New Silver Discovery in Mexico Drawing Favorable Parallels to Other Major Producers

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Kootenay Silver’s high-grade La Negra diatreme Silver Discovery is quickly proving to be a rare, near-surface grassroots discovery. Located within the Vancouver-based mining company’s Promontorio Property in Sonora, Mexico, the property represents a major near term opportunity for Kootenay Silver, Inc. (KTN:CA) . The company owns 100% of the discovery, so it’s undoubtedly a relief for the company’s leadership and investors that it shows signs of evolving into potentially one of the richest near surface silver discoveries witnessed in Mexico in recent years. In fact, with Phase II of the project recently completed, La Negra is already drawing comparisons to many precious metal-producing projects that helped put various top mining companies on the map while creating exceptional value for their investors.

La Negra’s Impressive Value Potential

Leading up to the discovery, La Negra was an instant success, with Phase I drilling returning a series of eye-popping silver intercepts, that included hole 21, which returned 156 gpt silver over 200 meters from surface – bottoming in 50 meters grading 420 gpt silver, which included a spectacular interval grading 1337 gpt silver over 6 meters. By then, investors and mining industry professionals were beginning to draw comparisons between La Negra and various other success stories like the Silver Standard’s rich Pitarrilla mine in Mexico and AngloGold Ashanti’s Cripple Creek deposit in Colorado.

Yet, the most notable comparison can perhaps be made to Pan American’s Alamo Dorado Mine. That’s because some of the dominant silver minerals at Alamo Dorado like chlorargyrite (AgCl) and acanthite (AgS) have been found at La Negra, indicating the potential for low-cost leach extraction, in which the minerals are removed by dissolving them in liquid chemicals.

Kootenay recently announced the successful final results of Phase II of their drilling campaign. The objective of Phase II was to determine the overall size and extent of the silver contained in La Negra, and by all accounts, the program was a resounding success. Once again, drilling encountered multiple high-grade silver intercepts, extending from surface to depth, within the mineralized system traced at surface. Moreover, assays confirmed the existence of high-grade silver vertically down to 250-300 meters, extending the silver mineralization by a full 100-150 meters at depth. Although additional drilling will be required, based on results to date, some analysts are now estimating La Negra could contain up to 70 million ounces of silver.

Proven Management and Technical Team

Leading the thrust at La Negra is Kootenay Silver President and CEO James McDonald, P.Geo. McDonald has extensive hands on experience advancing precious metals projects from the exploration stage to full commercial production. Amongst his credentials, McDonald is a former founder of National Gold and its rich Mulatos deposit in Sonora, Mexico that went on to merge to form Alamos Gold (AGI:CA) . McDonald served as a Director and technical adviser for Alamos and played a key role in the development of the project. Today, Alamos is a mid-tier gold producer with its Mulatos Mine boasting over 140,000 ounces in annual gold production.

Drawing from his vast geologic experience in Mexico, McDonald steadfastly believes that assays returned from Phase II drilling on La Negra, combined with results from an expanded ground exploration program recently initiated in the immediate vicinity of the discovery, clearly underscore the significance of La Negra as one of the region’s top emerging silver plays.

“From every perspective the program has been a major step forward for the La Negra Silver discovery and for Kootenay Silver, says McDonald. Most significantly, the continuity of the silver grades returned from drilling and the remarkable consistency of silver mineralization to depth has set the stage for the advanced drilling and development of La Negra.”

McDonald says the Company will continue its systematic approach of drilling off of the known high-grade silver intercepts returned from Phase one and two of the program to begin proving up and confirming the silver resource. Even though La Negra, based on its own merits, displays all the earmarks to become a “Company maker,” McDonald believes the best is yet to come.

“What we have determined is that La Negra is part of a much larger mineralized trend that includes the Company’s Promontorio Silver Project and the newly discovered Vania prospect and the La Negra Silver trend.” Says McDonald. “Although the La Negra silver discovery is our immediate priority, we believe ongoing results from our expanded ground exploration program will show this mineralized corridor has potential to become a major mining camp that will produce multiple new precious metals discoveries well into the future.” Adds McDonald

What’s next for the La Negra Discovery?

Results of Phase II of the La Negra drill program have reinforced its potential as a very substantial, low-cost, open-pittable silver resource. This sets the stage for the program’s next phase: compiling, collating and interpreting drill results into a 3D geologic model. This compilation, along with detailed metallurgical work, will be used to design the next drill phase, with the objective of moving the project as quickly as possible to a maiden NI 43-101 independent resource calculation.

Despite the consistent flow of impressive high-grade results coming from its new La Negra silver discovery and the prospect’s unprecedented growth potential, many believe Kootenay Silver remains one of the sector’s premier undervalued and overlooked companies trading under $1.00 CDN. Like most emerging situations in the resource sector, timing is everything. For Kootenay Silver Inc., the development of La Negra has been two years in the making.

In a very short period of time, we are about to find out the true impact of this new silver discovery. One thing that is for certain, if upcoming results continue to mirror results from the two previous drill programs on La Negra, Kootenay will definitely be a company to keep a close watch on in the coming weeks and months.

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