| General and administrative expenses | 84,327 | 322,533 | 471,543 |
| Other material costs expensed or recognized as assets | 1,006,982 | (21,097,585) | 21,043,863 |
| Total | 1,471,048 | (19,284,843) | 25,597,989 |
OFF BALANCE SHEET ARRANGEMENTS
The Company does not have any off-balance sheet arrangements.
INVESTOR RELATIONS
On November 29, 2024, the Company engaged the services of ICP Securities Inc. ("ICP") to provide automated market making services, including use of its proprietary algorithm, ICP Premium™, in compliance with the policies and guidelines of the TSX Venture Exchange and other applicable legislation. ICP will be paid a monthly fee of $7,500, plus applicable taxes. The agreement between the Company and ICP was signed with a start date of November 29, 2024, and is for four (4) months (the "Initial Term") and shall be automatically renewed for subsequent one (1) month terms (each month called an "Additional Term") unless either party provides at least thirty (30) days written notice prior to the end of the Initial Term or an Additional Term, as applicable.
March 31, 2025 Management Discussion and Analysis
30 | Page
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
CRITICAL ACCOUNTING ESTIMATES
The preparation of the Company's condensed interim consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed interim consolidated financial statements, and the reported amounts of revenues and expenses during the reporting year. Areas requiring the use of estimates in the preparation of the Company's condensed interim consolidated financial statements include the carrying value and the recoverability of the exploration and evaluation assets included in the condensed interim consolidated statement of financial position, the assumptions used to determine the fair value of share-based payments in the condensed interim consolidated statement of comprehensive loss, and the estimated amounts of reclamation and environmental obligations. Management believes the estimates used are reasonable; however, actual results could differ materially from those estimates and, if so, would impact future results of operations and cash flows.
CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION
There were no changes in the Company's material accounting policies during the year ended December 31, 2024, that had a material effect on its consolidated financial statements. The Company's material accounting policies are disclosed in Note 2 to its consolidated financial statements for the year ended December 31, 2024.
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
Refer to Note 13 of the Company's condensed interim consolidated financial statements for the three month period ended March 31, 2025.
RISKS AND UNCERTAINTIES
Liquidity, Financing and Going Concern Risks
The Company has limited financial resources. There is no assurance given by the Company that it will be able to secure the financing necessary to explore, develop and produce its mineral properties. The Company does not presently have sufficient financial resources or operating cash-flow to undertake by itself all of its planned exploration and development programs. Further exploration and development of the Company's properties will therefore depend on the Company's ability to obtain additional required financing. There is no assurance the Company will be successful in obtaining the required financing on terms acceptable to it, or at all, the lack of which could result in the loss or substantial dilution of its interests (as existing or as proposed to be acquired) in its properties. The Company's ability to continue as a going concern is dependent on its ability to raise equity capital financings, exploration success, the attainment of profitable operations and the completion of further share issuances to satisfy working capital and operating needs. The Company, as of March 31, 2025, had a working capital of $496,694, and currently is exposed to significant liquidity risk and additional financing will be required and may not be attainable. Additional funds will be required for property expenditures, retention of essential personnel, general and administration and to maintain its listing on the TSX.V
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
Climate Change Risks
Governments are moving to introduce climate change legislation and treaties at the international, national, state/provincial and local levels. Regulations relating to greenhouse gas emission levels (such as carbon taxes) and energy efficiency are becoming more stringent. If the current regulatory trend continues, and the increased transitional risks evolve as society and industry work to reduce their reliance on carbon, the Company’s operating costs could increase at its operations. In addition, the physical risks of climate change may also have an adverse effect on the Company’s operations. These physical risks include changes in rainfall rates, rising sea levels, reduced water availability, higher temperatures, increased snowpack and extreme weather events. Such events could materially disrupt the Company’s operations if they affect any of the Company’s property sites, impact local infrastructure or threaten the health and safety of the Company’s employees and contractors, and there can be no assurances that the Company will be able to predict, respond to, measure, monitor or manage the physical risks posed as a result of climate change factors. Climate-related risks could also result in shifts in demand for certain commodities, including precious metals. The Company’s operations in Mexico are exposed to climate-related risks as a result of geographical location. The Company’s operations may be adversely affected by climate change factors.
The occurrence of any climate change violation or enforcement action may have an adverse impact on the Company’s operations, the Company’s reputation and could adversely affect the Company’s results of operations. As well, environmental hazards caused by third parties may exist on a property in which the owners or operators of the mining projects are not aware at present, and which could impair the commercial success, levels of production and continued feasibility and project development and mining operations on these properties.
The Company acknowledges international and community concerns around climate change and supports initiatives consistent with international initiatives on climate change.
