South American Silver Recommences Drilling at the Escalones Copper-Gold Project in Chile and Reports Positive Metallurgical Testing Results

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 12/10/12 -- South American Silver Corp. (TSX: SAC)(PINKSHEETS: SOHAF) is pleased to announce the commencement of the summer drilling program at the Escalones copper-gold project in Chile. The first drill started turning on December 5th at hole ES-36 located on the Meseta in the central "porphyry area" of the deposit. The summer program is designed to fill gaps in the resource model in order to expand resources in the porphyry and skarn environments, and to test part of the large magnetic anomaly identified by the 2011 geophysical surveys. The planned program includes over 10,000 metres of diamond drilling and will continue through March-April 2013, weather-permitting. It is intended that a resource update based on the new drilling will be completed in mid-2013.

In addition, the first program of metallurgical testwork on Escalones material has been completed at SGS Laboratories in Ontario. A second program which will be reported in early 2013 is underway. Flotation and leaching testwork carried out to date has shown positive results. The standard sulphuric acid leach test achieved average copper extraction of 77% from mixed copper oxide/sulphide mineralization. Copper flotation is also proving successful and rougher/cleaner flotation testing of the porphyry material achieved 25-34% copper concentrate grade at high recovery. The thrust of metallurgical testing is to use conventional sulphuric acid and flotation methods although the company's patented chloride leach has also been tested. The patented leach averaged 100% extraction of the copper and 57% of the gallium on both oxide and sulphidic mineralization but with high reagent consumption.

Phillip Brodie-Hall, President and CEO said "We are very pleased to be drilling again after the winter break as we are eager to increase and upgrade resources at Escalones. We are especially excited about the prospect of testing the magnetic anomaly as this has the potential to bring new resources into the model. Also, the metallurgical test results are promising and show that flotation of a saleable concentrate from the porphyry material is likely to be straightforward. This is very good news."

Escalones is approximately 100 km southeast of Santiago, Chile and 35 km east of El Teniente, the world's largest underground copper mine. As previously announced, Escalones currently has a defined Inferred Resource of 420 million tonnes of mineralized material containing 3.8 billion lbs of copper, 56.9 million lbs of molybdenum, 610,000 ozs of gold and 16.8 million ozs of silver using a 0.2% Cu Equivalent cut-off grade (see December 19, 2011 News Release). The detailed NI 43-101 Technical Report is available on SEDAR under the Company's profile and on the Company's website at www.soamsilver.com.

About South American Silver Corp.

South American Silver Corp. is a growth focused mineral exploration company creating value through the exploration and development of the large scale Escalones copper-gold project in Chile, the pursuit of new opportunities, and the realization of value from the Malku Khota project in Bolivia. The Company's approach to business combines the team's track record of discovery and advancement of large projects, key operational and process expertise, and a focus on community relations and sustainable development. Management has extensive experience in the global exploration and mining industry. The Company's shares are listed on the Toronto Stock Exchange under the symbol "SAC" and on the US OTC market as "SOHAF". Additional information related to South American Silver Corp. is available at www.soamsilver.com and on SEDAR at www.sedar.com.

Forward-looking statements

Forward-looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business. Forward-looking statements may include words such as "expand", "test", "planned", "will", "intended", "prospect", "potential", "promising", "likely", "pursuit", "creating", "realization" and similar expressions. This release contains forward-looking statements. These forward-looking statements are based on current expectations and various estimates, factors and assumptions and involve known and unknown risks, uncertainties and other factors.

Readers are cautioned not to place undue reliance on these statements as the Company's actual results, performance or achievements may differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements if known or unknown risks, uncertainties or other factors affect the Company's business, or if the Company's estimates or assumptions prove inaccurate. Therefore, the Company cannot provide any assurance that forward-looking statements will materialize. Factors that could cause results or events to differ materially from current expectations expressed or implied by the forward-looking statements, include, but are not limited to, risks of the mineral exploration industry which may affect the advancement of the Escalones project, including possible variations in mineral resources or grade; metal prices; availability of equipment and qualified personnel; failure of equipment or processes to operate as anticipated; changes in project parameters as plans continue to be refined; the political and economic climate in Bolivia including the attitudes and actions of the Bolivian government related to foreign investment in Bolivia; the pursuit by the Bolivian government of stated courses of action; the international arbitration process; and other risks more fully described in the Company's Annual Information Form filed and publicly available on SEDAR at www.sedar.com. The assumptions made in developing the forward-looking statements include: the accuracy of current inferred resources and the interpretation of drill and other exploration results for Escalones; the availability of equipment and qualified personnel to advance the Escalones project and execution of the Company's existing plans and further exploration and development programs for Escalones, which may change due to changes in the views of the Company or if new information arises which makes it prudent to change such plans or programs; the ability of the Company to realize value from its investments in Bolivia and that statements made by Bolivian government officials reflect the government's intentions. Subject to applicable laws, the Company assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason. Unless otherwise indicated, forward-looking statements in this release describe the Company's expectations as of December 10, 2012.

Contacts:

South American Silver Corp.

Robert Gill

Investor Relations

604-681-6926 or 1-855-681-6926 Toll Free
www.soamsilver.com