South American Silver Updates Resource at Escalones in Chile

VANCOUVER, BRITISH COLUMBIA--(Marketwired - June 28, 2013) - South American Silver Corp. (TSX:SAC)(OTCQX:SOHAF) ("The Company") is pleased to announce an updated independent NI 43-101-qualified resource estimate for the Company's 100%-controlled Escalones copper-gold-silver project in central Chile.

Highlights:

• A significant increase in pounds of copper and molybdenum and ounces of gold above assumed economic cut-off of 0.25% copper equivalent (CuEq*), compared to the initial resource dated December 19, 2011.
  
  
• Upgrading of approximately a third of the resource to Indicated from Inferred.
  
  

Table Comparing 2011 Resource to 2013 (Note Indicated resource is in addition to the Inferred resource)

Year	2011	2013
Resource Classification	Inferred	Inferred	Indicated
Pounds of Copper	3,835	3,992	1,578
(Million lbs)
Ounces of Gold	610	609	498
(Thousand ounces)
Ounces of Silver	16.8	14.4	4.9
(Million ounces)
Pounds of Molybdenum	56.9	79.5	31.9
(Million lbs)

For further details see tables 1 and 2 below.

• The updated resource dated 28 June, 2013 includes:
  
  
  • Indicated resource of 1.9 billion pounds CuEq* at a CuEq* grade of 0.38% (see table 1 below).
    
    
  • Inferred resource of 4.7 billion pounds CuEq* at a CuEq* grade of 0.40% (see table 2 below).
    
    
• The deposit includes a higher grade portion particularly within the skarn using a 0.35% CuEq* cut-off (See details in table 3 and 4 below):
  
  
  • Indicated resource of 235 million pounds CuEq* at a CuEq grade of 0.65%.
    
    
  • Inferred resource of 2.0 billion pounds CuEq* at a CuEq grade of 0.58%.
    
    

Copper Equivalent (Cu Eq*) calculations reflect gross metal content using approximate 3 year average metals prices as of June 25^th, 2013 of $3.71/lb copper (cu), $1549/oz gold (Au), $30.29/oz silver (Ag), and $14.02/lb molybdenum (Mo) and have not been adjusted for metallurgical recoveries. An economic cut-off grade of 0.25% copper equivalent was assumed for this report. Contained metal values may vary from calculated values due to rounding.

• The deposit remains open to expansion laterally and down dip.
  
  
• Major geophysical targets are still to be drilled.
  
  
• The 70 square kilometer Escalones project is located in the world-class central Chilean mining district which includes the nearby El Teniente deposit, which is the world's largest underground copper mine.
  
  

Executive Chairman, Ralph Fitch stated "The skarn is a very important part of the mineralized system and, as interpreted from the geophysical surveys, only a small part of it has been drilled to date. This interpretation is corroborated by our deepest intercept of the skarn in hole ES-35 which intersected 9.25 m of 2.11% copper, 17 g/t silver and 0.07 g/t gold before the hole was abandoned for weather reasons. This intercept was not included in the Indicated resource because it is too far from neighboring holes but it does coincide with the interpreted skarn geophysical response. In fact the intersection is 500 metres south and 400 metres deeper than the main skarn resource, clearly indicating the opportunity to extend the mineralized zone in a substantial way. The potential skarn extends for 4-6 km along strike and to several km in depth. Present drilling covers approximately 1 km by 0.5 km of this. The remainder, which is the majority, will be available to drill once permitting is complete."

Mr. Fitch went on to say "Escalones continues to increase in size and now hosts a substantial gold as well as copper resource. As well, the large reported resource still does not include drilling into the substantial geophysical targets which are interpreted to represent additional skarn and secondary oxide/sulphide mineralization. Also, as stated in an earlier News Release (NR12-21 dated December 10, 2012), initial metallurgical testing suggests that high grade copper sulphide concentrates are achievable which should enhance the value of the property."

Table 1. Escalones Indicated Resource

CuEq%	Tonnes *	Cu %	Cu lbs *	Au g/t	Au Oz	Ag g/t	Ag oz	Mo %	Mo lbs	CuEq% (1)	CuEq lbs *
Cutoff	1,000		1,000								1,000
0.15	405,242	0.243	2,170,281	0.052	673,999	0.528	6,879,224	0.006	51,308,289	0.302	2,701,842
0.25	232,561	0.308	1,578,329	0.067	498,012	0.661	4,938,667	0.006	31,908,650	0.380	1,947,232
0.35	107,885	0.393	935,279	0.082	284,745	0.877	3,041,487	0.006	14,730,116	0.477	1,134,703
0.45	43,319	0.507	484,661	0.092	127,714	1.329	1,850,716	0.006	5,665,736	0.602	574,524
0.55	19,395	0.634	271,048	0.098	60,973	1.948	1,214,926	0.005	2,341,742	0.737	315,284
0.75	6,141	0.860	116,456	0.107	21,198	2.760	544,871	0.005	722,393	0.979	132,489
1.00	1,974	1.120	48,753	0.127	8,091	3.294	209,076	0.004	163,188	1.251	54,456

