KOOTENAY ANNOUNCES INAUGURAL DRILL PROGRAM COMPLETED ON LA NEGRA SILVER DISCOVERY AND INITIATES PLANS FOR NI 43-101 RESOURCE CALCULATION

December 3, 2014

Kootenay Silver Inc. (TSX VENTURE: KTN.V) (“Kootenay”) is pleased to announce results on the final 2 drill holes from its inaugural Phase I drill program on its new La Negra Breccia Silver Discovery, situated approximately 6.5 kilometers north of Kootenay's flagship Promontorio Silver Resource in Sonora, Mexico.

A total of 25 holes for 3173 meters of drilling have been completed along an approximate 400 meter strike length of the breccia. Silver mineralization is exposed at surface and is shown to extend to a vertical depth of at least 190 meters (approximately 110 meters above sea level) and along the entire length of the breccia, where drill testing and surface sampling was conducted. The breccia silver mineralization is open to the east and at depth, with possible extensions to the west as indicated from surface exposures.

States Kootenay President and CEO James McDonald “We are very pleased to conclude our inaugural drill program on the La Negra Diatreme Breccia system that has resulted in a significant and exciting new silver discovery in Mexico. Drilling continues to return high grades and shows a remarkable consistency of silver mineralization on surface and at depth across the entire length of the breccia. Results from the inaugural program will be immediately compiled and collated in a 3D model showing the geologic controls and assay results. This compilation will be used to design the next drill phase which is expected to begin early in the New Year. Based on the outstanding results to date, the objective is to move the project quickly to a maiden NI 43-101 resource calculation.”

The remaining two holes LN 24 and 25-14 are reported herein, along with complete results of the 25 hole drill program. Drill hole LN 24-14 encountered high grades of silver starting at surface on the same section as LN 22 and 23-14. This is also the eastern most section drilled. LN 25-14 hit 60 meters of silver mineralized breccia from surface, which is interpreted to confirm a south dip in this area of the breccia.

Details of the final two drill hole intercepts are in the following table:

Drill Hole From To Interval Silver Gold Lead Rock
(m) (m) (m) (gpt) (gpt) % Type
LN-24-14 -45/360 Az 0 76 76 92.88 0.063 0.69 Breccia/Stockwork
Including 29 41 12 397.83 0.246 1.76 Breccia
144m EOH
LN-25-14 -45/015 Az 0 61 61 44.86 0.017 0.17 Breccia
Including 0 19 19 50.11 0.02 0.34 Breccia
Including 3 30 27 74.18 0.026 0.24 Breccia
Including 21 30 9 128.55 0.037 0.13 Breccia
115m EOH

To view cross sections of the drill holes visit: La Negra Cross Sections LN 01 to LN 25-14. To view a drill plan outlining the location of the La Negra drilling visit: La Negra Drill Plan Map.

Phase I Highlights include:

  • LN 01-14 Containing from surface;
    • 110.46 gpt Ag over 41 meters including
    • 223.23 gpt Ag over 13 meters
  • LN 02-14 Containing from surface;
    • 141.28 gpt Ag over 50 meters including
    • 212.64 gpt Ag over 28 meters and
    • 323.13 gpt Ag over 15 meters
  • LN 03-14 Bottomed in mineralized breccia in a vertical hole from surface;
    • 82.57 gpt Ag over 144 meters including
    • 98 gpt Ag over 106 meters and
    • 195.84 gpt Ag over 25 meters
  • LN 04-14 Containing from surface;
    • 92.98 gpt Ag over 92 meters including;
    • 149.43 gpt Ag over 20 meters from surface and
    • 146.38 gpt Ag over 31 meters from 43 meter depth
  • LN 05-14 Containing from surface;
    • 91 gpt Ag over 119 meters including
    • 182.87 gpt Ag over 40 meters
    • 367.85 gpt Ag over 14 meters
  • LN 06-14 Containing from surface and bottomed in mineralized breccia;
    • 92.79 gpt Ag over 98 meters including
    • 168.33 gpt Ag over 21 meters including
    • 214.3 gpt Ag over 13 meters
  • LN 07-14 Containing from surface;
    • 132.49 gpt Ag over 59 meters including
    • 149.6 gpt Ag over 43 meters and
    • 185.35 gpt Ag over 17 meters
  • LN 08-14 Containing from 13 meter depth;
    • 91.89 gpt Ag over 49 meters including
    • 251 gpt Ag over 11 meters
  • LN 10-14 Containing from 5 meters;
    • 87.08 gpt Ag over 35 meters including
    • 135.52 gpt Ag over 21 meters
  • LN 13-14 Containing from surface;
    • 61.43 gpt Ag over 140 meters including
    • 79 gpt Ag over 47 meters and
    • 355.16 gpt Ag over 8 meters
  • LN 21-14 Containing from surface and bottomed in mineralization;
    • 156.47 gpt Ag over 200 meters including
    • 420.34 gpt Ag over 50 meters from 150 to 200 meters including
    • 1337.66 gpt Ag over 6 meters and
    • 492.30 gpt Ag over 17 meters at the bottom of the hole excl. the 6 meters of 1337 gpt Ag interval
  • LN 22-14 Containing from surface
    • 265.31 gpt Ag including over 34 meters including
    • 467.77 gpt Ag over 18 meters
  • LN 23-14 Containing from surface;
    • 239.92 gpt Ag over 30 meters including
    • 459.76 gpt Ag over 13 meters
  • LN 24-14 from surface on section with LN 22 and 23-14;
    • 92.88 gpt Ag over 76 meters including
    • 397.83 gpt Ag over 12 meters

