December 01, 2014

Santacruz Silver Announces Amendment to Silver Prepay Agreement

Vancouver, B.C. - Santacruz Silver Mining Ltd. ("Santacruz" or the "Company") (TSX.V:SCZ) reports that it has amended the previously announced US$28.4 million Pre-paid Silver Purchase Agreement with JMET, LLC ("JMET") wherein the Company had agreed to sell 4,635,000 ounces of silver through August 2019, subject to certain adjustments relating to metal prices. The original agreement was announced in a news release on September 18, 2014.

In light of the volatility in both the precious metals and equities markets, Santacruz has elected to delay the construction decision on the San Felipe Project until better market conditions exist. The Company will continue baseline studies, permitting applications and in-house technical studies with respect to the San Felipe Project, so as to continue to advance the development of the project in the coming months. As such, the Company's cash requirements have been reduced and accordingly the Company has amended the agreement with JMET. In the near-term the Company will focus on increasing both production and efficiencies at the Rosario Mine and generating positive cash flow with the intention of increasing its treasury.

The amended agreement reduces the contractual quantity of silver to be sold to JMET and, accordingly, the Company has agreed to repay JMET a portion of the original silver prepayment amount. Pursuant to the amended agreement Santacruz will now sell to JMET 2,600,000 ounces of silver at an agreed upon discount to the spot price. The first delivery of silver to JMET is 52,000 ounces in July 2015, and sales of an additional 52,000 ounces shall occur each month through August 2019, at which point the contract will be fulfilled.

Pursuant to the original agreement the Company received an upfront payment of US$28.4 million. With the quantity of silver ounces to be delivered reduced to 2,600,000 ounces, the upfront payment has been commensurately reduced to US$12.4 million. Accordingly, Santacruz repaid JMET US$9.0 million upon execution of the amended agreement and has agreed to repay the balance of US$7.0 million on or before April 1, 2015.

With the purpose of guaranteeing cash flow, the Company has entered into a minimum price protection program ("PPP") to set a floor price of US$17/ Ag ounce on its silver production for 2015 and Q1 2016, and US$16/ Ag ounce for the balance of 2016, and has also put in place a floor price for its gold, zinc and lead production for 2015 and Q1 2016. For clarity, the PPP does not limit the maximum price at which Santacruz may sell its production, which will allow it to benefit from any increase in metal prices. The Company has funded a portion of the PPP from its treasury and JMET has funded a portion from the US$9 million payment made upon execution of the amended agreement.

President Arturo Préstamo stated, "With this amended agreement, we have set up the Company to be in a stronger position during these volatile market conditions. The Company will continue low cost but important and necessary activities on the San Felipe Project, aiming to further de-risk the project and advance all necessary permits and approvals to have them in hand when timing is appropriate to make a construction decision. We are now on the cusp of having the Rosario Mine at full operational capacity of 450 -- 500 tpd, and with the ability to become a cash flow positive operation at today's low metal prices." Mr. Préstamo added, "By early first quarter 2015, Rosario's milling capacity is expected to be approximately 700 tpd, at which time we plan to maximize the full capacity by augmenting production from the Rosario Mine with third party ore, as we have done in the past."


About Santacruz Silver Mining Ltd.

Santacruz is a Mexican-focused silver company with a producing mine (Rosario); two advanced-stage projects (San Felipe and Gavilanes) and an early-stage exploration project (El Gachi). The Company is managed by a technical team of professionals with proven track records in developing, operating and discovering silver mines in Mexico. Our corporate objective is to become a mid-tier silver producer.

'signed'

Arturo Préstamo Elizondo,
President, Chief Executive Officer and Director

For further information please contact:

Neil MacRae
Santacruz Silver Mining Ltd.
Email: info@santacruzsilver.com
Telephone: (604) 569-1609

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

Forward looking information

Certain statements contained in this news release, such as the parties' obligations under the amended agreement, productions plans and cash flow at Rosario and development at San Felipe grades, mine and mill development and the acquisition of mineralized material from third parties, constitute "forward-looking information" as such term is used in applicable Canadian securities laws. Any forward-looking information that constitutes a financial outlook is intended to provide information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Forward-looking information is based on plans, expectations and estimates of management at the date the information is provided and is subject to certain factors and assumptions, including, that the Company's financial condition and development plans do not change as a result of unforeseen events, that the Company obtains required regulatory approvals, that the Company is able to obtain material from third parties on reasonable terms, future metal prices and that the demand and market outlook for metals do not decline significantly. Forward-looking information is subject to a variety of risks and uncertainties and other factors that could cause plans, estimates and actual results to vary materially from those projected in such forward-looking information. Factors that could cause the forward-looking information in this news release to change or to be inaccurate include, but are not limited to, the risk that any of the assumptions referred to prove not to be valid or reliable, that occurrences such as those referred to above are realized and result in delays, or cessation in planned work, that the Company's financial condition and development plans change, delays in regulatory approval, risks associated with the interpretation of data, the geology, grade and continuity of mineral deposits, the possibility that results will not be consistent with the Company's expectations, as well as the other risks and uncertainties applicable to mineral exploration and development activities and to the Company as set forth in the Company's Annual Information Form filed under the Company's profile at www.sedar.com. There can be no assurance that any forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader should not place any undue reliance on forward-looking information or statements. The Company undertakes no obligation to update forward-looking information or statements, other than as required by applicable law.