PROMONTORIO - Drilling Encounters High-Grade Silver Zone on Promontorio Between Pit and NE Zones

June 4, 2013

Vancouver, British Columbia: Kootenay Silver Inc. (TSX VENTURE: KTN.V) ("Kootenay" or the "Company") is pleased to announce assay results from drill holes DH 141 to 188 as part of its Phase V drill and resource expansion program on its flagship Promontorio Silver Project in Sonora, Mexico.

Drilling Highlights:

DH 186

  • 301 gpt Silver Eqv. Over 31.7 Meters (200 gpt Ag, 1.21 gpt Au and 1.79% Pb+Zn);
  • Including 1,046 gpt Silver Eqv. Over 5.0 Meters
    (808 gpt Ag, 1.83 gpt Au and 6.88% Pb+Zn)
  • Including 300 gpt Silver Eqv. Over 7 Meters
    (233 gpt Ag, 0.62 gpt Au and 1.6% Pb+Zn)

DH 185

  • 274 gpt Silver Eqv. Over 18.4 Meters (208 gpt Ag, 0.92 gpt Au and 0.79% Pb+Zn);
  • Including 1,106 gpt Silver Eqv. Over 3.0 Meters
    (1,023 gpt Ag, 0.92 gpt Au and 1.66% Pb+Zn)

DH 188

  • 124 gpt Silver Eqv. Over 20.3 meters (59 gpt Ag, 0.84 gpt Au and 1.0% Pb+Zn)

DH 183

  • 188 gpt Silver Eqv. Over 6 meters (111 gpt Ag, 0.49 gpt Au and 2.48% Pb+Zn)
  • 161 gpt Silver Eqv. Over 7.1 meters (98 gpt Ag, 0.61 gpt Au and 1.5% Pb+Zn)

States Kootenay President and CEO James McDonald "We are very pleased with current assays returned from drilling. Not only do results from Holes such as 186 and 185 represent some of the highest grades drilled to date, they occur in an area between the North East and Pit zones where these grades were not expected. This underscores the potential to delineate additional high-grade silver zones within the diatreme system. This new area of high-grade silver mineralization is open along strike and dip directions and appears to be on strike with other high-grade intercepts previously returned from drilling in the North East Zone."

A CEO interview video is available for viewing at: http://www.kootenaysilver.com/s/Video.asp

Table of the full results follows:

