IMPACT Silver Corp.

Good day, ladies and gentlemen. Welcome to Impact Silver's Q2 2026 period ending June 30th, 2026 Financial and Production Results Conference Call. Before we begin, we would like to go over our disclosure statements, followed by Mr. Fred Davidson's comments on the quarterly results and the Q&A period. Certain statements in the following conference call regarding Impact Silver's core business operations may constitute four looking statements. Such statements are not historical facts, but are predictions about the future, which inherently involves risk, uncertainties, and could cause actual results to differ materially from those contained in the forelooking statements. I would like to now turn it over to Fred Davidson, President and CEO of Impact Silver.

Thanks, Jerry. I've got to admit, it's always great to have a quarter like this and a first half like this, in fact. So it's been a good year for a good year so far. Starting off with some of the numbers, it's revenue for the second quarter was and the rest of the world. and the gross profit for the six months was $29 million compared to $3 million in the year before. So overall, there's a heck of a way to start off the new year. Obviously, the things that are impacting it are the price of metals are obviously dramatically up. As well, we had significant improvement in grades over the quarter and the year for the year to date. The average grade... For instance, June 30th, 2025, for the quarter, was 158 grams a ton. We averaged over 200 grams per ton in this quarter. And year-to-date, we've averaged 229 grams a ton compared to 158 grams a ton. Obviously, grade is important and we can thank the Kenner for it. We advertised that a while ago. I don't think people truly appreciated that it was significant and is as significant as it is now. As we go forward, we're working into an area called San Ramon and San Ramon South Deep's Thank you for joining us. We had, as we've advertised, been rebuilding the shaft, which was, I guess, last built in about 1950, 1960. And the track system underground at the Guadalupe, because Guadalupe continues to provide our principal source of ore. And it's got, of course, the... It's fed now by the Kena as well as our traditional veins there. So that's going forward and I've got to admit it's really quite exciting to see it happen. The other mines are still consistently producing and they're moderate grades and what have you. But those two, the San Ramon and the Kena and the Guadalupe are our principal source of feed. Overall, The average price we received in the second quarter was $67.91 per ounce, and that's up from $34.83. So you can see there's been a fairly dramatic increase there. And the realized gold price was $4,283 as opposed to $3,317. So yes, grade, tonnage, price, you can't ask for a better combination. and as everybody knows, our stock is highly leveraged to that type of thing. We are a relatively small producer, but we are a very pure producer. 97% or thereabouts of our grade is traditionally the silver production and the other 3% is Things like lead sink. So going forward, we're looking at, subject to our friends south of the border, we're looking at continued strength in the price of metal and continued strength in terms of grades and time. Other things happening. We're looking at Capiri now. Obviously, prices have changed and changed our perspective. Then, of course, we've had the rather exciting results out at the Carlos Pacheco, where we're running over kilos in certain cases on some of the holes. So we're going to have an extensive program on that. It's high-grade. It's brand new in terms of our We did have an original understanding of Carlos Pacheco. We thought it was limited. It's now opening up to the north, and so the exploration there is dramatic. And finally, at Plamosa, we've been test running ore from other suppliers. We haven't signed off any of it yet. It's got to make money for us, otherwise we won't be doing it. But overall, I think we're looking at a strong balance of the year. We've averaged four cents for the first six months yield per shareholder, per share rather, and I'm not sure we'll get quite that comparable to the first quarter, which was dramatic, but certainly we're seeing growing strength both in production grade and metal prices. Cash in bank is over $50 million. We have no long-term debt. Our working capital is the equivalent as well. And we don't expect any substantial changes in that other than as we expand. When we start developing Capiri, we'll obviously be spending some capex there. And the rest of it is our expiration program. We're going to be accelerating the expiration program as we've always sort of funded it based on the amount of cash available. and that's been always tough in this business. We're going to be bringing two more rigs on site and that'll bring our surface fleet up to about three rigs at Sequalpan and an underground rig as well because we've still got 200 square kilometers of project, number of targets and a lot of them haven't been tested yet. So it's going to be an exciting year in 2027 as we accelerate our exploration there. Overall, it's just been a good six months. Period.

Perfect. Thanks Fred for that overview. Here are some of the questions we compiled and received from investors in emails and calls this quarter. In the future, please feel free to send questions to inquiries at impactsilver.com or call me directly at 778- 867-7909. Question 1. Great quarter, Fran and Jerry. Finally net income for the second quarter in a row. Looking forward to the rest of the year. With significant cash on hand, will there be any sort of buyback considered for IMPACT?

We've looked at doing a bit of that. The biggest problem with buybacks, it's expensive to do if you only do a little bit, because the legal costs, the broker's costs, etc. It's certainly something we've considered, but we haven't discarded it, but we're not hard on it yet at this point in time.

Okay, got it. Question two. In regards to the Plamosa, any updates on the third-party mineral processing news and deals? It appears to be a break-even or possibly a profitable activity. Would it just be offset some cost, or would it possibly add to net income for the company?

Yeah, Plamosa is, what we are doing is we're negotiating with a couple of people there. We've test-mined some work. That actually showed up in the quarter. It was some gold that we basically bought the ore and processed it. It ended up in a small profit on that, on the gold. We've also been mining, well not mining, recovering from the tailings pond. The lead oxides that have always been going into the pond, and as you know, we've developed a system for recovering it. But what we're doing right now is really reviewing the operating costs to get it down to a bare minimum, the maintenance costs, if you will. And secondly, to continue the exploration there. And we've actually had a couple of exploration projects come in in the general region that we're negotiating on as well. So We're focusing more on developing the resource before we start mining. And that's going to be a little bit. It's not easy. So at this point in time, nothing in hand is to the point where we've got a solid sort of two-year contract for processing. It's being negotiated with a couple of people right now.

