South American Silver Announces Intersection of New Lead-Zinc- Silver SEDEX Mineralization at Malku Khota

VANCOUVER, BRITISH COLUMBIA–(Marketwire – Aug. 28, 2008) – South American Silver Corp. (“SASC” or the “Company”)(TSX:SAC) is pleased to announce the results from the next 12 holes from the Malku Khota Project, Bolivia. All diamond drill holes are from the South Limosna and Wara Wara Zones.

Several significant drill intercepts of SEDEX style (sedimentary exhalative deposit), lead-zinc-silver mineralization have been obtained in the south Limosna Zone. Assays include three one and a half metre intervals of between six and seven percent lead with additional zinc and silver in drill hole LMD040. The intervals including these assays are shown below. ——————————————————————– ——– Drill Hole____From______ To__ Length__ Av Ag____Av__Av Cu__Av Pb Av Zn__ Av __________ (metres) (metres) (metres)__ (gpt)__ In__ (ppm)____(%)__ (%)__Ga

______________________________________(gpt)____________________(gpt) ——————————————————————– ——– The higher grade lead mineralization in LMD040 -75 degrees inclination ——————————————————————– ——– ____________ 257.0____261.5______4.5____37.0__ 7.3______8__ 4.81__1.17__1.1 ——————————————————————– ——– ____________ 272.2____278.0______5.8__ 173.3__10.7____769__ 4.66__1.03__1.4 ——————————————————————– ——–

Ralph Fitch, President of the Company stated “these exciting results strongly suggest that in addition to the expanding silver- indium resource, this large SEDEX system is zoned and that these new results are part of a new body of lead-zinc-silver-indium mineralization that surface samples suggest extends for several kilometres to the south. SEDEX ore bodies can be very large such as the well known Broken Hill and Mt. Isa mines in Australia, the Red Dog mine in Alaska and the Sullivan mine in British Columbia. Malku Khota mineralization now shows indications of extending over at least 7 km giving it significant size potential.”

The majority of mineralization the Company has drilled to date has been high silver with low to modest lead-zinc. These holes in South Limosna indicate that the mineralization is zoning into lead- zinc-silver-indium as we move to the south. Importantly, earlier surface chip sampling of the host sandstone to the south of LMD040 includes results such as 32 metres averaging 0.5% lead, 600 metres to the south and a second line of chip samples 3.8 km to the south of LMD040 that averaged 0.1% lead over 16 metres, strongly suggesting that the lead-zinc-silver-indium mineralization continues for a significant distance to the south.

The most southerly fan of holes is shown below. Both holes were drilled from the same pad with LMD040 at a steeper angle such that it intersected the stratabound mineralization at greater depth.

——————————————————————– ——– Drill Hole____From______ To__ Length__Av Ag__Av In__Av Cu__Av Pb Av Zn__ Av __________ (metres) (metres) (metres)__(gpt)__(gpt)__(ppm)____(%)__ (%)__Ga

____________________________________________________________________ (gpt) ——————————————————————– ——– LMD040 ——————————————————————– ——– -75 degrees inclin- ation________ 3.0____456.0____453.0__ 55.3____8.7____125__ 0.49__0.11__1.8 ——————————————————————– ——– ________ including ——————————————————————– ——– ______________ 4.5____ 15.0____ 10.5__116.7____5.2____ 30__ 0.96__0.46__2.0 ——————————————————————– ——– ____________ 147.9__ 171.08____23.18__ 37.8____4.5____355__ 3.62__0.36__1.1 ——————————————————————– ——– ____________ 239.6____279.9____ 40.3__ 97.0____7.9____525__ 1.97__0.64__1.5 ——————————————————————– ——– ____________ 252.2____279.9____ 27.7__ 65.8____8.1____428__ 2.72__0.83__1.5 ——————————————————————– ——– ____________ 451.5____456.0______4.5__ 15.0__ 11.5____126__ 1.36__0.23__5.3 ——————————————————————– ——– LMD039 ——————————————————————– ——– -45 degrees inclin- ation________ 3.0____195.5____192.5__ 31.1____6.3__ 85.6__ 0.16__0.03__2.3 ——————————————————————– ——– ________ Including ——————————————————————– ——– ______________ 6.0____ 44.0____ 38.0__ 65.1____5.9____ 31__ 0.16__0.03__1.9 ——————————————————————– ——– ____________ 136.0____143.7______7.7__ 24.6__ 12.9____116__ 0.39__0.01__3.6 ——————————————————————– ——– ____________ 172.3____204.8____ 32.5__ 21.1____3.3____339__ 0.40__0.16__4.9 ——————————————————————– ——– Ag-Silver; In-Indium; Cu-Copper; Pb-Lead; Zn-Zinc; Ga-Gallium

The true width of these intersections is difficult to estimate due to the low angle between the bedding of the sandstone and the drill hole. The Company estimates, however, that true widths are approximately 20% of downhole widths in the case of LMD040 and 70% in the case of LMD039. This translates to the bands of higher grade lead mineralization having a width of 2 to 8 metres with indications that grade and thickness are increasing with depth and to the south.

