Kootenay Silver Announces $5.0 Million Private Placement Financing

Kootenay Silver Announces $5.0 Million

Private Placement Financing

/NOT FOR DISTRIBUTION TO

UNITED STATES

NEWSWIRE SERVICES OR FOR

DISSEMINATION IN

THE UNITED STATES

./

VANCOUVER, BC

,

July 28, 2020

/CNW/ - Kootenay Silver Inc. ("

Kootenay

" or the "

Company

")

(TSXV: KTN), is pleased to announce that it has entered into an agreement with Mackie Research

Capital Corporation, as lead agent and sole bookrunner (the "

Lead

Agent

"), on its own behalf and, if

applicable, on behalf of a syndicate of agents (together with the Lead Agent, the "

Agents

") in

connection with a best efforts, private placement of units of the Company (the "

Units

") at a price of

$0.40

per Unit (the "

Offering Price

") for gross proceeds of up to

$5,000,000

(the "

Offering

").

Each Unit will be comprised of one common share of the Company (a "

Common Share

") and one-

half of one Common Share purchase warrant (each whole warrant, a "

Warrant

"). Each Warrant

shall be exercisable to acquire one Common Share (a "

Warrant Share

") at a price of

$0.55

per

Warrant Share for a period of 24 months from the closing of the Offering.

The Agents will have an option (the "

Agents' Option

") to offer for sale up to an additional 15% of

the number of Units sold in the Offering at the Offering Price, which Agents' Option is exercisable, in

whole or in part, at any time up to 48 hours prior to the closing of the Offering.

The Company intends to use the net proceeds from the Offering for working capital requirements

and other general corporate purposes.

The securities to be issued under the Offering will be offered by way of private placement in each of

the provinces of

Canada

, other than

Quebec

, and such other jurisdictions as may be determined by

the Company, in each case, pursuant to applicable exemptions from the prospectus requirements

under applicable securities laws.

The Offering is scheduled to close on or about the week of

August 20, 2020

, or such date as agreed

upon between the Company and the Lead Agent (the "

Closing

") and is subject to certain conditions

including, but not limited to, the receipt of all necessary approvals including the approval of the

Exchange. The Units to be issued under the Offering will have a hold period of four months and one

day from Closing.

In connection with the Offering, the Agents will receive an aggregate cash fee equal to 6.0% of the

gross proceeds from the Offering, including in respect of any exercise of the Agents' Option. In

addition, the Company will grant the Agents, on date of Closing, non-transferable compensation

options (the "

Compensation Options

") equal to 6.0% of the total number of Units sold under the

Offering (including in respect of any exercise of the Agents' Option). Each Compensation Option will

entitle the holder thereof to purchase one Unit (a "

Compensation Option Unit

") at an exercise price

per Compensation Option Unit equal to the Offering Price for a period of 24 months following the

Closing.

The securities described herein have not been, and will not be, registered under the United States

Securities Act of 1933, as amended (the "

U.S. Securities Act

"), or any state securities laws, and

accordingly, may not be offered or sold within

the United States

except in compliance with the

registration requirements of the U.S. Securities Act and applicable state securities requirements or

pursuant to exemptions therefrom. This press release does not constitute an offer to sell or a

solicitation to buy any securities in any jurisdiction.

About Kootenay Silver Inc.

Kootenay Silver Inc. is an exploration company actively engaged in the discovery and development

of mineral projects in the Sierra Madre Region of

Mexico

and in

British Columbia, Canada

.

Supported by one of the largest junior portfolios of silver assets in

Mexico

, Kootenay continues to

provide its shareholders with significant leverage to silver prices. The Company remains focused on

the expansion of its current silver resources, new discoveries and the near-term economic

development of its priority silver projects located in the states of

Sonora

,

Sinaloa

and

Chihuahua,

Mexico

, respectively.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:

Certain statements in this news release, referred to herein as "forward-looking statements",

constitute "forward-looking statements" under the provisions of Canadian provincial securities laws.

These statements can be identified by the use of words such as "expected", "may", "will" or similar

terms.

Forward-looking statements are necessarily based upon a number of factors and assumptions that,

while considered reasonable by Kootenay as of the date of such statements, are inherently subject

to significant business, economic and competitive uncertainties and contingencies. Many factors,

known and unknown, could cause actual results to be materially different from those expressed or

implied by such forward-looking statements. Readers are cautioned not to place undue reliance on

these forward-looking statements, which speak only as of the date made. Except as otherwise

required by law, Kootenay expressly disclaims any obligation or undertaking to release publicly any

updates or revisions to any such statements to reflect any change in Kootenay's expectations or any

change in events, conditions or circumstances on which any such statement is based.

Cautionary Note to US Investors:

This news release may contain information about adjacent

properties on which we have no right to explore or mine. We advise U.S. investors that the SEC's

mining guidelines strictly prohibit information of this type in documents filed with the SEC. U.S.

investors are cautioned that mineral deposits on adjacent properties are not indicative of mineral

deposits on our properties. This news release may contain forward-looking statements including but

not limited to comments regarding the timing and content of upcoming work programs, geological

interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking

statements address future events and conditions and therefore involve inherent risks and

uncertainties. Actual results may differ materially from those currently anticipated in such

statements.

This press release uses the terms "Measured", "Indicated", and "Inferred" resources.

United States

investors are advised that while such terms are recognized and required by Canadian regulations,

the United States Securities and Exchange Commission does not recognize them. "Inferred Mineral

Resources" have a great amount of uncertainty as to their existence, and as to their economic and

legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever

be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources

may not form the basis of feasibility or other economic studies.

United States

investors are

cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever

be converted into Mineral Reserves.

United States

investors are also cautioned not to assume that

all or any part of a Mineral Resource is economically or legally mineable.

SOURCE

Kootenay Silver Inc.

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For further information:

James McDonald, CEO and President at 403-880-6016; Ken Berry,

Chairman at 604-601-5652, 1-888-601-5650; or visit: www.kootenaysilver.com

CO: Kootenay Silver Inc.

CNW 07:30e 28-JUL-20