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)

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

Table 2. Escalones Inferred Resource

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