South American Silver Announces Intersection of New Lead-Zinc-Silver SEDEX Mineralization at Malku Khota: Financial News

South American Silver Announces Intersection of New Lead-Zinc-Silver SEDEX Mineralization at Malku Khota
Thursday August 28, 2008 1:08 pm ET

VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--Aug 28, 2008 -- South American Silver Corp. ("SASC" or the "Company")(Toronto:SAC.TO - News) is pleased to announce the results from the next 12 holes from the Malku Khota Project, Bolivia. All diamond drill holes are from the South Limosna and Wara Wara Zones.

Several significant drill intercepts of SEDEX style (sedimentary exhalative deposit), lead-zinc-silver mineralization have been obtained in the south Limosna Zone. Assays include three one and a half metre intervals of between six and seven percent lead with additional zinc and silver in drill hole LMD040. The intervals including these assays are shown below.

 

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Drill Hole    From       To   Length   Av Ag    Av  Av Cu  Av Pb Av Zn   Av
           (metres) (metres) (metres)   (gpt)   In   (ppm)    (%)   (%)  Ga
                                              (gpt)                    (gpt)
----------------------------------------------------------------------------
The higher grade lead mineralization in LMD040 -75 degrees inclination
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             257.0    261.5      4.5    37.0   7.3      8   4.81  1.17  1.1
----------------------------------------------------------------------------
             272.2    278.0      5.8   173.3  10.7    769   4.66  1.03  1.4
----------------------------------------------------------------------------

Ralph Fitch, President of the Company stated "these exciting results strongly suggest that in addition to the expanding silver-indium resource, this large SEDEX system is zoned and that these new results are part of a new body of lead-zinc-silver-indium mineralization that surface samples suggest extends for several kilometres to the south. SEDEX ore bodies can be very large such as the well known Broken Hill and Mt. Isa mines in Australia, the Red Dog mine in Alaska and the Sullivan mine in British Columbia. Malku Khota mineralization now shows indications of extending over at least 7 km giving it significant size potential."

The majority of mineralization the Company has drilled to date has been high silver with low to modest lead-zinc. These holes in South Limosna indicate that the mineralization is zoning into lead-zinc-silver-indium as we move to the south. Importantly, earlier surface chip sampling of the host sandstone to the south of LMD040 includes results such as 32 metres averaging 0.5% lead, 600 metres to the south and a second line of chip samples 3.8 km to the south of LMD040 that averaged 0.1% lead over 16 metres, strongly suggesting that the lead-zinc-silver-indium mineralization continues for a significant distance to the south.

The most southerly fan of holes is shown below. Both holes were drilled from the same pad with LMD040 at a steeper angle such that it intersected the stratabound mineralization at greater depth.

 

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Drill Hole    From       To   Length  Av Ag  Av In  Av Cu  Av Pb Av Zn   Av
           (metres) (metres) (metres)  (gpt)  (gpt)  (ppm)    (%)   (%)  Ga
                                                                       (gpt)
----------------------------------------------------------------------------
LMD040
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-75
 degrees
 inclin-
 ation         3.0    456.0    453.0   55.3    8.7    125   0.49  0.11  1.8
----------------------------------------------------------------------------
         including
----------------------------------------------------------------------------
               4.5     15.0     10.5  116.7    5.2     30   0.96  0.46  2.0
----------------------------------------------------------------------------
             147.9   171.08    23.18   37.8    4.5    355   3.62  0.36  1.1
----------------------------------------------------------------------------
             239.6    279.9     40.3   97.0    7.9    525   1.97  0.64  1.5
----------------------------------------------------------------------------
             252.2    279.9     27.7   65.8    8.1    428   2.72  0.83  1.5
----------------------------------------------------------------------------
             451.5    456.0      4.5   15.0   11.5    126   1.36  0.23  5.3
----------------------------------------------------------------------------
LMD039
----------------------------------------------------------------------------
-45
 degrees
 inclin-
 ation         3.0    195.5    192.5   31.1    6.3   85.6   0.16  0.03  2.3
----------------------------------------------------------------------------
         Including
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               6.0     44.0     38.0   65.1    5.9     31   0.16  0.03  1.9
----------------------------------------------------------------------------
             136.0    143.7      7.7   24.6   12.9    116   0.39  0.01  3.6
----------------------------------------------------------------------------
             172.3    204.8     32.5   21.1    3.3    339   0.40  0.16  4.9
----------------------------------------------------------------------------

