JOINT VENTURE - Kootenay and Pinecrest Announce Drill Results from the Espiritu Polymetallic Vein/Breccia Property, Sonora, Mexico

June 15, 2012

Vancouver, Canada - Kootenay Silver Inc. (TSX VENTURE: KTN.V) ("Kootenay" or the "Company") and Pinecrest Resources Ltd. (TSX VENTURE: PCR.V) ("Pinecrest") report initial Phase 1 drill results from the Espiritu polymetallic vein/breccia project, Sonora, Mexico. Five diamond drill holes totaling 409 metres were completed on two of seven known silver-rich mineralized areas outlined to date. Two holes tested the Road Show Zone and three the Molinos Zone.

Road Show Zone

Two drill holes collared on the Road Show zone were an initial test of a 500-metre by 500-metre target characterized by the presence of silver/gold/lead/zinc/copper mineralization as replacement, breccia, vein and stockwork zones associated with ferrodolomite-ankerite and manganese alteration hosted in limestone/rhyolite dikes.

ESP-12-01 intersected 54 meters of ferro-dolomite altered breccia in a rhyolite dyke. Forty-one meters of the interval were anomalous in silver, lead and zinc with the best interval returning 11.0 m grading 26.2 g/t Ag, 2762 ppm Zn and 1388 ppm Pb. The highest individual section within this interval assayed 1.0 m assaying 187 g/t Ag and 1.87% Pb+Zn.

Hole ID From (m) To (m) Interval (m) Ag (g/t) Zn (ppm) Pb (ppm)
ESP-12-01 0 41 41 9 1268 537
including 13 24 11 26.2 2762 1388
Drill Hole ESP-12-02 did not reach target depth due to fault offset.

Molinos Zone

Three holes tested the Molinos Zone. ESP-12-03 was lost prior to target depth because it intersected an old mine working. This hole was then re-drilled and intersected argillically altered argillites strongly fractured with limonite stockworking. The drill hole showed anomalous values for Ag, Pb and Zn over 4 meters (see table below).

Hole ID From (m) To (m) Interval (m) Ag (g/t) Zn (ppm) Pb (ppm)
ESP-12-03 18 22 4 17.8 195 1375

In drill hole ESP-12-04, argillically altered shale was intersected in the top 26 meters followed by 56 meters of sericitically and potassically altered feldspar porphyry. The shale interval returned anomalous silver, lead and zinc while the porphyry is anomalous in copper and molybdenum (see table below).

Hole ID From (m) To (m) Interval (m) Ag (g/t) Zn (ppm) Pb (ppm) Cu (ppm) Mo (ppm)
ESP-12-04 13.5 22 8.5 12.4 730 582 420
ESP-12-04 27 64.5 37.5 569 65.5
Including 56 57 1 38 1580 960 670 210

ESP-12-05 was lost before reaching the target depth and encountered strong sericite and potassic alteration with quartz veining in a feldspar porphyry. No significant values were intercepted with very weakly anomalous amounts of gold, silver, copper and lead being encountered.

The Molinos zone is located approximately 2.0 kilometres southeast of the Road Show zone. Polymetalic mineralization is associated with highly anomalous copper, lead, zinc and antimony with elevated molybdenum, tungsten and mercury. A 500 m by 1,000 m soil survey completed over the Molinos zone outlined a broad zone of highly anomalous gold, silver, lead, zinc mineralization. The Molinos zone is interpreted to represent the deeper zones of mineralization associated with high temperature carbonate-hosted replacement ("CRD") deposits. This level of mineralization is commonly associated with porphyry, skarn and chimney/manto styles of mineralization, and is suggestive of a continuum of mineralization between the Road Show into the Molinos zone. Pinecrest and Kootenay are reviewing all technical data from the Espiritu project in order to recommend the next stage of work to advance the project.

The Espiritu project covers an extensive area of alteration and mineralization over several kilometers including a copper-gold porphyry zone where previous drilling intersected up to 232 meters grading 0.14% Cu and 0.14 g/t Au. In addition, silver-gold-lead-zinc veins, stockworks and breccias have been documented on the property with grab samples assaying from background values to over 1000 g/t Ag. The project is located along a northwest structural trend that a few tens of kilometres to the south hosts the La India and Tarachi gold deposits which are being advanced by Agnico Eagle and also Alamos Gold's Mulatos gold deposit.

Mineralization, alteration and host rocks at Espiritu are similar to many limestone-hosted replacement deposits of the Mesa Central district of Mexico that include the Santa Eulalia, San Maritn, Naica and Santa Barbara silver mines. These deposits are some of Mexico's largest silver deposits/mines.

Santa Eulalia: >45Mt grading 310 g/t Ag, 8.2% Pb, 7.1% Zn
San Martin: 60Mt grading 118g/t Ag, 0.9% Cu and 3.9% Zn)
Naica: >24 Mt grading 213 g/t Ag, 5.9% Pb, 5.6% Zn
Santa Barbara: 25 Mt grading 113 g/t Ag, 1.7% Pb, 3.4% Zn

QA and QC

All intervals reported are hole length as true widths are not known at this time. Drill holes were completed using HQ sized core and samples were cut in half with a diamond saw with one half being bagged, tagged, recorded and sent to ALS Chemex in Hermosillo Sonora, Mexico for sample preparation and onto ALS Chemex in Vancouver for analysis. The other half of the core was returned to the core box. All samples were in 1 to 2 meter lengths. Further QA and QC procedures are posted on Kootenay Silver's website.

Drill Hole Depth (m) Azimuth Inclination EAST NORTH ELEV
ESP-12-01 99 50° -50 683480 3213648 832
ESP-12-02 99 230° -50 683653 3213746 828
Drill Hole Depth (m) Azimuth Inclination EAST NORTH ELEV
ESP-12-03 (aborted) 21 200° -50 685130 3212749 920
ESP-12-03 57 175° -50 685127 3212751 913
ESP-12-04 82 150° -50 685128 3212678 908
ESP-12-05 51 110° -50 685159 3212553 892
Total Drilled 409

Pursuant to the terms of an option agreement, Pinecrest can earn a 50% interest in the Espiritu project by spending $1.0 million on exploration over a four year period and by issuing up to 750,000 common shares of Pinecrest to the Company over 3 years.

The technical disclosure in this release has been reviewed and verified by James McDonald, P.Geo., a qualified person ("QP") as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects. Mr. McDonald is a director of the Company.

ABOUT KOOTENAY

Kootenay Silver is actively developing mineral projects in the Sierra Madre Region of Mexico and in British Columbia, Canada. The Company's flagship property is the former producing Promontorio Silver mine in Sonora State, Mexico. The Company's objective is to develop near term discoveries and long-term sustainable growth. Kootenay's management and technical team are proven professionals with extensive international experience in all aspects of mineral exploration, operations and venture capital markets. Multiple, ongoing J/V partnerships in Mexico and Canada maximize potential for additional, new discoveries while maintaining minimal share dilution.

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For additional information, please contact:
James McDonald, CEO and President at 403-238-6986
Ken Berry, Chairman at 604-601-5652; 1-888-601-5650
or visit: www.kootenaysilver.com

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release.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. 2012 number 11