Table 2. Escalones Inferred Resource

CuEq%	Tonnes *	Cu %	Cu lbs *	Au g/t	Au Oz	Ag g/t	Ag oz	Mo %	Mo lbs	CuEq% (1)	CuEq lbs *
Cutoff	1,000		1,000								1,000
0.15	1,023,299	0.253	5,712,479	0.028	931,176	0.624	20,520,258	0.006	132,275,704	0.300	6,768,823
0.25	527,667	0.343	3,992,410	0.036	609,437	0.849	14,397,830	0.007	79,488,676	0.401	4,664,903
0.35	233,140	0.463	2,378,257	0.047	349,019	1.205	9,029,026	0.008	40,503,161	0.535	2,750,819
0.45	129,938	0.572	1,638,097	0.049	203,645	1.471	6,146,340	0.008	22,270,448	0.648	1,857,501
0.55	73,690	0.688	1,117,424	0.051	120,870	1.622	3,841,986	0.007	11,658,186	0.765	1,243,336
0.75	24,609	0.950	515,222	0.057	45,400	1.875	1,483,881	0.006	3,224,734	1.029	558,488
1.00	8,622	1.300	247,098	0.055	15,342	1.792	496,792	0.003	661,249	1.368	260,062

1) Copper Equivalent (Cu Eq %) calculations reflect gross metal content using approximate 3 year average metals prices as of June 25^th, 2013 of $3.71/lb copper (cu), $1549/oz gold (Au), $30.29/oz silver (Ag), and $14.02/lb molybdenum (Mo) and have not been adjusted for metallurgical recoveries. An economic cut-off grade of 0.25% copper equivalent was assumed for this report. Contained metal values may vary from calculated values due to rounding.

Table 3. Skarn Indicated Resource

CuEq%	Tonnes *	Cu %	Cu lbs *	Au g/t	Au Oz	Ag g/t	Ag oz	Mo %	Mo lbs	CuEq% (1)	CuEq lbs *
Cutoff	1,000		1,000								1,000
0.15	26,373	0.424	246,748	0.065	54,814	1.702	1,443,345	0.004	2,188,618	0.498	289,699
0.25	21,424	0.484	228,757	0.072	49,653	1.944	1,339,354	0.004	1,900,252	0.567	267,613
0.35	16,500	0.554	201,600	0.082	43,275	2.229	1,182,623	0.004	1,537,656	0.646	235,142
0.45	12,441	0.626	171,646	0.090	36,152	2.504	1,001,661	0.004	1,215,080	0.727	199,516
0.55	9,132	0.699	140,797	0.098	28,877	2.784	817,506	0.005	929,620	0.810	163,047
0.75	4,099	0.895	80,885	0.112	14,794	3.310	436,236	0.004	389,837	1.019	92,099
1.00	1,592	1.144	40,166	0.130	6,661	3.842	196,680	0.003	118,375	1.282	45,002

Table 4. Skarn Inferred Resource

CuEq%	Tonnes *	Cu %	Cu lbs *	Au g/t	Au Oz	Ag g/t	Ag oz	Mo %	Mo lbs	CuEq (1)	CuEq lbs *
Cutoff	1,000		1,000								1,000
0.15	330,512	0.348	2,533,258	0.031	326,123	1.204	12,796,875	0.007	49,094,872	0.406	2,959,496
0.25	242,350	0.416	2,222,150	0.035	274,449	1.360	10,597,093	0.007	39,908,333	0.482	2,574,126
0.35	159,589	0.504	1,774,373	0.042	213,251	1.515	7,773,538	0.008	27,573,129	0.577	2,031,117
0.45	106,337	0.590	1,384,229	0.045	154,323	1.666	5,695,843	0.008	18,373,009	0.667	1,564,628
0.55	64,275	0.701	993,446	0.049	101,228	1.753	3,622,065	0.007	10,311,882	0.779	1,104,271
0.75	22,629	0.962	479,705	0.056	40,641	1.923	1,399,105	0.006	3,034,235	1.041	519,570
1.00	8,337	1.308	240,370	0.053	14,337	1.799	482,237	0.003	628,878	1.375	252,672

1) Copper Equivalent (Cu Eq %) calculations reflect gross metal content using approximate 3 year average metals prices as of June 25^th, 2013 of $3.71/lb copper (cu), $1549/oz gold (Au), $30.29/oz silver (Ag), and $14.02/lb molybdenum (Mo) and have not been adjusted for metallurgical recoveries. An economic cut-off grade of 0.25% copper equivalent was assumed for this report. Contained metal values may vary from calculated values due to rounding.

