South American Silver Corp.
TSX : SAC
PINK SHEETS : SOHAF

South American Silver Corp.

November 30, 2010 11:39 ET

South American Silver Corp. Announces Closing of $31.9 Million Financing

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 30, 2010) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES

South American Silver Corp. (TSX:SAC)(PINK SHEETS:SOHAF) is pleased to announce that it has closed its previously announced $31.9 million private placement of 27.5 million common shares of the Company (the "Offering").

The largest component of the Offering consisted of a strategic investment by Zamin Precious Minerals Limited, who purchased 18,900,000 common shares of the Company, giving them ownership of approximately 19.7% of the issued shares of the Company, of the 96,174,353 common shares of the Company issued and outstanding following completion of the Offering. The Zamin group has a portfolio of major resource projects and investments in Brazil, Uruguay, Bolivia and Chile.

The Offering also included the sale of 4,008,000 common shares for gross proceeds of $4,649,280 pursuant to an underwritten offering by Wellington West Capital Markets Inc. The remaining portion of the Offering of 4,591,378 common shares for gross proceeds of $5,326,000 was purchased by private investors. A total of 27,499,378 common shares were issued pursuant to the Offering.

"We are pleased with the strong interest from investors on this offering and to have the backing of the Zamin group as a strategic investor in the Company going forward," said Greg Johnson, President & CEO of South American Silver Corp. "The Company is now in a very strong financial and operating position to move forward with the rapid development of our world-class Malku Khota silver-indium project in Bolivia to feasibility and to advance our Escalones copper-gold project in Chile to the resource definition stage."

The Company intends to use the net proceeds of approximately $29.5 million to fund activities to accelerate the advancement the Company's two key projects in South America, as well as for other general corporate purposes.

As compensation for services, the Company paid cash commissions totalling $2,231,269.60 and issued a total of 2,323,508 compensation options, each entitling the holder to subscribe for one common share at a price of $1.16 per common share until May 30, 2012. The common shares and compensation options issued pursuant to the Offering, as well as the common shares issuable upon exercise of the compensation options, are subject to a four-month restricted resale period, which expires on March 31, 2011.

About the Malku Khota Project

The Malku Khota project is a recent discovery of a sediment hosted, bulk mineable, silver, indium, lead, zinc and copper deposit located in a world-class silver mining district of central Bolivia, approximately 200 kilometers north of Potosi. The project is road accessible and has commercial scale power within 15 kilometers of the site. The project contains an Indicated Mineral Resource of approximately 145M oz silver and 854 tonnes of indium and an additional Inferred Mineral Resource of approximately 178M oz silver and 968 tonnes of indium. South American Silver continues an ongoing exploration drill program at the project and is conducting metallurgical and engineering studies to evaluate optimal development scenarios. Current studies indicate that the Malku Khota project has the potential to be one of the largest silver and indium mines in development.

As part of the Company's ongoing community relations approach to Malku Khota, community relations personnel are working closely with the surrounding local communities. Signed agreements of cooperation with these communities are in place and the Company will look to facilitate local and regional economic development through the various stages of the project.

About South American Silver Corp.

South American Silver Corp. is a growth focused mineral exploration company creating value through the exploration and development of the 100% owned Malku Khota Silver-Indium project in Bolivia, one of the world's largest undeveloped silver and indium deposits, and the 100% owned large-scale Escalones Copper-Gold project in Chile. The Company's approach to business combines the team's track record of world-class discoveries and successful project development and integrates strong community relations and corporate social responsibility. Management has over 100 years of combined experience in the global exploration and mining industry with much of that focused in Bolivia, Chile, Peru and Argentina. The Company's shares are listed on the Toronto Stock Exchange under the symbol "SAC" and on the US OTC market as "SOHAF". Additional information related to South American Silver Corp. is available at www.soamsilver.com and on SEDAR at www.sedar.com.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933 (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons (as defined in the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws, or an exemption from such registration is available.

Certain statements contained herein constitute "forward-looking statements". Forward-looking statements may include words such as "intends", "move forward", "development", "advance", "potential", "will", "indicate", and similar expressions. 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, environmental and other risks of the mining industry; sustained favourable commodities prices; continued project development and other risks more fully described in the Company's Annual Information Form filed and publicly available on SEDAR at www.sedar.com. There can be no assurance that the Company's properties will be commercialized. 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 ("NI 43-101"). 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 economic assessment as defined under NI 43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.

Contact Information

  • South American Silver Corp.
    Greg Johnson
    President & CEO
    604.681.6926 or Toll Free: 1.866.681.6926
    or
    South American Silver Corp.
    Kristina Knopp
    Investor Relations
    604.681.6926 or Toll Free: 1.866.681.6926
    www.soamsilver.com