Ag-Silver; In-Indium; Cu-Copper; Pb-Lead; Zn-Zinc; Ga-Gallium

The true width of these intersections is difficult to estimate due to the low angle between the bedding of the sandstone and the drill hole. The Company estimates, however, that true widths are approximately 20% of downhole widths in the case of LMD040 and 70% in the case of LMD039. This translates to the bands of higher grade lead mineralization having a width of 2 to 8 metres with indications that grade and thickness are increasing with depth and to the south.

The stronger lead-zinc silver mineralization extends approximately 300 metres to the north of LMD039-040 and is open to the south. LMD041 is approximately 300 metres north of LMD039-040, and LMD042-043 are located approximately 100 metres north of LMD039-040.

 

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Drill       From       To   Length  Av Ag  Av In  Av Cu  Av Pb  Av Zn    Av
 Hole    (metres) (metres) (metres)  (gpt)  (gpt)  (ppm)    (%)  (ppm)   Ga
                                                                       (gpt)
----------------------------------------------------------------------------
LMD041(i)
----------------------------------------------------------------------------
-47
 degees
 inclin-
 ation       0.0    249.9    249.9   44.9    8.4     28   0.21    390   2.2
----------------------------------------------------------------------------
         includ-
             ing
----------------------------------------------------------------------------
            16.5     48.0     31.5   79.8   11.6     66   0.91    926   2.3
----------------------------------------------------------------------------
            16.5     34.0     17.5   65.6    9.1     66   1.49  1,387   2.5
----------------------------------------------------------------------------
            16.5     22.9      6.4  114.6   13.0     68   2.97  1,460   2.4
----------------------------------------------------------------------------
           122.0    125.3      3.3   52.5    4.7     26   1.35    626   1.4
----------------------------------------------------------------------------
           205.5    244.0     38.5   88.4   15.1     13   0.04    202   2.4
----------------------------------------------------------------------------
LMD042(i)
----------------------------------------------------------------------------
-45
 degrees
 inclin-
 ation       0.0    488.5    488.5   27.5    8.5     43   0.12    676   2.3
----------------------------------------------------------------------------
         Includ-
             ing
----------------------------------------------------------------------------
             0.0     44.0     44.0   26.0   16.8     28   0.34  3,734   3.1
----------------------------------------------------------------------------
             0.0      8.0      8.0   14.0   14.1     21   0.40 16,091   3.4
----------------------------------------------------------------------------
           300.0    322.0     22.0   61.5   10.2     17   0.04     49   1.8
----------------------------------------------------------------------------
           390.0    461.3     71.3   38.7    8.3    145   0.28  1,238   2.1
----------------------------------------------------------------------------
           477.9    494.0     16.1   11.5    4.8    134   0.47  3,336   4.0
----------------------------------------------------------------------------
LMD043
 (ii)
----------------------------------------------------------------------------
-75
 degrees
 inclin-
 ation     108.0    455.5    347.5   16.0    3.8     32   0.19    725   3.4
----------------------------------------------------------------------------
         includ-
             ing
----------------------------------------------------------------------------
           213.8    276.1     62.3   15.9    3.2     58   0.43  1,832   3.5
----------------------------------------------------------------------------
           213.8    229.3     15.5   12.2    7.2     30   1.04  4,919   3.9
----------------------------------------------------------------------------
           259.2    266.1      6.9   10.1    2.8     27   0.72  2,860   3.3
----------------------------------------------------------------------------
           419.5    445.9     26.4   26.7    4.0     83   0.90  2,817   3.1
----------------------------------------------------------------------------
           442.0    445.9      3.9   63.9    8.7     26   2.31  8,594   3.5
----------------------------------------------------------------------------

(i)  true width approximately 70% of downhole length
(ii) true width approximately 20% of downhole length



Results have also been received for two holes at the north end of the
Limosna Zone.