The Escalones mineral resource estimate is based on 53 diamond drill holes (24,939 meters) and 15,880 associated assay values collected through 2013. The resource estimate is categorized as indicated and inferred as defined by the Canadian Institute of Mining guidelines for resource reporting. Mineral resources do not demonstrate economic viability, and there is no certainty that these mineral resources will be converted into minable reserves once economic considerations are applied.

Assay values were verified against drill logs and assay certificates. Drill hole collar locations and downhole surveys were checked and verified. The mineral resource was estimated using 3.0-meter composites of the assay values. A geological model was constructed of the Cu-Au-Ag-Mo mineralized zones. This model was used to constrain the composite values chosen for interpolation and the ore blocks reported in the mineral resource. A block model was constructed using 10-meter by 10-meter by 10-meter blocks in the x, y and z directions respectively. Grades for copper, gold, silver and molybdenum were interpolated into the blocks using ordinary kriging. A minimum of 3 and maximum of 20 composites were used to generate the block grades.

The indicated and inferred mineral resource estimates have been prepared in compliance with the standards of NI 43-101 by Jeff Choquette, P.E. of Hardrock Consulting LLC. Jeff Choquette acted as the qualified person, as defined in NI 43-101, and is independent of the Company and has reviewed the technical information in this release. A NI 43-101 report will be finalized and filed on SEDAR within 45 days of the date of this news release.

The Escalones property lies within the well-known central Chilean porphyry copper belt that runs north-south through Chile in the central Andes Mountains. The property is located approximately 100 kilometers southeast of Santiago and 35 kilometers due east of El Teniente, the world's largest underground copper mine.

The Escalones project hosts a four-square-kilometer area of hydrothermal alteration with coincident geophysical anomalies and additional skarn type geophysical targets extending a significant distance from this area. Significant grades of copper, gold and silver mineralization hosted in both skarn and porphyry. Mineralization remains open to further expansion laterally and at depth.

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 large scale Escalones copper-gold project in Chile and the realization of value from the Malku Khota project in Bolivia. The Company's approach to business combines the team's track record of discovery and advancement of large projects, key operational and process expertise, and a focus on community relations and sustainable development. Management has extensive experience in the global exploration and mining industry. The Company's shares are listed on the Toronto Stock Exchange under the symbol "SAC" and on the US OTCQX market as "SOHAF". Additional information related to South American Silver Corp. is available at www.soamsilver.com and on SEDAR at www.sedar.com.

Forward-looking Statements

Forward-looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business. Forward-looking statements may include words such as "plans", "intends", "anticipates", "should", "estimates", "expects", "believes", "indicates", "suggests" and similar expressions. This release contains forward-looking statements. These forward-looking statements are based on current expectations and various estimates, factors and assumptions and involve known and unknown risks, uncertainties and other factors. Information concerning mineral resource estimates and the interpretation of drill results may also be considered as a forward-looking statement; as such information constitutes a prediction of what mineralization might be found to be present if and when a project is actually developed.

It is important to note that:

Readers are cautioned not to place undue reliance on these statements as the Company's actual results, performance or achievements may differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements if known or unknown risks, uncertainties or other factors affect the Company's business, or if the Company's estimates or assumptions prove inaccurate. Therefore, the Company cannot provide any assurance that forward-looking statements will materialize. 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, metal prices; availability of sufficient financing to fund planned or further required work in a timely manner and on acceptable terms; changes in project parameters as plans continue to be refined; failure of equipment or processes to operate as anticipated; and political, regulatory, environmental and other risks of the mining industry.

The material assumptions that were applied in making the forward looking statements in this release or referenced in this release include, but are not limited to: statements regarding estimated mineral resources and the potential for delineation of additional resources through further exploration at the Escalones project; the accuracy of current interpretation of drill and other exploration results; and execution of the Company's existing plans or exploration programs for its properties, either of which may change due to changes in the views of the Company or if new information arises which makes it prudent to change such plans or programs.

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. Unless otherwise indicated, forward-looking statements in this release describe the Company's expectations as of June 28, 2013.

This news release uses the term 'inferred resources' which is recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), however, such term is not a defined term under SEC Industry Guide 7 and is not normally permitted to be used in reports and registration statements filed with the United States Securities and Exchange Commission. Investors are cautioned not to assume that any part or all of the 'inferred resources' will be upgraded or converted into 'indicated resources' or 'reserves' as defined under NI 43-101. In addition, 'inferred resources' have a great amount of uncertainty as to their existence, and economic and legal feasibility. 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.