Exploration and Development Risks
There is no assurance given by the Company that its exploration and development programs and properties will result in the discovery, development or production of a commercially viable deposit or ore body. The business of exploration for minerals and mining involves a high degree of risk. Few properties that are explored are ultimately developed into producing mines. There is no assurance that the Company’s mineral exploration activities will result in any discoveries of bodies of commercial ore. The economics of developing mineral properties are affected by many factors including capital and operating costs, variations of the grades and tonnages of ore mined, fluctuating metal prices, costs of mining and processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection. Substantial expenditures are required to establish resources or reserves through drilling and other work, to develop metallurgical processes to extract metal from ore, and to develop the mining and processing facilities and infrastructure at any site chosen for mining. No assurance can be given that funds required for exploration and/or development can be obtained on a timely basis. The marketability of any metals or minerals acquired or discovered may be affected by numerous factors which are beyond the Company’s control and which cannot be accurately foreseen or predicted, such as market fluctuations, the global marketing conditions for precious and base metals, the proximity and capacity of required processing facilities, mineral markets and required processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting minerals and environmental protection.
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
Estimates of Mineral Deposits
The Company provides no assurance that any estimates of mineral deposits or resources will materialize on any of its properties. No assurance can be given that any identified mineralization will be developed into a coherent mineralization deposit, or that such deposit will even qualify as a commercially viable and mineable ore body that can be legally and economically exploited. Estimates regarding mineralized deposits can also be affected by many factors such as permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In addition, the grades and tonnages of ore ultimately mined may differ from that indicated by drilling results and other exploration and development work. There can be no assurance that test work and results conducted and recovered in small-scale laboratory tests will be duplicated in large-scale tests under on-site conditions. Material changes in mineralized tonnages, grades, dilution and stripping ratios or recovery rates may affect the economic viability of projects. The existence of mineralization or mineralized deposits should not be interpreted as assurances of the future delineation of ore reserves or the profitability of any future operations.
Estimates of Indicated and Inferred Mineral Resources
The Company uses the terms "Indicated Mineral Resources" and "Inferred Mineral Resources" in its public disclosures. The Company advises investors that these terms as recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), and differ from the standards for such terms adopted in other countries. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into Mineral Reserves. In addition, "Inferred Mineral Resources" are Mineral Resources for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. "Inferred Mineral Resources" are based on limited information and have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of "Inferred Mineral Resources" could be upgraded to "Indicated Mineral Resources" with continued exploration. Under Canadian rules, estimates of Inferred Mineral Resources are considered too geologically speculative to have the economic considerations applied to them to enable them to be categorized as Mineral Reserves and, accordingly, "Inferred Mineral Resources" must not be included in the economic analysis, production schedules, or estimated mine life in publicly disclosed feasibility or pre-feasibility studies, or in the life of mine plans and cash flow models of developed mines. "Inferred Mineral Resources" can only be used in economic studies as provided under NI 43-101. Investors are cautioned not to assume that part or all of an Inferred Mineral Resource exists, or is economically mineable.
Commodity Prices
The Company has no control over future commodity prices. The mining industry is competitive and commodity prices fluctuate constantly so that there is no assurance, even if commercial quantities of a mineral resource are discovered, that a profitable market will exist for the sale of same. Factors beyond the control of the Company may affect the marketability of any substances discovered. The prices of precious and base metals fluctuate on a daily basis, have experienced volatile and significant price movements over short periods of time, and are affected by numerous factors beyond the Company's control, including international economic and political trends, expectations of inflation, currency exchange fluctuations (specifically, the U.S. dollar relative to other currencies), interest rates, central bank transactions, world supply for precious and base metals, international investments, monetary systems, and global or regional consumption patterns (such as the development of gold coin programs), speculative activities and increased production due to improved mining and production methods. The supply of and
March 31, 2025 Management Discussion and Analysis
33 | Page
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
demand for precious and base metals are affected by various factors, including political events, economic conditions and production costs in major producing regions, and governmental policies with respect to precious metal holdings by a nation or its citizens. The exact effect of these factors cannot be accurately predicted, and the combination of these factors may result in the Company not receiving adequate returns on invested capital or the investments retaining their respective values. There is no assurance that the prices of gold, silver and other precious and base metals will be such that the Company properties can be mined at a profit. The Company is particularly exposed to the risk of movement in the price of silver and gold. Declining market prices for silver and/or gold could have a material effect on the Company's perceived value and profitability potential.
