Mr. Darren Blasutti reports

U.S. SILVER & GOLD REPORTS SECOND QUARTER FINANCIAL AND OPERATIONAL RESULTS

U.S. Silver & Gold Inc. has released financial and operational results for the second quarter of 2014.

This earnings release should be read in conjunction with the company's management's discussion and analysis, financial statements, and notes to financial statements for the corresponding period, which have been posted on SEDAR and are also available on the company's website. All figures are in U.S. dollars unless otherwise noted.

Second quarter highlights

Revenues of $11.3-million and a net loss of $1.5-million or (two cents) per share for the quarter, compared with revenues of $16.9-million and a net loss of $8.3-million or (14 cents) per share in second quarter 2013. Revenues of $19.4-million and a net loss of $4.4-million or (six cents) per share year to date compared with revenues of $39.8-million and a net loss of $11.7-million or (20 cents) per share for the first six months of 2013.

Mine operating earnings for the quarter of $300,000 and positive cash flow from mine operations before working capital adjustments of $1.0-million compared with a $2.3-million mine operating loss and $6.4-million negative cash flow in second quarter 2013.

Production of 649,928 silver equivalent ounces, including 520,723 silver ounces, which represent a 35-per-cent increase in silver production compared with 460,490 silver equivalent ounces, including 385,503 silver ounces silver in first quarter 2014.

Cash costs dropped to $12.31 per ounce silver, a decrease of 34 per cent from first quarter 2014 and 25 per cent year over year, while all-in sustaining costs fell to $15.36, a reduction of 36 per cent from first quarter 2014 and 35 per cent year over year.

Guidance for 2014 remains at 2.0 million to 2.4 million silver ounces at cash costs of $14.50 to $15.50 per ounce and all-in sustaining cash costs of $18 to $19 per ounce.

As of June 30, 2014, the company had a cash balance of approximately $7.2-million and working capital of $13.8-million, representing a 10-per-cent increase over $12.5-million at March 31, 2014.

"Over the last 12 months, we focused on reducing our cost base and rightsizing operations. With that complete, our goal is to return the company to profitability at current metal prices by year-end," said Darren Blasutti, president and chief executive officer of U.S. Silver & Gold.

"The strategy to accomplish this began earlier in the year with a transition toward mining wider, higher silver-equivalent-grade silver-lead veins, which are well suited for mechanized mining and less costly to operate. This approach was a significant factor in the company's strong second quarter operating results, and has not only proved its viability, but has helped us find areas where we can continue to improve as we move forward."

Production and operating costs

As reported in the July 14, 2014, press release, the Galena complex produced 520,723 ounces of silver during the second quarter of 2014 at an average grade of 13.5 ounces per ton and a cash cost of $12.31 per ounce of silver. Production increased by 35 per cent over first quarter 2014 as stopes that had been undergoing planned sand cycles earlier in the year became available, and staff transitions from silver-copper stopes to wider, silver-lead stopes were completed. In addition, lead head grade decreased from 9.19 per cent in second quarter 2013 to 5.97 per cent in second quarter 2014 due to stope availability and ore sequencing as the company developed into higher-grade ore for production later in the year. Cash costs fell 34 per cent compared with the first quarter of 2014 and 25 per cent year over year while all-in sustaining costs were reduced by 36 per cent quarter over quarter and 35 per cent year over year following comprehensive cost-cutting initiatives implemented over the last 12 months.

                   GALENA PRODUCTION DETAILS                                
                                                    Q2 2014     Q2 2013

Total ore processed (tons milled)                    40,166      58,585
Silver -- copper                                     21,697      43,375
Silver -- lead                                       18,469      15,210
Silver produced (ounces)                            520,723     629,227
Lead produced (pounds)                            2,040,198   2,636,089
Copper produced (pounds)                            215,302     268,392
Silver recoveries (per cent)                           96.1        96.4
Lead recoveries (per cent)                             92.6        94.4
Copper recoveries (per cent)                           96.2        96.3
Silver head grade (ounces per ton)                    13.49       11.14
Silver -- copper                                      17.24       11.83
Silver -- lead                                         9.08        9.20
Lead head grade (per cent)                             5.97        9.19
Copper head grade (per cent)                           0.52        0.32
Silver sold (ounces)                                460,037     661,056
Lead sold (pounds)                                1,955,807   2,791,816
Copper sold (pounds)                                173,386     295,486
Realized silver price ($ per ounce)                  $19.48      $23.26
Realized lead price ($ per pound)                     $0.96       $0.94
Realized copper price ($ per pound)                   $3.05       $3.27
Silver cash costs ($ per ounce)                      $12.31      $16.41
All-in sustaining costs ($ per ounce silver)         $15.36      $23.65

