Exhibit 99.1

Condensed Interim Consolidated Financial Statements

For the Three and Six Months ended June 30, 2026 and 2025

(Expressed in thousands of US dollars)

(Unaudited)

TABLE OF CONTENTS

Notice of no auditor review of Condensed Interim Consolidated Financial Statements	3

Condensed Interim Consolidated Statements of Financial Position	3

Condensed Interim Consolidated Statements of Comprehensive Income	4

Condensed Interim Consolidated Statements of Cash Flows	5

Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity	6

Notes to the Condensed Interim Consolidated Financial Statements	7

SANTACRUZ SILVER MINING LTD.

Condensed Interim Consolidated Statements of Financial Position

As at June 30, 2026 and December 31, 2025

(Unaudited)

(Expressed in thousands of US dollars)

Notice of no auditor review of condensed interim consolidated financial statements

Pursuant to National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited condensed interim consolidated financial statements of Santacruz Silver Mining Ltd. for the three months and six months ended June 30, 2026, have been prepared by and are the responsibility of the Company’s management.

The Company’s independent auditor has not performed a review of these financial statements in accordance with the standards established by the Chartered Professional Accountants of Canada for a review of interim financial statements by an entity’s auditor.

August 14, 2026

	Note	June 30, 2026		December 31, 2025
		$		$
ASSETS
Current
Cash and cash equivalents	4		50,398		44,267
Marketable securities	20		16,621		16,662
Trade and other receivables	5		100,263		88,399
Inventories	6		71,876		57,517
Prepaid expenses and deposits			17,132		14,055
Total current assets			256,290		220,900

Marketable securities	20		5,800		5,800
Trade and other receivables	5		47,147		36,249
Mineral properties, plant and equipment	7		157,091		160,558
Goodwill	7		15,466		15,466
Deferred income tax asset	18		8,387		6,798
Total assets			490,181		445,771

LIABILITIES
Current
Trade payables and accrued liabilities	8		40,080		47,402
Deferred revenue			12,426		-
Loans payable	10		44,968		50,642
Current income taxes payable	18		64,311		49,470
Other liabilities	11		7,777		8,876
Decommissioning and restoration provision	12		606		822
Total current liabilities			170,168		157,212

Trade payables and accrued liabilities	8		6,139		7,167
Consideration payable	9		35,066		20,243
Loans payable	10		200		1,344
Other liabilities	11		15,830		20,541
Decommissioning and restoration provision	12		20,639		35,194
Deferred income tax liability	18		29,051		25,012
Total liabilities			277,093		266,713

SHAREHOLDERS’ EQUITY
Share capital	13		148,830		146,166
Equity reserves	13		7,568		6,677
Retained earnings			56,690		26,215
Total shareholders’ equity			213,088		179,058
Total liabilities and shareholders’ equity			490,181		445,771

Subsequent event (note 10(d), 13(e), 13(f), 13,(g))

Approved and authorized for issue on behalf of the Board of Directors on August 14, 2026:

“Arturo Préstamo Elizondo”		“Larry Okada”
Director		Director

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

SANTACRUZ SILVER MINING LTD.

Condensed Interim Consolidated Statements of Comprehensive Income

For the Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars)


		Three months ended June 30,						Six months ended June 30,
	Note	2026			2025			2026			2025
		$			$			$			$

Revenues	14		113,458			73,295			240,987			143,609
Mine operating costs
Cost of sales	15		(54,523	)		(42,568	)		(131,886	)		(80,446	)
Depreciation, depletion and amortization	7		(7,796	)		(5,439	)		(15,093	)		(10,016	)
Gross profit			51,139			25,288			94,008			53,147

General and administrative expenses	16		(5,767	)		(3,957	)		(13,365	)		(8,877	)
Share-based compensation expense	13		(619	)		(1,349	)		(1,148	)		(1,508	)
Operating income			44,753			19,982			79,495			42,762

Other income	17		1,300			(51	)		3,460			2,037
Loss on change in fair value of consideration payable	9		(15,788	)		(1,034	)		(14,823	)		(2,979	)
Foreign exchange gain			7,807			3,144			14,849			9,378
Income before tax			38,072			22,041			82,981			51,198

Income tax expense	18		(36,067	)		(1,064	)		(52,506	)		(20,770	)
Net income for the period			2,005			20,977			30,475			30,428

Other comprehensive income that may be reclassified subsequently to net income or loss:
Unrealized (loss) gain on marketable securities			(68	)		177			(298	)		177
Currency translation differences			753			(805	)		1,603			(483	)
Comprehensive income for the period			2,690			20,349			31,780			30,122

Net income per share:
Basic	23		0.02			0.24			0.33			0.34
Diluted	23		0.02			0.22			0.32			0.33

Weighted average number of common shares:
Basic	23		92,666,724			88,967,382			92,423,038			88,965,643
Diluted	23		94,053,260			93,451,548			93,809,574			93,449,809

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

SANTACRUZ SILVER MINING LTD.

Condensed Interim Consolidated Statements of Cash Flows

For the Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars)


		Three months ended June 30,						Six months ended June 30,
	Note	2026			2025			2026			2025
		$			$			$			$
Operating activities:
Net income for the period			2,005			20,977			30,475			30,428
Items not affecting cash:
Depreciation, depletion and amortization	7		7,796			5,439			15,093			10,016
Other income	24		1,470			916			2,700			1,231
Loss on change in fair value of consideration payable	9		15,788			1,034			14,823			2,979
Share-based compensation expense	13		619			1,349			1,148			1,508
Foreign exchange gain			(5,144	)		2,207			(10,681	)		(20,038	)
Gain on change in estimate of decommissioning provisions	12		(6,505	)		-			(6,505	)		-
Income tax expense	18		36,067			1,064			52,506			20,770
Operating cash flows before non-cash working capital			52,096			32,986			99,559			46,894
Changes in non-cash working capital:
Trade and other receivables	5		(11,065	)		(478	)		(21,785	)		49,492
Inventories	6		(17,053	)		(1,081	)		(14,359	)		(5,290	)
Prepaid expenses and deposits			(9,326	)		(3,718	)		(3,077	)		(2,696	)
Trade payables and accrued liabilities	8		(3,101	)		3,443			(8,350	)		(5,655	)
Deferred revenue			12,426			-			12,426			-
Current income taxes payable	18		(3,682	)		(264	)		(35,215	)		(32,082	)
Other liabilities	11		(4,917	)		5,735			(5,004	)		(11,413	)
Decommissioning and restoration provision	12		(12	)		(3,752	)		(55	)		(90	)
Net cash generated by operating activities			15,366			32,871			24,140			39,160

Investing activities:
Expenditures on mineral properties, plant and equipment	7		(6,513	)		(4,809	)		(16,371	)		(12,084	)
Proceeds on disposition of mineral properties, plant and equipment	7		82			(118	)		82			312
Purchases of marketable securities	20		(5,736	)		(22,621	)		(12,786	)		(22,621	)
Maturities of marketable securities	20		5,479			4,926			12,529			4,926
Payment of consideration payable for acquisition of Sinchi Wayra	9		-			(7,500	)		-			(17,500	)
Net cash used in investing activities			(6,688	)		(30,122	)		(16,546	)		(46,967	)

Financing activities:
Proceeds from exercise of options	13		475			-			1,102			-
Proceeds from loans payable	10		30,622			10,502			54,969			44,057
Repayments of loans payable	10		(32,051	)		(5,148	)		(56,662	)		(30,500	)
Lease payments on plant and equipment	11		-			(722	)		(834	)		(1,559	)
Net cash provided by (used in) financing activities			(954	)		4,632			(1,425	)		11,998

Effect of exchange rate on changes in cash			23			89			(38	)		85
Net change in cash and cash equivalents			7,747			7,470			6,131			4,276
Cash and cash equivalents – beginning of period	4		42,651			32,527			44,267			35,721
Cash and cash equivalents – end of period			50,398			39,997			50,398			39,997
Cash paid during the period for:
Interest expense			1,370			223			2,455			436
Income taxes			7,130			3,628			43,161			22,865
Supplemental cash flow information (Note 24)

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

SANTACRUZ SILVER MINING LTD.

Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity

For the Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, except number of shares)


	Share Capital				Equity reserves
	Shares		Amount		Share-based compensation reserve			Contributed surplus		Accumulated other comprehensive loss			Total equity reserves			Retained earnings (deficit)			Total shareholders’ equity
	#		$		$			$		$			$			$			$

Balance, December 31, 2024		88,963,885		139,080		9,269			1,949		(2,944	)		8,274			(16,007	)		131,347
Shares issued from vesting of RSUs		79,585		229		(229	)		-		-			(229	)		-			-
Share-based compensation expense		-		-		1,508			-		-			1,508			-			1,508
Comprehensive income		-		-		-			-		(306	)		(306	)		30,428			30,122
Balance, June 30, 2025		89,043,470		139,309		10,548			1,949		(3,250	)		9,247			14,421			162,977

Balance, December 31, 2025		91,962,128		146,166		7,946			1,949		(3,218	)		6,677			26,215			179,058
Shares issued from exercise of options		751,487		1,987		(885	)		-		-			(885	)		-			1,102
Shares issued from vesting of RSUs		151,669		318		(318	)		-		-			(318	)		-			-
Shares issued from vesting of PSUs		125,000		359		(359	)		-		-			(359	)		-			-
Share-based compensation expense		-		-		1,148			-		-			1,148			-			1,148
Comprehensive income		-		-		-			-		1,305			1,305			30,475			31,780
Balance, June 30, 2026		92,990,284		148,830		7,532			1,949		(1,913	)		7,568			56,690			213,088

The accompanying notes are an integral part of the condensed interim consolidated financial statements.

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

1.	NATURE OF OPERATIONS

Santacruz Silver Mining Ltd. (the “Company” or “Santacruz”) was incorporated pursuant to the Business Corporations Act of British Columbia on January 24, 2011. The Company’s registered office is located at 1111 West Hastings Street, 15^th Floor, Vancouver, British Columbia, Canada V6E 2J3. The Company is listed for trading on the TSX Venture Exchange (“TSX-V”) under the symbol “SCZ” and on the Nasdaq Capital Market (“NASDAQ”) under the symbol “SCZM”.

The Company is engaged in the operation, acquisition, exploration and development of mineral properties in Latin America, with a primary focus on silver and zinc, but also including lead and copper. The company also generates sales revenue from ore processing that come from the sale of metal concentrates obtained from processing ore purchased from third-party miners in Bolivia.

As at June 30, 2026, the Company had interests in, including mining concession rights, to the following:

●

Sinchi Wayra S.A. (“Sinchi Wayra”), Sociedad Minero Metalurgico Reserva Ltda. and Sociedad Minera Illapa S.A. (“Illapa”) which consist of the following mineral properties and businesses located in Bolivia: the producing Tres Amigos and Colquechaquita mines, collectively the (“Caballo Blanco Group”); the producing Bolivar and Porco mines held under a net operating cash flow interest agreement with Corporación Minera de Bolivia (“COMIBOL”), a Bolivian state-owned entity; the Soracaya exploration project (“Soracaya Project”); the Reserva mine and the San Lucas ore sourcing and trading business (“San Lucas Group”);

●

The producing Zimapan mine located in Mexico held by Compañía Minera Zilar Mendi SA de C.V (“Zilar Mendi”).

