Mr. Phillip Brodie-Hall reports

SOUTH AMERICAN SILVER FILES THIRD QUARTER 2013 FINANCIAL STATEMENTS AND MD&A

South American Silver Corp. has released its unaudited condensed interim consolidated financial statements for the three and nine months ended Sept. 30, 2013, and the related management's discussion and analysis (MD&A) of financial position and results of operations. All amounts in this news release are expressed in U.S. dollars, unless otherwise indicated.

As at Sept. 30, 2013, the company had working capital of $12.7-million, including cash and cash equivalents of $13-million. As at the date of this news release, the company also owns an 18.5-per-cent equity interest in High Desert Gold Corp. (HDG), which had a quoted value as at Sept. 30, 2013, of $900,000.

South American Silver continues to advance before the permanent court of arbitration its international arbitration proceedings against Bolivia for the expropriation of the Malku Khota project. An arbitral tribunal of three members is being empanelled by the parties. Two arbitrators have been appointed and the two appointed arbitrators have until Nov. 29, 2013, to appoint a third arbitrator, who will act as president of the tribunal. Once the tribunal is formed, it will set a provisional timetable for the arbitration itself. This will include a schedule for submission of a statement of claim, statement of defence and oral hearings at the court of arbitration. Unless there is a negotiated settlement of the dispute, it is expected that the arbitration can take up to two to three years from commencement of proceedings until rendering of a final award. Most of South American Silver's costs and expenses related to its international arbitration proceedings against Bolivia, including those to be incurred in connection to the enforcement of any arbitration award, are covered by a third party financier on a non-recourse basis (see news release dated May 24, 2013).

On May 2, 2013, the company completed its drilling program at the Escalones copper-gold project in Chile, with a total of 9,070 metres of drilling completed. On Aug. 12, 2013, the company filed a National Instrument 43-101 technical report that includes an updated resource estimate for Escalones (see news releases dated June 28, 2013, and Aug. 12, 2013) showing a significant increase in copper, molybdenum and gold resources as well as a category upgrade of approximately a third of the resource to indicated from inferred.

On Oct. 21, 2013, the company announced that it has entered into an arrangement agreement pursuant to which the company will acquire all of the issued and outstanding shares of HDG that it does not already own in an all-share transaction by way of a plan of arrangement. Under the arrangement, immediately prior to the exchange of the outstanding securities of HDG for securities of the company, each shareholder of the company will exchange each of its South American Silver common shares for one South American Silver Class A share and one South American Silver Class B share. The Class A shares (which will be redesignated as common shares as the last step in the arrangement) will carry voting, dividend and liquidation rights similar to the company's current common shares. The Class B shares will carry redemption and retraction rights and rights on liquidation that entitle the holders collectively to 85 per cent of the net cash, if any (after deducting all costs, taxes and expenses and the financier's portion thereof), received by the company from an award or settlement in relation to the company's wholly owned subsidiary's (South American Silver Ltd.) arbitration proceeding against the Plurinational State of Bolivia for the expropriation of the Malku Khota project. The Class B shares will be non-voting and non-participating in regard to dividends and on liquidation other than as described above. Postarrangement, each South American Silver stock option and warrant that was outstanding at the time of the arrangement will be exercisable to acquire one Class A share and one Class B share instead of a common share at the same exercise price. HDG shareholders will receive 0.275 of a South American Silver Class A share for each HDG common share held, and all outstanding HDG stock options and warrants will be adjusted accordingly.

The Toronto Stock Exchange has conditionally approved the arrangement, including the listing of the Class B shares to be issued thereunder. Meetings of the shareholders of HDG and the company to consider the arrangement are to be held on Dec. 9, 2013, and materials in respect of such meeting have been mailed to shareholders. Copies of the materials mailed to the company's shareholders are available under its SEDAR profile and on its website, and copies of the materials mailed to HDG's shareholders are available under its SEDAR profile and on its website.

Outlook

The immediate priorities of the company for 2013 remain to: (i) diligently manage and preserve the company's cash resources; (ii) complete the acquisition of HDG; (iii) recover fair market value for the Malku Khota project by pursuing international arbitration proceedings against Bolivia while at the same time remaining open to a negotiated settlement; and (iv) evaluate the potential of joint venturing future stages of Escalones.

Further details, including copies of the unaudited financial statements and related MD&A, can be found on SEDAR and on the company's website.

We seek Safe Harbor.