Kootenay Silver Announces Option Agreement with Capstone Mining FOR the LA Mina Project, Mexico
June 28, 2018
KOOTENAY SILVER ANNOUNCES OPTION AGREEMENT WITH CAPSTONE
MINING FOR THE LA MINA PROJECT, MEXICO
Kootenay Silver Inc. (TSXV: KT N) (the “Company” or “Kootenay”) is pleased to announce that its
wholly owned Mexican subsidiary has entered into an option agreement (“Agreement”) with Capstone
Mining Corp. (TSX: CS) (“Capstone Mining”) on the Company’s La Mina Project (“La Mina”), located
180 kilometers southeast of the city of Hermosillo in Sonora State, Mexico. La Mina was staked by
Kootenay as part of its generative property portfolio strategy and covers th e upper levels of a zoned
copper porphyry mineral system exposed over a 2 by 2 kilometer area.
Kootenay President & CEO, James McDonald stated: “We are pleased to have completed the Agreement
with Capstone Mining and are looking forward to ha ve them drill test this exciting copper porphyry
system”.
La Mina contains a large leached argillized pyritic zone exposed at surface where surface grab and chip
samples taken averaged about 300 ppm copper. This is consistent with leached zones above enriched
copper deposits to the north such as at La Caridad, where the leached zone was in the 200 ppm range and
overlaid an enriched deposit of 0.7% copper. Click to view maps of c opper (%) and gold (gpt) rock
samples taken within the leached pyrite shell.
The concessions also cover an exotica copper zone no rthwest of the leached py ritic shell where sampling
averaged 0.49% copper over 40 rock chip samples. Th is zone occurs over an approximate 100 by 700-
meter area. Additionally, there is a peripheral zone of silver-gold veins out bound from the copper
porphyry which is classic of zonation around porphyri es. Kootenay discovered the area while conducting
a grass roots generative work program looking for silver deposits. Click to view map of copper (%) rock
samples taken within the exotica copper and polymetallic vein zones.
The Agreement allows Capstone Mining to earn an in itial 60% (“Initial Earn In”) interest in La Mina by
making staged cash payments totalling US$600,000 and incurring exploration expenditures totalling
US$4 million over 4 years. Following the Initial Earn In , Capstone may earn up to a 100% interest in La
Mina in stages by completing certain milestones including preparation of a preliminary economic
assessment, a pre feasibility study and paying an additional aggregate total of US$8.4 million to Kootenay
in stages at each of the various milestones.
The La Mina is subject to an underlying inform ation agreement (dated May 4, 2018) between the
Company and a third party whereby, the third party holds a net smelter return royalty (“Underlying
Royalty”) of 2.5% on the concession. The Company has renegotiated the right to purchase on or before
the beginning of commercial production up to 2% of the Underlying Royalty (“Buydown”) in increments
of 0.25% for aggregate total of US$1.6 million. The Company will pay US$20,000 and issue 142,000
common shares of the Company to the third party upon acceptance of the TSX Venture Exchange. If
Capstone Mining earns 100% interest , Kootenay will retain a 1% net smelter return with no buy out
option of which 0.5% will be held by the third party after giving effect to the Buydown.
Qualified Persons
The Kootenay technical information in this news release has been prepared in accordance with the
Canadian regulatory requirements set out in Nationa l Instrument 43-101 (Standards of Disclosure for
Mineral Projects) and reviewed on behalf Kooten ay by James McDonald, P.Geo, President, CEO &
Director for Kootenay, a Qualified Person.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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 Me xico and in British Columbia, Canada. Supported by
one of the largest portfolios of silver assets in Mexi co, Kootenay continues to provide its shareholders
with significant leverage to silver prices. The Comp any remains focused on the expansion of its current
silver resources, new discoveries and the near-term econom ic development of two of its priority silver
projects located in prolific mining districts in Sonora, State and Chihuahua, State, Mexico, respectively.
For additional information, please contact:
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
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
The information in this news release has been prepared as at J une 27, 2018. Certain statements in this news release, referred t o herein as
"forward-looking statements", cons titute "forward-looking statements" under the prov isions of Canadian provincial securities la ws. 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 si gnificant business, economic and competitive uncertainties and conting encies. Many
factors, known and unknown, could cause actual results to be mate rially different from those expre ssed or implied by such forwa rd-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, Kooten ay expressly disclaims any obligation or un dertaking to release publicly any updates or revisions to
any such statements to reflect any change in Kootenay’s expectati ons or any change in events, conditions or circumstances on wh ich any such
statement is based.
Cautionary Note to US Investors: This news release may contain information about adja cent properties on which we have no right to explore or
mine. We advise U.S. investors that the SEC' s mining guidelines strictly prohibit inform ation of this type in documents filed w ith the SEC. U.S.
investors are cautioned that mineral deposits on adjacent propertie s 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 prope rty titles, potential mineral recovery processe s, etc. Forward-looking statements a ddress future events
and conditions and therefore involve inherent risks and uncertaintie s. Actual results may differ materially from those currentl y 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 Can adian regulations, the United States Securities and Exchange Commission does not recognize them. "Inferred
Mineral Resources" have a great amount of uncertainty as to th eir 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 categor y. Under Canadian rules, estimate s of Inferred
Mineral Resources may not form the basis of feasibility or ot her 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.
2018 number 14