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

Highlights Include 360 gpt Silver over 1.80 Meters within 275.97 gpt over 3.5 Meters

Kootenay Silver Inc. (TSXV: KTN)(the “Company” or “Kootenay”) is pleased to announce that additional assay results from outcropping quartz veins continue to support the potential for the discovery of a high-grade silver deposit at the Company’s newly acquired Columba silver project (“Columba” or “Property”) located in Chihuahua State, Mexico.

Columba hosts a former producing high-grade silver mine that covers a classic high-grade silver epithermal system comprised of numerous veins. The Property has never been systematically explored during modern times. Initial exploration by the Company traced mineralized veins on surface over strike lengths of 200 meters to up to 2 kilometers, while sampling returned widths of 0.5 to 6 meters with grades of up to 692 grams per tonne (“gpt”) silver (refer to the Company’s news release dated November 19, 2018).

Exploration work at Columba is continuing prior to the commencement of drilling which is anticipated to begin in Q1 2019. The strategy of the upcoming drill program will focus on confirming high grades reported from historic underground sampling and production data.

Results of the most recent mapping and sampling completed at Columba returned anomalous silver values consistent to those previously reported on the Property. The follow up program comprised of 79 individual samples (50 channel and 29 grab) taken from 8 of the 10 veins identified on surface, with all but three (3) samples returning anomalous silver values. Highlights include 33 samples, between lengths of 0.70 and 2.0 meters, returning silver values ranging between 30 gpt to 397 gpt and 55 samples returning grades >10 gpt. See table below showing results >10 gpt. Click link to view a map of the sampling.

In addition to the individual sample results, adjacent channel samples taken along continuous segments of the veins were assembled to create cross sections to establish overall widths and grades of the outcropping mineralization at surface. Highlights of these contiguous channel samples include individual cross sections returning 4.9 meters of 198.37 gpt silver, 3.5 meters of 275.97 gpt silver and 2.2 meters of 330 gpt silver. Click link to view cross sections.

These results are consistent with the previously announced results from earlier work reported by the Company and support the observation that grades, vein continuity and vein widths improve as one moves into lower elevations, being deeper into the system. This observation is also seen in historic underground mining data that indicate grades continue to increase with depth as reported in the Company’s news release dated November 19, 2018. (Please note historic data has not been verified and thus cannot be relied upon for accuracy.)

Kootenay’s next steps at Columba are additional mapping and surface sampling to prioritize drill targets and obtain drill permits. Details from subsequent work will be reported once the Company receives and compiles the results.

Sampling Results

Sampling and QA/QC
Surface samples reported herein are a combination of grab chipped channel. All technical information for the Columba exploration program is obtained and reported under a formal quality assurance and quality control ("QA/QC") program. Samples are taken under the direction of qualified geologists. Samples are then labeled placed in plastic bags, sealed and with interval, location and sample numbers recorded. Samples are delivered by the Company to ALS Minerals ("ALS") in Chihuahua City. The samples are dried, crushed and pulverized with the pulps being sent airfreight for analysis by ALS in Vancouver, B.C. Systematic assaying of standards, blanks and duplicates is performed for precision and accuracy. Analysis for silver, zinc, lead and copper and related trace elements was done by ICP four acid digestion, with gold analysis by 30-gram fire assay with an AA finish.

Qualified Persons

The Kootenay scientific and technical information in this news release has been prepared in accordance with the Canadian regulatory requirements set out in National Instrument 43-101 (Standards of Disclosure for Mineral Projects) and reviewed and approved on behalf Kootenay by James McDonald, P.Geo, President, CEO & Director for Kootenay, a Qualified Person.

About Kootenay Silver Inc.

Kootenay Silver Inc. is an exploration company actively engaged in the discovery and development of mineral projects in the Sierra Madre Region of Mexico and in British Columbia, Canada. Supported by one of the largest portfolios of silver assets in Mexico, Kootenay continues to provide its shareholders with significant leverage to silver prices. The Company remains focused on the expansion of its current silver resources, new discoveries and the near-term economic development of two of its priority silver projects located in prolific mining districts in Sonora, State and Chihuahua, State, Mexico, respectively.

On Behalf of the Board of Directors of

KOOTENAY SILVER INC.

“James McDonald”

President & CEO

For additional information, please contact:
James McDonald, CEO and President at 403-880-6016
Ken Berry, Chairman at 604-601-5652; 1-888-601-5650
or visit: www.kootenaysilver.com

Neither the 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.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
The information in this news release has been prepared as at January 7, 2019. 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.