U.S. Silver Corporation

U.S. Silver Corporation

March 27, 2007 17:27 ET

U.S. Silver Corporation Announces Early Exercise Warrant Incentive Program

TORONTO, ONTARIO--(CCNMatthews - March 27, 2007) -

NOT FOR DISTRIBUTION TO THE UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

U.S. Silver Corporation ("U.S. Silver" or the "Corporation") (TSX VENTURE:USA) announces a proposed warrant incentive program designed to encourage the early exercise of up to 40,671,611 warrants which are currently exercisable at US$0.355 per share (or CDN$0.40 for certain outstanding warrants that have been exchanged for warrants of the Corporation) (collectively, the "Warrants"). The Corporation will issue up to 4,067,161 common shares (representing 10% of the number of warrants exercised) to its warrant holders who exercise during a 30 day period expected to commence as soon as possible subsequent to receipt of TSX Venture Exchange conditional approval and approval of the transaction by way of written shareholder consent from a majority of disinterested shareholders of U.S. Silver as further described in this press release (the "Early Warrant Exercise Period"). Upon receipt of such approvals, the Corporation will issue a further press release announcing the commencement date of the Early Warrant Exercise Period.

If all Warrants are exercised during the Early Warrant Exercise Period, U.S. Silver expects it will:

- Receive gross proceeds of approximately US$14.4 million on or before expiration of the Early Warrant Exercise Period (the "Early Exercise Expiry Date");

- Issue approximately 40,671,611 common shares pursuant to the exercise by the holders of the Warrants in accordance with the original terms of the Warrants; and

- Issue 4,067,161 additional common shares to encourage the early exercise of the Warrants by the holders thereof, representing approximately 2.2% of all U.S. Silver common shares outstanding (including the 40,671,611 common shares issued pursuant to the exercise of the Warrants). Such additional common shares will be subject to a four month hold period from the date of issuance.

To the extent that holders of the Warrants take advantage of the opportunity to exercise their Warrants early, this will provide U.S. Silver with additional working capital and the capital to accelerate the exploration and development of its Galena underground silver mine and adjoining properties. Development activities will include accessing the silver-lead zone between the 2400 and 3700 levels of the Galena Mine, as well as developing the new high-grade silver-copper zones discovered on the 3400 level. The Corporation will also focus on the repair of the Galena Shaft as well as repairs to the Coeur Mill and. The Coeur Mill is scheduled to start up processing lead-silver material in August 2007.

The transaction is subject to the receipt of all final regulatory approvals and consents, including but not limited TSX Venture Exchange and approval of the transaction as disclosed in this press release by way of written shareholder consent from a majority of disinterested shareholders of U.S. Silver (all shareholders other than shareholders who hold Warrants that are eligible for the warrant incentive program). As such, consent will be required from disinterested shareholders holding at least 28,256,219 common shares out of an aggregate of 56,512,436 common shares determined to be held by disinterested shareholders.

If a holder does not exercise his or her Warrants prior to the Early Exercise Expiry Date, the Warrants will continue to be exercisable for common shares on the same terms as currently existing. Other than Warrants to acquire 775,000 common shares which expire on May 11, 2008, all other Warrants were issued as part of a unit in a private placement that closed in June 2006 and such Warrants expire on December 28, 2008. Warrants held by insiders of the Corporation and warrants previously issued to agents as compensation or held by employees of such agents will not be eligible for the warrant incentive program.

Research Capital Corporation is acting as financial advisor to U.S. Silver with respect to the transaction.

ABOUT U.S. SILVER CORPORATION

U.S. Silver Corporation owns and operates the producing Galena Silver Mine in Shoshone County, Idaho which is the second most prolific silver mine in US history with over 200 million ounces of silver produced since 1953. The Mine is currently anticipated to produce 3.2 million ounces of silver in 2007 with assayed by-product lead and copper production. U.S. Silver acquired the Galena Mine as well as the Coeur Mine and the Caladay Property and over 11,000 acres of ground in the heart of the Coeur D'Alene Silver Mining District in June 2006. The Company is focused on the production and exploration on its extensive Silver Valley holdings.

Certain information in this press release may contain forward-looking statements. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Corporation assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Corporation. Additional information identifying risks and uncertainties is contained in filings by the Corporation with the Canadian securities regulators, which filings are available at www.sedar.com.

This is not an offer for sale, or a solicitation of an offer to buy, in the United States or to any "U.S. Person," as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended (the "U.S. 1933 Act") of any equity shares or any other securities of U.S. Silver.

The common shares of U.S. Silver to be issued as described in this press release have not been registered under the U.S. 1933 Act and may not be offered or sold in the United States (or to a U.S. person) absent registration under the U.S. 1933 Act or an applicable exemption from the registration requirements of the U.S. 1933 Act.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • U.S. Silver Corporation
    Bruce Reid
    Chief Executive Officer
    (647) 500-4495
    or
    U.S. Silver Corporation
    Vance Loeber
    Investor Relations
    (604) 805-3530