The company recorded a net loss of $1.5-million for the quarter and $4.4-million year to date, compared with a net loss of $8.3-million for the second quarter of 2013 and $11.7-million for the six months ended June 30, 2013. The decreased loss is due to reductions in cost of sales, general and administrative expenses, exploration costs, care and maintenance, depreciation, depletion, amortization, and stock-based compensation. In addition, a shipment of silver-copper concentrate produced during the quarter did not arrive at the smelter until early July, and was therefore unsold at the end of second quarter 2014.

Exploration update

In the second quarter, drilling continued to follow the 2014 exploration budget designed to: (a) develop near-term resources, (b) provide information to help refine the highest-grade silver equivalent areas in proximity to existing infrastructure for mining, (c) complete block modelling on priority veins and (d) evaluate drill results from 2013. The proposed budget is projected at $1.7-million for the year, of which $700,000 was spent in the first half of 2014. The company drilled 10,629 feet underground during the first half of the year with two drill crews operating the company's in-house drills. The company continues to reduce the backlogged drill core. The use of in-house drills and crews has resulted in a lowering of drilling cost to under $35 per foot during the first half of 2014 compared with the company's previous contract rates of over $50 per foot. Recent selected silver/lead drilling results are provided in the attached drill results table. Additional results are available at the company's website.

                 RECENT EXPLORATION DRILL RESULTS  
                                                               
Hole No.       From (ft)     To (ft)     Width (ft) True thickness (ft)

52-434              0.0         7.0            7.0                 5.4
52-434            13.50        15.2            1.7                 1.5
37-295            118.0       124.5            6.5                 5.6
37-296            135.0       140.0            5.0                 3.8
37-297            276.5       280.0            3.5                 2.9
37-297            340.0       347.3            7.3                 4.6
37-305            235.0       255.0           20.0                12.8
40-347             64.8        67.5            2.7                 1.4
46-273              0.0         6.8            6.8                 3.4
46-273             62.7        65.9            3.2                 1.4
46-276             10.5        14.5            4.0                 3.6

Hole No.    Ag (oz/ton)  Cu (%)  Pb (%) Ag equivalent (oz/ton)   Ag equivalent (g/t)

52-434            98.9      --    27.0                  124.6               4,272.0
52-434            20.0      --    22.7                   41.6               1,424.9
37-295             4.0      --     9.9                   13.5                 460.9
37-296             4.6      --    10.7                   14.8                 506.9
37-297            10.7      --    28.0                   37.3               1,277.3
37-297            14.3      --     3.1                   17.3                 591.9
37-305            16.0     0.9      --                   18.8                 637.6
40-347           202.0     4.0      --                  214.8               7,335.9
46-273            16.3     0.3      --                   17.2                 588.2
46-273           148.6     2.4      --                  155.7               5,336.7
46-276            54.3     0.7      --                   56.3               1,931.3

Note that the intersection in drill hole 52-434 (98.97 ounces per ton and 27 per cent lead) begins at the start of the hole and will allow for easy access to this high-grade mineralization. It is visible in the wall of the drift, but the extent of the mineralization was not previously known. The intersections on the 4600 level in drill holes 46-273 and 46-276 are exploring newly discovered (as well as known) tetrahedrite veins close to the existing workings. Drilling in the upper country silver-lead veins was completed in the latest period, and preliminary block modelling of this series of veins will now be undertaken. As stated in the May 14, 2014, press release, these veins had undergone only limited historical development during the mine's decades-long exclusive focus on silver/copper. As a result, only a small amount of production mining took place, and this area was left readily available by established development and infrastructure. The development of block models for this area will assist in the mine-planning effort and efficient extraction of this ore consistent with the company's stated strategy.

Financial position,

The company's cash and cash equivalents at June 30, 2014, totalled $7.2-million compared with $7.2-million at Dec. 31, 2013, while net working capital totalled $13.8-million and $12.2-million, respectively, for the same dates.

Quality assurance/quality control

U.S. Silver & Gold maintains a QA/QC program for all assays, including the use of standards, blanks and duplicates. All QA/QC results are routinely evaluated using a program of QA/QC monitoring. Details of the program are provided in the company's NI 43-101-compliant technical report on the Galena project dated March 22, 2013.

We seek Safe Harbor.