OVERVIEW

The Promontorio Silver Resource is situated on Promontorio Mineral Belt Property that includes the La Negra silver discovery; located in the state of Sonora, Mexico. The Promontorio Silver Resource currently hosts a resource estimate of 44.5 million tonnes containing 84 million ounces of silver equivalent in the Measured & Indicated categories grading 58.73 g/t silver equivalent and 14.6 million tonnes containing 21.7 million ounces of silver equivalent in the Inferred category grading 46.34 g/t silver equivalent (see Table 1). Pan American Silver optioned the Promontorio Mineral Belt from 2016 to June 2019, and invested US$3.6 million in expenditures on advancing the project.

PROMONTORIO MINERAL RESOURCE ESTIMATE

The Promontorio mineral resource estimate was completed by Matthew Hastings MSc, P.Geo and reviewed by Frank Daviess, MAusIMM, RM-SME, Associate Principal Resource Geologist with SRK. A site visit was conducted by Allan Moran, of SRK, R.G., C.P.G, who has reviewed pertinent geological information in sufficient detail to support the data incorporated in the mineral resource estimate. Mr. Daviess is an Independent Qualified Person as defined under National Instrument 43-101 ("NI 43-101") and is responsible for the mineral resource estimate presented below. Eric Olin, of SRK, MSc, MBA, RM-SME reviewed the metallurgical information.

Table 1: Resource Statement for the Promontorio Deposit, Sonora State, Mexico: SRK Consulting (U.S.) Inc., Effective Date March 31, 2013*

Notes: * Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves.

1 Silver equivalency amounts are calculated incorporating metals prices and mill recoveries for silver, gold, lead and zinc. See note 3 below

2 Open pit resources stated as contained within a potentially economically minable pit shell;

3 Pit optimization is based on assumed silver, gold, lead, and zinc prices of $31/oz, $1650/oz, $0.96/lb, and $0.89/lb respectively, mill recoveries of 74%, 70%, 81% and 88% respectively, a 1.5% NSR, Estimated mining costs of $1.20/t, and estimated processing and G&A cost of $12.00/t; and an estimated POX cost of $2/tonne ($30/tonne of pyrite concentrate)

4 Break-even cut-off grades used were 20 g/t AgEq for open pit mill material and 45 gpt AgEq for underground material;

5 Mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding

Additional metallurgical test work has allowed for the inclusion of gold in the mineral resources, which has a significant impact on the AgEq grades and relative ounces.The following material changes incorporated into the updated resource estimation contributed to the significant increase in the mineral resource:

• The estimated Measured and Indicated gold resources contained within the mineralized diatreme system total 508,000 ounces with an additional 155,000 ounces Inferred.

Drilling data includes a total of 45,118 samples from 65,092 meters of drilling. Of the 45,118 samples in the database, 22,658 lie within the wireframes and were used in the resource estimation. Wireframes are three-dimensional closed solids constructed in Vulcan(tm) and based on a combination of logged geology and assay information. These wireframes limit the estimation.

Three-dimensional wireframes were constructed for the modeled domains using Leapfrog 3D(tm) modeling software as well as Vulcan(tm). SRK modeled both the Pit and NE zones independently, and corrected inconsistencies with the Leapfrog solids using Vulcan.

The average sample length for all samples is 1.44 metres. Samples were composited to 3 m lengths within the breccia, stockwork, and PC zones. For the estimation, SRK used Ordinary Kriging in the densely-drilled areas and Inverse Distance Weighting for the areas with more widely-spaced drilling. SRK applied appropriate block model validation techniques for a resource estimation at this stage of project development.

Pit optimization was conducted using Whittle(tm) software and evaluating the block model which was constructed in Vulcan(tm). The purpose of the pit-optimization exercise is to satisfy the conditions of "reasonable prospects for economic extraction" as defined in the CIM Guidelines using pit shells based on a very simple "break-even" cash flow model. These pits are not representative of detailed mine plans or even the "best" pit design for the Project. A cut-off for the mineral resource of 20 g/t and 45 g/t AgEq for open pit and underground potential was used respectively.

Measured, Indicated and Inferred Mineral Resources are categorized as Measured being where at least 3 drill holes occur within a 25 metres ellipsoid, Indicated being where at least 3 drill holes occur within a 50 metres ellipsoid and Inferred being where at least 2 drill holes occur within a 75 metres ellipsoid. Blocks estimated using Inverse Distance Weighting in the widely-spaced drilling intermediate to the two primary zones are categorized as Inferred.

METALLURICAL TEST WORK

G&T Metallurgical Services Ltd, Kamloops, BC, Canada completed preliminary metallurgical programs on drill core composites from the Promontorio property for Kootenay in 2009, 2012 and 2013.

Several significant factors were noticed in SRK's review of the metallurgical process work conducted to date. The metallurgical program investigated a standard polymetallic sequential flotation flowsheet that includes:

• Crushing;
• Grinding;
• Lead Flotation;
• Zinc Flotation; and
• Pyrite/Arsenopyrite Flotation

Pressure oxidation (POX) of the pyrite/arsenopyrite concentrate is required to extract the contained gold by cyanidation.

SRK estimates metal recoveries shown in Table 2 are based on the average results from the preliminary metallurgical test programs conducted in 2009, 2012 and 2013. Overall gold recovery is estimated at 70% and is based on 65% gold recovery into the pyrite flotation concentrate followed by 94% cyanidation gold extraction from the pyrite concentrate after pressure oxidation, plus an average 9% gold recovery into the lead flotation concentrate.

Table 2: Metallurgical Recovery Assumptions

* Includes 94% cyanidation extraction from pyrite concentrate + gold contained in lead concentrate

GEOLOGY & MINERALIZATION

The claims lie on the western margin of the Sierra Madre Occidental rhyolite volcanic province, and occur in a wide NNW-trending zone of late-Tertiary (Neogene) extension. The listric normal faults have dissected and tilted the Tertiary rhyolite sequence and exposed a wide range of older rock types as inliers.

Geologic units in the immediate vicinity of the Promontorio prospect include basement rocks of Late Triassic, Late Cretaceous and Lower Tertiary age overlain unconformably by Late Tertiary volcanics and conglomerates. The basement rocks underlie the northern part of the Promontorio area and the Late Tertiary cover units, the southern part. The Project lies very proximal to the transition between the basement and the cover units. It is entirely hosted in the basement rocks. The regional distribution of the basement and cover is suggestive of a general southerly tilting to the area where the older rocks are exposed to the north.

The mineralization at Promontorio is recognized as being hosted in a diatreme breccia complex measuring roughly 3.5 by 1.8 km in size. This is an important geologic concept, as diatreme complexes have exploration potential and are known to host deposits of precious and base metals. Mineralization is centered on multi-stage breccias and peripheral stockwork zones within the diatreme complex. Drilling has concentrated on two areas of the diatreme complex that make up the current mineral resources, referred to as the Pit and NE zones.

The Pit and NE resource zones are locally open along strike and at depth and represent potential areas for resource expansion. The Pit and NE zones are the only two areas of known mineralized breccia or stockwork to be extensively drilled. Distal from these areas, there are several other areas of mineralized breccia or stockwork with limited or no drilling or are being currently drill tested that have similar geochemical or geophysical characteristics as the known mineralization of the Pit and NE zones.

Mineralized breccias and surrounding stockworks are further delineated by broader alteration and geochemical zones showing geochemical signatures such as strong sodium depletion and sulfur enrichment which are volumetrically larger than the mineralization and coincident with it. These geochemical signatures are currently being applied to assist in the delineation of additional mineralization in some of the satellite exploration targets.