Cost Estimates May not be Accurate
The Company prepares budgets and estimates of cash costs and capital costs for our operations and our main costs relate to material costs, workforce and contractor costs, and energy costs. As a result of the substantial expenditures involved in the exploration and development of mineral projects and the fluctuation of costs over time, projects may be prone to material cost overruns. Our actual costs may vary from estimates for a variety of reasons, including short-term operating factors; revisions to exploration and development plans; risks and hazards associated with exploration, development and mining; natural phenomena, such as inclement weather conditions, water availability and unexpected labour issues, labour shortages, strikes or community blockades and quality of existing infrastructure being less than expected. Many of these factors are beyond the Company's control and the inaccuracy of any estimates may result in the Company requiring additional capital and time to execute on its exploration and development plans.
Operating Hazards and Other Uncertainties
The Company's business operations are subject to risks and hazards inherent in the mining industry. The exploration for and the development of mineral deposits involves significant risk, including but not limited to:
- environmental hazards;
- discharge of pollutants or hazardous chemicals;
- industrial accidents;
- labour disputes and shortages;
- supply and shipping problems and delays;
- shortage of equipment and contractor availability;
- unusual or unexpected geological or operating conditions;
- fire;
- changes in the regulatory environment; and
- natural phenomena such as inclement weather conditions, floods and earthquakes.
These or other occurrences could result in damage to, or destruction of, mineral properties, personal injury or death, environmental damage, delays in mining, monetary losses and possible legal liability. The Company could also incur liabilities as a result of pollution and other casualties all of which could be very costly and could have a material adverse effect on the Company's financial position and results of operations.
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
Competition
The Company competes with larger, better capitalized competitors in the mining industry and the Company provides no assurance that it can compete for mineral properties, future financings, technical expertise, the recruitment and retention of qualified employees and the purchase or lease of equipment and third-party servicing companies.
Title Matters
The Company provides no assurance given that it owns legal title to its mineral properties and concessions. The acquisition of title to mineral properties and concessions is a very detailed and time-consuming process. Title to any of its mining concessions, claims and/or leases may come under dispute. While the Company has diligently investigated title considerations to its mineral properties and concessions, in certain circumstances, the Company has only relied upon representations of property partners and government agencies. There is no guarantee of title to any of its properties or concession holdings. The properties and concessions may be subject to prior unregistered agreements or transfers, government claims for past due concession fees and title may be affected adversely by unidentified and undetected defects and by different interpretations of the law. Native land claims or claims of aboriginal or indigenous title may be asserted over areas in which the Company's properties are located. The Company provides no assurances that the concessions it holds or that are under application will be granted to it.
Community Groups
There is an ongoing level of public concern relating to the effects of mining on the natural landscape, on communities and on the environment. Certain non-governmental organizations, public interest groups and reporting organizations ("NGOs") who oppose resource development can be vocal critics of the mining industry regardless of merit. In addition, there have been many instances in which local community groups have opposed resource extraction activities, which have resulted in disruption and delays to the relevant operation. While the Company seeks to operate in a socially responsible manner and believes it has good relationships with local communities in the jurisdictions in which it owns properties, NGOs or local community organizations could direct adverse publicity and/or disrupt the Company's operations in respect of one or more of its properties due to political factors, activities of unrelated third parties on lands in which it has an interest or its operations specifically. Any such actions and the resulting media coverage could have an adverse effect on the Company's reputation and financial condition or its relationships with the communities in which it operates, which could have a material adverse effect on its business, financial condition, results of operations, cash flows or prospects.
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
Environmental and Other Regulatory Requirements
The Company provides no assurance that it has met all environmental or regulatory requirements. The current or future operations of the Company, including exploration and development activities and commencement of production on its properties, require permits from various foreign, federal, state and local governmental authorities and such operations are and will be governed by laws and regulations governing prospecting, development, mining, production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. Companies engaged in the development and operation of mines and related facilities generally experience increased costs, and delays in production and other schedules as a result of the need to comply with applicable laws, regulations and permits. There can be no assurance that approvals and permits required in order for the Company to commence exploration, development or production on its various properties will be obtained. Additional permits and studies, which may include environmental impact studies conducted before permits can be obtained, are necessary prior to operation of the other properties in which the Company has interests and there can be no assurance that the Company will be able to obtain or maintain all necessary permits that may be required to commence exploration, construction, development or operation of mining facilities at these properties on terms which enable operations to be conducted at economically justifiable costs.
Failure to comply with applicable laws, regulations, and permitting requirements may result in enforcement actions including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions. Parties engaged in exploration, development and mining operations may be required to compensate those suffering loss or damage by reason of such activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations. New laws or regulations or amendments to current laws, regulations and permits governing operations and activities of exploration and mining companies, or more stringent implementation of current laws, regulations or permits, could have a material adverse impact on the Company and cause increases in capital expenditures or production costs or reduction in levels of production at producing properties or require abandonment or delays in development of new mining properties.
