VANCOUVER, BRITISH COLUMBIA--(Feb 3, 2014) - South American Silver Corp. (OTCQX:SOHAF) (TSX:SAC) (TSX:SAC.B) (the "Company") is pleased to announce that a Chairperson has been appointed by the Secretary-General of the Permanent Court of Arbitration to the three-person Arbitration Tribunal in the international arbitration case that the Company's wholly-owned Bermudan subsidiary, South American Silver Limited, initiated last year against the Bolivian Government for the expropriation of the Malku Khota silver-indium project ("the Malku Khota Project"). This is an important step in the arbitration process. The next step is for the Arbitration Tribunal to set a provisional timetable for the proceedings. The case has been brought 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 and the Government of Bolivia for the Promotion and Protection of Investments (the "Treaty").

According to Ralph Fitch, President and CEO of the Company, "Substantive advances in the process are expected in 2014 with a major step forward being the expected submittal of South American Silver's Statement of Claim. Following this, Bolivia will submit its Statement of Defense and each party will have the opportunity to reply to each other's submissions. There will then be an oral hearing in front of the Arbitration Tribunal. It is expected that the arbitration can take up to several years from commencement of proceedings until rendering of a final award, hence any actual cash award, if there is one, would not be expected for some time and not in 2014."

The arbitration case commenced as a result of acts and omissions of the Bolivian Government, including the issuance of Supreme Decree No.1308 on August 1, 2012 (the "Decree"). The Decree revoked mining concessions covering the Malku Khota project held by Compa�ia Minera Malku Khota S.A. (CMMK), a wholly-owned subsidiary of South American Silver Limited. These measures resulted in the complete expropriation of the Malku Khota Project without compensation. The arbitration claim is for Bolivia's breach of the Treaty and international law. Bolivia breached the Treaty's requirement to provide full protection and security to foreign investors and their investments, as well as the Treaty's protections against, among other things, expropriation without just and effective compensation, unfair and inequitable treatment, and less favorable treatment than afforded to Bolivian nationals or nationals of third states.

The Company commenced exploration at Malku Khota in 2003 and work on the Malku Khota Project continued through the expropriation in August 2012. After completing a total of 42,700 meters of drilling in 121 Diamond core holes, and undertaking metallurgical testwork, process development and engineering design, a Preliminary Economic Assessment (PEA) Update was filed on SEDAR on 13th May, 2011 in a NI 43-101 technical report (News Release NR 11-06 dated 16th May, 2011). The May 2011 PEA Update included economic modeling that indicated pre-tax net present value (NPV) at a 5% discount rate of:

				-- $704 million at metal prices of $18.00/oz silver and $500/kg indium 
 
 -- $1.482 billion at $25.00/oz silver and $570/kg indium 
 
 -- $2.571 billion at the $35.00/oz silver and $650/kg indium.1 

(1) At the date of the Supreme Decree, 1st August, 2012, the silver price was $27.87/ounce and indium was $715/kg

After the 2011 PEA Update, the pre-feasibility study ("PFS") phase was started in June 2011. The ongoing work program, which was designed to expand mineral resources and enhance project economics, included the development of social and community programs to benefit indigenous communities in the Malku Khota Project area, baseline studies for the environmental review and assessment program, exploration, metallurgical testwork, flow sheet development, engineering design and preparations to construct a modern 150 person exploration camp near the exploration site. The planned work programs, including the PFS, were not completed due to the expropriation.

About South American Silver Corp.:

South American Silver Corp. is a growth focused mineral exploration company creating value through the exploration and development of the Gold Springs gold project along the Nevada-Utah border, the large scale Escalones copper-gold project in Chile, the pursuit of new opportunities and the realization of value from the expropriated Malku Khota project in Bolivia through the arbitration process. The Company's approach to business combines the team's track record of discovery and advancement of large projects, key operational and process expertise, and a focus on community relations and sustainable development. Management has extensive experience in the global exploration and mining industry. Additional information related to South American Silver Corp. is available at www.soamsilver.com and on SEDAR at www.sedar.com.

Plan of Arrangement Completed:

The plan of arrangement with High Desert Gold Corporation was completed on Dec. 20, 2013 (see SASC NR13-25). Under the Arrangement, SASC shareholders received one new SASC Common Share and one SASC Class B Share for each SASC common share previously held. The new SASC Common Shares carry voting, dividend and liquidation rights similar to SASC's former common shares. The Class B Shares carry redemption and retraction rights and rights on liquidation which entitle the holders collectively to 85% of the net cash, if any, (after deducting all costs, taxes and expenses and the third party funder's portion thereof) received by SASC from an award or settlement in relation to SASC's wholly-owned subsidiary South American Silver Limited's arbitration proceeding. The Class B Shares are non-voting and non-participating in regards to dividends and on liquidation other than as described above.

The holders of the Class B Shares have contingent rights to receive a pro rata share of 85% of the net cash proceeds, if any, (after deducting all costs, taxes and expenses and the third party funder's portion thereof) received pursuant to any award or settlement agreement entered into in respect of the South American Silver Limited's arbitration claim against the Government of Bolivia. The holders of Class B Shares will not realize any value if: (i) no award or settlement agreement is reached; (ii) no cash payment is included in the award or settlement agreement; or (iii) the costs of obtaining a cash payment on, or enforcement of, the award or settlement agreement exceeds to amount of such cash payment.. South American Silver Limited has sole discretion and decision making authority over when and whether to pursue any particular course of action in respect of the arbitration proceedings, including whether to negotiate or enter into a settlement agreement and including whether to accept non-cash consideration pursuant thereto.

Forward-looking statements:

Certain statements contained herein constitute "forward-looking statements". Forward-looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business. Forward- looking statements may include words such as "will", "eventual", "proceeding", "expected", "creating", "development", "pursuit", "realization" and similar expressions. Information concerning the PEA may also be considered forward-looking statements as such information constitutes a prediction of project economics if Malku Khota were to be developed. These forward- looking statements are based on current expectations and entail various risks and uncertainties.

Actual results may materially differ from expectations, if known and unknown risks or uncertainties affect our business, or if our estimates or assumptions prove inaccurate. 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, uncertainties associated with the arbitration proceeding against Bolivia, including the quantum of damages to be obtained and the realization or collection of the value of any award or settlement; possible variations in mineral resources, grade, metal prices; and regulatory, environmental and other risks of the mining industry more fully described in the Company's management information circular dated November 7, 2013 and its Annual Information Form, which is available on SEDAR at www.sedar.com. The assumptions made in developing the forward-looking statements include the arbitration process proceeding in a similar manner to other international arbitration claims against Bolivia.

Readers are cautioned not to place undue reliance on the forward-looking statements contained in this news release. Except as required by law, the Company assumes any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason. Unless otherwise indicated, forward-looking statements in this news release describe the expectations of the Company as of February 3, 2014.

South American Silver Corp.

Ralph Fitch

President & CEO

303-584-0606

South American Silver Corp.

Richard Doran

Investor Relations

303-584-0606

www.soamsilver.com