Ceo Letter To Shareholders

Dear Fellow Shareholders,

As we close 2025, Outcrop Silver holds a rare asset: a true high-grade primary silver project in Colombia, a category with very few peers globally against a backdrop of prolonged supply constraints and growing demand. Assets like Santa Ana require patience, discipline, and a long-term mindset, because when handled correctly they have the potential to create exceptional value over time.

At the end of 2023, Outcrop Silver had a defined resource at Santa Ana and a strong conviction that the district was far larger than what had been captured in the model-but we still had to prove it. In 2024, we began doing exactly that by stepping out along the broader trend, securing the access required to drill new areas, and converting early targets into multiple new discoveries that validated the scale and continuity of the system.

2025 was the year of execution. We surpassed our initial guidance of 24,000 metres, with more than 28,500 metres drilled to date,. During the year, we increased our discovery inventory to six, delivered major vein extensions, achieved a step-change in land access, and advanced technical work that strengthens future project economics.

The Company also reached important corporate milestones, including graduation to the Toronto Stock Exchange in November and completion of a $23 million oversubscribed financing. We attracted long-term institutional capital, with Jupiter Asset Management acquiring a 9.25% ownership position and Eric Sprott increasing his - shareholder position to over 20%, reflecting a meaningful shift toward a more strategic, long-term shareholder base. Supported by this execution and a strengthening silver market, Outcrop Silver's share price delivered gains of approximately 100% year-to-date, reaching a 52-week high of $0.47 on December 11.

2026 is the delivery year. We expect to publish an updated resource that reflects what has been demonstrated through more than eighteen months of continuous drilling, continue expanding the system, and begin laying the groundwork for project-level studies at a scale and profile appropriate for a meaningful silver development opportunity. With a stronger market foundation now in place, we also intend to pursue broader U.S. capital markets exposure to enhance visibility and liquidity as the Company continues to mature.

These milestones matter because today Santa Ana is valued on dollars per ounce in the ground. One side of that equation-the silver price-is driven by broader market forces, and 2025 was a powerful reminder of the leverage a true primary silver company carries to rising silver prices. The other side of the equation-the ounce base we define and de-risk-is firmly within our control. Our strategy has been to preserve silver price leverage while growing the ounce base in disciplined, meaningful steps.

Turning Discoveries Into Ounces

2025 marked the transition from discovery-led exploration to disciplined execution across the Santa Ana system. While new high-grade vein systems continued to be added-including Aguilar, Jimenez, La Ye, Los Mangos, Guadual, and Morena-the primary focus shifted to extending strike and depth, confirming continuity, linking structures, and converting discoveries into resource-ready ounces. This approach strengthened the technical foundation of the project, expanded the scale of known mineralization, and positioned Santa Ana for a materially more robust resource update based on continuity, repeatability, and execution rather than isolated intercepts.

Exploration highlights in the year include:

• Aguilar was extended to more than 1,250 metres along strike and more than 250 metres vertically, supported by parallel veins such as Aguilar North and Aguilar HW that add meaningful scale
• Jimenez confirmed strong high-grade mineralization across 500 metres, accompanied by additional upside from the parallel Jimenez North structure.
• La Ye and La Lupe evolved into an interconnected vein system with multiple high-grade intercepts and excellent continuity for more than 700 metres.
• Los Mangos delivered the most significant step-out to date with hole DH459 returning 12.03 metres true width grading 736 g/t Ag and 3.41 g/t Au. This result confirms the strength of high-grade mineralization far south of the existing resource area.
• Guadual and Morena provided additional high-grade discoveries, further validating the district scale potential of Santa Ana

Technical Work Supporting Future Economics

Santa Ana continues to demonstrate its hallmark combination of high-grade and high recovery. Metallurgical test work again confirmed exceptional recoveries of 96.3 percent for silver and 98.5 percent for gold¹. These results support the potential for a high-grade mineral concentrate with no penalty metals² and strengthen the foundation for future economic studies.

In addition, sensor-based ore sorting test work on La Porfia material demonstrated the potential for early-stage pre-concentration to increase head grade and reject waste, supporting future efficiency and footprint improvements³.

Community and Government Partnerships that Enable Execution

Execution at Santa Ana in 2025 was enabled by long-standing community partnerships and increasing recognition at the municipal, departmental, and national levels. These relationships are fundamental to uninterrupted access, permitting momentum, and long-term value creation in Colombia.