Reclamation
Land reclamation requirements for the Company's properties may be burdensome. There is a risk that monies and accruals allotted for land reclamation may not be sufficient to cover all risks, due to changes in the nature of any potential waste rock and/or tailings and/or revisions to government regulations. Therefore, additional funds, reclamation bonds or other forms of financial assurance may be required over the tenure of the Company's properties to cover potential risks. These additional costs may have material adverse impact on the financial condition and results of the Company.
Unknown Environmental Risks for Past Activities
Exploration and mining operations involve a potential risk of releases to soil, surface water and groundwater of metals, chemicals, fuels, liquids having acidic properties and other contaminants. In recent years, regulatory requirements and improved technology have significantly reduced those risks. However, those risks have not been eliminated, and the risk of environmental contamination from present and past exploration or mining activities exists for mining companies. Companies may be liable for environmental contamination and natural resource damages relating to properties that they currently own or operate or at which environmental contamination occurred while or before they owned or operated the properties. However, no assurance can be given that potential liabilities for such contamination or damages caused by past activities at these properties do not exist.
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
Permitting Risk
The Company’s mineral exploration operations in Mexico are subject to receiving and maintaining permits (including environmental permits) from appropriate governmental authorities. Furthermore, prior to any development on any of its properties, the Company must receive permits from appropriate governmental authorities. The Company can provide no assurance that necessary permits will be obtained, that previously issued permits will not be suspended for a variety of reasons, including through government or court action, or that delays will not occur in connection with obtaining all necessary permits, renewals of permits for existing operations, or additional permits for any possible future changes to operations, or additional permits associated with new legislation. The Company can provide no assurance that it will continue to hold or obtain, if required to, all permits necessary to develop or continue operating at any particular site, which could materially adversely affect its operations.
Foreign Country Risk
The Company’s sole material property is located in Mexico. The Company is subject to certain risks as a result of conducting foreign operations, including, but not limited to: currency fluctuations; possible political or economic instability that may result in the impairment or loss of mineral titles or other mineral rights; opposition from environmental or other non-governmental organizations; government regulations relating to the mining industry; renegotiation, cancellation or forced modification of existing contracts; expropriation or nationalization of property; changes in laws or policies or increasing legal and regulatory requirements including those relating to taxation, royalties, imports, exports, duties, currency, or other claims by government entities, including retroactive claims and/or changes in the administration of laws, policies and practices; uncertain political and economic environments; war, terrorism, narco-terrorist actions or activities, sabotage and civil disturbances; delays in obtaining or the inability to obtain or maintain necessary governmental or similar permits or to operate in accordance with such permits or regulatory requirements; currency fluctuations; import and export regulations, including restrictions on the export of gold, silver or other minerals; limitations on the repatriation of earnings; and increased financing costs. Any changes in regulations or shifts in political attitudes are beyond the control of the Company and may adversely affect its business. The introduction of new tax laws, regulations or rules, or changes to, or differing interpretation of, or application of, existing tax laws, regulations, or rules in any of the countries in which the Company currently conducts business or in the future may conduct business, could result in an increase in taxes, or other governmental charges, duties, or impositions. No assurance can be given that new tax laws, rules or regulations will not be enacted or that existing tax laws will not be changed, interpreted, or applied in a manner that could otherwise have a material adverse effect on the Company.
Organized Crime Risk
Violence in Mexico is well documented and has, over time, been increasing. Conflicts between the drug cartels and violent confrontations with authorities are not uncommon. Other criminal activity, such as kidnapping and extortion, is also an ongoing concern. Many incidents of crime and violence go unreported and efforts by police and other authorities to reduce criminal activity are challenged by a lack of resources, corruption, and the pervasiveness of organized crime. Incidents of criminal activity have occasionally affected the communities in the vicinity of the Company’s operations. Such incidents may prevent access to the Company’s property or offices; halt or delay operations; result in harm to employees, contractors, visitors, or community members; increase employee absenteeism; create or increase tension in nearby communities; or otherwise adversely affect the Company’s ability to conduct business. The Company can provide no assurance that security incidents, in the future, will not have a material adverse effect on its operations.
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
Geopolitical Risk
The Company may be affected in varying degrees by government regulations with respect to, but not limited to, restrictions on future exploitation and production, price controls, export controls, currency availability, income taxes, import tariffs, delays in obtaining or the inability to obtain necessary permits, opposition to mining from environmental and other non-governmental organizations, expropriation of property, ownership of assets, environmental legislation, labour relations, limitations on mineral exports, increased financing costs, and site safety. In addition, legislative enactments may be delayed or announced without being enacted and future political action that may adversely affect the Company cannot be predicted. Any changes in regulations or shifts in political attitudes that may result, among other things, in significant changes to mining laws or any other national legal body of regulations or policies are beyond the control of the Company and may adversely affect its business.
