​Northair to Become Wholly-Owned Subsidiary of Kootenay Silver

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Kootenay Silver Inc. ($TSX-V: KTN), a mineral discovery and development company, announced today that the company has entered into a definitive arrangement with Northair Silver Corp., pursuant to which Kootenay has agreed to acquire all of the issued and outstanding common shares of Northair. Replacing the binding letter agreement previously announced on January 13, 2016, Northair will become a wholly-owned subsidiary of Kootenay once the transaction is completed. The combination of Kootenay and Northair will create a leading Mexican silver exploration and development company and consolidator.

By generating exploration targets that demonstrate potential to evolve into large scale discoveries and exploring joint venture partnerships, Kootenay aims to create shareholder value through discovery and acquisition of mineral resources.

"We could not be more pleased to complete our definitive agreement with Kootenay,” said Andrea Zaradic, President, CEO & Director of Northair. “Through the consolidation, we will clearly be dealing from a position of strength. By combining our established assets, including two of the highest profile recent silver discoveries in Mexico, we will stand out from our peer group as a recognized leader in the Mexican silver sector. As the consolidation moves forward, we believe this transaction will substantially benefit both Northair and its security-holders. First, it will enable our shareholders to obtain an attractive premium on their shares. Secondly, it will allow them to continue to participate in the La Cigarra silver project within a larger, and more diversified company. Equally important to future development, we will be backed by an exploration and mining team with a proven track record of building high valued mining companies."

Positive Preliminary Metallurgy Tests

This announcement is only one of many positive updates from Kootenay. Last year, the company received positive results from preliminary metallurgy tests conducted in October on samples from the company's La Negra silver discovery. The discovery’s potential resource is estimated at over 65 million ounces of silver. Along with their La Negra discovery, which alone positions the company as a major player in the sector, and the announcement of this strategic consolidation, Kootenay is sure to continue furthering their goals.

"We are very pleased and excited to move forward with this milestone transaction with Northair,” said James McDonald, President and CEO of Kootenay. “This is a well-planned consolidation that has the potential to provide both companies and their shareholders with far reaching benefits well into the future. Combining the Promontorio, La Negra and La Cigarra projects will immediately position Kootenay as one of Mexico's preeminent, asset-based, silver development companies. Moreover, the support of a newly invigorated treasury and growth plan will allow us to prioritize the expedited development of both the La Negra and La Cigarra projects, as we continue to advance our generative project portfolio and pursue further strategic opportunities in the sector."

For more information about Kootenay Silver, visit www.kootenaysilver.com.

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