2.	BASIS OF PRESENTATION

These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34, “Interim Financial Reporting” which is part of IFRS Accounting Standards (“IFRS® Accounting Standards”) as issued by the International Accounting Standards Board (“IASB”). Because these statements have been prepared in accordance with IAS 34, certain disclosures included in the annual financial statements have been condensed or omitted. These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited annual consolidated financial statements for the year ended December 31, 2025.

These unaudited condensed interim consolidated financial statements were approved by the Board of Directors of the Company on August 14, 2026.

References made throughout the consolidated financial statements to “US dollar” or “USD” are to United States dollars, “C$” or “CAD” are to Canadian dollars, “MXN” are to Mexican pesos, “BOB” are to Bolivian bolivianos. All references are in thousands, unless otherwise noted.

On December 10, 2025 the Company consolidated its issued and outstanding common shares on the basis of one post-consolidated common share for every four pre-consolidated common shares. The number of issued and outstanding shares, options, warrants, DSUs, RSUs and PSUs, and any per share amounts in these financial statements have been retrospectively restated in notes 10, 13, and 23 for all periods presented unless otherwise stated.

3.	MATERIAL ACCOUNTING POLICIES

The accounting policies applied in the preparation of these unaudited condensed consolidated interim financial statements are consistent with those applied and disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2025 and reflect all the adjustments necessary for fair presentation in accordance with IFRS for the interim periods presented.

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

3.	MATERIAL ACCOUNTING POLICIES (continued)

New IFRS accounting standards and pronouncements – not yet adopted

IFRS 18: Presentation and Disclosure in Financial Statements

In April 2024, the IASB issued IFRS 18: Presentation and Disclosure of Financial Statements (“IFRS 18”), which replaces IAS 1: Presentation of Financial Statements. IFRS 18 introduces a specified structure for the income statement by requiring income and expenses to be presented into the three defined categories of operating, investing and financing, and by specifying certain defined totals and subtotals. Where company-specific measures related to the income statement are provided, IFRS 18 requires companies to disclose explanations around these measures, which are referred to as management-defined performance measures. IFRS 18 also provides additional guidance on principles of aggregation and disaggregation which apply to the primary financial statements and the notes. IFRS 18 will not affect the recognition and measurement of items in the financial statements, nor will it affect which items are classified in other comprehensive income and how these items are classified. Some of the requirements in IAS 1 are moved to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and IFRS 7 Financial Instruments: Disclosures. The IASB also made minor amendments to IAS 7 Statement of Cash Flows and IAS 33 Earnings per Share in connection with the new standard.

The standard is effective for reporting periods beginning on or after January 1, 2027, including for interim financial statements. Retrospective application is required, and early application is permitted. The Company is currently assessing the effect of this new standard to its financial statements.

New IFRS accounting standards and pronouncements –adopted

Amendments to IFRS 9: Financial Instruments and IFRS 7: Financial Instruments: Disclosures

In May 2024, the IASB issued amendments to update classification and measurement requirements in IFRS 9: Financial Instruments, and related disclosure requirements in IFRS 7: Financial Instruments: Disclosures. The IASB clarified the recognition and derecognition date of certain financial assets and liabilities, and amended the requirements related to settling financial liabilities using an electronic payment system. It also clarified how to assess the contractual cash flow characteristics of financial assets in determining whether they meet the solely payments of principal and interest criterion, including financial assets that have environmental, social and corporate governance (ESG)-linked features and other similar contingent features. The IASB added disclosure requirements for financial instruments with contingent features that do not relate directly to basic lending risks and costs and amended disclosures relating to equity instruments designated at fair value through other comprehensive income. The amendments are effective for annual periods beginning on or after January 1, 2026 with early application permitted. The Company has adopted the amendments with no material impact to the current reporting period.

The preparation of the financial statements in conformity with IFRS requires management to select accounting policies and make estimates and judgments that may have a material impact on the financial statements. Estimates are continuously evaluated and are based on management’s experience and expectations of future events that are believed to be reasonable under the circumstances. Actual outcomes may differ from these estimates. The Company’s critical accounting judgments and estimates have been consistently applied with those presented in Note 4 of the audited annual consolidated financial statements for the years ended December 31, 2025, and 2024.

4.	CASH AND CASH EQUIVALENTS

A summary of the Company’s cash and cash equivalents is as follows:

SCHEDULE OF CASH AND CASH EQUIVALENTS

	June 30, 2026		December 31, 2025
	$		$
Cash		50,167		41,607
Cash equivalents		231		2,660
Total		50,398		44,267

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

5.	TRADE AND OTHER RECEIVABLES

A summary of the Company’s trade and other receivables is as follows:

	June 30, 2026		December 31, 2025
	$		$
Trade receivables		44,440		20,371
COMIBOL contract prepayment		1,708		1,995
COMIBOL initial investment period CAPEX receivable (note 5(a))		2,173		2,540
Uncertain income tax position receivable (note 18(c))		8,014		9,356
VAT receivable		41,852		51,817
Other receivables		2,076		2,320
Balance, current portion		100,263		88,399
COMIBOL initial investment period CAPEX receivable (note 5(a))		12,611		13,653
VAT receivable		32,067		20,127
Other receivables		2,469		2,469
Balance, non-current portion		47,147		36,249
Trade and other receivables		147,410		124,648

a)	COMIBOL initial investment period CAPEX receivable

The COMIBOL initial investment period CAPEX receivable is a reimbursement of 22.5% of a pre-defined amount of capital investments made by the Company from 2012 to 2019 in the Illapa Joint Operation. The refundable amount becomes available for the Company to offset against amounts due to COMIBOL for its 55% interest in the operation over seven years from 2020 to 2026. If the joint operation does not produce sufficient positive cash flows, COMIBOL can defer payment until cash flows are positive at which point the amounts receivable can be used to reduce the amount due to COMIBOL for its 55% share of the interest in the operation. If the operation does not generate enough positive cash flows to offset amounts due, the outstanding amount receivable will be paid by COMIBOL at the end of the agreement. The classification between current and non-current has been made based upon management’s best estimate of when the receivable will be used to offset future payments to COMIBOL for its 55% interest.

The timing of the cash flows will vary depending on the operational results from the joint operation and how much is payable to COMIBOL for their 55% interest in the operation. Depending on estimates and actual results each period the asset will be revalued to reflect the timing of the expected cash flows and will be discounted using the same effective rate at acquisition resulting in recognizing a gain or loss on the re-estimation of cash flows related the CAPEX receivable.

6.	INVENTORIES

A summary of the Company’s inventories is as follows:

SCHEDULE OF INVENTORIES

	June 30, 2026		December 31, 2025
	$		$
Mineralized material stockpiles		19,493		11,983
Concentrate inventory		36,445		30,172
Supplies inventory		15,938		15,362
Total		71,876		57,517

During the three and six months ended June 30, 2026, the inventory recognized as cost of sales was $54,523 and $131,886 (2025 – $42,568 and $80,446), which includes production costs directly attributable to the inventory production process.

During the three and six months ended June 30, 2026, the Company recognized through cost of sales a net realizable value write-off of inventory of $nil and $nil (2025 – $646 and $646).

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

7.	MINERAL PROPERTIES, PLANT AND EQUIPMENT

A summary of the Company’s Mineral Properties, Plant and Equipment is as follows:

	Depletable mineral properties			Exploration and evaluation		Plant and equipment			Total
	$			$		$			$
Cost
Balance, December 31, 2024		115,721			12,189		115,807			243,717
Additions		9,212			-		21,407			30,619
Change in decommissioning and restoration costs (note 12)		3,006			-		-			3,006
Disposals		(3,244	)		-		(3,758	)		(7,002	)
Adjustments		2,071			-		2,017			4,088
Balance, December 31, 2025		126,766			12,189		135,473			274,428
Additions		5,726			-		10,645			16,371
Change in decommissioning and restoration costs (note 12)		(5,909	)		-		-			(5,909	)
Disposals		-			-		(2,608	)		(2,608	)
Adjustments		2,638			-		(1,552	)		1,086
Balance, June 30, 2026		129,221			12,189		141,958			283,368

Accumulated depreciation and impairment
Balance, December 31, 2024		50,013			-		48,971			98,984
Depletion, depreciation and amortization		7,199			-		14,378			21,577
Disposals		(3,245	)		-		(3,446	)		(6,691	)
Adjustments		(513	)		-		513			-
Balance, December 31, 2025		53,454			-		60,416			113,870
Depletion, depreciation and amortization		4,976			-		10,117			15,093
Disposals		-			-		(2,526	)		(2,526	)
Adjustments		-			-		(160	)		(160	)
Balance, June 30, 2026		58,430			-		67,847			126,277

Cost as at December 31, 2025		126,766			12,189		135,473			274,428
Accumulated depreciation and impairment		(53,454	)		-		(60,416	)		(113,870	)
Carrying value - December 31, 2025		73,312			12,189		75,057			160,558

Cost as at June 30, 2026		129,221			12,189		141,958			283,368
Accumulated depreciation and impairment		(58,430	)		-		(67,847	)		(126,277	)
Carrying value – June 30, 2026		70,791			12,189		74,111			157,091

As at June 30, 2026, the Company’s plant and equipment included right-of-use assets with a carrying amount of $38 for leased mining equipment (December 31, 2025 - $2,926). Depreciation on the right of use assets for the three and six months ended June 30, 2026 was $11 and $80 (2025 - $145 and $265, respectively).

A summary of the Company’s Goodwill and allocation to each CGU is as follows:

SCHEDULE OF GOODWILL

	June 30, 2026		December 31, 2025
	$		$
Caballo Blanco Group (Tres Amigos mine)		2,963		2,963
San Lucas Group		12,503		12,503
Goodwill		15,466		15,466

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

8.	TRADE PAYABLES AND ACCRUED LIABILITIES

A summary of the Company’s trade payables and accrued liabilities is as follows:

	June 30, 2026			December 31, 2025
	$			$
Trade payables		23,801			34,541
COMIBOL contract obligations (note 8(a))		6,139			7,167
Accrued liabilities		16,279			12,861
Balance, end of period		46,219			54,569
Less: current portion		(40,080	)		(47,402	)
Non-current portion		6,139			7,167

a)	COMIBOL contract obligations

COMIBOL contract obligations represent the Company’s obligation to pay its portion of committed funding related to the investment of inventories and fixed assets made prior to 2013 under the previous contract of $4,016, and COMIBOL’s share of the VAT receivable of $2,123 (all of which classified as non-current).

9.	CONSIDERATION PAYABLE

On March 18, 2022, the Company acquired 100% ownership of Sinchi Wayra and Illapa (the “Acquisition”) from Glencore plc (“Glencore”) under the terms and conditions outlined in the Share Purchase Agreement (“SPA”). The SPA was amended on October 3, 2024 by entering into a definitive omnibus agreement.

