Mr. Greg Johnson reports

SOUTH AMERICAN SILVER PROVIDES UPDATE ON MALKU KHOTA SILVER-INDIUM PROJECT

South American Silver Corp. today provided an update on the situation in Bolivia and the Malku Khota silver-indium project. Over recent days media coverage has reported that Bolivian officials were making changes to legislation from 1985, which among other things had allowed for the privatization during the 1990s of the operatorship of certain specific mines owned and operated by Comibol (the Bolivian State Mining Corporation), but that now are under operating agreements directly or indirectly with Comibol.

Bolivian government officials have confirmed that these changes are primarily focused on the Comibol-owned mines and private investments in mining will continue to be respected. Specifically, South American Silver has been assured by government officials that its 100-per-cent-owned Malku Khota project will not be impacted by these proposed changes for government-owned mines. The company confirms that the Malku Khota project is a private investment and that there has never been Comibol involvement in the project. The company also confirms that its concessions covering over 50 square kilometres are in good standing.

Recently, the Bolivian press reported that the Bolivian vice-minister of mining emphasized the government's wishes to attract foreign investments in mining and respect legal security and private investment. In that same article, the vice-minister further stated that the Bolivian government intends to support the development activities at South American Silver's Malku Khota project this year as one of the largest new mining projects in the country.

Greg Johnson, president and chief executive officer of South American Silver, stated: "With the completion of the recent positive preliminary economic assessment study on the Malku Khota project the company is moving into prefeasibility study activities for the remainder of 2011 and into feasibility in 2012. We appreciate the support from the Bolivian government for the development of the Malku Khota project. The project has the potential to become one of the largest new primary silver producing mines in the world and would also be one of the largest producers of the high-technology metals, indium and gallium. At conservative base-case metal price assumptions of $18 per ounce silver, cash flows, project valuations and rates of returns have all strengthened considerably over previous studies, highlighting the value of this long-life asset. The successful development and operation of the project will provide significant economic benefits to the local region and to Bolivia as a whole."

We seek Safe Harbor.