South American Silver Corp.
TSX : SAC

South American Silver Corp.

July 02, 2008 15:44 ET

South American Silver Announces Extension of Silver Enrichment at Malku Khota

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 2, 2008) - South American Silver Corp. ("SASC" or the "Company) (TSX:SAC) is pleased to announce the results from the next 12 holes from the Malku Khota Project, Bolivia. All diamond drill holes are from the Central Limosna Zone.

These results continue to support management's view that Malku Khota hosts a significant silver-indium resource. The mineralization in these holes shows that in Central Limosna, high grade mineralization extends much deeper than the previously interpreted zone of secondary enrichment silver mineralization.

Three fans of holes covering approximately 300 metres of strike include the highest grade mineralization and include intervals of 100-300 plus gpt silver. Two of these fans have holes that include intervals of deep, plus 100 gpt silver mineralization. One hole has plus 100 gpt silver at a depth of 198 metres down-hole (191 m below ridge top) and a second plus 100 gpt silver mineralization at 301 metres (291 m below ridge top).

The two deep high grade holes are in fans LP and LA which are approximately 100 metres apart. Assay intervals for these two holes are shown in the following table:



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Drill From To Length Av Ag Av Av Cu Av Pb Av Zn Av
Hole (metres) (metres) (metres) (gpt) In (ppm) (ppm) (ppm) Ga
(gpt) (gpt)
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Fan LP: LMD 035 drilled at -75 degrees towards 290 degrees
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LMD035 0.0 318.0 318.0 135.8 2.9 287.9 1,334 253 2.0
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17.5 74.0 56.5 289.0 4.0 958.6 2,769 230 1.4
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196.9 254.0 57.1 279.7 3.7 242.2 2,007 308 1.7
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Highest
assay 234 235.5 1.5 1,905.0 13.9 89.30 7,990 530 1.8
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Deepest
assay plus
100 gpt 301.5 304.4 2.9 221.9 2.7 60.0 317.3 112 2.0
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Fan LA: LMD024 drilled at -75 degrees towards 290 degrees
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LMD024(i) 0.0 304.0 304.0 112.6 8.3 64.9 1,927 169 2.1
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0.0 242.0 242.0 137.2 4.3 75.7 2,369 198 2.0
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47.0 112.0 65.0 312.1 2.8 109.3 2,589 246 1.7
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183.6 208.0 24.4 204.4 1.3 39.2 669 132 2.1
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Highest
assay 70 71.35 1.35 1,465.0 5.5 199.0 3,090 374 1.8
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Deepest
assay plus
100 gpt 198 199.5 1.5 209.0 0.5 27.3 259 165 1.8
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(i)Previously reported


Good enrichment mineralization was also found in Fan LS, approximately 100
metres to the north of Fan LP.

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Drill From To Length Av Ag Av In Av Cu Av Pb Av Zn Av Ga
Hole (metres) (metres) (metres) (gpt) (gpt) (ppm) (ppm) (ppm) (gpt)
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LMD028 drilled at -50 degrees towards 290 degrees
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0.0 266.0 266.0 47.1 2.1 137.3 1,546 255 2.5
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28.0 113.5 85.5 90.7 3.0 266.4 1,700 415 3.4
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71.6 111.7 40.1 127.7 2.5 171.6 1,535 355 2.7
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Highest
assay 88.0 89.7 1.7 370.0 9.5 279.0 3,270 361 3.3
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These holes have been drilled from the top of the ridge back towards the NW. Since the sandstone dips steeply to the west the true width of sandstone intersected is only a small fraction of the total length of intercept. The purpose of the holes, however, is to ascertain the distribution of secondary enrichment which is thought to have a near-horizontal attitude, such that the holes cut the enrichment at a high angle. The deep, plus 100 gpt silver intersections suggest that there may be a band of stratabound high grade mineralization that extends to a greater depth than the more horizontally distributed near surface enrichment. The entire Central Limosna zone extends over a strike length of at least 550 metres.