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Drill       From       To   Length  Av Ag    Av  Av Cu  Av Pb  Av Zn  Av Ga
 Hole    (metres) (metres) (metres)  (gpt)   In   (ppm)  (ppm)  (ppm)  (gpt)
                                           (gpt)
----------------------------------------------------------------------------
LMD037(i)
----------------------------------------------------------------------------
-45
 degrees
 inclin-
 ation       0.0    172.5    172.5   33.8   3.0    116  1,009    322    3.1
----------------------------------------------------------------------------
         includ-
             ing
----------------------------------------------------------------------------
             0.0    112.0    112.0   42.5   4.0    140  1,382    379    4.0
----------------------------------------------------------------------------
             3.0      8.0      5.0   44.9   5.7    429  8,118  1,049    4.0
----------------------------------------------------------------------------
LMD038
 (ii)
----------------------------------------------------------------------------
-75
 degrees
 inclin-
 ation       0.0    211.0    211.0   25.0   8.5     59    727    265    3.4
----------------------------------------------------------------------------
         Includ-
             ing
----------------------------------------------------------------------------
             0.0     93.5     93.5   40.9   9.4     90    847    344    3.1
----------------------------------------------------------------------------
             0.0     31.5     31.5   49.8   4.6    148  1,437    375    4.1
----------------------------------------------------------------------------

(i)  true width approximately 70% of downhole length
(ii) true width approximately 20% of downhole length



Results from five holes have also been received from drilling in the Wara
Wara Zone, approximately 3 km to the north. The silver mineralization is
associated with higher gallium assays in this northern portion of the
system.

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Drill                                Av    Av    Av    Av    Av    Av    Av
 Hole      From       To   Length    Au    Ag    In    Cu    Pb    Zn    Ga
        (metres) (metres) (metres)  gpt  (gpt) (gpt) (ppm) (ppm) (ppm) (gpt)
----------------------------------------------------------------------------
WW021(i)
----------------------------------------------------------------------------
-45
 degrees
 incli-
 nation    56.0    359.7    303.7  0.01  21.2   1.3    95   246    13   4.5
----------------------------------------------------------------------------
        Includ-
            ing
----------------------------------------------------------------------------
           91.5    103.0     11.5  0.01  46.8   2.1   119 1,161    11   5.1
----------------------------------------------------------------------------
          122.5    138.7     16.2  0.01  38.3   1.6    90   594    11   5.0
----------------------------------------------------------------------------
WWD022(i)
----------------------------------------------------------------------------
-40
 degrees
 inclin-
 ation    106.6    120.2     13.6  0.01   9.8   1.1 1,662   206    10  13.9
----------------------------------------------------------------------------
          185.5    213.5     28.0  0.01  20.2   2.0   224   459    36   6.4
----------------------------------------------------------------------------
          308.0    352.2     44.2  0.01  20.2   0.9   154   213    10   5.8
----------------------------------------------------------------------------
          357.6    361.4      3.8  0.01  31.8  10.7 3,552   555   137  30.1
----------------------------------------------------------------------------
WWD025(ii)
----------------------------------------------------------------------------
-75
 degrees
 inclin-
 ation      2.0     37.2     35.2  0.01  15.5   4.0    98   298   107   3.9
----------------------------------------------------------------------------
WWD027(i)
----------------------------------------------------------------------------
-45
 degrees
 inclin-
 ation      0.0    297.1    297.1  0.02  26.1   1.0   149   275    25   5.8
----------------------------------------------------------------------------
        Includ-
            ing
----------------------------------------------------------------------------
            0.0     14.5     14.5  0.02  39.3   1.3    34   211     7   4.9
----------------------------------------------------------------------------
           74.5     95.5     21.0  0.01  50.7   1.9    92   396    58   7.7
----------------------------------------------------------------------------
          163.0    207.0     44.0  0.07  53.4   1.3   157   561    16   7.5
----------------------------------------------------------------------------
          163.0    168.2      5.2  0.06 149.8   1.7    84   873    52   6.6
----------------------------------------------------------------------------
WWD028
 (ii)
----------------------------------------------------------------------------
-75
 degrees
 inclin-
 ation      0.0    112.0    112.0  0.01  42.3   2.8   126   482    32   6.1
----------------------------------------------------------------------------
        includ-
            ing
----------------------------------------------------------------------------
           41.0     85.0     44.1  0.01  70.5   3.4   162   596    25   7.1
----------------------------------------------------------------------------
           41.0     46.0      5.1  0.07 339.7  10.7   220 2,709    29  11.2
----------------------------------------------------------------------------