During the year, land-access agreements expanded to 233 properties, up from 112 in 2024, enabling continuous, year-round drilling across the district. This progress was supported by sustained, transparent engagement, including more than 75 formal community dialogues and stakeholder meetings focused on listening, alignment, and co-planning rather than one-way communication.

After six years of continuous partnership with the communities of Falan and Frías, Outcrop has built a foundation of trust that materially reduces execution risk. Our community programs are intentionally focused on capacity building rather than short-term support. In 2025, these efforts reached nearly 400 participants through education, technical training, and adult learning initiatives, aimed at strengthening local skills, professional opportunities, and the ability of communities to participate meaningfully in long-term economic activity.

We also work as a facilitator alongside local leaders to advance shared priorities. In 2025, this included collaboration on 49 community infrastructure initiatives, road improvements across 32 local communities used jointly by residents and our operations, and the co-development of seven priority municipal projects designed to unlock external funding and long-term public benefit.

In recognition of this operating model, Santa Ana was formally acknowledged by the Government of Tolima as one of 26 companies contributing to regional economic development, reinforcing institutional confidence in our approach and long-term development pathway.

Maturing Market Platform and Shareholder Base

In 2025, Outcrop Silver successfully graduated from the TSX Venture Exchange to the Toronto Stock Exchange, marking an important step in the Company's maturation. This transition reflected the scale of activity at Santa Ana, the strength of our governance, and the evolution of Outcrop from an early-stage explorer to a company executing against a clear growth and development pathway.

Throughout 2025, we actively monitored the evolution of our shareholder base and trading activity using third-party custody and market analytics. This data reflects consistent net buying from U.S.-based investors through both the Canadian exchange and sustained liquidity on the OTC market. In several late-2025 weeks, U.S. depository (DTC) net purchases were meaningful, and U.S.-based custody now accounts for approximately one-fifth of the Company's outstanding shares. This accumulation has occurred alongside rising institutional ownership and reflects longer-term positioning rather than short-term trading.

These trends indicate that Outcrop's shareholder base is becoming increasingly international and institutionally anchored. With this foundation in place, we are preparing to pursue a full-board U.S. exchange listing, such as the NYSE American or Nasdaq. Expanding our U.S. market presence is intended to improve accessibility for existing and prospective shareholders, align our trading venue with where demand is originating, and better reflect the profile of a growing, high-quality primary silver development company.

Strengthening the Balance Sheet and Expanding Institutional Ownership

In 2025, Outcrop Silver materially strengthened its balance sheet through a series of disciplined financing initiatives, culminating in the closing of an upsized $23 million public offering on October 3, 2025. This financing significantly improved the Company's financial flexibility and positioned Outcrop to fund major value-defining catalysts while maintaining capital discipline.

Jupiter Asset Management emerged as a cornerstone investor with a $15 million investment, and Eric Sprott contributed $5 million, increasing his ownership to approximately 20%. Together, these investments marked a meaningful shift in Outcrop's shareholder base toward long-term, institutionally anchored capital following extensive technical and commercial due diligence.

Collectively, these milestones mark a clear inflection point for the Company, placing Outcrop Silver in the strongest position it has ever held as we move into the next phase of growth.

Silver Market and Outlook

The silver market in 2025 confirmed a structural shift that has been building for several years: demand is growing faster than supply in a market with limited ability to respond. According to the Silver Institute's World Silver Survey 2025, global silver demand exceeded mine supply for a fifth consecutive year, with a deficit of approximately 95 million ounces in 2025. Cumulative supply shortfalls from 2021 through 2025 now exceed 800 million ounces-roughly one full year of global mine production.

Silver's supply profile makes these deficits persistent. Only approximately 25-30% of global silver production comes from primary silver mines, with the balance produced as a byproduct of lead-zinc, copper, and gold operations (Silver Institute, World Silver Survey 2025). Because byproduct supply is driven by other metals, higher silver prices do not quickly translate into increased production, limiting supply elasticity even during strong price environments.

Demand growth is increasingly industrial in nature. Industrial applications now account for more than 60% of total silver consumption, with annual usage approaching 700 million ounces, driven by solar photovoltaics, electrification, electronics, automotive systems, and emerging technologies (Silver Institute, World Silver Survey 2025). These end uses are essential, difficult to substitute, and linked to long-term structural trends rather than short-term economic cycles.

At the same time, the pipeline of new primary silver projects remains constrained. Years of underinvestment have left few advanced-stage assets capable of materially contributing new supply as existing mines age and grades decline.