The following table summarizes the consideration payable to Glencore under the omnibus agreement:

SCHEDULE OF CONSIDERATION PAYABLE

	June 30, 2026		December 31, 2025
	$		$
Contingent value rights (note 9(b))		35,066		20,243
Balance, end of period		35,066		20,243
Less: current portion		-		-
Non-current portion		35,066		20,243

a)	Base purchase price

The base purchase price was to pay up to $80,000 in cash to Glencore in eight equal annual instalments of $10,000 each (the “Base Purchase Price” or “BPP”) with the first payment being made on or before November 1, 2025. The base purchase price obligation had an option to accelerate the payment of the outstanding balance reducing it to $40,000 if exercised prior to November 1, 2025. On September 4, 2025 the Company exercised the acceleration option and fully settled the base purchase price liability for $40,000.

Contingent value rights & additional payments

The Company granted a contingent value right (the “CVR”) to Glencore whereby the Company will pay Glencore a monthly payment of $1,333 (the “CVR Payment”), subject to a total cap of $77,700 (the “Valuation Cap”), in the event that in any calendar month after the date the parties enter into the Term Sheet, the average London Metal Exchange (“LME”) spot price of zinc (or the highest open hedge price if the Hedging Option (as defined below) has been exercised) in the calendar month is at least $3,850 per tonne (the “Base Price”). The CVR Payment will increase by $83 for each increase of $100 per tonne above the Base Price and up to a price of $5,049.99 per tonne.

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

9.	CONSIDERATION PAYABLE (continued)

In addition to the CVR Payment, in the event the average LME spot price of zinc (or the highest open hedge price if the Hedging Option has been exercised) in a calendar month is at least $5,050 per tonne (the “Additional Payment Price”), the CVR Payment will increase by $83 for each increase of $100 per tonne above the Additional Payment Price and the Company will pay Glencore a monthly payment of $83 as a Bonus Payment that will increase by $83 for each increase of $100 per tonne above the Additional Payments Price. The Bonus Payment is not considered as part of the CVR Payment.

Upon the occurrence of the monthly average zinc LME spot price exceeding the Base Price, Glencore can require the Company to hedge a limited amount of zinc production from its Bolivian mining operations (so long as the hedging price would exceed the Base Price) subject to certain conditions (the “Hedging Option”).

The CVR and Additional Payments will be effective from the date of the omnibus agreement until the earlier of December 31, 2032 and the date the Valuation Cap is reached. The Additional Payments and the Hedging Option will terminate once the Company is no longer obligated to make CVR Payments.

The fair value at the initial recognition of the CVR was calculated using a Monte Carlo Simulation with key inputs and assumptions including the zinc spot price ($3,220 per tonne), the expected price of zinc in each year until December 31, 2032, the market risk-free rate and credit spread and the volatility and variability of historical zinc prices.

The Company performed a valuation exercise as at June 30, 2026 and determined a fair value of the CVR of $35,066 (December 31, 2025 - $20,243). The loss on change in fair value attributed to the CVR was $15,788 for the three months ended June 30, 2026 and $14,823 for the six months ended June 30, 2026 ($1,034 three months ended 2025 and $2,979 for six months ended 2025) which is recorded on the statement of comprehensive income.

The following table summarizes the details of the consideration payable to Glencore:

	BPP (a)			CVRs (b)		Total
	$			$		$
Balance, December 31, 2024		34,625			10,158		44,783
Loss on change in fair value of consideration payable		5,375			10,085		15,460
Settlement of base purchase price obligation		(40,000	)		-		(40,000	)
Balance, December 31, 2025		-			20,243		20,243
Less: current portion		-			-		-
Non-current portion		-			20,243		20,243

Balance, December 31, 2025		-			20,243		20,243
Gain on change in fair value of consideration payable		-			14,823		14,823
Balance, June 30, 2026		-			35,066		35,066
Less: current portion		-			-		-
Non-current portion		-			35,066		35,066

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

10.	LOANS PAYABLE

A summary of the Company’s loans payable is as follows:

SCHEDULE OF LOANS PAYABLE


	Bank facilities (a)			Trafigura loan facility (b)			Other loans payable (c)			Promissory loan payable (d)			Total
	$			$			$			$			$
Balance, December 31, 2024		14,791			4,034			744			-			19,569
Proceeds advanced		44,279			-			16,993			11,684			72,956
Interest expense		1,223			336			-			569			2,128
Foreign exchange loss or gain		3,797			-			(160	)		5,270			8,907
Repayment with cash		(32,595	)		(1,848	)		(17,131	)		-			(51,574	)
Balance, December 31, 2025		31,495			2,522			446			17,523			51,986
Less: Current portion		(31,495	)		(1,412	)		(212	)		(17,523	)		(50,642	)
Non-current portion		-			1,110			234			-			1,344

Balance, December 31, 2025		31,495			2,522			446			17,523			51,986
Proceeds advanced		47,325			-			10			7,634			54,969
Interest expense		1,503			47			-			510			2,060
Foreign exchange gain		(4,892	)		-			(75	)		(2,218	)		(7,185	)
Repayment with cash		(37,930	)		(2,569	)		(87	)		(16,076	)		(56,662	)
Balance, June 30, 2026		37,501			-			294			7,373			45,168
Less: Current portion		(37,501	)		-			(94	)		(7,373	)		(44,968	)
Non-current portion		-			-			200			-			200

a)	Bank facilities

The Company has a secured credit facility denominated in Bolivian Bolivianos with Banco BISA S.A. of BOB 55,000 ($5,635), which is comprised of 1) a revolving credit facility of BOB 48,800 ($5,000) for the financing of mining operations and working capital with a fixed interest rate of 10.00% per annum; and 2) a “loan guarantee” credit facility of BOB 6,200 ($635) for the purpose of providing collateral to the Bolivian government for VAT refunds collected prior to the completion of the audit process by the Bolivian tax authority. In Bolivia, companies have the option to receive VAT refunds in advance of the audit process being completed if a loan guarantee for the refund amount is provided. The BOB 55,000 ($5,635) total credit facility is secured by certain real estate assets in Bolivia.

The BOB 48,800 ($5,000) revolving credit facility for working capital purposes can be drawn down at BOB 3,480 ($357) increments and automatically rolls over at maturity once fully repaid. As at June 30, 2026, BOB 48,720 ($4,992) (December 31, 2025 – BOB 48,720 ($5,828)), was drawn down from this credit facility.

As at June 30, 2026, BOB 1,028 ($105) of the BOB 6,200 ($635) loan guarantee credit facility was used to provide collateral to the Bolivian government on VAT refunds received (December 31, 2025 – BOB 1,703 ($204)).

On April 24, 2025, Sociedad Minera Illapa S.A. obtained a 360-day bank loan from Banco BISA S.A. with a fixed interest rate of 6.0% per annum. The facility is secured by a standby letter of credit guarantee issued by Stifel Bank where the marketable securities are held as collateral (refer to note 20). As at June 30, 2026, the loan has been repaid in full.

On April 20, 2026, Sociedad Minera Illapa S.A. obtained a 360-day bank loan from Banco BISA S.A. with a fixed interest rate of 10.00% per annum. The facility is secured by a standby letter of credit guarantee issued by Stifel Bank where the marketable securities are held as collateral (refer to note 20). As at June 30, 2026, the loan amount outstanding was BOB 90,500 ($9,273).

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

10.

LOANS PAYABLE (continued)

The Company also has an unsecured revolving credit facility for working capital requirements and a loan guarantee with Banco de Crédito de Bolivia S.A. for a total of BOB 48,020 ($4,920). The credit facility has a weighted average fixed interest rate of 10.00% per annum and the weighted average interest rate on the loan guarantee facility is 2.0%.

As at June 30, 2026, BOB 50,078 ($5,131) (December 31, 2025 - BOB 50,078 ($5,990)) was drawn down on the credit facility. The credit facility has varying maturity dates to November 2026.

On March 31, 2025, Sociedad Minera Illapa S.A. obtained 180-day bank loan outstanding for BOB 45,962 ($4,709) from Banco de Crédito de Bolivia S.A. with a fixed interest rate of 6.00% per annum. The facility is secured by a standby letter of credit guarantee issued by Stifel Bank where the company holds some of its USD cash balances from sales revenues (refer to note 20). On March 16, 2026, the loan rolled over for an additional 180 calendar days for an amount of BOB 45,962 ($4,709) with a fixed interest rate of 10.00%.

On February 14, 2026 the Company obtained an unsecured 6 month working capital term loan for BOB 17,150 ($1,757) with a fixed interest rate of 10.00% with repayment of interest and principal at the end of the term from Banco Mercantil Santa Cruz S.A.

On March 17, 2026, the Company received a working capital term loan from Banco BISA S.A. for BOB 14,000 ($1,434). The loan term is 180 calendar days and due on September 13, 2026. The loan is unsecured and has a fixed interest rate of 10.00%.

On March 31, 2026, the Company obtained an additional working capital term loan from Banco BISA S.A. for BOB 69,986 ($7,171). The loan term is 360 calendar days and due on March 26, 2027. The loan is unsecured and has a fixed interest rate of 10.00%.

b)	Trafigura loan facility

On April 23, 2021, in connection with the acquisition of Zimapan, Trafigura Mexico, S.A. de C.V. (“Trafigura”) loaned the Company $17,616 under a new loan facility (“Trafigura Loan Facility”).

The Trafigura Loan Facility is secured by a first charge over all Zimapan Mine assets and all other material rights and properties owned by Zilar Mendi.

In the third quarter of 2024, the Company entered into a new amended and restated agreement to settle the outstanding principal amount of $4,156. The amended agreement has the same annual interest rate as the original agreement (1-month SOFR + 6.5%) and is for a period of 36 months, ending on October 31, 2027. The loan is repayable in monthly installments of principal plus accrued interest for the respective period.

On January 29, 2026, the Company made an early payment to settle the remaining balance of the loan facility, fully extinguishing the liability.

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

10.

LOANS PAYABLE (continued)

c)	Other loans payable

In the fourth quarter of 2022, the Company entered into contracts to sell trucks and machinery for net proceeds of $1,310. The Company subsequently leased the trucks and machinery back from the counterparty for a period of five years at a financing charge of 10.0% per annum and is required to make quarterly lease payments plus accrued interest. As the contracts provide the Company the right to repurchase the trucks and machinery at the end of the term for their residual value of 1%, the Company has an irrevocable right to repurchase the assets, and control of the assets did not transfer to the counterparty. Hence, these contracts are accounted for as financing transactions in accordance with IFRS 9 - Financial Instruments, rather than as sale and leaseback transactions under IFRS 16 - Leases. In accordance with IFRS 9, these contracts were recorded as a financial liability at amortized cost using the effective interest rate method. As at March 31, 2026, the financial liability was $294 (December 31, 2025 - $446).

During December 2025, the Company received BOB 20,000 ($2,049) from Banco BISA S.A. to cover payroll costs. The loan term is 180 calendar days and due on June 15, 2026. The loan is unsecured and has a fixed annual nominal rate of 10.00%. As of June 30, 2026, the loan has been repaid in full.