Foreign Countries and Regulatory Requirements
The Company’s mineral property interests are located in countries outside of Canada, specifically in Mexico, and mineral exploration and mining activities may be affected in varying degrees by political stability, changes in foreign policy, and government regulations relating to the mining industry. Any changes in regulations, foreign policy, or shifts in political attitudes may vary from country to country and are beyond the control of the Company and may adversely affect its business and its ability to operate in foreign jurisdictions. Such changes have, in the past, included nationalization of foreign owned businesses and properties. The Company’s ability to operate its business may be affected in varying degrees by government regulations with respect to, but not limited to, restrictions on production, price controls, export controls, income and other taxes and duties, tariffs, trade, expropriation of property, environmental legislation and mine safety. These uncertainties may make it more difficult for the Company to obtain any required financing for its mineral properties.
Litigation affecting Mineral Properties
Potential litigation may arise on a mineral property on which the Company has an interest (for example, litigation with the original property owners or neighboring property owners). The results of litigation cannot be predicted with certainty and defense and settlement costs of legal claims can be substantial, even with respect to claims that have no merit. If the Company is unable to resolve these disputes favorably or if the cost of the resolution is substantial, such events may have a material adverse impact on the ability of the Company to carry out its business plan.
Changes in Tax Laws and Regulations Impacting the Company
There can be no assurance that new tax laws, mining and other regulations, policies or interpretations will not be enacted or brought into being in Mexico where the Company has interests that could have a material adverse effect on the Company. Any such change or implementation of new tax laws or regulations could adversely affect the Company’s ability to conduct its business. No assurance can be given that new taxation rules or accounting policies will not be enacted or that existing rules will not be applied in a manner which could result in future profits of the Company being subject to additional taxation or which could otherwise have a material adverse effect on the profitability of the Company, the Company’s results of operations, financial condition and the trading price of the Company’s securities. In addition, the introduction of new tax rules or accounting policies, or changes to, or differing interpretations of, or application of, existing tax rules or accounting policies could make royalties or other investments and dispositions by the Company less attractive to counterparties. Such changes could adversely affect the ability of the Company to acquire new assets or make future investments and dispositions.
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
The Canadian Extractive Sector Transparency Measures Act (Canada) ("ESTMA"), which became effective June 1, 2015, requires public disclosure of payments to governments by mining and oil and gas companies engaged in the commercial development of oil, gas and minerals who are either publicly listed in Canada or with business or assets in Canada. Mandatory annual reporting is required for extractive companies with respect to payments made to foreign and domestic governments at all levels, including entities established by two or more governments and including Indigenous groups. ESTMA requires reporting on the payments of any taxes, royalties, fees, production entitlements, bonuses, dividends, infrastructure improvement payments, and any other prescribed payment over $100,000. Failure to report, false reporting or structuring payments to avoid reporting may result in fines. If the Company becomes subject to an enforcement action or in violation of ESTMA, this may result in significant penalties, fines and/or sanctions imposed on us resulting in a material adverse effect on our reputation.
Uninsured Risks
The Company provides no assurance that it is adequately insured against all risks. The Company maintains insurance in such amounts as it considers to be reasonable, however, such insurance may not cover all the potential risks associated with its activities, including any future mining operations. The Company may not be able to obtain or maintain insurance to cover its risks at economically feasible premiums, or at all. Insurance coverage may not be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration or production may not be available to the Company on acceptable terms. The Company might also become subject to liability for pollution or other hazards which it is does not insure against or in future may not insure against because of premium costs or other reasons. Losses from these events may cause the Company to incur significant costs which could have a material adverse effect on Company's business, financial condition, results of operations or prospects.
Historical Negative Cash Flow and No Assurance of Profitability
The Company had negative cash flow from operating activities during the year ended December 31, 2024 and it is expected that the Company will experience negative cash flows in the immediate future. The Company has experienced net losses in the past and will incur losses in the future until and unless it can derive sufficient cash flows from its investments in mineral projects. Future negative cash flows could have an adverse effect on the market price of the Company's common shares and on its ability to continue as a going concern.
