Kuya Silver Sets New Q2 Production Records at Bethania Mine with 66% Increase in Quarterly Tonnage

Bethania Mine Hits Quarterly Production Milestone Amid Accelerated Ramp-Up

In Q2 2026, Kuya Silver achieved a new production record at the Bethania Project with 5,097 metric tonnes of mineralized material mined, marking a 66% increase over Q1 2026. This growth underscores the company’s disciplined operational ramp-up alongside ongoing underground development. The mine set a daily production record of 124 tonnes and a monthly record of 2,040 tonnes (68 tonnes per day) during the quarter, highlighting steady operational progress.

During Q2, silver processing totaled 23,912 ounces at an average grade of 5.9 ounces per tonne, with silver equivalent production reaching 30,559 ounces. June represented a pivotal month, with silver equivalent production climbing to 13,273 ounces as ore grades improved. Kuya Silver credits this surge to mine sequencing optimizations implemented mid-quarter, which boosted silver grades to 6.66 ounces per tonne by June, surpassing management expectations and indicating potential for sustained grade improvements.

Processing Efficiency and Metallurgical Optimization Efforts

Silver recoveries averaged 79.7% in Q2 2026, influenced by processing lower-grade development material and early stope scheduling. As sequencing improved and higher-grade ore was processed, recoveries increased to approximately 82% by June. Historically, the company has achieved silver recoveries above 90% with higher-grade batches, and management anticipates further recovery improvements as operations stabilize and focus on richer ore.

Kuya Silver initiated a metallurgical testing program to optimize processing outcomes for current and future ore profiles. Lead recoveries averaged 80.87%, while zinc recoveries were 32.51%, with zinc recovery identified as a key area for enhancement as production scales. This methodical approach reflects management’s commitment to maximizing economic returns from all processed material.

Advances in Underground Development and Infrastructure

During Q2 2026, underground development at Bethania progressed by 437 metres, with 1,535 metric tonnes of development material drilled and blasted to support mine expansion. This development targets deeper, higher-grade veins, underpinning the company’s Phase 1 goal of 350 tonnes per day and positioning the operation for improved margins.

Kuya Silver approved a dual-car hoisting winch system installation at Bethania, slated for commissioning in October 2026. This upgrade will allow simultaneous haulage of two ore cars, enhancing extraction efficiency and operational flexibility. The investment reflects a strategic focus on deliberate, safe infrastructure growth to support long-term production ramp-up.

Strategic Contractor Partnerships Boost Development and Exploration

To sustain growth and expand exploration, Kuya Silver engaged up to three specialized contractors for development, drilling, and mining. Safasermin S.A.C., a Peruvian drilling and exploration firm, was awarded the underground drilling contract to operate three rigs at Bethania, with plans to add surface drilling in H2 2026 to accelerate exploration of additional silver veins.

Following competitive bidding and site visits, Kuya Silver issued a Letter of Award to Minera Tauro S.A.C. for underground development. Pending contract finalization, mobilization is expected shortly, allowing in-house staff to focus on production ramp-up. This outsourcing strategy underscores management’s recognition of the need for specialized contractors to meet growth targets.

Internal Ramp Project Progress and Geomechanical Preparations

Kuya Silver initiated portal development for a new internal ramp and conducted a competitive bidding process to assign ramp development to a specialized contractor. Four mining contractors submitted comprehensive technical and economic proposals, currently under evaluation, with contract award and mobilization anticipated soon to accelerate ramp execution.

Concurrent geomechanical assessments and ground-support designs were completed, defining rock-mass conditions and reinforcement strategies. This engineering groundwork enables immediate contractor mobilization post-award, minimizing project delays and improving confidence in timelines and costs for this vital infrastructure unlocking deeper ore zones.

Strong Revenue and Financial Position Support Growth Plans

Silver accounted for 87% of Bethania’s Q2 revenue, with an average realized price of $72 per ounce. The company sold 17,450 ounces of silver, plus 41 tonnes of lead and 22 tonnes of zinc byproducts. Lead and zinc sales contributed significantly to cash flow, with average prices of $1,889 per tonne for lead and $3,445 per tonne for zinc, reflecting stable commodity markets.

Rising production volumes, improving grades, and enhanced recoveries are driving meaningful revenue growth. Management emphasized that these operational achievements, combined with a robust balance sheet, uniquely position Kuya Silver to meet near-term production goals while expanding exploration across six additional silver vein systems in the Bethania district. This financial strength supports disciplined infrastructure investments without reliance on external financing, reducing execution risks and enhancing strategic flexibility.

Exploration and District-Scale Development Strategy

Kuya Silver controls seven silver vein systems in the Bethania district, with the current mine representing the initial value realization. The company pursues a dual-track strategy: maintaining disciplined production growth at Bethania while systematically exploring and developing six other vein systems. Management highlights that exploration expansion is enabled by the strong balance sheet, new drilling contractor, and increased technical capacity.

Development decisions are geology-driven rather than influenced by short-term commodity price fluctuations, reflecting confidence in the long-term value of the Bethania veins and surrounding targets. The company’s commitment to deliberate infrastructure building and systematic exploration aims to maximize shareholder value through controlled, high-return development over aggressive short-term production.

Quality Assurance and Production Data Integrity

Kuya Silver employs rigorous quality assurance and control protocols involving two main sampling methods. Underground vein material is sampled every 4 metres via continuous channel sampling along galleries, with complete volume collection. Stockpiled material is sampled using trenching at regular intervals, with precise topographic referencing.

Samples are pulverized on-site, quartered, and securely transported to the Dmtri I. Mendelejeff laboratory in Huancayo for fire assay and atomic absorption spectroscopy. Concentrate assay results are independently verified by buyers. Sample security includes sealed transport trucks and tamper-proof concentrate trucks, with documented custody chains overseen by the mine superintendent, ensuring data integrity throughout.

Community Engagement and Earthquake Relief Efforts

Kuya Silver’s Bethania mine and infrastructure were unaffected by a 5.5 magnitude earthquake in Junin on July 19, 2026. However, the company acknowledged the severe impact on nearby communities, especially Chongos Bajo and Chupuro. As a responsible local operator, Kuya Silver extended sympathies and committed to supporting recovery efforts.

The company is assisting employees with affected family members and donating to local emergency relief. It noted partner and stakeholder interest in aid and identified official donation centers, including the Municipalidad Distrital de Chongos Bajo offices, which collect drinking water, non-perishable food, warm clothing, and medicines. This response reflects Kuya Silver’s integration and commitment to the Junin community.

Processing Facility Operations and Capacity Expansion Plans

Kuya Silver continues processing mineralized material at the Camila Plant, integral to its operational infrastructure. The company announced a letter of intent regarding the Camila Plant on January 27, 2026, with further updates on facility developments and strategic plans forthcoming. This processing capacity is key to the company’s production infrastructure and future scaling.

The combined structure of underground mining at Bethania and third-party processing at Camila offers operational flexibility and optimization of production scheduling and concentrate handling as volumes grow. Management’s cautious, contractor-consulted approach extends to processing facility planning, reflecting disciplined capital allocation and capacity growth strategies.