On June 29, 2026, the Company received BOB 20,000 ($2,049) from Banco BISA S.A. for working capital coverage. The loan term is 180 calendar days and due on February 2, 2027. The loan is unsecured and has a fixed annual nominal rate of 10.00%.

d)	Promissory notes

The San Lucas Promissory Notes Issuance program allows the Company to issue up to BOB 140,000 ($16,746) in the Bolivian stock market (Bolsa Boliviana de Valores).

On February 20, 2025, the Company completed its first offering of BOB 70,000 ($7,718), the notes were denominated in Bolivian Bolivianos and had a 6.50% interest rate and a maturity date of February 15, 2026. On August 8, 2025, the Company completed a second offering of BOB 70,000 ($7,718) in promissory notes under its San Lucas Promissory Notes Issuance program. The notes under the second offering have an interest rate of 7.00% and a maturity date of June 15, 2026 and are unsecured. As of June 30, 2026, the Company has repaid the two offerings settling their liability in full.

On April 8, 2026, the Company completed its third offering of BOB 70,000 ($7,718). The notes have an annual interest rate of 11.50%, mature on March 22, 2027, and are unsecured.

On August 4, 2026, the Company completed the fourth offering of BOB 70,000 ($7,718). The notes have an annual interest rate of 10.9985%, mature on July 18, 2027 and are unsecured.

In accordance with IFRS 9, these contracts were recorded as a financial liability at amortized cost using the effective interest rate method. The promissory notes require that San Lucas maintain a current ratio greater than 1.15, a debt service ratio greater than 1.5, and that the debt to equity ratio not exceed 1.85. The Company is fully compliant with all financial covenants stipulated as at June 30, 2026.

Bonds

On December 30, 2024, the Financial System Supervisory Authority (ASFI) authorized the San Lucas Bonds Program. The San Lucas Bonds program allows the Company to issue up to $40,000 of unsecured bonds in the Bolivian Stock market (Bolsa Boliviana de Valores), the bonds can be denominated in USD or Bolivian Bolivianos. As at June 30, 2026, no bonds have been issued under the program.

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

11.	OTHER LIABILITIES

A summary of the Company’s other liabilities is as follows:

SUMMARY OF OTHER LIABILITIES

	June 30, 2026			December 31, 2025
	$			$
Post Employment Benefits (note 11(a))		11,956			12,608
Lease liability		33			867
Other taxes payable (note 11(b))		3,609			5,106
Long-term portion of current income taxes payable		419			713
Participation payable to COMIBOL for interest in joint operation (note 11(c))		4,929			8,873
Other liabilities		2,661			1,250
Balance, end of the period		23,607			29,417
Less: current portion		(7,777	)		(8,876	)
Non-current portion		15,830			20,541

a)	Post-employment benefits

As at June 30, 2026, the Company recognized a provision of $2,128 ($1,933 as at December 31, 2025) for payments that must be made to employees upon termination of employment which is required by Mexican labour legislation. A provision of $9,828 ($10,675 as at December 31, 2025) has been recognized in Bolivia which entitles employees to receive a payment after five years of employment, if the employee resigns or is terminated before the 5-year period they are entitled to receive the amount accrued at the time of separation. Based on expected employee turnover, these provisions are considered non-current.

b)	Other taxes payable

Other taxes payable includes amounts payable to the Mexican and Bolivian tax authorities for miscellaneous taxes such as payroll taxes, withholding taxes, VAT payables and income taxes from prior periods which are being paid under an installment plan.

c)	Participation payable to COMIBOL for interest in joint operation

The net participation payable to COMIBOL is derived from the Illapa Joint Operation. The Company is solely responsible for 100% of certain transactions specified in the agreement and such transactions are recorded as liabilities where there is a net amount payable to COMIBOL.

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

12.	DECOMMISSIONING AND RESTORATION PROVISION

The Company has an obligation to undertake decommissioning, restoration, rehabilitation and environmental work when environmental disturbance is caused by the development and ongoing production of a mining operation. Movements in decommissioning liabilities during the six months ended June 30, 2026 and 2025 are allocated as follows:

SCHEDULE OF DECOMMISSIONING LIABILITIES

	Bolivar			Porco			Caballo Blanco Group			San Lucas Group			Zimapan			Total
	$			$			$			$			$			$
Balance, December 31, 2024		3,666			6,256			7,543			3,006			5,205			25,676
Change in estimate		813			1,113			570			399			111			3,006
Reclamation work performed		(20	)		(7	)		(72	)		(30	)		-			(129	)
Accretion		250			423			698			286			490			2,147
Foreign exchange gain		443			655			2,445			1,104			669			5,316
Balance, December 31, 2025		5,152			8,440			11,184			4,765			6,475			36,016
Less: current portion		(84	)		(15	)		(650	)		(73	)		-			(822	)
Non-current portion		5,068			8,425			10,534			4,692			6,475			35,194

Balance, December 31, 2025		5,152			8,440			11,184			4,765			6,475			36,016
Change in estimate (note 12(a))		(1,094	)		(1,778	)		(6,463	)		(2,670	)		(415	)		(12,420	)
Reclamation work performed		(2	)		(1	)		(23	)		(23	)		-			(49	)
Accretion		242			395			473			200			279			1,589
Foreign exchange gain		(739	)		(1,210	)		(1,488	)		(637	)		183			(3,891	)
Balance, June 30, 2026		3,559			5,846			3,683			1,635			6,522			21,245
Less: current portion		(85	)		(36	)		(434	)		(51	)		-			(606	)
Non-current portion		3,474			5,810			3,249			1,584			6,522			20,639

a)	Change in estimate

In the second quarter of 2026, management updated its estimate of the future expenditures required for the restoration of its mining properties which resulted in a $12,420 decrease in the decommissioning and restoration provision. The decrease in future expenditures is primarily caused by significant changes to the Bolivian economic environment which includes the adopting of a floating exchange rate and a significant reduction in the projected inflation rate. The change in estimate reduced the carrying value of the decommissioning and restoration asset to zero and the remaining $6,505 was recorded as a reduction to Cost of Sales.

A provision for decommissioning liabilities is estimated based on current regulatory requirements and is recognized at the present value of such costs. The expected timing of cash flows in respect of the provision is based on the estimated life of the Company’s mining operations.

	Bolivar			Porco			Caballo Blanco Group			San Lucas Group			Zimapan
	Decommissioning and restoration provisions - June 30, 2026
	Bolivar			Porco			Caballo Blanco Group			San Lucas Group			Zimapan
Undiscounted uninflated estimated cash flow	$	4,243		$	6,924		$	7,747		$	3,242		$	10,069
Discount rate		11.3	%		11.3	%		13.0	%		14.7	%		8.9	%
Inflation rate		7.62	%		7.62	%		7.62	%		7.62	%		3.6	%

	Bolivar			Porco			Caballo Blanco Group			Group			Zimapan
	Decommissioning and restoration provisions - December 31, 2025
	Bolivar			Porco			Caballo Blanco Group			San Lucas Group			Zimapan
Undiscounted uninflated estimated cash flow	$	4,248		$	6,925		$	7,829		$	3,250		$	9,791
Discount rate		10.2	%		10.2	%		9.9	%		9.6	%		8.7	%
Inflation rate		20.2	%		20.2	%		20.2	%		20.2	%		3.6	%

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

13.	SHARE CAPITAL

a) Authorized share capital

The Company is authorized to issue an unlimited number of common shares without par value.

b) Issued – share capital

During the six months ended June 30, 2026, the Company issued 151,669 common shares from the vesting of RSUs, 125,000 common shares from the vesting of PSUs, and 751,487 common shares from the exercise of options for proceeds of $1,102. During the six months ended June 30, 2025, the Company issued 79,585 common shares from the vesting of RSUs.

c) Stock options

On November 25, 2025 at the Company’s annual general meeting, shareholders re-approved the omnibus equity incentive plan (the “Omnibus Incentive Plan”). Pursuant to the Omnibus Incentive Plan, the Company may grant options, RSUs, PSUs, and DSUs to directors, officers, employees, management company employees, and consultants of the Company and its subsidiaries. The maximum number of shares available for issuance under the Omnibus Incentive Plan is limited to 10% of the issued and outstanding common shares.

Pursuant to the Omnibus Incentive Plan, options granted have a maximum term of ten years and the vesting provisions of options granted are at the discretion of the Board of Directors. Options are non-transferrable and the exercise price of the options shall be determined by the Board of Directors at the time the options are granted but in no event shall be lower than the discounted market price permitted by the TSX-V.

The following is a summary of the Company’s stock options granted, exercised and cancelled for the six months ended June 30, 2026 and for the year ended December 31, 2025:

SCHEDULE OF STOCK OPTIONS

	Number of stock options			Weighted average exercise price
	#			C$
Balance, December 31, 2024		3,612,500			1.84
Granted		862,500			4.40
Exercised		(2,663,544	)		1.94
Cancelled		(54,166	)		3.54
Balance, December 31, 2025		1,757,290			2.89
Granted		45,000			17.18
Exercised		(762,501	)		2.20
Balance, June 30, 2026		1,039,789			4.02

As at June 30, 2026, the Company had the following stock options outstanding:

SCHEDULE OF STOCK OPTION OUTSTANDING

		Options outstanding						Options exercisable
Grant Date	Date of expiry	Number of options		Weighted average exercise price		Weighted average remaining years		Number of options		Weighted average exercise price		Weighted average remaining years
				C$						C$
August 1, 2024	August 01, 2029		327,083		1.60		3.09		181,250		1.60		3.09
October 16, 2024	October 16, 2029		18,750		1.64		3.30		18,750		1.64		3.30
June 26, 2025	June 26, 2030		648,956		4.40		3.99		373,963		4.40		3.99
February 27, 2026	February 27, 2031		45,000		17.18		4.67		11,250		17.18		4.67
Balance, June 30, 2026			1,039,789		4.02		3.72		585,213		3.69		3.70

During the six months ended June 30, 2026, the Company recognized share-based compensation expense of $679 (2025 - $651) based on the fair value of the options granted in the current and prior years.

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

13.

SHARE CAPITAL (continued)

The weighted average assumptions used in the Black-Scholes option pricing model were as follows:

Assumption	Based on	2026			2025
Risk-free rate (%)	Yield curves on Canadian government zero-coupon bonds with a remaining term equal to the stock options’ expected life		2.62	%		2.83	%
Expected life (years)	Expiry term of the options		5 years			5 years
Expected volatility (%)	Historical volatility of the Company’s share price		91.86	%		89.86	%
Dividend yield (%)	Annualized dividend rate as of the date of grant		Nil			nil

The weighted average closing share price on the date of the option exercises for the six months ended June 30, 2026 was $12.87 per share (year ended December 31, 2025 - C$8.58).

e) Restricted Share Units (RSU)

RSUs are non-transferrable awards for service which upon vesting and settlement entitle the recipient to receive cash or common shares of equivalent value at the discretion of the Company. The choice of settlement method is at the Company’s sole discretion and the RSUs have been accounted for assuming they will be settled through equity. Vesting conditions for RSUs are set by the Board of Directors.