The Company has no history of earnings and due to the nature of its business there can be no assurance that the Company will ever be profitable. The Company has not paid dividends on its shares since incorporation and does not anticipate doing so in the foreseeable future. The only present source of funds available to the Company is from the sale of its common shares or from the sale or optioning of a portion of its interest in its resource properties. Even if the results of exploration are encouraging, the Company may not have sufficient funds to conduct the further exploration that may be necessary to determine whether a commercial deposit exists. While the Company may generate additional working capital through further equity offerings or through the sale or syndication of its properties, there can be no assurance that any such funds will be available on favorable terms, or at all. At present, it is impossible to determine what amounts of additional funds, if any, may be required. Failure to raise such additional capital could put the continued viability of the Company at risk.
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
Currency Fluctuation and Foreign Exchange Controls
The Company maintains a portion of its funds in U.S. dollars and Mexican pesos denominated accounts. Certain of its property and related contracts are denominated in U.S. dollars and Mexican Pesos. The Company’s operations in countries other than Canada are normally carried out in the currency of that country and make the Company subject to foreign currency fluctuations and such fluctuations may materially affect its financial position and results. In addition, future contracts may not be denominated in Canadian dollars and may expose the Company to foreign currency fluctuations and such fluctuations may materially affect its financial position and results.
Dependence on Key Individuals
The Company is dependent on a relatively small number of key personnel, the loss of any one of whom could have an adverse effect on it. The Company maintains key-person insurance on the life of its President and COO, Marcio Fonseca but does not maintain key-person insurance on the life of any of its other personnel. In addition, while certain of the Company’s officers and directors have experience in the exploration of mineral producing properties, the Company will remain highly dependent upon contractors and third parties in the performance of its exploration and development activities. There can be no guarantee that such contractors and third parties will be available to carry out such activities on behalf of the Company or be available upon commercially acceptable terms.
Substantial Number of Authorized but Unissued Shares
The Company has an unlimited number of common shares which may be issued and authorized by the Company’s Board without further action or approval of the Company’s shareholders. While the Company’s Board is required to fulfil its fiduciary obligations in connection with the issuance of such shares, the shares may be issued in transactions with which not all shareholders agree, and the issuance of such shares will cause dilution to the ownership interests of the Company’s shareholders.
Potential Volatility of Market Price of Common Shares and Related Litigation Risks
Securities of publicly listed companies such as the Company have, from time to time, experienced significant price and volume fluctuations unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the market price of the Company’s common shares. In addition, the market price of the Company’s shares is likely to be highly volatile. Factors such as gold prices, the average volume of shares traded, announcements by competitors, changes in stock market analysts’ recommendations regarding the Company and general market conditions and attitudes affecting other exploration and mining companies may have a significant effect on the market price of the Company’s common shares. It is likely that the Company’s results or development and exploration activities may fluctuate significantly or may fail to meet the expectations of stock market analysts and investors and, in such event, the market price of the Company’s common shares could be materially adversely affected. In the past, securities class action litigation has often been initiated following periods of volatility in the market price of a company’s securities. Such litigation, if brought against the Company, could result in substantial costs and a diversion of management’s attention and resources, which could have a material adverse effect on the Company’s business, financial position and results of operations.
Future Sales of Common Shares by Existing Shareholders
Sales of a large number of common shares in the public markets, or the potential for such sales, could decrease the trading price of the common shares and could impair the Company’s ability to raise capital through future sales of common shares. The Company has previously completed private placements at prices per share which may be, from time to time, lower than the market price of the common shares at the time of the offering announcement. Accordingly, a significant number of the Company’s shareholders at any given time may have an investment profit in the common shares that they may seek to liquidate.
March 31, 2025 Management Discussion and Analysis
40 | Page
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
International Conflict
International conflict and other geopolitical tensions and events, including war, military action, terrorism, trade disputes and international responses thereto have historically led to, and may in the future lead to, uncertainty or volatility in global commodity and financial markets and supply chains. Russia's invasion of Ukraine has led to sanctions being levied against Russia by the international community and may result in additional sanctions or other international action, any of which may have a destabilizing effect on supply chain disruptions may adversely affect the Company's business, financial condition and results of operations. The extent and duration of the current Russia-Ukraine conflict and related international action cannot be accurately predicted at this time and the effects of such conflict may magnify the impact of the other risks identified above, including those relating to commodity price volatility and global financial conditions. The situation is rapidly changing and unforeseeable impacts, including on the Company's shareholders and counterparties on which the Company rely and transact, may materialize and may have an adverse effect on the Company's business, results of operation and financial condition.
