U.S. Silver Corporation
TSX VENTURE : USA

U.S. Silver Corporation

April 04, 2007 15:05 ET

U.S. Silver Corporation Announces Shareholder Approval of Early Exercise Warrant Incentive Program-Early Exercise Period to Commence on April 12, 2007

TORONTO, ONTARIO--(CCNMatthews - April 4, 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) is pleased to announce that it has as of today received the written consent of a majority of disinterested shareholders of the Corporation (all shareholders other than shareholders who hold warrants eligible for the warrant incentive program) to proceed with the early exercise warrant incentive program, as such a program is described in more detail in the news release of the Corporation dated March 27, 2007 and as further described herein.

The 30 day period for the early exercise ("Early Exercise Period") of the Corporation's warrants will commence on Thursday, April 12, 2007 and will expire at 5:00 p.m. (Toronto time) (the "Early Exercise Expiry Time") on Friday, May 11, 2007 ("Early Exercise Expiry Date").

Warrantholders are encouraged to exercise their warrants in accordance with the procedures set forth below as soon as possible, and in any event, on or before the Early Exercise Expiry Time in order to acquire an additional 0.10 of a common share of the Corporation ("Common Share") in addition to the one full common share issuable upon exercise of each warrant.



Illustrative Early Exercise of 1,000 Warrants

Fraction of
Additional Common
Share for each
Warrant exercised
Warrants Paid on during the Early Total Common
Exercised Exercise Exercise Period Shares Received

US$0.355 per
1,000 Warrant(1) 0.10 1,100

(1) CDN$0.40 for certain outstanding warrants that have been exchanged
for warrants of the Corporation



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

- Receive gross proceeds of approximately US$14.4 million on or before the Early Exercise Expiry Time;

- 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.

U.S. Silver believes that the early exercise warrant incentive program is an effective means for the Corporation to raise capital with minimal dilution to its shareholders. Furthermore, U.S. Silver believes that the early exercise warrant incentive program carries a lower transaction risk and a lower cost of capital compared to other means of raising capital available to the Corporation, and simplifies the Corporation's capital structure as it currently exists.

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. The Coeur Mill is scheduled to start processing lead-silver material in August, 2007.

If a warrant holder does not exercise his or her warrants prior to the Early Exercise Expiry Time, 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 of units 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 are not be eligible for the early exercise warrant incentive program.

The early exercise warrant incentive program is subject to the receipt of all final regulatory approvals and consents, including but not limited to those of TSX Venture Exchange.

Research Capital Corporation is acting as financial advisor to the Corporation with respect to this transaction.

Eligible warrant holders will be sent a package describing the process for the exercise of warrants during the Early Exercise Period. Should warrant holders wish to start the exercise process before receiving such package or should warrant holders have any questions on the process, please contact the Corporation at the number listed at the end of this press release.

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.

ABOUT U.S. SILVER CORPORATION

U.S. Silver Corporation owns and operates the Galena Silver Mine and also owns the Coeur Mine and Caladay Property, which are located near the Galena Silver Mine, as well as certain other mining properties in the Coeur d'Alene Mining district, a region known for silver, lead and zinc production in northern Idaho. U.S. Silver acquired these silver properties in June 2006.

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.

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