The following is a summary of the Company’s RSUs for the six months ended June 30, 2026 and for the year ended December 31, 2025:

SCHEDULE OF RESTRICTED SHARE UNITS

	Number of RSUs outstanding			Weighted average fair value
				C$
Balance, December 31, 2024		206,250			1.38
Granted		238,750			3.92
Vested		(148,334	)		2.74
Balance, December 31, 2025		296,666			2.74
Granted		39,000			13.55
Vested		(151,669	)		2.73
Balance, June 30, 2026		183,997			5.05

As at June 30, 2026, the Company had the following RSUs outstanding:

Grant Date	Vesting Date	Number of RSUs outstanding		Weighted average fair value		Weighted average years until vesting
				C$
August 1, 2024	March 31, 2027		67,083		1.38		0.75
June 26, 2025	June 26, 2027		77,914		3.92		0.99
January 05, 2026	January 05, 2027		13,000		13.55		0.52
January 05, 2026	January 05, 2028		13,000		13.55		1.52
January 05, 2026	January 05, 2029		13,000		13.55		2.52
Balance, June 30, 2026			183,997		5.05		1.01

During the six months ended June 30, 2026, the Company recognized share-based compensation expense of $291 (2025 – $292) related to RSUs.

On July 31, 2026 the Company issued 269,000 RSUs to directors, consultants, officers and employees of the Company. One-third of the RSUs vest on each anniversary of the grant date.

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

13.

SHARE CAPITAL (continued)

f) Deferred Share Units (DSU)

DSUs are non-transferrable awards that become payable upon termination of service of the participant. Vesting conditions for DSUs are set by the Board of Directors. Upon settlement, DSUs entitle the recipient to receive cash or common shares of an equivalent value at the discretion of the Company. Timing of settlement after vesting occurs at the discretion of the participant and communicated to the Company by the participant in writing at least fifteen days prior to the designated day, or an earlier date as the participant and the Company pay agree. If no notice is given by the participant for a designated day, the DSUs shall be payable on the first anniversary of the date on which the participant’s termination of service, or any earlier period on which the DSUs vest, at the sole discretion of the participant.

The following is a summary of the Company’s DSUs for the six months ended June 30, 2026 and for the year ended December 31, 2025:

SCHEDULE OF DEFERRED SHARE UNITS

	Number of DSUs outstanding		Weighted average fair value
			C$
Balance, December 31, 2024 and December 31, 2025		168,750		1.38
Balance, June 30, 2026		168,750		1.38

As at June 30, 2026, the Company had the following DSUs outstanding:

Grant Date

Vesting Date

Number of DSUs outstanding

Weighted average fair value

Weighted average years until vesting

years

August 1, 2024

August 1, 2025

168,750

1.38

0.00

Balance, June 30, 2026

168,750

1.38

0.00

During the six months ended June 30, 2026, the Company recognized share-based compensation expense of $nil (2025 – $83) related to DSUs.

On July 31, 2026 the Company issued 60,000 DSUs to directors of the Company. One-third of the DSUs vest on each anniversary of the grant date.

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

13.

SHARE CAPITAL (continued)

g) Performance Share Units (PSU)

PSUs are non-transferrable awards that will vest and become payable upon the attainment of performance criteria within a certain period, the criteria and the evaluation of performance in relation to the criteria is determined by the Board of Directors. PSUs are settled through cash or the issuance of common shares of equivalent value at the discretion of the Company. The choice of settlement method is at the Company’s sole discretion.

The following is a summary of the Company’s PSUs for the six months ended June 30, 2026 and for the year ended December 31, 2025:

SCHEDULE OF PERFORMANCE SHARE UNITS

	Number of PSUs outstanding			Weighted average fair value
				C$
Balance, December 31, 2024		250,000			1.38
Granted		125,000			3.92
Vested		(200,000	)		1.38
Cancelled		(50,000	)		1.38
Balance, December 31, 2025		125,000			3.92
Vested		(125,000	)		3.92
Balance, June 30, 2026		-			-

During the six months ended June 30, 2026, the Company recognized share-based compensation expense of $178 (2025 – $482) related to PSUs.

On July 31, 2026 the Company issued 304,000 PSUs to directors, officers and employees of the Company. The PSUs vest upon attaining certain performance measures over a one-year period. The criteria and the evaluation of performance in relation to the criteria are determined by the Board of Directors.

14.

REVENUES

The Company’s sales revenue is generated from the following significant components:

SCHEDULE OF SALES REVENUE


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
	$		$		$		$
Sales revenue from mining operations (note 14(a))		74,804		51,223		152,021		103,714
Sales revenue from ore processing (note 14(b))		38,654		22,072		88,966		39,895
Revenues		113,458		73,295		240,987		143,609

a)	Sales revenue from mining operations

Sales revenue comes from the sale of metal concentrates which primarily contain silver and zinc but also includes lead and copper. All sales revenue from mining operations is generated from concentrate sales derived from ore that was extracted from the Company’s mineral properties. To generate revenues from the Company’s mineral properties, the Company is responsible and incurs costs for the operation, acquisition, exploration and development of those properties.

b)	Sales revenue from ore processing

Sales revenue from ore processing comes from the San Lucas feed sourcing business located in Bolivia. The feed sourcing business generates revenue from the sale of metal concentrates derived from ore purchased from third-party miners. Third-party miners are paid based upon the metal content of the ore provided and the prevailing metal prices at the time of purchase. After purchasing the ore, the Company assumes full ownership of the ore and is responsible for the processing and sale of the final product which is metal concentrates. The San Lucas ore sourcing and trading business operates under a margin-based business model that maintains contribution margins by aligning ore purchase costs with its metallurgical content and optimizes mill capacity utilization.

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

15.	COST OF SALES

Cost of sales excluding depletion, depreciation and amortization are costs that directly relate to production and generation of revenues at the operating segments. Significant components of cost of sales are comprised of the following:

SCHEDULE OF COST OF SALES


	Three months ended June 30,						Six months ended June 30,
	2026			2025			2026			2025
	$			$			$			$
Consumables and materials		3,716			2,590			7,761			4,957
Energy		1,009			566			2,063			1,282
Insurance		701			707			1,656			1,532
Mining and plant maintenance costs		24,098			19,435			47,142			38,063
Other costs		517			(148	)		(422	)		(406	)
Production Costs		30,041			23,150			58,200			45,428
Transportation and other selling costs		4,467			3,508			8,112			7,444
Mining royalties expense⁽¹⁾		2,349			1,002			5,511			2,350
Purchased ore costs
Ore processing costs
Finished goods inventory changes		(2,933	)		1,163			(3,223	)		2,425
Change in estimate of decommissioning provisions (note 12(a))		(4,657	)		-			(4,657	)		-
Cost of sales – mining operations		29,267			28,823			63,943			57,647

	Three months ended June 30,						Six months ended June 30,
	2026			2025			2026			2025
	$			$			$			$
Purchased ore costs⁽²⁾		26,899			9,703			69,738			15,653
Ore processing costs		7,910			4,385			17,481			7,853
Finished goods inventory changes		(7,705	)		(343	)		(17,428	)		(707	)
Change in estimate of decommissioning provisions (note 12(a))		(1,848	)		-			(1,848	)		-
Cost of sales – ore processing		25,256			13,745			67,943			22,799
Cost of sales		25,256			13,745			67,943			22,799

⁽¹⁾

Mining royalty expense includes a 1% royalty on silver revenue payable to the Mexican government and mining royalties payable to the Bolivian government based upon 5% zinc and 6% silver gross sales revenue from Bolivian mining operations.

⁽²⁾

Purchased ore costs are the amounts paid to third-party miners for the purchase of ore from mineral properties not owned by the Company which is then processed and sold by the Company to generate sales revenue (refer to note 14(b)). The amount paid to third-party miners is based upon the ore’s metal content and prevailing metal prices at the time of purchase.

16.	GENERAL AND ADMINISTRATIVE EXPENSES

A summary of the Company’s general and administrative expenses is as follows:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
	$		$		$		$
Corporate administration		822		856		2,026		1,668
Professional fees		451		518		1,352		1,221
Salaries and benefits		2,483		1,749		5,709		3,509
Tax penalties and inflation charges		2,011		834		4,278		2,479
		5,767		3,957		13,365		8,877

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

17.	OTHER INCOME

A summary of the Company’s other income is as follows:

SCHEDULE OF OTHER INCOME


	Three months ended June 30,						Six months ended June 30,
	2026			2025			2026			2025
	$			$			$			$
Accretion of decommissioning provisions (note 12)		(746	)		(394	)		(1,589	)		(775	)
Accretion of receivable from COMIBOL (note 5(a))		461			(12	)		977			440
Financing charge on leases		-			(162	)		(28	)		(296	)
Interest expense, carrying and finance charges		(1,185	)		(348	)		(2,060	)		(600	)
Interest income on VAT receivable		2,487			1,326			4,958			2,387
Interest income		517			291			894			607
Other income		(234	)		(752	)		308			274
Total Other income		1,300			(51	)		3,460			2,037

18.	INCOME TAX

a)	Income tax expense

A summary of the Company’s income tax expense is as follows:

SCHEDULE OF INCOME TAX EXPENSE


	Three months ended June 30,					Six months ended June 30,
	2026		2025			2026		2025
	$		$			$		$
Current tax expense		32,266		4,692			50,133		12,734
Deferred tax (recovery)		3,801		(3,628	)		2,373		8,036
Income tax expense		36,067		1,064			52,506		20,770

A summary of the Company’s reconciliation of income taxes at statutory rates for the three and six months ended June 30, 2026 and 2025, is as follows:


	Three months ended June 30,						Six months ended June 30,
	2026			2025			2026			2025
	$			$			$			$
Income before income taxes		38,072			22,041			82,981			51,198
Combined federal and provincial statutory income tax rates		27	%		27	%		27	%		27	%
Income tax expense at statutory rates		10,279			5,951			22,405			13,823

Permanent differences		7,368			5,943			5,716			(6,855	)
Change due to differences in tax rates		5,117			4,435			8,865			15,169
Inflation adjustment		(512	)		(33	)		(928	)		(50	)
Change due to foreign translation		10,595			(15,779	)		12,493			(3,063	)
Deferred tax assets not recognized		1,089			1,585			1,720			1,324
Mexico mining royalty tax		1,026			48			2,924			235
Tax effect of investment in subsidiaries		(262	)		(1,509	)		(517	)		(236	)
Impact of change in accounting estimate		807			325			(172	)		325
Others		560			98			-			98
Income tax expense		36,067			1,064			52,506			20,770

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

18.