Management believes that La Negra is a diatreme breccia which implies good depth potential as diatreme breccias can extend to depths of 100’s of meters. The depth potential in the La Negra Breccia is underscored by hole LN 21-14 as it bottoms in high silver grades at a vertical depth of around 150 meters showing the potential for resources to depth. The depth of the high silver grade shows the grades are primary so not a result of supergene enrichment.

Due to faulting and possibly the nature of the breccia contact itself the width of the breccia body is not well defined at this time. Thus far the apparent widths of the breccia interpreted from drilling are varying from about 60 to over 100 meters within a broader 200 by 500 meter area of breccia outcrop exposures.

The La Negra Breccia is cut by two northwest trending faults across which the dip of the breccia changes from near vertical to moderate southerly dips. This is evidenced by holes LN 11, 12, 14, 18, 19 and 20, which were drilled through the breccia into the footwall or directly within the footwall thus missing the bulk of the breccia body. Hole LN 25-14 drilled to the north confirms a southerly dip encountering 60 meters of breccia from surface followed by about 50 meters of stockwork and argillic alteration.

Drill hole intercepts LN 01 to 23-14 (Previously Announced):

Drill Hole From To Interval Silver Gold Lead Rock
(m) (m) (m) (gpt) (gpt) % Type
LN-01-14 -45/180 Az 3 44 41 110.46 0.068 0.126 Breccia
Including 18 37 19 177.1 0.113 0.056 Breccia
Including 18 31 13 223.23 0.129 0.07 Breccia
95m EOH
LN-02-14 -60/180 Az 0 50 50 141.28 0.108 0.215 Breccia
Including 0 40 40 161.25 0.121 0.256 Breccia
Including 19 47 28 212.64 0.149 0.144 Breccia
Including 19 34 15 323.13 0.198 0.216 Breccia
100m EOH
LN-03-14 -90/360 Az 0 144 144 82.57 0.058 0.309 Breccia
Including 0 27 27 108.32 0.077 0.618 Breccia
Including 0 106 106 98.03 0.062 0.373 Breccia
Including 0 78 78 114.63 0.066 0.383 Breccia
Including 53 78 25 195.84 0.107 0.144 Breccia
Including 54 67 13 229.38 0.104 0.166 Breccia
144m EOH
LN-04-14 -60/360 Az 0 114 114 78.54 0.066 0.311 Breccia
Including 0 92 92 92.98 0.08 0.351 Breccia
Including 0 67 67 118.93 0.083 0.409 Breccia
Including 0 20 20 149.43 0.073 0.85 Breccia
Including 43 74 31 146.38 0.096 0.103 Breccia
152m EOH
LN-05-14 -45/360 Az 0 119 119 91 0.046 0.576 Breccia
Including 0 88 88 108.85 0.04 0.625 Breccia
Including 89 119 30 40.4 0.065 0.427 Breccia
Including 51 91 40 182.87 0.071 1.171 Breccia
Including 51 65 14 367.85 0.111 1.84 Stockwork
147m EOH
LN-06-14 -60/090 Az 3 101 98 92.79 0.104 0.153 Breccia
Including 3 55 52 124.36 0.089 0.224 Breccia
Including 3 24 21 168.33 0.126 0.416 Breccia
Including 3 16 13 214.3 0.131 0.618 Breccia
101m EOH
LN-07-14 -60/270 Az 5 64 59 132.49 0.085 0.26 Breccia
Including 5 48 43 149.6 0.079 0.27 Breccia
Including 31 48 17 185.35 0.153 0.23 Breccia
Including 5 116 111 83.89 0.052 0.23 Breccia/Stockwork
Including 65 116 51 17.06 0.007 0.19 Stockwork
Including 106 116 10 41.9 0.013 0.47 Stockwork
130m EOH
LN-08-14 -45/180 Az 13 62 49 91.89 0.015 0.26 Breccia/+Andesite
Including 30 41 11 251 0.035 0.15 Breccia
Including 53 62 9 59.7 0.009 0.53 Breccia
137m EOH
LN-09-14 -60/180 Az 9 37 28 60 0.038 0.32 Breccia
Including 9 23 14 64.57 0.044 0.39 Breccia
105m EOH
LN-10-14 -90/360 Az 5 40 35 87.08 0.037 0.51 Breccia/+Andesite
Including 10 35 25 116.56 0.045 0.6 Breccia
Including 14 35 21 135.52 0.053 0.65 Breccia
70 78 8 37.25 0.005 0.24 Breccia
157 163 6 38.83 0.063 0.27 Breccia
191m EOH
LN-11-14 -60/360 Az 6 11 5 56.33 0.01 0.33 Breccia
27 29 2 32.5 0.003 0.01 Stockwork
131m EOH
LN-12-14 -45/360 Az 13 28 15 29.76 0.009 0.44 Stockwork/Breccia
Including 17 28 11 37.33 0.01 0.47 Breccia
117m EOH
LN-13-14 -60/090 Az 0 140 140 61.43 0.048 0.38 Breccia/Stockwork
Including 24 71 47 79 0.052 0.31 Breccia
Including 12 19 7 95.57 0.05 0.22 Stockwork
Including 24 34 10 83.33 0.05 0.1 Breccia
Including 54 64 10 136.5 0.057 0.73 Breccia
Including 66 71 5 120.2 0.013 0.74 Breccia
Including 112 120 8 355.16 0.118 2.97 Breccia
Including 132 140 8 52.75 0.089 0.19 Breccia
183.5m EOH
LN-14-14 -60/270 Az 0 33 33 179.65 0.033 0.33 Breccia
Including 13 24 11 412.11 0.062 0.24 Breccia
Including 26 30 4 181 0.055 0.72 Breccia
48 60 12 31.5 0.008 0.13 Stockwork
92m EOH
LN-15-14 77m EOH No Significative Results Argillic Andesite
LN-16-14 60m EOH No Significative Results Argillic/Propylitic
LN-17-14 51m EOH No Significative Results Argillic/Propylitic
LN-18-14 156m EOH No Significative Results Argillic/Propylitic
LN-19-14 -45/180 Az 70 82 12 289.58 0.04 1.42 Breccia
Including 74 82 8 421.37 0.051 1.93 Breccia
193m EOH
LN-20-14 -45/180 Az 51 61 10 33.7 0.03 0.4 Stockwork
97 133 36 79.05 0.065 0.24 Breccia/Stockwork
Including 105 133 28 99.35 0.089 0.24 Breccia/Stockwork
Including 111 133 22 107.66 0.1 0.16 Breccia
192m EOH
LN-21-14 -45/290 Az 0 200 200 156.47 0.103 0.18 Breccia/Stockwork
Including 41 57 16 114.31 0.009 0.21 Breccia
Including 119 128 9 392.11 0.218 0.15 Breccia
Including 150 158 8 258.37 0.155 0.07 Breccia
Including 164 169 5 476.2 0.294 0.14 Breccia
Including 150 200 50 420.34 0.183 0.23 Breccia
Including 174 180 6 1337.66 0.475 0.28 Breccia
Including 183 200 17 492.3 0.128 0.5 Breccia
200m EOH
LN-22-14 -90/360 Az 0 34 34 265.31 0.114 0.75 Breccia/Stockwork
Including 16 34 18 467.77 0.201 1.11 Breccia
82m EOH
LN-23-14 -45/180 Az 0 30 30 239.92 0.053 0.41 Breccia/Stockwork
Including 17 30 13 459.76 0.09 0.59 Breccia
Including 17 23 6 899.5 0.161 1.15 Breccia
Including 18 19 1 3040 0.426 4.53 Breccia
78m EOH

