Defiance (DEF.V): Discovers Blind Silver System at Lucita

Vancouver, British Columbia–(Newsfile Corp. – August 9, 2022) – Defiance Silver Corp. (TSXV: DEF) (OTCQX: DNCVF) (FSE: D4E) (“Defiance” or the “Company“) is pleased to provide a second update on the 4,750-metre maiden drill program at the Lucita property on the company’s Zacatecas silver project, including additional newly-discovered zones of high-grade silver mineralization. This drill program was the first to be undertaken at the central Lucita project (Palenque vein system), which is currently under option from Pan American Silver (See News Release dated: December 2^nd, 2020). Initial results from this program were released on April 13^th, 2022.

The current release summarizes the results from an additional 8 holes (DDLU-21-06 to DDLU-21-13). The drill holes reported in this release encountered several styles of high-grade silver mineralization, including the classic vein-hosted style and blind, newly-discovered contact-style mineralization at depth. The encountered mineralization is open along strike and both up and down dip from the released results, which are highly-encouraging and warrant extensive follow-up exploration work, including diamond drilling.

Chris Wright, Chairman & CEO, stated: “Our team has been successful at identifying both near-surface and high-grade, vein-hosted silver mineralization, as well as a blind silver-rich zone that is over 45 metres wide, encountered in hole DDLU-22-10. The drilling within the central Lucita license area has demonstrated the continuity of the Palenque vein system over a 4 km vein corridor. This vein system represents an emerging discovery in a world-class silver mining district.”

Highlights:

• DDSA-22-10 discovered several different styles of mineralization, including a new blind high-grade interval at depth. The hole returned multiple results over 100 g/t Ag, and individual intercepts grade up to 737 g/t Ag (from 398m). Intercepts include 3.05m of 264 g/t Ag and 0.20 g/t Au (from 370.23 to 373.28m), 4.01m of 166 g/t Ag and 0.37 g/t Au (from 388.56 to 392.57m), and 2.25m of 235 g/t Ag (from 398 to 400.25m).

• DDSA-22-10 also returned highly anomalous Ag mineralization from 370.23m to the end of the hole at 420.1m, with a 49.87m interval returning a weighted average of 58.79 g/t Ag. This new zone is open for expansion and will be a key follow up target in future drill programs.

• DDSA-22-09 was drilled prior to DDSA-22-10 and hit anomalous veins, but was stopped short of the mineralized zones encountered in DDSA-22-10. Additional targeting work will be completed, and deeper follow up drilling will be planned with the goal of reaching the newly discovered zone of mineralization.

• DDLU-22-12 returned high-grade Zn-Pb mineralization and moderate grade Ag mineralization over narrow widths (0.28m of 86.30 g/t Ag, 2.63% Pb, and 8.08% Zn from 364.54 to 364.82m) and represents a follow-up drill target once additional targeting and modeling work has been completed.

Further exploratory drilling in the Palenque central zone (DDLU-22-13) encountered narrow zones of high-grade mineralization, including up to 843 g/t Ag & 0.2 g/t Au at from 184.0m to 184.30m.

• The inaugural drill program at Lucita central (Palenque vein system) confirmed the presence of high-grade, Fresnillo-style, low to intermediate-sulfidation epithermal silver mineralization, consisting of mainly of pyrargyrite (high-level sulfosalt) and silver sulfides that potentially indicate the higher-level setting of a zoned epithermal system. Follow-up drilling is planned for later this year at the newly discovered zones of mineralization at Palenque and Tahures.

Select Table of Results

Table 1 – Drill Results. *True thicknesses are unknown at this time but are assumed to be between 50%-90% of the core length. **Drill holes DDLU-21-06, DDLU-21-07, DDLU-21-08, DDLU-22-09, DDLU-22-11, and DDLU-22-12 did not return reportable results.

Cross Section of DDSA-22-09 & 10:

Figure 1- Cross section through holes DDLU-22-09 & 10, showing multiple styles of mineralization, including a high-grade intercept at a “blind” faulted contact and as well as narrow zones of grade within the black shale unit.

To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/2950/133217_fb50425bc4789a9f_001full.jpg

Map of Lucita Central Drill Holes:

Figure 2 – Overview map of the completed drilling at Lucita Central (Palenque) and San Acacio.