Conflicts of Interest
The Company provides no assurance that its directors and officers will not have conflicts of interest from time to time. The Company's directors and officers may serve as directors or officers of other mineral exploration and development companies or have significant shareholdings in other resource companies and, to the extent that such other companies may participate in ventures in which the Company may participate, the Company's directors and management may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. The interests of these companies may differ from time to time. In the event that such a conflict of interest arises at a meeting of the Company's directors, a director who has such a conflict will abstain from voting for or against any resolution involving any such conflict. From time to time several companies may participate in the acquisition, exploration and development of natural resource properties thereby allowing for their participation in larger programs, permitting involvement in a greater number of programs and reducing financial exposure in respect of any one program. It may also occur that a particular company will assign all or a portion of its interest in a particular program to another of these companies due to the financial position of the company making the assignment. In accordance with the laws of the Province of British Columbia, the directors of the Company are required to act honestly, in good faith and in the best interests of the Company. In determining whether the Company will participate in any particular exploration or mining project at any given time, the directors will primarily consider the upside potential for the project to be accretive to shareholders, the degree of risk to which the Company may be exposed and its financial position at that time.
Legislative Changes in Mexico
On May 8, 2023, the Mexican Government enacted a decree amending several provisions of the Mining Law, the Law on National Waters, the Law on Ecological Equilibrium and Environmental Protection and the General Law for the Prevention and Integral Management of Waste (the "Decree"), which became effective on May 9, 2023. The Decree amends the mining and water laws, including: (i) the duration of the mining concession titles, (ii) the process to obtain new mining concessions (through a public tender), (iii) imposing conditions on water use and availability for the mining concessions, (iv) the elimination of "free land and first applicant" scheme, (v) new social and environmental requirements in order to obtain and keep mining concessions, (vi) the authorization by the Ministry of Economy of any mining concession's transfer, (vii) new penalties and cancellation of mining concessions grounds due to non-compliance with the applicable laws, (viii) the automatic dismissal of any application for new concessions, and (ix) new financial instruments or collaterals that should be provided to guarantee the preventive, mitigation and compensation plans resulting from the social impact assessments, among other amendments.
March 31, 2025 Management Discussion and Analysis
41 | Page
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
These amendments could have an impact on our current and future exploration activities and operations in Mexico. However, the likelihood and extent of such impact is yet to be determined.
GR Silver wholly owns concessions in the Rosario Mining District for which titles and operating permits are held and it is not expected that this will change under the modified legislation, although no assurances can be given as the full impact of the changes are unknown at this time. In addition, while GR Silver has nurtured relationships with in-country stakeholders, enjoyed success in the granting of permits from Mexican authorities and secured long term agreements with neighbouring ejidos, there is no assurance that these relationships and successes will continue. The full impacts of the legislative changes have not yet been completely assessed as the industry waits for the Government to issue changes to the Mining Law Regulations further clarifying the changes. The Company will continue to monitor this closely to best deal with the changes. There is no assurance that these changes will not adversely affect the Company or its Mexican properties and assets.
Permits and Licenses Risks
The operations of the Company will require licenses and permits from various governmental authorities. The Company believes it will be able to obtain in the future all necessary licenses and permits to carry on the activities which it intends to conduct and intends to comply in all material respects with the terms of such licenses and permits. There can be no assurance or guarantee, however, that the Company will be able to obtain and maintain, at all times, all licenses and permits required to undertake its proposed exploration or to place its properties into commercial production and to operate mining facilities if its exploration programs are successful. Amendments to current laws and regulations governing the operating and activities of the Company and the more stringent implementation thereof could have a substantial adverse impact on the business, financial condition and the results of operations of the Company. Obtaining necessary permits, leases and licenses can be a complex, time-consuming process and the Company cannot be certain that it will be able to obtain necessary permits on acceptable terms, in a timely manner or at all. The costs and delays associated with obtaining necessary permits, leases and licenses and complying with these permits and applicable laws and regulations could stop, delay or restrict the Company from proceeding with the development of an exploration project or the development and operation of a mine. Any failure to comply with applicable laws and regulations or permits could result in interruption or closure of exploration, development or mining operations, or fines, penalties or other liabilities. The Company could also lose its licenses or permits under the terms of its existing agreements.
Changes to the Mexican legislation provides additional uncertainty with respect to the evolving enactment of changes to title law in Mexico. The Company continues to monitor the situation.
Global Economy Risk
The United States and Canadian governments announced new tariffs on imported good. This has caused significant economic uncertainty and market volatility. Management is actively assessing the situation and the effects on the Company, if any, are currently uncertain.