INCOME TAX (continued)

b)	Deferred taxes

The significant components of the Company’s deferred tax assets are as follows:

SCHEDULE OF DEFERRED TAX ASSETS

	June 30, 2026		December 31, 2025
	$		$
Trade and other receivables		2,059		1,916
Accounts payable		987		-
Other liabilities		5,725		5,871
Mineral properties, plant and equipment		-		12
Decommissioning and restoration provision		2,510		2,671
Non-capital losses		1,595		2,706
Mining tax		2,162		616
Other		374		187
Deferred tax assets, gross		374		187
Deferred tax assets		15,412		13,979

The significant components of the Company’s deferred tax liabilities are as follows:

SCHEDULE OF DEFERRED TAX LIABILITIES


	June 30, 2026			December 31, 2025
	$			$
Mineral properties, plant and equipment		(23,502	)		(22,570	)
Investment in subsidiaries		(1,237	)		(1,916	)
Inventories		(5,215	)		(1,444	)
Trade payables and accrued liabilities		-			(22	)
COMIBOL initial investment period CAPEX receivable		(3,037	)		(3,565	)
Mining tax		(497	)		-
Other		(2,588	)		(2,676	)
Deferred tax liabilities		(36,076	)		(32,193	)

The following table reconciles the deferred tax assets and liabilities to the Consolidated Statements of Financial Position:


	June 30, 2026			December 31, 2025
	$			$
Deferred tax assets		8,387			6,798
Deferred tax liabilities		(29,051	)		(25,012	)
Deferred tax (liability) Asset		(20,664	)		(18,214	)

Deferred tax assets and liabilities that are probable to be utilized are offset if they relate to the same taxable entity and same taxation authority. Future potential tax deductions that do not offset deferred tax liabilities are considered to be deferred tax assets.

As at June 30, 2026, the Company had unrecognized capital losses of approximately $51,119 (December 31, 2025 - $48,424) that arose in Canada, the capital losses can be carried forward indefinitely.

As at June 30, 2026, the Company had unrecognized inflationary adjustments on its investments in subsidiaries of $30,084 (December 31, 2025 – $21,315) that arose in Bolivia, the amount can be utilized upon sale of subsidiaries.

As at June 30, 2026, the Company has unrecognized taxable temporary differences of $85,900 (December 31, 2025 - $87,100) for taxes that would be payable on the unremitted earnings of certain subsidiaries of the Company.

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

18.

INCOME TAX (continued)

c)	Bolivia uncertain income tax position relating to tax year 2017

As part of the acquisition of the Bolivian operations, the Company assumed potential pre-acquisition income tax liabilities related to Bolivia’s 2017 tax year. The potential liability is from different tax positions regarding the deductibility of decommissioning and restoration provisions, depreciation of mineral properties, plant and equipment, undeclared income, and non-deductible expenses in the determination of the Bolivian current income tax.

As the matter relates to income tax, and there was uncertainty over whether the relevant authorities will accept the current tax treatment under the Bolivian tax law, management concluded that it meets the definition of an uncertain tax treatment within the scope of IAS 12 – Income Taxes and IFRIC 23 – Uncertainty over Income Tax Treatments. In accordance with IFRIC 23, an entity shall consider whether it is probable (more likely than not) that a taxation authority will accept an uncertain tax treatment. If an entity concludes it is probable that a taxation authority will accept an uncertain tax treatment, the entity shall determine the taxable income or loss consistent with the tax treatment applied in its income tax filings.

In 2023, the Bolivian tax authorities issued the tax reassessment of 132,559 BOB ($13,568), which included tax interest and penalties. The Company and the Bolivian tax authorities agreed on a financing arrangement (“financing arrangement”) by making an initial deposit of 40,479 BOB ($4,143) (which represented 35% of the total balance) in the second quarter of 2023, and monthly instalments for the remaining balance of 75,175 BOB ($7,694) were payable over five years until June 2028.

The Company successfully challenged the Bolivian tax authorities’ decision through legal proceedings with the Supreme Court of Justice and the Constitutional Court in Bolivia. On January 7, 2025 the Supreme Court of Justice ruled in favor of the Company by issuing sentence 188/2025 which nullified the previous rulings in favor of the tax authority and requires the tax authority issue a new assessment that is legally compliant. The tax authority appealed the decision during the second quarter of 2025, but the appeal was denied in October 2025 and has no further avenues to challenge the decision. The next step is for the tax authority to issue a new assessment, this time updated for the items addressed by the court ruling management will determine whether or not to accept the new assessment or challenge it again. Management has concluded that the matter has been resolved, accordingly, the Company believes there is no current tax liability and has not recognized an expense or any liability related to this matter as at June 30, 2026.

Pursuant to the Sinchi Wayra and Illapa acquisition agreements, Glencore has agreed to indemnify the Company for up to a maximum of $25,000, in aggregate, for all claims and liabilities arising from the acquisition. Such indemnification would, subject to such cap and certain conditions, extend to income tax liabilities. In the unlikely event that the Company exhausts all avenues and receives an unfavourable ruling, the Company is indemnified by the acquisition agreements and would not be liable for any income tax liability up to $25,000.

As at June 30, 2026, the Company has remitted tax instalments totaling 78,297 BOB ($8,014) inclusive of interest and penalties to the Bolivian tax authorities based on the financing arrangement mentioned in the third paragraph above. As the Company believes the current tax owing related to this matter is $nil and the amounts paid will ultimately be refunded to the Company, the total payment made to date of $8,014 has been recognized as “trade and other receivables” (Note 5). On February 27, 2026, the Company filed a formal refund request with the tax authority requesting the refund of the amounts paid and is awaiting a formal response. Due to the current legal status of the proceedings and progress made with the tax authority to issue a refund, management expects to receive the full amount in the next year and no valuation allowance has been recognized.

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

19.	CAPITAL MANAGEMENT

The Company’s objective when managing its capital is to maintain its ability to continue as a going concern while at the same time maximizing the growth of its business and providing returns to its shareholders. The Company’s capital structure consists of shareholders’ equity (comprising issued capital plus equity reserves plus retained earnings) with a shareholders’ equity of $213,088 as at June 30, 2026 (December 31, 2025 - $179,058).

The Company manages its capital structure and makes adjustments based on changes to its economic environment and the risk characteristics of the Company’s assets. The Company’s capital requirements are effectively managed based on the Company having a thorough reporting, planning and forecasting process to help identify the funds required to ensure the Company is able to meet its operating and growth objectives.

The Company is not subject to any externally imposed capital requirements with the exception of compliance with covenants for the San Lucas Promissory Notes Issuance program (note 10(d)).

20.	FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The carrying amounts of the Company’s financial assets and financial liabilities by category are as follows:


June 30, 2026	Amortized cost		FVTPL		FVTOCI		Total
	$		$		$		$
Financial assets
Cash and cash equivalents		50,398		-		-		50,398
Marketable securities		-		-		22,421		22,421
Trade and other receivables		21,037		44,440		-		65,477
Financial assets		71,435		44,440		22,421		138,296
Financial liabilities
Trade payables and accrued liabilities		46,219		-		-		46,219
Consideration payable		-		35,066		-		35,066
Loans payable		45,168		-		-		45,168
Other liabilities		19,579		-		-		19,579
Financial liabilities		110,966		35,066		-		146,032

December 31, 2025
Financial assets
Cash and cash equivalents		44,267		-		-		44,267
Marketable securities		-		-		22,462		22,462
Trade and other receivables		22,977		20,371		-		43,348
Financial assets		67,244		20,371		22,462		110,077
Financial liabilities
Trade payables and accrued liabilities		54,569		-		-		54,569
Consideration payable		-		20,243		-		20,243
Loans payable		51,986		-		-		51,986
Other liabilities		23,598		-		-		23,598
Financial liabilities		130,153		20,243		-		150,396

The categories of the fair value hierarchy that reflect the inputs to valuation techniques used to measure fair value are as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities;

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3: Inputs for the asset or liability based on unobservable market data.

The carrying values of cash and cash equivalents, other receivables, and trade payables and accrued liabilities approximate their fair values because of their short-term nature.

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

20.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

Marketable securities consist of US treasury notes and US treasury bills which are held as part of the Company’s cash position and liquidity management strategy. The marketable securities are measured at fair value using level 1 inputs, the unrealized gain/loss is recorded as other comprehensive income and once the securities are sold or mature the corresponding gain/loss is recorded as other income/expense.

The securities are held with Stifel which uses a portion of the holdings as collateral for the Standby Letters of Credit that were issued to Banco BISA and Banco Credito de Bolivia (see note 10(a)). Although the securities held can be readily converted to cash, they are restricted to the extent that the amounts serve as collateral. The Standby Letter of credit issued to Banco BISA is for $10,000 and expires on April 20, 2027. The standby letter of credit issued to Banco Credito de Bolivia is for $5,800 and expires on September 14, 2026, and automatically renews every six months. Since the standby letter of credit to Banco Credito de Bolivia will renew indefinitely, the amount held as collateral has been classified as non-current.

Trade receivables are measured at fair value using Level 2 inputs. The fair value of trade receivables is measured based on inputs other than quoted prices for the underlying commodity prices (silver, lead, zinc, copper) to which the receivable relates as the trade receivables are provisionally priced at the time of sale.

The fair value of the loans payable for disclosure purposes is determined using discounted cash flows based on the expected amounts and timing of future cash flows discounted using a market rate of interest adjusted for appropriate credit risk.

Consideration payable, comprised of contingent value rights (see note 9(b)), is measured at fair value using Level 3 inputs. The fair value is calculated using a Monte Carlo Simulation with key inputs and assumptions including the zinc spot price, the expected price of zinc in each year until December 31, 2032, the market risk-free rate and credit spread and the volatility and variability of historical zinc prices.

The levels in the fair value hierarchy into which the Company’s financial assets and liabilities that are measured and recognized on the consolidated statements of financial position at fair value on a recurring basis were categorized as follows:


	June 30, 2026						December 31, 2025
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
	$		$		$		$		$		$
Assets
Marketable securities		22,421		-		-		22,462		-		-
Trade and other receivables		-		44,440		-		-		20,371		-
Assets		22,421		44,440		-		22,462		20,371		-

Liabilities
Consideration payable		-		-		35,066		-		-		20,243
Liabilities		-		-		35,066		-		-		20,243

The Company’s trade receivables arose from provisional concentrate sales and are valued using quoted market prices based on the forward London Metal Exchange for silver, zinc and lead and the London Bullion Market Association P.M. fix for silver.

The methodology and assessment of inputs for determining the fair value of financial assets and liabilities as well as the levels of hierarchy for the Company’s financial assets and liabilities measured at fair value remains unchanged from that at December 31, 2025.

The Company has exposure to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives for growth and shareholder returns. The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework and reviews the Company’s policies on an ongoing basis.

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

20.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s trade receivables.

The Company has concentrate contracts to sell the zinc, lead and copper concentrates produced by all of the Company’s mines. Concentrate contracts are a common business practice in the mining industry. The terms of the concentrate contracts may require the Company to deliver concentrate that has a value greater than the payment received at the time of delivery, thereby introducing the Company to credit risk of the buyers of concentrates. Should any of these counterparties not honour purchase arrangements, or should any of them become insolvent, the Company may incur losses for products already shipped and be forced to sell its concentrates on the spot market or it may not have a market for its concentrates and therefore its future operating results may be materially adversely impacted. At June 30, 2026, the Company had receivable balances associated with buyers of its concentrates of $44,439 (December 31, 2025 - $20,371). The Company’s concentrate is sold to well-known and well-established international concentrate buyers.

