9,070 Meters Drilled At Escalones Copper-Gold Project

VANCOUVER, BC - South American Silver Corp. reported that at the Escalones copper-gold project in Chile, drilling for the season that started in November 2012 ended on May 2, 2013 with a total of 9,070 meters of drilling completed. In June, the Company announced an updated NI 43-101-qualified resource estimate for Escalones showing a significant increase in copper, molybdenum and gold resources from the previous estimate as well as a category upgrade of approximately a third of the resource to Indicated from Inferred. The total exploration costs for the season amounted to $7.6 million of which $6.3 million were incurred during the first half of 2013. Effective June 27, 2013 the Company extended for 5 years the terms of its Option Agreement to acquire the remaining portion of the Escalones property, resulting in a $2.4 million cash savings for the Company in the current year.

At Malku Khota, the Company's wholly owned subsidiary, South American Silver Limited, commenced international arbitration against the Government of Bolivia on April 30, 2013. South American Silver is seeking compensation based on fair market value of the Malku Khota project under the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL) pursuant to the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Bolivia for the Promotion and Protection of Investments (UK-Bolivia Treaty). Bolivia and South American Silver agreed to designate the Permanent Court of Arbitration as the appointing and administering authority in the arbitration. An arbitral tribunal is being empanelled by the parties. Thereafter, the tribunal will set a provisional timetable for the arbitration itself. This will include a schedule for submission of a Statement of Claim, Statement of Defense and oral hearings at a court of arbitration to be designated. Unless there is a negotiated settlement of the dispute, it is expected that the arbitration can take up to 2-3 years from commencement of proceedings until rendering of a final award.