South American Silver Initiates Strategic Discussions With Asian Indium Producers and Consumers Regarding Its Malku

VANCOUVER, BRITISH COLUMBIA, Jul 14 (MARKET WIRE) --
South American Silver Corp. (TSX: SAC) ("SASC" or the "Company")
announces that it has initiated discussions on the Malku Khota
silver-indium project with various interested parties in China, Japan and
South Korea. The purpose of these discussions has been to explore the
possibility of securing a strategic alliance in the form of a marketing,
off take or investment agreement. Several groups have expressed interest
in learning more about the Malku Khota project and discussions are
ongoing but there can be no assurance that a strategic alliance will
result from these efforts.

As demonstrated in the recently released Preliminary Economic Assessment
(Scoping) Study ("PEA")- see SASC PR09-03, March 20, 2009- Malku Khota
has the potential of becoming one of the world's largest future sources
of indium. The PEA was prepared by Pincock, Allen & Holt and showed that
at a production rate of 20,000 tpd, Malku Khota could produce 27,000 kg.
of indium per year for 36 years and if the project were expanded to
40,000 tpd, could represent approximately 10% of the world's current
production. Indium is a key ingredient metal in a number of consumer
electronic applications and its current primary application is being used
as a coating for the flat panel displays. It is also increasingly being
used in the solar energy industry where Copper, Indium, Gallium Selenides
(CIGS) are becoming a key semiconductor material in the high efficiency
photovoltaic cells. In recent years the price of indium has ranged from
US$250 to US$1,000 per kg. The current price is approximately US$350/kg.

Ralph Fitch, President and CEO of the Company, noted that "This is a
positive development for the Company and shows that Malku Khota is a
becoming a recognized project in the minds of consumers and other
producers. The presence of gallium, in addition to indium, has added
interest to Malku Khota. Gallium is also a strategic metal with similar
applications to indium in the electronics and solar photovoltaic fields
that we think will attract the interest of consumers and producers and
further the development of a strategic alliance. We will be estimating
the gallium resource when we complete the next resource update for Malku
Khota."

With respect to the program in Asia, the Company has retained the
consulting services of Mr. Michael Mason, Managing Partner of Mineral
Services LLC, based in Garden City, New York. Mr. Mason has been working
with the Company in developing these Asian contacts and he has a wide
range of professional experience in Asia, particularly in the field of
mineral product marketing and sales contract negotiations. In that
capacity he has been associated with such projects as the Escondida
Copper Project in Chile and the Olympic Dam Project in Australia. He was
involved in the development of the strategic marketing plan for placing
the complex lead, zinc and bulk concentrates produced at the San
Cristobal Project in Bolivia.

Malku Khota is a large, disseminated silver-indium deposit in west
central Bolivia with associated gold, copper and lead credits. The
present 43-101 resource includes an indicated resource of 144.6 million
oz. of silver and 845 thousand kgs. of indium and an inferred resource of
177.8 million oz. of silver and 968 thousand kgs. of indium. The PEA
demonstrated a net cash flow of US$1.23 billion, cash costs (net of
credits) of US$3.74/oz silver, a pre-tax IRR of 50.7%, capital cost of
US$104 million and a 1.4 years payback. SASC management believes that
there is significant upside potential to expand the resource and to
optimize the project economics. The metallurgical testing continues to
indicate that the deposit is leachable with an acid-chloride solution and
will not require the conventional, higher capital cost milling method
normally associated with other silver deposits.

Certain statements in this press release constitute "forward-looking
statements". Forward-looking statements may include words such as
"plans," "intends," "anticipates," "should," "estimates," "expects,"
"believes," "indicates," "targeting," "suggests," "potential,"
"interpretation" and similar expressions. Forward-looking statements
express, as at the date of this press release, the Company's plans,
estimates, forecasts, projections, expectations, or beliefs as to future
events or results. Forward-looking statements are based on certain
assumptions, including the key assumptions and parameters on which such
estimates are based, involve risks and uncertainties and there can be no
assurance that such statements will prove to be accurate. Therefore,
actual results and future events could differ materially from those
anticipated in such statements. Factors that could cause results or
events to differ materially from current expectations expressed or
implied by the forward-looking statements, include, but are not limited
to, possible variations in mineral resources, grade or recovery rates;
changes in project parameters as plans continue to be refined; failure of
equipment or processes to operate as anticipated; political, regulatory
and other risks of the mining industry; and other risks more fully
described in the Company's Annual Information Form filed and publicly
available on SEDAR at www.sedar.com. Readers are cautioned not to place
undue reliance on the forward-looking statements contained in this press
release. Subject to applicable laws, the Company assumes no obligation to
update or revise any forward-looking statement, whether as a result of
new information, future events or any other reason.

SASC is a mineral exploration company that acquires, explores and
develops mineral properties, primarily silver, gold and copper in South
America. The Company presently holds interests in two material
properties: the flagship Malku Khota silver-indium-gold property in
Bolivia and the Escalones copper-gold-molybdenum property in Chile.

Contacts:
South American Silver Corp.
Richard Doran
Executive Vice President
(303) 512-0919
(303) 758-2063 (FAX)
rdoran@soamsilver.com

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