Santacruz Silver Mining Ltd.

Mining

There are two operational mines on the property:

The Carrizal Mine which produces approximately half of the total mine production and is connected to the Monte Mine and San Francisco concentrator by a 7 km Underground trackless haulage drift; and

The Monte Mine which also produces about half of the total mine production and lies along the main haulage drift more proximal to the San Franciso concentrator.

The Carrizal has been subdivided into four zones: Lomo de Toro, Socavón La Cuña, Cuerpo 960 (mining in Carrizal below 960 m elevation), and the historic Carrizal Mine.

All feed the San Francisco processing plant.

In general, the Carrizal mine consists of both remnant mineralized zones and pillars which are being recovered, as well as extensions of historically mined zones. Mining is more selective and conventional with jackleg drills and small Load Haul Dump (LHD) machines. The grades at Carrizal are marginally higher than Monte. Monte mine is comprised of mostly large bulk mineable mineralized zones and utilizes more Sub Level Open Stoping. The grade is generally lower at Monte mine, as are the unit costs.

Metallurgically, a blend of feeds from multiple sources is required to achieve increased recoveries and acceptable quality concentrates, so the operation of both zones simultaneously is a requirement.

Mining methods are selected for each mineralized block using the following criteria and methodology:

Rock stability and quality analyses are carried out by the rock mechanics department;

Analysis of mineral quality, contents and mineral value, and Cut-Off-Grade are carried out by the Geology department; and

Analysis of the preparation cost vs mineral value are carried out by the Planning and Engineering department (cost-benefit).

Selection of the proper mining methods are closely linked to and often dictated by Geotechnical conditions of each mineralized zone. Sublevel open stoping, as well as cut and fill are the primary methods in use at Monte and Carrizal.