Mr. Robert Gill reports

SOUTH AMERICAN SILVER PROVIDES FURTHER UPDATE ON BOLIVIA

South American Silver Corp. has released a further update on recent events in Bolivia since the update on July 4.

Bolivian government authorities continue in their efforts to restore peace and order to the Malku Khota region in the face of acts of aggression being perpetrated against law-abiding local indigenous communities, police, the company's employees and its local contractors.

Four of the detainees taken by the faction, which represents only three of the 46 indigenous communities, have been freed during a government security action (three drill contractors and a Bolivian government prosecutor). The two Bolivian employees of the company and a policeman continue to be held.

One project opponent died during one of these security actions. While the exact cause of the death is still under investigation, it is believed to have been as a result of the individual mishandling dynamite.

The leadership representing five of the six indigenous groups (known as Allyus) of the Malku Khota project area have travelled to the capital city of La Paz, where they made a strong public condemnation of the criminal actions and aggression against their communities and other law-abiding Bolivians by the local faction, along with people from outside the region.

Bolivian government authorities have previously stated that there will be a period of constitutionally mandated consultation with local indigenous communities before the project enters the extraction phase.

"South American Silver reaffirms its co-operation with Bolivian authorities and its strong support for the indigenous people of the Malku Khota communities in their continuing efforts to bring a timely and peaceful resolution to this situation," said Greg Johnson, chief executive officer of South American Silver. "The company looks forward to a constructive dialogue with regional and national governments along with the local indigenous authorities after this situation is resolved in order to agree on an approach to development that is inclusive of all communities in the project area."

The company has temporarily ceased all field activities while government-led talks proceed to seek a peaceful resolution.

South American Silver has worked closely with the local indigenous communities over the past several years, providing significant direct employment on project-related jobs, as well as jointly developing programs with the communities to facilitate job training, education, agricultural enhancement and water management for long-term sustainable development.

The vast majority of the local indigenous communities living in the project area have signed multiple resolutions of support for the project and understand the potential social and economic benefits to their communities through the development of a world-class, modern mine at Malku Khota.

We seek Safe Harbor.