Quality Silver Assets are Scarce
.....We Have Several

Kootenay Silver Inc. (TSX VENTURE: KTN.V) ("Kootenay") is pleased to announce drilling has commenced on its La Negra Diatreme Breccia prospect, located within Kootenay's Promontorio property and approximately 6-7 kms north of Kootenay's flagship Promontorio Silver Resource in Sonora, Mexico. The program is contracted to be a minimum of 2500 meters of core drilling with HQ diameter core. It is anticipated 15 to 20 holes will be drilled in the inaugural program. Drilling is being conducted by BD Drilling of Guadalajara, Mexico.

States Kootenay President and CEO James McDonald "We are very pleased to commence drilling on Promontorio's La Negra prospect. Based on results from trenching and sampling to date, La Negra as emerged as a very exciting diatreme target with potential to evolve into a significant, open-pittable discovery. Further supporting its near-surface potential, La Negra forms a prominent hill, has a large aerial exposure and the mineralization identified at surface is a leachable silver halide (silver chlorargyrite). The current drill program will play a key factor in determining the sub-surface consistency, grade and geometry of the mineralization."

Drilling will test in widely spaced fences the diatreme pipe along 400 to 500 meters of its length providing information on the sub-surface grade, continuity and geometry of the mineralized pipe. Surface sampling from bedrock exposure shows silver mineralization is remarkably consistent throughout the breccia's exposed breadth and length (between 100 to 200 meters by 500 meters). The average of all samples is 65 gpt silver from 50 three meter chip samples in trenches, 19 two meter square chip panels and 31 grab samples. (See news releases from May 28th and June 5th, 2014 for more details). Airborne geophysics was effective in mapping the southern contact of the breccia and indicates the breccia could be twice the aerial extent of the visible bedrock exposure.

To View Full Results of Sampling Program Visit: www.kootenaysilver.com

Current NI 43-101 Compliant Silver Resource

The current mineral estimate on Promontorio effective date March 31, 2013 (See May 14, 2013 news release) 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 additional26,814,000 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 current NI 43-101 Resource Estimation conducted on Promontorio by SRK Consulting Inc. (U.S.) of Lakewood, Colorado (See May 14, 2013 news release), included gold assay results in the updated resource estimation. As a result of the addition of gold, the mineral resource is now contained in a single larger optimized Whittle Pit, as opposed to two individual smaller pits as reported in the August 21, 2012 resource estimate. The decision to include gold in the resource estimation follows extensive metallurgical testing and technical analysis conducted by ALS Minerals of Kamloops, British Columbia that confirmed up to 94.5% recovery of gold from pyrite concentrates from the Promontorio resource can be achieved using a post pressure oxidation treatment process.

QA/QC

Samples were assayed using a high-grade multi-acid digestion ICP analysis conducted by ALS Chemex of North Vancouver, B.C., Canada and prepped in ALS Chemex's Lab in Hermosillo, Sonora, Mexico. Further Quality Assurance and Control procedures and details on assays procedures and laboratories used are disclosed on the Kootenay Silver Inc. website. 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 August 27, 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 13