Additional supply risk emerged late in 2025, when China-the world's largest silver refiner-announced new export licensing requirements effective January 2026 (Ministry of Commerce of the People's Republic of China, November 1, 2025). While the full impact remains uncertain, any friction in refined silver exports would further tighten an already constrained market.

In this context, high-quality primary silver projects with demonstrated continuity, scale, and technical robustness are becoming increasingly strategic assets.

2026: The Year of Delivery

After more than eighteen months of continuous drilling, our priority is to deliver an updated resource that reflects what has now been demonstrated across Santa Ana. This update is anticipated to underpin our valuation and expected to represent- a critical proof point for shareholders: our ability to materially grow the resource in meaningful steps, at scale, while maintaining the characteristics that have consistently differentiated Santa Ana to date.

That distinction matters. Santa Ana is valued not only on the silver price and the ounce base, but on the type of asset it represents-a primary silver system in a market where very few such projects exist. Within this already small peer group, the key differentiator is not silver price exposure alone, but the demonstrated ability to significantly expand the underlying ounce base. Our strategy has been to convert sustained drilling into resource-ready ounces in large, deliberate steps, not incremental gains, thereby expanding the foundation of value on which the market assigns a premium.

It is anticipated that a 2026 resource update will also mark a transition point for the Company. With scale increasingly defined, the focus begins to shift from pure discovery risk toward execution and definition. Continued drilling remains central, but it is anticipated that the work ahead will increasingly supports project-level evaluation, allowing the market to assess Santa Ana not just as an exploration success, but as a credible and advancing silver development opportunity.

Execution will continue at pace. We expect a minimum of three drill rigs operating continuously through 2026, with approximately 35,000 metres of drilling planned. This program will focus on resource expansion, infill, and selective new discovery drilling, building directly on the existing system. With eight drill-ready targets and another seven in the pipeline, Santa Ana continues to offer substantial growth potential.

From a corporate perspective, 2026 is anticipated to also reflect the next stage in Outcrop Silver's evolution. With a stronger valuation foundation and a more institutionally anchored shareholder base in place, we intend to pursue broader U.S. market exposure as part of aligning the Company's trading platform with its growing scale, profile, and long-term ambitions.

Final Thoughts

Santa Ana earned attention for one simple reason: it is one of the highest-grade primary silver systems. That remains important-but Outcrop Silver is no longer defined by grade alone.

Over the past several years, we have deliberately positioned the Company on a long-term value creation pathway. We have executed on discovery and drilling, strengthened our balance sheet, built a durable shareholder base, and established trusted partnerships with communities and government. These are the fundamental challenges that ultimately determine whether a project advances or stalls, and I am proud of the progress we have made on each of them.

Santa Ana has the scale potential and technical foundation to support lasting value creation. In 2026, our focus is disciplined execution-delivering the resource update, continuing to convert drilling into resource-ready ounces, and advancing the work required for the next stage of project definition.

Sincerely,

Ian Harris
President and Chief Executive Officer
Outcrop Silver
harris@outcropsilver.com
www.outcropsilver.com

¹ Based on gravimetric concentration and conventional froth flotation sequence array, released on June 25, 2024.

² Based on chemical characterization of resulted mineral concentrate and tails released on August 23, 2023.

³ Ore sorting results released on June 17, 2025.

Qualified Person: The technical information contained in this news release has been reviewed and approved by Mr. Guillermo Hernandez, CPG-AIPG, Vice-President Exploration at Outcrop Silver. Mr. Hernandez is a Qualified Person for the Company as defined by National Instrument 43-101.

Certain information contained herein constitutes "forward-looking information" under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "potential," "we believe," or variations of such words and phrases or statements that certain actions, events or results "will" occur. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Outcrop Silver to be materially different from those expressed or implied by such forward-looking statements or forward-looking information, including: the timing and delivery of an updated resource; further expansion of drilling; timing and ability to list on a U.S. stock exchange; outlook of trading in the United States and internationally; continuity of institutional ownership; outlook for the demand and pricing of silver; forecasted supply risk of silver, receipt of all necessary regulatory approvals, capital expenditures and other costs, financing and additional capital requirements, general economic, market and business conditions, new legislation, uncertainties resulting from potential delays or changes in plans, political uncertainties, and the state of the securities markets generally. Although management of Outcrop Silver have attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. Outcrop Silver will not update any forward-looking statements or forward-looking information that are incorporated by reference.

SOURCE Outcrop Silver & Gold Corp.