Got it. Question three is more specifically on the average cost sales price of silver. Average price of silver you obtained this quarter seems to be just over $51 an ounce when in some periods some investors expected $70 US an ounce. How does that work? Just to add to that, the MD&A and financials actually indicated $67.91 per ounce. So I'm not quite sure what the $51 was seeing. But Fred?

You've answered it already. I'm not sure. We're certainly getting better than $51 an ounce right at the moment, and obviously it's quite a bit down from over $100 in the first quarter, but it's been fairly resilient, and I think there's still strength there. It's down a little bit at the moment, but it's been bouncing up and down for the last several weeks. I'm not sure what's driving it, political or otherwise, but it sure beats the $30 an ounce that we were getting a year ago. So we're quite pleased with the price.

Fair enough. Question four. We're trending at almost a million ounces of silver halfway through the year, Fran and Jerry. Is this now the expected new run rate for IMPACT?

I'd hope so. The fact is, you know, we are subject to the variability we get when you're running on epithermal veins. And, for instance, first quarter, the cannon gave us some really impressive grades. We got into an area which, although we're still really good, we're as impressive as a kilo. So it's going to vary, but I'd expect... We're expecting that we're going to try and maintain that level of production for the balance of the year, yes.

Okay, excellent. Question five regards the exploration budget. There's been 2.7 million exploration drilling reports so far this year. Can we expect more drilling news on a regular basis given the size and meters?

Well, we gave two recent releases on the drilling at Colas Pacheco, and they were fairly impressive, and I don't think anybody even noticed it. But in any event, a lot of our drilling is, if you will, let's call it production-type drilling, where we're drilling the Thank you very much. and Carlos Pacheco. Silver Corp., Fernando Montoya, George Gorzynski, Frederick Davidson

Yeah, we're working on that right now, actually. The whole idea is the animals changed in terms of character, and that is we're hoping to put more tonnage through at any one time.

And the engineers are... There's still, we have to make up equipment. We're doing the specs on it. For instance, one of the transformers on site was blasted by a lightning strike. Okay, there's one we have to replace type of thing. So yeah, we're working on that. We hope to have a pretty firm decision on that in the next, let's say, months.

Question 7, with regards to the overhead and increased costs in G&A, $2.1 million for 2025 and $2.6 million, substantial increase so far in 2026. Is that expected to continue or is this a one-time?

Well, actually, as you know, financial statements now require us to disclose that. And doing a quick look at it, you can see that it's all legal and accounting. And that was in part sort of probably a slightly higher billing from our auditors because they're new auditors. They always sort and George Gorzynski. and the other side is trying to clarify title on some certain transactions that much of it is involved with say Mexican legal where we evaluate when we're looking at a project or even when we're negotiating for instance with somebody who's going to supply us or We actually have to find out whether they really own the ore. So it just takes time and hopefully it's not going to spend as much as we have. And I think that'll probably be the area where we'll get our biggest reduction in costs for the balance of this year.

Got it. Question eight in regards to the balance sheet investment line item. It went down from $5 million to about just under $800,000. Does that mean Impact has sold off some properties or options or redeemed some GICs to free up some cash?

We just reduced the GICs in 90 days. They wouldn't allow us to put them into current assets, which is kind of silly. In any event, what we're doing is we're running shorter term and it doesn't show up as GICs. It just shows up in the cash balance.

Okay, got it. Question 9, any plans to hedge silver now that the cash flow is positive and seems to be stable? I know nobody likes to hear about this but obviously things can go up and down on the silver side quite fast.

Yeah, no. We've always said that we are leveraged to the price of silver. And as you've seen, we get a sort of a dramatic result when the price of silver moves up. First quarter, $11 million net profit after tax. What are we doing by hedging? We're saying that management can outguess the average investor. And our attitude is, we'll produce it, we'll sell it, we'll sell it at market price. If there's a specific situation where we have a, say, a marginal investment, and we may look at it, for instance, if we start the Capiri Open Pit, it's very sensitive to the price of metal. So it's one that we may hedge. But otherwise, no, we don't hedge.

Okay, got it. Last question. Any other M&A ideas or organic growth as a direction for impact given these new levels of silver prices?

Yeah, we've actually got a team out right now. In fact, I just got a report on one project that they just brought in. We're definitely looking. The problem with the public companies is a lot of them, and you know the story in this business, up on Mystery Down on History, somebody's market cap is up because they've got a couple of drill holes. It goes a long way from a couple of drill holes Productions, and and of the last three projects we brought in all of them were private companies that obviously either somebody wants to retire or they want to take some money off the table. So we're getting quite a bit of that coming in and I think over the next while we'll be able to sort of identify and maybe take on one or two of them.

Got it. That's all the questions we have for this quarter. Thank you, everyone, investors and stakeholders for all the questions and interest in Impact Silver. Please submit questions to us at inquiries at impactsilver.com for the future of earning calls and conference call. We look forward to hearing from you on the next call. For more information, please visit www.impactsilver.com. We are traded on the TSX under IPT and also on the OTCQB under ISVLF. Thank you, everyone. Have a great day.