The following financial assets represent the maximum credit risk to the Company:


	June 30, 2026		December 31, 2025
	$		$
Cash and cash equivalents		50,398		44,267
Marketable securities		22,421		22,462
Trade and other receivables		97,544		43,348

Management constantly monitors and assesses the credit risk resulting from its concentrate sales, trading counterparties and customers. With the exception to the above, the Company believes it is not exposed to significant credit risk.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages its liquidity risk by continuously monitoring forecasted and actual cash flows. The Company has in place a rigorous planning and budgeting process to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis and its expansion plans. The Company strives to maintain sufficient liquidity to meet its short-term business requirements, taking into account its anticipated cash flows from operations, its holdings of cash and marketable securities, and its committed loan facilities.

In the normal course of business, the Company enters into contracts that give rise to commitments for future minimum payments. The following tables summarize the remaining contractual maturities of the Company’s financial liabilities and operating and capital commitments on an undiscounted basis at June 30, 2026:

	<1 year		1 – 2 years		2 – 5 years		>5 years		Total
	$		$		$		$		$
Trade payables and accrued liabilities		40,080		6,139		-		-		46,219
Consideration payable – CVR & additional payments		7,458		11,586		18,756		6,170		43,970
Loans payable		44,968		200		-		-		45,168
Lease payments		39		35		35		-		109
Financial liabilities		39		35		35		-		109
Maturities of financial liabilities		92,545		17,960		18,791		6,170		135,466

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

20.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

Currency risk

The Company reports its financial statements in USD; however, the Company operates in jurisdictions that utilize other currencies. As a consequence, the financial results of the Company’s operations as reported in USD are subject to changes in the value of the USD relative to local currencies. Since the Company’s sales are denominated in USD and a portion of the Company’s operating costs and capital spending are in local currencies, the Company is negatively impacted by strengthening local currencies relative to the USD and positively impacted by the inverse.

The sensitivity of the Company’s net income to changes in the exchange rate between the US dollar and the Bolivian boliviano, the Mexican peso and the Canadian dollar, would be as follows: a 1% change in the US dollar exchange rate relative to the Bolivian boliviano would change the Company’s net income by approximately $308, a 1% change in the US dollar exchange rate relative to the Mexican peso would change the Company’s net income by approximately $223, and a 1% change in the US dollar exchange rate relative to the Canadian dollar would change the Company’s net Income by approximately ($74).

The Company’s financial assets and liabilities as at June 30, 2026 are denominated in Canadian dollars, US dollars, Bolivian bolivianos and Mexican pesos and translated to US dollars as follows:

SCHEDULE OF CURRENCY EXPOSURES

	CAD		BOB			USD		MXN			Total
	$		$			$		$			$
Financial assets
Cash and cash equivalents		1,213		7,212			41,090		883			50,398
Marketable securities		-		-			22,421		-			22,421
Trade and other receivables		98		6,980			58,154		245			65,477
Financial assets		1,311		14,192			121,665		1,128			138,296

Financial liabilities
Trade payables and accrued liabilities		456		27,093			6,410		12,260			46,219
Consideration payable		-		-			35,066		-			35,066
Loans payable		-		45,168			-		-			45,168
Other liabilities		-		9,828			7,590		2,161			19,579
Financial liabilities		456		82,089			49,066		14,421			146,032
Net financial assets (liabilities)		855		(67,897	)		72,599		(13,293	)		(7,736	)

Interest rate risk

Interest rate risk is the risk that the fair values and future cash flows of the Company will fluctuate because of changes in market interest rates. The Company monitors its exposure to interest rates and has not entered into any derivative contracts to manage this risk. As at June 30, 2026, the Company’s exposure to interest rate risk on interest bearing liabilities is limited to its consideration payable, debt facilities and lease liabilities. Based on the Company’s interest rate exposure at June 30, 2026, a change of 1% increase or decrease of market interest rate would impact the Company’s income or loss by approximately $452.

Price risk

Metal price risk is the risk that changes in metal prices will affect the Company’s income or the value of its related financial instruments. The Company derives its revenue from the sale of silver, zinc, lead and copper. The Company’s sales are directly dependent on metal prices that have shown significant volatility and are beyond the Company’s control. Consistent with the Company’s mission to provide equity investors with exposure to changes in precious metal prices, the Company’s current policy is to not hedge the price of precious metal.

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

21.	RELATED PARTY TRANSACTIONS AND KEY MANAGEMENT COMPENSATION

The Company’s related parties include its subsidiaries, joint arrangements and key management personnel. During its normal course of operation, the Company enters into transactions with its related parties for goods and services. All related party transactions for the three and six months ended June 30, 2026 and 2025, have been disclosed in these consolidated financial statements.

These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the parties.

Remuneration of key management personnel

Key management includes directors of the Company, the COO, the CFO, the CEO and Executive Chairman, and other members of key management. Compensation to key management personnel was as follows:

SCHEDULE OF KEY MANAGEMENT PERSONNEL


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
	$		$		$		$
Management and consulting fees		664		627		1,359		1,309
Share-based compensation		320		1,133		715		1,282
Key management personnel		984		1,760		2,074		2,591

Of the $664 in management and consulting fees incurred with related parties during the three and six months ended June 30, 2026, $55 and $112 (2025 - $61 and $117) was related to directors’ fees and $609 and $1,247 (2025 - $566 and $1,192) was related to management fees.

22.	SEGMENT INFORMATION

The Company has identified its operating segments based on the internal reports that are reviewed and used by the chief executive officer and the executive management team, collectively the chief operating decision maker (“CODM”), in assessing performance and in determining the allocation of resources. The Company primarily manages its business by looking at individual producing and developing resource projects as well as the aggregate of the exploration and evaluation properties and typically segregate these projects between production, development, and exploration.

Operating segments

Management has identified 5 reportable operating segments: the Bolivar mine and processing plant, the Porco mine and processing plant, the Caballo Blanco Group which includes the Tres Amigos, Colquechaquita mines and the Don Diego processing plant, the San Lucas Group which includes the Reserva mine and San Lucas feed sourcing business, Zimapan mine and processing plant, and Corporate and Other activities.

The Bolivar and Porco segment revenues, cost of sales, capital expenditures, total assets and total liabilities are presented on 100% basis even though the assets, liabilities, sales and expenses are recorded at 45% in the consolidated balance sheet and statement of comprehensive income because the Company’s interest meets the definition of a joint operation in accordance with IFRS 11 Joint Arrangements. The Illapa Joint Operations elimination column in the tables below shows the removal of COMIBOL’s 55% interest in Illapa’s operating results and assets and liabilities.

Under the Association Agreement, Illapa S.A. is the designated operator and holds exclusive, comprehensive responsibility for all technical, financial, labor, legal, and commercial aspects of the operations. The Agreement grants Illapa full control over the mining production chain, including the exclusive right to commercialize concentrates in both domestic and international markets and to manage all related commercial processes. Because the Company is responsible for overseeing all of the operations, the CODM evaluates the performance of the segment on a 100% gross basis.

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

22.

SEGMENT INFORMATION (continued)

a)	Revenues, operating costs and gross profit mining operations and ore processing:

SCHEDULE OF SEGMENT INFORMATION

Three months ended June 30, 2026	Bolivar			Porco			Caballo Blanco Group			Zimapan			San Lucas Group			Illapa Joint Operation eliminations			Total
Country	Bolivia			Bolivia			Bolivia			Mexico			Bolivia			Bolivia
	$			$			$			$			$			$			$
Revenues from mining operations		20,082			12,200			24,303			35,973			-			(17,754	)		74,804
Mine operating costs																				-
Production costs		(7,919	)		(6,063	)		(4,942	)		(18,013	)		-			6,680			(30,257	)
Ore processing costs
Depletion and amortization		(4,573	)		(1,455	)		(2,083	)		(2,862	)		-			3,761			(7,212	)
Mine operating costs		(12,492	)		(7,518	)		(7,025	)		(20,875	)		-			10,441			(37,469	)
Gross profit - mining operations		7,590			4,682			17,278			15,098			-			(7,313	)		37,335

Revenues from ore processing		-			-			-			-			38,654			-			38,654
Ore processing operating costs																				-
Purchased ore & conc. costs		-			-			-			-			(19,194	)		-			(19,194	)
Ore processing costs		-			-			-			-			(5,072	)		-			(5,072	)
Depletion and amortization		-			-			-			-			(584	)		-			(584	)
Mine operating costs		-			-			-			-			(24,850	)		-			(24,850	)
Gross profit - ore processing		-			-			-			-			13,804			-			13,804

Total revenues		20,082			12,200			24,303			35,973			38,654			(17,754	)		113,458
Total cost of sales		(7,919	)		(6,063	)		(4,942	)		(18,013	)		(24,266	)		6,680			(54,523	)
Total depletion and amortization		(4,573	)		(1,455	)		(2,083	)		(2,862	)		(584	)		3,761			(7,796	)
Gross profit – total		7,590			4,682			17,278			15,098			13,804			(7,313	)		51,139

Three months ended June 30, 2025	Bolivar			Porco			Caballo Blanco Group			Zimapan			San Lucas Group			Illapa Joint Operation eliminations			Total
Country	Bolivia			Bolivia			Bolivia			Mexico			Bolivia			Bolivia
	$			$			$			$			$			$			$
Revenues from mining operations		18,229			7,871			18,901			20,577			-			(14,355	)		51,223
Mine operating costs
Production costs		(7,783	)		(4,745	)		(5,855	)		(17,358	)		-			6,512			(29,229	)
Depletion and amortization		(3,437	)		(742	)		(1,908	)		(1,741	)		-			2,917			(4,911	)
Mine operating costs		(11,220	)		(5,487	)		(7,763	)		(19,099	)		-			9,429			(34,140	)
Gross profit - mining operations		7,009			2,384			11,138			1,478			-			(4,926	)		17,083

Revenues from ore processing		-			-			-			-			22,072			-			22,072
Ore processing operating costs																				-
Purchased ore & conc. costs		-			-			-			-			(9,361	)		-			(9,361	)
Ore processing costs		-			-			-			-			(3,978	)		-			(3,978	)
Depletion and amortization		-			-			-			-			(528	)		-			(528	)
Mine operating costs		-			-			-			-			(13,867	)		-			(13,867	)
Gross profit - ore processing		-			-			-			-			8,205			-			8,205

Total revenues		18,229			7,871			18,901			20,577			22,072			(14,355	)		73,295
Total cost of sales		(7,783	)		(4,745	)		(5,855	)		(17,358	)		(13,339	)		6,512			(42,568	)
Total depletion and amortization		(3,437	)		(742	)		(1,908	)		(1,741	)		(528	)		2,917			(5,439	)
Gross profit - total		7,009			2,384			11,138			1,478			8,205			(4,926	)		25,288

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

22.