To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/2950/133217_fb50425bc4789a9f_002full.jpg

Discussion of the Lucita Exploration Model:

Regional targeting done by Defiance in late 2019 and early 2020 identified the potential for a Fresnillo-style low to intermediate-sulfidation epithermal system on the Lucita land package, which is in a similar crustal-scale setting as the world-class Fresnillo district. The regional prospectivity of the Lucita project has been historically defined by surface geochemistry, mapped vein structures, and regional drill holes that the company has in its proprietary 1,300 km² regional database. Since mid-2021, the company has completed a detailed surface mapping program, with targeted re-sampling of veins and surrounding areas. This work has yielded significant surface grab sample results and outlined multiple un-tested vein targets throughout the Lucita land package. The first pass 4,750 m diamond drilling program on the Palenque and Tahures vein systems were completed earlier in 2022, with the aim of conducting follow-up drilling in this area later in 2022 (Fig 2).

Discussion of Results:

The dominant silver mineralization at Lucita consists of pyrargyrite (with lesser acanthite, proustite and stephanite), hosted in polyphase calcite and quartz veins, breccia veins and stockwork veinlets. As is common in the Zacatecas and Fresnillo districts, mineralization is often hosted in steeply-dipping veins with typical epithermal-style textures. The main commodity at the level of current drilling is silver with minor gold. This differs from the Veta Grande system at the company’s San Acacio project (See News Release dated: September 7^th, 2021), which has a more polymetallic signature.

Initial interpretations are that the west-striking Palenque vein system (Fig. 2) are part of a low-to-intermediate-sulfidation epithermal-style vein system. New holes reported here, DDLU-22-10 and 11, also encountered two additional styles of silver-dominant mineralization, including a flat-lying faulted contact as well as fine veinlet arrays within underlying shales. Future exploration will target these new styles of mineralization at DEF’s Zacatecas projects.

DDLU-21-06, DDLU-21-07 & DDLU-21-08 – These holes were designed to step west along the Palenque vein system from holes DDLU-21-01 to 05 (Fig 2). Holes DDLU-21-06 and 07 were targeted under mapped outcropping veins with silver grade and historic workings at surface. However, the two shallow holes failed to intersect the vein. This is likely due to displacement from a low-angle structure or steepening of the vein; further structural data collection and interpretation is underway to generate follow-up targets. DDLU-21-08 was similarly designed to test under mapped veins with historic workings and evidence of mineralization at surface. However, no significant intervals were intersected.

DDLU-22-09 – This hole was designed to intercept a mapped calcite-rich but low-grade portion of the Palenque vein system (Fig 1), with old workings nearby. The vein successfully intersected the steeply dipping veins with anomalous Ag and Au grades, including deep in the hole. Results were encouraging to follow up with a deeper hole, DDLU-22-10.

DDLU-22-10 – Interesting results from DDLU-22-09 prompted a deeper hole underneath the encountered veins. Hole DDLU-22-10 successfully encountered multiple calcite and quartz veins with anomalous to high-grade Ag ± Au mineralization. A blind intercept in a low-angle fault between the volcanosedimentary package and underlying black shales also yielded a high-grade Ag ± Au intercept (Fig 1). Several small but higher-grade Ag intercepts continued further into the black shales. This new style of mineralization related to the black shale, as well as the targeted vein-hosted intercepts, will be followed up with future exploration effort.

DDLU-22-11 and 12 – Encouraging results from DDLU-22-10 prompted step overs to the west (Fig 1). DDLU-22-11 encountered the same thick, calcite-rich veins as hole DDLU-22-10 with narrow intervals of mineralization, including 0.7 m @ 86.70 g/t Ag and 0.53 m @ 83.60 g/t Ag, at 248.81 m and 249.92 m depth, respectively. These results are encouraging evidence for the presence of similar mineralization along the same vein system. Likewise, the black shale contact was encountered with moderately anomalous results.

Hole DDLU-22-12 continued to test the western limit of the Palenque system within the license area. Results included several small veinlets with anomalous but not reportable values. A surprising intercept of 0.28 m of high-grade Zn-Pb mineralization and moderate-grade Ag was encountered in the underlying sediments at 364.54 m with 86.30 g/t Ag, 2.63% Pb and 8.08% Zn. This interval is encouraging and is a target for future follow-up.