A total of 74 holes have now been completed for a total of 24,800 metres. With this press release results from a total of 58 holes have been released. Mineralized areas now defined include Central Limosna, South Limosna, Wara Wara and Sucre.

Only approximately 11,000 metres of the 24,800 metres of drilling were included in the previously reported indicated and inferred resource due to the non-availability of assay results. The reported initial resource is 50,200,000 ounces of silver and 288,000 Kg of indium and additional inferred resource of 74,700,000 ounces of silver and 487,000 Kg of indium (Press Release PR08-07, May 13, 2008).

The resource will be updated based on information available at the end of July, 2008. There are now four areas defined at Malku Khota with good silver-indium mineralization, all of which will be included in the updated resource to the extent that they have been drilled and results received. The initial resource included portions of Limosna Central, Limosna South and Wara Wara but not the strongly mineralized Sucre Zone.

The Company is also continuing with metallurgical testing at the SGS Laboratory in Ontario. The ongoing tests will optimize the recovery of silver and gold by conventional leaching and continue to optimize the acid plus salt leach for silver, indium and other extracted metals. The tests will for the first time include extracting the metals from the leach solutions into saleable products.

Nine fans of drill holes from the top of the Limosna Ridge have been completed and extend over a strike length of approximately 1.2 km. Six fans have now been completed in Central Limosna and three in South Limosna. Drill holes on the top of the ridge were drilled as groups or fans of holes from the same collar location, rather than a series of holes from different collars equally spaced across the sandstone host rock, because of the rugged topography which required the Company to blast roads and pads for drilling.

The following table lists new results from portions of five fans of holes in Central Limosna:



Drill From To Length Av Ag Av In Av Cu Av Pb Av Zn Av Ga
Hole (metres) (metres) (metres) (gpt) (gpt) (ppm) (ppm) (ppm) (gpt)
Fan LQ
LMD025(i) 9.0 224.3 215.3 24.2 11.9 84.6 1,946 403 2.6
31.0 64.0 33.0 30.2 17.5 169.1 2,445 407 2.4
Fan LQ
LMD026(iii) 0.0 280.0 280.0 20.0 11.6 75.7 620 287 3.2
39.0 165.0 126.0 25.1 5.3 71.7 713 383 2.3
Fan LQ
LMD027(ii) 0.0 95.0 95 17.5 3.5 292 3,055 1,040 4.1
79.0 120.0 41.0 16.6 12.1 157.8 2,296 373 3.6
Fan LS
LMD028(i) 0.0 279.0 279.0 45.5 2.0 132.2 1,483 249 2.5
28.0 113.5 85.5 90.7 3.0 266.4 1,700 415 3.4
71.6 111.7 40.1 127.7 2.5 171.6 1,535 355 2.7
Fan LS
LMD029(iii) 0.0 281.0 281.0 19.2 12.0 71.0 2,366 333 3.9
0.0 44.0 44.0 40.6 9.9 156.7 8,623 167 3.7
0.0 47.5 47.5 39.1 9.5 150.2 8,675 166 3.8
30.0 46.0 16.0 29.4 6.2 151.2 10,175 260 3.8
246.0 281.0 35.0 16.7 24.7 56.9 4,500 2,011 4.2
273.5 281.0 7.5 6.0 26.3 28.8 1,577 8,524 3.4
Base of
ridge
LMD030(ii) 51.5 373.0 321.5 33.6 6.4 52.3 603 412 3.2
51.5 252.0 200.5 47.0 4.0 69.2 538 240 3.0
70.8 186.0 115.2 65.0 2.4 85.3 516 220 2.2
171.0 184.5 13.5 129.5 2.6 66.1 615 162 3.6
417.5 438.0 20.5 44.1 1.7 90.4 1,950 1,707 2.2
Fan LS
LMD031(ii) 0.0 16.0 16.0 41.5 6.3 61.5 3,845 120 3.8
Base of
ridge
LMD032(ii) 223.0 240.0 17.0 25.2 1.0 60.5 524 149 4.2
354.0 395.8 41.8 54.9 1.8 90.2 949 236 2.8
362.0 380.1 18.1 92.7 2.9 154.6 1,707 327 3.1
Base
of
ridge
LMD033(ii) 25.0 60.0 35.0 15.8 0.2 42.8 195 196 1.8
128.0 189.5 61.5 21.4 1.1 49.4 266 211 2.7
Fan LC
LMD034(i) 162.5 226.5 64.1 24.2 11.2 52.8 1,219 280 3.5
35.0 228.0 193.0 18.5 6.2 82.6 1,039 231 2.9
222.0 228.0 6.0 21.8 5.5 16.3 7,781 2,639 16.9
Fan LP
LMD035(iii) 0.0 318.0 318.0 135.8 2.9 287.9 1,334 253 2.0
17.5 74.0 56.5 289.0 4.0 958.6 2,769 230 1.4
196.9 254.0 57.1 279.7 3.7 242.2 2,007 308 1.7
Fan LC
LMD036
(iii) 222.5 270.0 47.5 14.7 1.8 48.0 631 108 3.4
274.8 277.6 2.8 10.5 7.0 91.0 1,877 5,159 4.6