SEGMENT INFORMATION (continued)

Six months ended June 30, 2026	Bolivar			Porco			Caballo Blanco Group			Zimapan			San Lucas Group			Illapa Joint Operation eliminations			Total
Country	Bolivia			Bolivia			Bolivia			Mexico			Bolivia			Bolivia
	$			$			$			$			$			$			$
Revenues from mining operations		41,111			22,203			48,790			74,739			-			(34,822	)		152,021
Mine operating costs
Production costs		(20,628	)		(12,153	)		(14,300	)		(34,832	)		-			16,284			(65,629	)
Depletion and amortization		(8,982	)		(2,962	)		(4,118	)		(5,299	)		-			7,459			(13,902	)
Mine operating costs		(29,610	)		(15,115	)		(18,418	)		(40,131	)		-			23,743			(79,531	)
Gross profit - mining operations		11,501			7,088			30,372			34,608			-			(11,079	)		72,490

Revenues from ore processing		-			-			-			-			88,966			-			88,966
Ore processing operating costs
Purchased ore & conc. costs		-			-			-			-			(52,310	)		-			(52,310	)
Ore processing costs		-			-			-			-			(13,947	)		-			(13,947	)
Depletion and amortization		-			-			-			-			(1,191	)		-			(1,191	)
Mine operating costs		-			-			-			-			(67,448	)		-			(67,448	)
Gross profit - ore processing		-			-			-			-			21,518			-			21,518

Total revenues		41,111			22,203			48,790			74,739			88,966			(34,822	)		240,987
Total cost of sales		(20,628	)		(12,153	)		(14,300	)		(34,832	)		(66,257	)		16,284			(131,886	)
Total depletion and amortization		(8,982	)		(2,962	)		(4,118	)		(5,299	)		(1,191	)		7,459			(15,093	)
Gross profit – total		11,501			7,088			30,372			34,608			21,518			(11,079	)		94,008

Six months ended June 30, 2025	Bolivar			Porco			Caballo Blanco Group			Zimapan			San Lucas Group			Illapa Joint Operation eliminations			Total
Country	Bolivia			Bolivia			Bolivia			Mexico			Bolivia			Bolivia
	$			$			$			$			$			$			$
Revenues from mining operations		39,548			18,057			34,008			43,783			-			(31,682	)		103,714
Mine operating costs
Production costs		(16,030	)		(10,146	)		(11,515	)		(34,165	)		-			13,407			(58,449	)
Depletion and amortization		(5,760	)		(2,083	)		(3,865	)		(2,858	)		-			5,550			(9,016	)
Mine operating costs		(21,790	)		(12,229	)		(15,380	)		(37,023	)		-			18,957			(67,465	)
Gross profit - mining operations		17,758			5,828			18,628			6,760			-			(12,725	)		36,249

Revenues from ore processing		-			-			-			-			39,895			-			39,895
Ore processing operating costs
Purchased ore & conc. costs		-			-			-			-			(14,947	)		-			(14,947	)
Ore processing costs		-			-			-			-			(7,050	)		-			(7,050	)
Depletion and amortization		-			-			-			-			(1,000	)		-			(1,000	)
Mine operating costs		-			-			-			-			(22,997	)		-			(22,997	)
Gross profit - ore processing		-			-			-			-			16,898			-			16,898

Total revenues		39,548			18,057			34,008			43,783			39,895			(31,682	)		143,609
Total cost of sales		(16,030	)		(10,146	)		(11,515	)		(34,165	)		(21,997	)		13,407			(80,446	)
Total depletion and amortization		(5,760	)		(2,083	)		(3,865	)		(2,858	)		(1,000	)		5,550			(10,016	)
Gross profit - total		17,758			5,828			18,628			6,760			16,898			(12,725	)		53,147

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

22.

SEGMENT INFORMATION (continued)

b)	Capital expenditures, total assets and total liabilities by operating segment

As at June 30, 2026	Bolivar			Porco			Caballo Blanco Group			Zimapan			San Lucas Group			Corporate and other			Illapa Joint Operation eliminations			Total
Country	Bolivia			Bolivia			Bolivia			Mexico			Bolivia						Bolivia
	$			$			$			$			$			$			$			$
Capital expenditures		7,133			969			4,209			6,638			1,879			-			(4,457	)		16,371
Total assets		144,475			87,786			124,262			95,076			100,476			24,329			(86,223	)		490,181
Total liabilities		(56,485	)		(37,288	)		(104,460	)		(47,218	)		(27,615	)		(35,118	)		31,091			(277,093	)

As at December 31, 2025	Bolivar			Porco			Caballo Blanco Group			Zimapan			San Lucas Group			Corporate and other			Illapa Joint Operation eliminations			Total
Country	Bolivia			Bolivia			Bolivia			Mexico			Bolivia						Bolivia
	$			$			$			$			$			$			$			$
Capital expenditures		11,184			1,887			5,097			15,602			3,895			-			(7,046	)		30,619
Total assets		138,287			88,393			136,936			66,534			74,026			26,687			(85,092	)		445,771
Total liabilities		(56,573	)		(39,876	)		(133,428	)		(42,714	)		(4,405	)		(20,502	)		30,785			(266,713	)

c)	Revenues by operating segment, product and major customers

Three months ended June 30, 2026	Bolivar			Porco			Caballo Blanco Group			San Lucas Group			Zimapan			Total
Country	Bolivia			Bolivia			Bolivia			Bolivia			Mexico
	$			$			$			$			$			$
Silver		12,680			4,116			11,494			17,018			24,144			69,452
Zinc		6,872			8,153			11,660			22,394			12,755			61,834
Lead		346			266			829			826			2,053			4,320
Copper		-			-			-			-			4,538			4,538
Illapa joint operation 55% interest		(11,045	)		(6,709	)		-			-			-			(17,754	)
Provisional pricing adjustments		903			401			1,249			485			(2,438	)		600
Smelting and refining costs		(719	)		(736	)		(929	)		(2,069	)		(5,079	)		(9,532	)
Sales to external customers		9,037			5,491			24,303			38,654			35,973			113,458

Three months ended June 30, 2025	Bolivar			Porco			Caballo Blanco Group			San Lucas Group			Zimapan			Total
Country	Bolivia			Bolivia			Bolivia			Bolivia			Mexico
	$			$			$			$			$			$
Silver		11,530			2,724			10,816			8,277			10,196			43,543
Zinc		7,435			5,609			7,703			15,778			8,404			44,929
Lead		369			302			1,130			956			2,146			4,903
Copper		-			-			-			-			1,868			1,868
Illapa joint operation 55% interest		(10,026	)		(4,329	)		-			-			-			(14,355	)
Provisional pricing adjustments		76			18			373			(977	)		1,649			1,139
Smelting and refining costs		(1,181	)		(782	)		(1,121	)		(1,962	)		(3,686	)		(8,732	)
Sales to external customers		8,203			3,542			18,901			22,072			20,577			73,295

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

22.

SEGMENT INFORMATION (continued)

Six months ended June 30, 2026	Bolivar			Porco			Caballo Blanco Group			San Lucas Group			Zimapan			Total
Country	Bolivia			Bolivia			Bolivia			Bolivia			Mexico
	$			$			$			$			$			$
Silver		23,918			7,463			26,447			49,590			50,271			157,689
Zinc		16,818			15,431			21,471			41,786			23,790			119,296
Lead		571			359			1,959			3,381			4,261			10,531
Copper		-			-			-			-			8,706			8,706
Illapa joint operation 55% interest		(22,611	)		(12,211	)		-			-			-			(34,822	)
Provisional pricing adjustments		1,532			390			869			(865	)		(1,885	)		41
Smelting and refining costs		(1,728	)		(1,440	)		(1,956	)		(4,926	)		(10,404	)		(20,454	)
Sales to external customers		18,500			9,992			48,790			88,966			74,739			240,987

Six months ended June 30, 2025	Bolivar			Porco			Caballo Blanco Group			San Lucas Group			Zimapan			Total
Country	Bolivia			Bolivia			Bolivia			Bolivia			Mexico
	$			$			$			$			$			$
Silver		23,606			7,420			17,401			14,889			21,729			85,045
Zinc		17,951			11,500			17,016			26,793			18,696			91,956
Lead		859			820			1,823			1,821			4,503			9,826
Copper		-			-			-			-			4,099			4,099
Illapa joint operation 55% interest		(21,751	)		(9,931	)		-			-			-			(31,682	)
Provisional pricing adjustments		245			105			383			(1,077	)		3,240			2,896
Smelting and refining costs		(3,113	)		(1,788	)		(2,615	)		(2,531	)		(8,484	)		(18,531	)
Sales to external customers		17,797			8,126			34,008			39,895			43,783			143,609

During the three and six months ended June 30, 2026 and 2025, the Company had two customers. One customer in Bolivia accounted for 68% and 69% of the total sales revenue for the three and six months ended June 30, 2026 (2025 – 72% and 70%, respectively). The other customer in Mexico accounted for 32% and 31% of the total sales revenue for the three and six months ended June 30, 2026 (2025 – 28% and 30%, respectively).

SANTACRUZ SILVER MINING LTD.

Notes to the Condensed Interim Consolidated Financial Statements

Three and Six Months ended June 30, 2026 and 2025

(Unaudited)

(Expressed in thousands of US dollars, unless otherwise noted)

23. EARNINGS PER SHARE

Earnings per share for the Company was calculated based on the following:

SCHEDULE OF EARNINGS PER SHARE

	2026		2025		2026		2025
	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
	$		$		$		$
Net income for the period		2,005		20,977		30,475		30,428
Weighted average number of shares outstanding		92,666,724		88,967,382		92,423,038		88,965,643
Earnings per share – basic		0.02		0.24		0.33		0.34

	2026		2025		2026		2025
	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
	$		$		$		$
Net income for the period		2,005		20,977		30,475		30,428
Weighted average number of shares outstanding		92,666,724		88,967,382		92,423,038		88,965,643
Incremental shares from options, RSUs, DSUs and PSUs		1,386,536		4,484,166		1,386,536		4,484,166
Earnings per share – diluted		0.02		0.22		0.32		0.33

Earnings per share is based on the weighted average number of common shares of the Company outstanding during the period. The diluted earnings per share reflects the potential dilution of common share equivalents, such as outstanding share options, RSUs, DSUs and PSUs in the weighted average number of common shares outstanding during the period, if dilutive.

The following securities could potentially dilute basic earnings per share in the future, but were not included in the computation of diluted earnings per share because they were anti-dilutive:

	2026		2025

Stock options		45,000		-
Anti-dilutive shares		45,000		-

24.	SUPPLEMENTAL CASH FLOW INFORMATION

A summary of the Company’s non-cash other income is as follows:

SCHEDULE OF NON-CASH OTHER INCOME

	2026			2025		2026			2025
	Three months ended June 30,					Six months ended June 30,
	2026			2025		2026			2025
	$			$		$			$
Accretion of decommissioning provision (note 12)		746			394		1,589			775
Accretion of COMIBOL initial investment CAPEX receivable (note 5(a))		(461	)		12		(977	)		(440	)
Finance charges on leases		-			162		28			296
Interest expense, carrying and finance charges (note 10)		1,185			348		2,060			600
Non-cash other income		1,470			916		2,700			1,231

Other non-cash transactions not included in the table above are disclosed elsewhere in the notes to the consolidated financial statements.