Kootenay Options Copalito Silver-Gold Property in Mexico

VANCOUVER, BC - Kootenay Silver Inc. reported that through the Company's wholly owned Mexican subsidiary has entered into an option agreement to acquire a 100% interest in the Copalito Silver-Gold Project located in the State of Sinaloa, Mexico.

The Copalito Project covers a gold and silver epithermal vein system comprised of numerous veins, with individual veins currently traced over strike lengths up to 2 kilometers. Veins vary in width from 0.5 to 10 meters at surface and grade from background to highs of 7.2 gpt gold and 1,620 gpt silver in grab samples. The highest chip samples graded 573 gpt silver and 2.1 gpt gold over widths of 1 meter. Click this link to view maps and sample details.

Kootenay President and CEO James McDonald said, "We are very excited about the potential at Copalito. It is a rare opportunity to find a project with such good surface values and vein widths in Mexico that has not been thoroughly drilled. We will be mapping and sampling the veins at surface to identify the best grading areas in the first step towards drill testing."

There are numerous small to medium sized old workings within the Copalito Project area; however, there is no evidence of any modern-day exploration.

The Company's management believes there is significant potential for the discovery of a high grade silver-gold vein deposit based on the anomalous values and good vein widths at surface. Vein textures are indicative of a classic low or intermediate sulfidation vein system.

The Copalito Project is located about 35 km east of McEwen Mining's "El Gallo mine" complex along the western fringes of the Sierra Madre Occidental in northwestern Mexico with good access, topography and infrastructure. The project lies within a prospective northeast trending transform geological belt approximately 350 kilometers in length that includes the districts and projects of Parral, Santa Barbara, Dolores, Guanacevi, La Pitarilla and Palmarejo.

The Copalito Project consists of seven concessions totaling approximately 3,700 hectares. Under the terms of the Agreement, Kootenay can acquire a 100% ownership in the concessions by making staged payments over a 4-year period totaling US$985,000. The Company at its option may accelerate the payments due under the Agreement. Upon earn-in the vendors will retain a 0.5% net smelter return. Subject to TSXV approval, the Company shall pay an arms length party a finders fee of 100,000 common shares and a cash payment of C$10,000.