(i) The approximate true width of the horizontally distributed enrichment
can be obtained by multiplying the intersection lengths by
approximately two thirds.
(ii) The approximate true width of sandstone can be obtained by multiplying
the intersection lengths by approximately one half.
(iii)The lengths are the approximate true width of the horizontally
distributed enrichment.


A map showing the locations of holes can be found on the Company website at www.soamsilver.com.

Geochemical analysis of the Malku Khota drill core was carried out by ALS Chemex. The samples were prepared in their Oruro, Bolivia laboratory and analyzed in their ISO 9001 2000 laboratory in Lima, Peru. Silver and lead were analyzed by the ICP MS61 method using a four acid digestion. Silver values greater than 100 gpt were reanalyzed by AA62 method using a four acid digestion. Silver assays greater than 1,500 gpt were analyzed by the 30g FA-GRAV method. Gallium and indium were assayed by ICP MS61. Ralph Fitch, President of the Company is the Qualified Person for this project and has reviewed the content of this press release.

Certain statements in this press release constitute "forward-looking statements". Forward-looking statements may include words such as "plans," "intends," "anticipates," "should," "estimates," "expects," "believes," "indicates," "targeting," "suggests," "potential," "interpretation" and similar expressions. These forward-looking statements include, but are not limited to, information concerning the interpretation of drill results, statements regarding estimated mineral resources and the potential for delineation of additional resources based on additional drill results from the Malku Khota Project. Forward-looking statements express, as at the date of this press release, the Company's plans, estimates, forecasts, projections, expectations, or beliefs as to future events or results. Forward-looking statements are based on certain assumptions, including the key assumptions and parameters on which such estimates are based, involve risks and uncertainties and there can be no assurance that such statements will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements. Factors that could cause results or events to differ materially from current expectations expressed or implied by the forward-looking statements, include, but are not limited to, possible variations in mineral resources, grade or recovery rates; changes in project parameters as plans continue to be refined; failure of equipment or processes to operate as anticipated; political, regulatory and other risks of the mining industry; and other risks more fully described in the Company's Annual Information Form filed and publicly available on SEDAR at www.sedar.com. Readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release. Subject to applicable laws, the Company assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason.

This press release uses the terms 'indicated resources' and 'inferred resources' which are terms recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects). Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will be converted into reserves. In addition, 'inferred resources' have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that an inferred resource will be upgraded to a higher category. Under Canadian rules, estimates of inferred resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for Preliminary Assessment as defined under 43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.

SASC is a mineral exploration company that acquires, explores and develops mineral properties, primarily silver, gold and copper in South America. The Company presently holds interests in three properties: the flagship Malku Khota silver-indium-gold and the Laurani gold-silver properties in Bolivia and the Escalones copper-gold-molybdenum property in Chile.

Please see the South American Silver Corp.'s website, www.soamsilver.com, for maps and sections.

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