South American Silver closes $9.6-million final tranche

South American Silver Corp (C:SAC)
Monday May 07 2012 - News Release

SOUTH AMERICAN SILVER CORP. ANNOUNCES FINAL CLOSING OF $16 MILLION FINANCING WITH ASIAN BASED HIGH TECHNOLOGY GROUPS

South American Silver Corp. has closed the final tranche of $9.6-million of its $16-million private placement offering of 10 million units of the company announced on April 16, 2012. The offering was priced at $1.60 per unit which represented a 6-per-cent premium to the five-day volume-weighted average trading price of the company's common shares at the time the Toronto Stock Exchange accepted notice of the transaction.

Each Unit of the Offering consists of one common share of the Company and one-half of one common share purchase warrant of the Company. Each whole warrant will be exercisable to purchase one common share of the Company until April 20, 2014 at a price of $2.00. The warrants will not be listed for trading.

The Offering is a strategic investment by a number of Asian based high technology investors, materials manufacturers, and indium/gallium end users from Taiwan, Hong Kong, Japan and Korea. The proceeds of the Offering will go toward the advancement of the Company's Malku Khota silver-indium-gallium project in Bolivia and the Escalones copper-gold project in Chile and for general corporate purposes.

Greg Johnson, President & CEO of South American Silver Corp, stated, "We are pleased with the strong interest from these Asian based high technology manufacturers and investors to facilitate the rapid advancement of one of the world's largest silver, indium and gallium projects. The Malku Khota project is anticipated to become an important new, long life, low cost, Western source of these strategic metals, which are critical for the manufacturing of flat panel displays, LED lighting and thin film solar panels. Bolivia is already one of the largest producers of indium outside of mainland China, supplying material to Japan, Korea and North America. With Malku Khota targeted to produce 10% or more of the global indium and gallium supply, the Company may review possible indium/gallium off-take or streaming-type opportunities as a source of project financing during the Feasibility process."

As compensation for services, the Company paid an agent a cash commission and granted the agent non-transferable compensation warrants (the "Compensation Warrants"). Each Compensation Warrant entitles the holder to acquire one common share and one-half of a common share purchase warrant at an exercise price of $1.60 per Compensation Warrant until October 20, 2013.

The common shares and warrants issued pursuant to the Offering, as well as the common shares issuable upon exercise of the warrants, and securities issuable upon exercise of the Compensation Warrants, are subject to a four-month restricted resale period, which expires on September 8, 2012. The Company shall be entitled to accelerate the exercise period of the warrants, in the event that the closing price of the common shares of the Company trading on the TSX exceeds $2.50 for a period of 10 consecutive trading days, to an exercise period ending at least 30 days from the date notice of such acceleration is provided to the holders of warrants.

South American Silver Corp. Contact:

Phone: 604.681.6926

Toll Free: 1.855.681.6926 http://www.soamsilver.com/