DDLU-22-13 – The last hole in the initial Lucita drilling campaign aimed to follow up on the success of DDLU-22-05. DDLU-22-13 was planned east of holes DDLU-21-05 and 04, underneath a calcite-rich portion of the Palenque vein (Fig 1). Several narrow but high-grade intercepts (up to 843 g/t Ag) were encountered. These results warrant follow up exploration in this portion of the Palenque vein.

Collar Information for Reported Drill Holes:

Table 2 -Drill hole information. Coordinate projection UTM:WGS 84 Zone 13N

Lucita Project Summary:

The Lucita project is a large land package in the prolific Fresnillo-Zacatecas mining district. In December 2020, Defiance Silver entered into an option agreement with Pan American Silver to acquire a 100% ownership of the Lucita property (See News Release dated: December 2^nd, 2020).

The 2,674 Ha Lucita property consists of the Panuco zone in the north, the central Lucita zone (Palenque vein system), and the southern Lucita zone adjacent to Defiance’s San Acacio project. The mineralization within the Lucita land package is characterized as a low to intermediate sulfidation epithermal Ag-Au veins, breccias, and stockwork. While historical work in the central Lucita area has been limited to first-pass regional geological mapping and sampling, the northern license area of Panuco has historical high-grade drill results and multiple drill ready exploration targets.

Discussion of QAQC and Analytical Procedure:

Samples were selected based on the lithology, alteration, and mineralization characteristics; sample size ranges from 0.25-2m in width. All altered and mineralized intervals were sent for assay. One blank, one standard, and one duplicate were included within every 20 samples. Standard materials are certified reference materials [CRMs] from OREAS and contain a range of Ag, Au, Cu, Pb, and Zn values. Blanks, standards, and duplicates did not detect any issues with the analytical results.

Samples were analyzed by ALS Chemex Laboratories. Sample preparation was performed at the Zacatecas, Mexico, prep facility, and analyses were performed at the Vancouver, Canada, analytical facility. All elements except Au and Hg were analyzed by a multi-element geochemistry method utilizing a four-acid digestion followed by ICP-MS detection [ME-MS61m]; mercury (Hg) was analyzed after a separate aqua regia digest by ICP-MS. Overlimit assays for Ag, Pb, and Zn were conducted using the OG62 method (multi-acid digest with ICP-AES/AAS finish). Gold was measured by fire-assay with an ICP-AES finish [50g sample, Au-ICP22].

Defiance also reports that it intends to settle up to $18,250 of debt through the issuance of up to 50,000 common shares of the Company (the “Shares”) at a deemed price of $0.395 per Share to a creditor of the Company.

The issuance of the Shares to the Creditor is subject to the approval of the TSX Venture Exchange. All securities issued will be subject to a four month hold period from the date of issue.

About Defiance Silver Corp.

Defiance Silver Corp. (TSXV: DEF) (OTCQX: DNCVF) (FSE: D4E) is an exploration company advancing the district-scale Zacatecas project, located in the historic Zacatecas Silver District and the Tepal Gold/Copper Project in Michoacán state, Mexico. Defiance is managed by a team of proven mine developers with a track record of exploring, advancing and developing several operating mines and advanced resource projects. Defiance’s corporate mandate is to expand the San Acacio and Tepal projects to become premier Mexican silver and gold deposits.

Mr. George Cavey, P.Geo, is a Qualified Person within the meaning of National Instrument 43-101 and has approved the technical information concerning the Company’s material mineral properties contained in this press release.

On behalf of Defiance Silver Corp.

“Chris Wright”

Chairman of the Board

For more information, please contact: Investor Relations at +1 (604) 343-4677 or via email at [email protected].

www.defiancesilver.com

Suite 2900-550 Burrard Street
Vancouver, BC V6C 0A3
Canada
Tel: +1 (604) 343-4677 Email: [email protected]

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release may contain forward-looking statements including but not limited to comments regarding timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. Defiance Silver Corp. relies upon litigation protection for forward-looking statements.