Hole ID Target From
(m)
To
(m)
Interval
(m)
*AgEq
(Ag,Au,Pb,Zn)
(gpt)
Ag
(gpt)
Au
(gpt)
Pb
(%)
Zn
(%)
Pb+Zn
(%)
DH-183-13 NE Zone 120.5 122 1.5 162 69 0.01 0.63 4.02 4.65
DH-183-13 NE Zone 187.25 194.35 7.1 161 98 0.61 0.62 0.88 1.5
DH-183-13 NE Zone 213 219 6 188 111 0.49 1.23 1.24 2.48
DH-183-13 NE Zone 228 229 1 107 73 0.08 0.94 0.5 1.44
DH-184-13 NE Zone 218.4 223.9 5.5 93 42 0.73 0.25 0.36 0.61
DH-184-13 NE Zone 234.15 236.42 2.3 72 11 1.01 0.26 0.09 0.35
DH-184-13 NE Zone 283 297 14 65 29 0.27 0.5 0.55 1.06
including NE Zone 286 289 3 169 89 0.4 1.42 1.43 2.85
DH-184-13 NE Zone 306 320 14 54 22 0.25 0.43 0.52 0.94
DH-185-13 NE Zone 185.5 191.5 6 136 92 0.69 0.12 0.24 0.36
DH-185-13 NE Zone 197.5 215.9 18.4 274 208 0.92 0.35 0.44 0.79
including NE Zone 201.55 204.55 3 1106 1023 0.92 1.07 0.59 1.66
including NE Zone 207.55 210.55 3 330 142 2.54 0.78 1.81 2.58
DH-186-13 NE Zone 164.8 166.3 1.5 98 81 0.15 0.28 0.15 0.42
DH-186-13 NE Zone 178.3 210 31.7 301 200 1.21 0.88 0.91 1.79
including NE Zone 183 188 5 1046 808 1.83 3.02 3.87 6.88
including NE Zone 192 199 7 300 233 0.62 1 0.6 1.6
including NE Zone 202 209 7 222 62 2.58 0.54 0.52 1.06
DH-186-13 NE Zone 256 258 2 62 4 1.06 0.07 0.05 0.12
DH-188-13 NE Zone 149.7 151.6 1.9 53 35 0.22 0.11 0.21 0.32
DH-188-13 NE Zone 158.5 178.8 20.3 124 59 0.84 0.46 0.54 1
DH-188-13 NE Zone 234.65 239.15 4.5 107 23 1.29 0.29 0.45 0.75
DH-188-13 NE Zone 288 299 11 79 22 0.29 0.8 1.28 2.08
DH-165-13 B Zone 16.3 17.8 1.5 85 49 0.59 0.1 0.14 0.24
DH-143-13 Dorotea SE 89 93 4 70 29 0.6 0.26 0.19 0.45
DH-143-13 Dorotea SE 101 110 9 54 15 0.38 0.42 0.48 0.9
DH-145-13 Dorotea SE 6 12 6 105 46 0.83 0.49 0.24 0.73
DH-149-13 Dorotea SE 96.15 111.15 15 48 10 0.59 0.12 0.21 0.34
including Dorotea SE 106.15 111.15 5 72 7 1.15 0.07 0.15 0.22
DH-153-13 Dorotea SE 18.25 19.25 1 104 1 1.94 0 0.01 0.01
DH-153-13 Dorotea SE 73.97 77.75 3.8 65 3 1.15 0 0.01 0.02
DH-166-13 Office Zone 397 419 22 30 10 0.19 0.19 0.25 0.45
DH-175-13 Phantom 76.8 79.05 2.3 46 3 0.8 0.04 0.01 0.05
DH-180-13 Phantom 35.2 36.4 1.2 94 4 1.67 0.03 0.02 0.05
DH-141-13 Pit SW Extension 254 258 4 87 20 0.67 0.58 0.94 1.52
DH-141-13 Pit SW Extension 335 336 1 72 16 0.95 0.22 0.04 0.26
DH-144-13 Pit SW Extension 327 328 1 80 41 0.26 0.76 0.42 1.19
DH-148-13 Pit SW Extension 312 321 9 47 17 0.37 0.25 0.27 0.51
DH-148-13 Pit SW Extension 328 331 3 51 24 0.18 0.38 0.47 0.84
DH-156-13 Pit SW Extension 316 339 23 32 14 0.17 0.22 0.24 0.45
DH-160-13 Pit SW Extension 348.2 364 15.8 48 25 0.14 0.34 0.43 0.77
DH-168-13 Pit SW Extension 67.75 71.2 3.5 92 47 0.07 0.87 1.14 2.02
DH-168-13 Pit SW Extension 274 277 3 43 13 0.24 0.23 0.62 0.86
DH-176-13 SW of Pit Farm EM 21 24 3 53 39 0.06 0.11 0.42 0.53
DH-151-13 SW of Pit FarmEM 54 69 15 42 32 0.05 0.24 0.13 0.37

*Assuming 100% Metallurgical Recovery
*Prices used in Silver Equivalent (AgEq) Calculations:
Ag dollars/oz : $ 31.00
Au dollars/oz : $ 1,650.00
Pb dollars/lb : $ 0.97
Zn dollars/lb : $ 0.89

To view map of drill results visit: drillresultsmap.pdf

All holes are reported as drill lengths. Because of the meandering nature of mineralization within breccias and surrounding stockworks determining dimensions of mineralization is only possible after numerous holes define the boundaries of mineralized bodies.

Holes DH 183 to 188 were drilled to follow up mineralization in an area of wide spaced drilling. The grades occur both within and outside some of the inferred resource blocks between the Pit and North East Zones with the grades significantly higher than the average resource. The holes tested about 115 meters of strike extent. This area is considered by management to be very prospective for additional ounces.