Current Phase I Drill Program

Drilling in the Phase I program was conducted in widely spaced fences along 400 of 500 meters of La Negra’s length to provide information on the sub-surface grade, continuity and geometry of the mineralized Breccia system. Current holes were broadly spaced as single holes or fences of holes from the same platforms in 115 to 50 meter spacing’s along strike. Extensive zones of breccia and stockwork were encountered along the strike length and dips seem to vary from steep northerly dips to moderate southerly dips. The Phase I drill program totaled 25 HQ diameter core holes with 3173.5 meters of drilling.

La Negra Silver Discovery

The La Negra Breccia prospect is situated approx. 6.5 kms north of Kootenay’s flagship Promontorio Silver Resource in Sonora, Mexico and is contained within a 25 x 15 km mineralized corridor, the ‘Promontorio Mineral Belt.’ The current Phase I drill program on La Negra follows a highly successful trenching and surface sampling program that confirmed widespread silver mineralization exists over a large 100 to 200 meters by 500 meters area on surface. (See news releases from May 28th and June 5th, 2014 for more details). To View Full Results of Sampling and drill Program Visit:www.kootenaysilver.com.

QA/QC

Core is being detailed logged and sampled with half the core being bagged, tagged, catalogued, sealed and sent to an accredited assay lab for analysis. A quality control program including blanks, standards and replicates is being used similar to that used on the Promontorio drill program. Geotechnical data such as recovery, RQD and density are being recorded also. All drilling has been with HQ core and is being done by BD Drilling from Guadalajara, Mexico. 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 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

Ken Berry, Chairman at 604-601-5652; 1-888-601-5650

or visit: www.kootenaysilver.com

Neither 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.

Forward-Looking Statements: The information in this news release has been prepared as at December 2, 2014. 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.

2014 number 19