Global financial conditions continue to be characterized as volatile. In recent years, global markets have been adversely impacted by various credit crises and significant fluctuations in fuel and energy costs and metals prices, inflation rates, interest rates and significant fluctuations in commodity prices as a result of the ongoing military conflicts. Many industries have been impacted by these market conditions. Global financial conditions remain subject to sudden and rapid destabilizations in response to international events, as government authorities may have limited resources to respond to future crises. A continued or worsened slowdown in the financial markets or other economic conditions, including but not limited to consumer spending, employment rates, business conditions, inflation, supply chain disruptions, sovereign
March 31, 2025 Management Discussion and Analysis
42 | Page
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
debt crises, fuel and energy costs, economic recession, consumer debt levels, lack of available credit, the state of the financial markets, interest rates and tax rates, may adversely affect the Company's growth and profitability. Future crises may be precipitated by any number of causes, including natural disasters, geopolitical instability, changes to energy prices, increases in interest rates or sovereign debt defaults. If increased levels of volatility continue or in the event of a rapid destabilization of global economic conditions, it may result in a material adverse effect on commodity prices, the strength and confidence in the U.S. dollar, availability of credit, investor confidence, and general financial market liquidity, all of which may adversely affect the Company's business and the market price of the Company's securities.
FORWARD-LOOKING STATEMENTS
This MDA contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable Canadian securities legislation. These statements relate to future events or the future activities or performance of the Company. All statements, other than statements of historical fact, are forward-looking statements. Information concerning mineral resource/reserve estimates and the economic analysis thereof contained in preliminary economic analyses or prefeasibility studies also may be deemed to be forward-looking statements in that they reflect a prediction of the mineralization that would be encountered, and the results of mining that mineralization, if a mineral deposit were developed and mined. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate, plans and similar expressions, or which by their nature refer to future events. These forward-looking statements include, but are not limited to, statements concerning:
- the Company's strategies and objectives, both generally and in respect of its specific mineral properties or exploration and evaluation assets;
- the timing of decisions regarding the timing and costs of exploration programs with respect to, and the issuance of the necessary permits and authorizations required for, the Company's exploration programs;
- the Company's estimates of the quality and quantity of the resources at its mineral properties;
- the Company's ability to increase through additional drilling the quality and quantity of the resources at its mineral properties;
- the timing and cost of planned exploration programs of the Company and the timing of the receipt of results thereof;
- general business and economic conditions;
- the Company's ability to meet its financial obligations as they come due, and to be able to raise the necessary funds to continue operations; and
- the Company's expectation that it will be able to add additional mineral projects of merit to its existing property portfolio.
The Company can give no assurance that such expectations will prove to be correct. Inherent in forward looking statements are risks and uncertainties beyond the Company's ability to predict or control, including, but not limited to, risks related to the Company's inability to raise the necessary capital to be able to continue in business and to implement its business strategies, to identify one or more economic deposits on its properties, variations in the nature, quality and quantity of any mineral deposits that may be located, variations in the market price of any mineral products the Company may produce or plan to produce, the Company's inability to obtain any necessary permits, consents or authorizations required for its activities, to produce minerals from its properties successfully or profitably, to continue its projected growth, and other risks identified herein under "Risks and Uncertainties".
March 31, 2025 Management Discussion and Analysis
GR SILVER MINING LTD.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED MARCH 31, 2025
GR SILVER MINING LTD
The Company cautions investors that any forward-looking statements by the Company are not guarantees of future performance, and that actual results are likely to differ, and may differ materially, from those expressed or implied by forward looking statements contained in this MDA. Such statements are based on several assumptions which may prove incorrect, including, but not limited to, assumptions about:
- the level and volatility of the price of commodities;
- general business and economic conditions;
- the timing of the receipt of regulatory and governmental approvals, permits and authorizations necessary to implement and carry on the Company's planned exploration;
- conditions in the financial markets generally;
- the Company's ability to attract and retain key staff;
- the nature and location of the Company's mineral exploration projects, and the timing of the ability to commence and complete the planned exploration programs; and
- the ongoing relations of the Company with its regulators.
These forward-looking statements are made as of the date hereof and the Company does not intend and does not assume any obligation, to update these forward-looking statements, except as required by applicable law. For the reasons set forth above, investors should not attribute undue certainty to or place undue reliance on forward-looking statements.
Historical results of operations and trends that may be inferred from the following discussion and analysis may not necessarily indicate future results from operations. The current state of the global securities markets may cause significant reductions in the price of the Company's securities and render it difficult or impossible for the Company to raise the funds necessary to continue operations.
APPROVAL
The Board of Directors of the Company has approved the disclosures in this MDA.
ADDITIONAL SOURCES OF INFORMATION
Additional disclosures pertaining to the Company, including its most recent, financial statements, management information circular, material change reports, press releases and other information, are available on the SEDAR website at www.sedarplus.ca or on the Company's website at www.grsilvermining.com. Readers are urged to review these materials, including the technical reports filed with respect to the Company's mineral properties.
March 31, 2025 Management Discussion and Analysis