(i)  true width approximately 70% of downhole length
(ii) true width approximately 20% of downhole length

A total of 80 holes have now been completed for a total of 27,158 metres. With this press release, results from a total of 70 holes have been released. Mineralized areas now defined include Central Limosna, South Limosna, Wara Wara and Sucre.

Only approximately 11,000 metres of the 25,000 metres of drilling completed at the time were included in the previously reported indicated and inferred resource due to the non-availability of assay results. The reported initial indicated resource is 50,200,000 ounces of silver and 288,000 Kg of indium and additional inferred resource of 74,700,000 ounces of silver and 487,000 Kg of indium (Press Release PR08-07, May 13, 2008).

An NI 43-101 compliant updated resource is planned to be completed by the end of September, 2008 and this information will be used as part of a scoping study which is planned to be completed by the end of December, 2008.

The Company is also continuing with metallurgical testing at the SGS Laboratory in Ontario. The ongoing tests will optimize the recovery of silver and gold by conventional leaching and continue to optimize the acid plus salt leach for silver, indium and other extracted metals. The tests will for the first time include extracting the metals from the leach solutions into saleable products.

A map showing the locations of holes can be found on the Company website at www.soamsilver.com.

Geochemical analysis of the Malku Khota drill core was carried out by ALS Chemex. The samples were prepared in their Oruro, Bolivia laboratory and analyzed in their ISO 9001 2000 laboratory in Lima, Peru. Silver and lead were analyzed by the ICP MS61 method using a four acid digestion. Silver values greater than 100 gpt and lead and zinc values greater than one percent were reanalyzed by AA62 method using a four acid digestion. Silver assays greater than 1,500 gpt were analyzed by the 30g FA-GRAV method. Gallium and indium were assayed by ICP MS61. Ralph Fitch, President of the Company is the Qualified Person for this project and has reviewed the content of this press release.

Certain statements in this press release constitute "forward-looking statements". Forward-looking statements may include words such as "plans," "intends," "anticipates," "should," "estimates," "expects," "believes," "indicates," "targeting," "suggests," "potential," "interpretation" and similar expressions. These forward-looking statements include, but are not limited to, information concerning the interpretation of drill results, statements regarding estimated mineral resources and the potential for delineation of additional resources based on additional drill results from the Malku Khota Project. Forward-looking statements express, as at the date of this press release, the Company's plans, estimates, forecasts, projections, expectations, or beliefs as to future events or results. Forward-looking statements are based on certain assumptions, including the key assumptions and parameters on which such estimates are based, involve risks and uncertainties and there can be no assurance that such statements will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements. Factors that could cause results or events to differ materially from current expectations expressed or implied by the forward-looking statements, include, but are not limited to, possible variations in mineral resources, grade or recovery rates; changes in project parameters as plans continue to be refined; failure of equipment or processes to operate as anticipated; political, regulatory and other risks of the mining industry; and other risks more fully described in the Company's Annual Information Form filed and publicly available on SEDAR at www.sedar.com. Readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release. Subject to applicable laws, the Company assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason.

This press release uses the terms 'indicated resources' and 'inferred resources' which are terms recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects). Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will be converted into reserves. In addition, 'inferred resources' have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that an inferred resource will be upgraded to a higher category. Under Canadian rules, estimates of inferred resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for Preliminary Assessment as defined under NI 43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.

SASC is a mineral exploration company that acquires, explores and develops mineral properties, primarily silver, gold and copper in South America. The Company presently holds interests in three properties: the flagship Malku Khota silver-indium-gold and the Laurani gold-silver properties in Bolivia and the Escalones copper-gold-molybdenum property in Chile.

Please see the South American Silver Corp.'s website, www.soamsilver.com, for maps and sections.