Holes have now been drilled testing the western and eastern extensions of the Pit and North East resource bodies and limited area between them, the Dorotea area, the Farm EM and B zones to the southwest of the Pit and the Phantom area.

Drilling indicates the resource is open to expansion to the northeast, southwest, down dip and in the area between the Pit and North East zones. Potential also lies in the new Farm EM zone where oxide silver mineralization has been discovered. Also 4 new targets have been identified through recent interpretation of resistivity from the IP survey. These 4 conductors have similar or greater conductance than the Pit and North East zones (Target_areas.pdf) within areas of known mineralization along the main Promontorio to Dorotea trend. There is only a single drill hole testing one of these targets and it indicates the conductor is mapping mineralization. The new geophysical interpretation indicates that the best areas within this trend may not have been drilled.

The Phantom and B Zone areas are interpreted to be the upper levels of the system above or lateral to the best mineralization.

These numerous target areas will be tested with further drilling. A break in the drilling is now being taken while all results are compiled into sections and surface mapping and geophysical targets are being incorporated into prioritizing the next set of drill holes. On completion the next stage of the current Phase V drill program will recommence. A total of 16,300 meters of the Phase V program have now been completed in 68 holes. All assays for samples taken to date in Phase V have now been reported. These are for holes DH 121 to DH 188. Various targets were tested with a total of 32 holes reporting composited mineralized intervals and 36 holes returning either insignificant results or weakly anomalous results.

Current NI 43-101 Compliant Silver Resource

The most recent mineral estimate on Promontorio (See Kootenay News Release---May 14, 2013) contains a combined Measured and Indicated silver resource of 92,428,000 silver equivalent ounces (39.9M oz's Ag, 508K oz's Au, 394.8M lb's Pb, 462.2M lb's Zn). In addition to the measured and indicated silver resources, there are an additional 26,814,000 silver equivalent ounces in the Inferred category (12.8M oz's Ag, 147 oz's Au, 99.5M lb's Pb, 109.1M lb's Zn). Measured and Indicated resources are contained in open pit resources of 44,504,000 tonnes grading an average of 64.32 gpt silver equivalent (27.77 gpt Ag, 0.35 gpt Au and 0.87% Pb+Zn) and resources outside of the open pit of 215,000 tonnes grading an average of 56.96 gpt silver equivalent (22.89 gpt Ag, 0.28 gpt Au and 0.95% Pb+Zn). Inferred resources are within open pit resources of 14,564,000 tonnes grading an average of 51.95 gpt silver equivalent (24.95 gpt Ag, 0.28 gpt Au and 0.59% Pb+Zn) and resources outside of the open pit of 1,265,000 tonnes grading an average of 61.17 gpt silver equivalent (26.57 gpt Ag, 0.37 gpt Au and 0.74% Pb+Zn).

The foregoing geological disclosure has also been reviewed and verified by Kootenay's CEO, James McDonald, P.Geo (a qualified person for the purpose of National Instrument 43-101, Standards of Disclosure for Mineral Projects). Mr. McDonald is a director of Kootenay.

QA/QC

The majority of holes were drilled with HQ sized diamond drill core with some sections reduced down to NQ sized core. Core samples were cut using a core saw with 1 to 2 meter long sample intervals. A select few holes drilled using reverse circulation methods were included in the resource estimation, but generally in the areas of more widely-spaced drilling between the two primary zones. Further Quality Assurance and Control procedures and details on assays procedures and laboratories used are disclosed on the Kootenay Silver Inc. website.

The foregoing geological disclosure has also been reviewed and verified by Kootenay's CEO, James McDonald, P.Geo (a qualified person for the purpose of National Instrument 43-101, Standards of Disclosure for Mineral Projects). Mr. McDonald is a director of Kootenay.

ABOUT KOOTENAY

Kootenay Silver Inc. is actively developing mineral projects in the Sierra Madre Region of Mexico and in British Columbia, Canada. Its flagship property is the former producing Promontorio Silver mine in Sonora State, Mexico. Kootenay's objective is to develop near term discoveries and long-term sustainable growth. Its 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

Investor Relations 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.

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.

2013 number 11