The stronger lead-zinc silver mineralization extends approximately 300 metres to the north of LMD039-040 and is open to the south. LMD041 is approximately 300 metres north of LMD039-040, and LMD042-043 are located approximately 100 metres north of LMD039- 040.

——————————————————————– ——– Drill______ From______ To__ Length__Av Ag__Av In__Av Cu__Av Pb__Av Zn____Av Hole____(metres) (metres) (metres)__(gpt)__(gpt)__(ppm)____(%)__(ppm)__ Ga

____________________________________________________________________ (gpt) ——————————————————————– ——– LMD041(i) ——————————————————————– ——– -47 degees inclin- ation______ 0.0____249.9____249.9__ 44.9____8.4____ 28__ 0.21____390__ 2.2 ——————————————————————– ——– ________ includ- ____________ ing ——————————————————————– ——– ____________16.5____ 48.0____ 31.5__ 79.8__ 11.6____ 66__ 0.91____926__ 2.3 ——————————————————————– ——– ____________16.5____ 34.0____ 17.5__ 65.6____9.1____ 66__ 1.49__1,387__ 2.5 ——————————————————————– ——– ____________16.5____ 22.9______6.4__114.6__ 13.0____ 68__ 2.97__1,460__ 2.4 ——————————————————————– ——– __________ 122.0____125.3______3.3__ 52.5____4.7____ 26__ 1.35____626__ 1.4 ——————————————————————– ——– __________ 205.5____244.0____ 38.5__ 88.4__ 15.1____ 13__ 0.04____202__ 2.4 ——————————————————————– ——– LMD042(i) ——————————————————————– ——– -45 degrees inclin- ation______ 0.0____488.5____488.5__ 27.5____8.5____ 43__ 0.12____676__ 2.3 ——————————————————————– ——– ________ Includ- ____________ ing ——————————————————————– ——– ____________ 0.0____ 44.0____ 44.0__ 26.0__ 16.8____ 28__ 0.34__3,734__ 3.1 ——————————————————————– ——– ____________ 0.0______8.0______8.0__ 14.0__ 14.1____ 21__ 0.40 16,091__ 3.4 ——————————————————————– ——– __________ 300.0____322.0____ 22.0__ 61.5__ 10.2____ 17__ 0.04____ 49__ 1.8 ——————————————————————– ——– __________ 390.0____461.3____ 71.3__ 38.7____8.3____145__ 0.28__1,238__ 2.1 ——————————————————————– ——– __________ 477.9____494.0____ 16.1__ 11.5____4.8____134__ 0.47__3,336__ 4.0 ——————————————————————– ——– LMD043 (ii) ——————————————————————– ——– -75 degrees inclin- ation____ 108.0____455.5____347.5__ 16.0____3.8____ 32__ 0.19____725__ 3.4 ——————————————————————– ——– ________ includ- ____________ ing ——————————————————————– ——– __________ 213.8____276.1____ 62.3__ 15.9____3.2____ 58__ 0.43__1,832__ 3.5 ——————————————————————– ——– __________ 213.8____229.3____ 15.5__ 12.2____7.2____ 30__ 1.04__4,919__ 3.9 ——————————————————————– ——– __________ 259.2____266.1______6.9__ 10.1____2.8____ 27__ 0.72__2,860__ 3.3 ——————————————————————– ——– __________ 419.5____445.9____ 26.4__ 26.7____4.0____ 83__ 0.90__2,817__ 3.1 ——————————————————————– ——– __________ 442.0____445.9______3.9__ 63.9____8.7____ 26__ 2.31__8,594__ 3.5 ——————————————————————– ——– (i)__true width approximately 70% of downhole length (ii) true width approximately 20% of downhole length Results have also been received for two holes at the north end of the Limosna Zone. ——————————————————————– ——– Drill______ From______ To__ Length__Av Ag____Av__Av Cu__Av Pb__Av Zn__Av Ga Hole____(metres) (metres) (metres)__(gpt)__ In__ (ppm)__(ppm)__(ppm)__(gpt) __________________________________________ (gpt) ——————————————————————– ——– LMD037(i) ——————————————————————– ——– -45 degrees inclin- ation______ 0.0____172.5____172.5__ 33.8__ 3.0____116__1,009____322____3.1 ——————————————————————– ——– ________ includ- ____________ ing ——————————————————————– ——– ____________ 0.0____112.0____112.0__ 42.5__ 4.0____140__1,382____379____4.0 ——————————————————————– ——– ____________ 3.0______8.0______5.0__ 44.9__ 5.7____429__8,118__1,049____4.0 ——————————————————————– ——– LMD038 (ii) ——————————————————————– ——– -75 degrees inclin- ation______ 0.0____211.0____211.0__ 25.0__ 8.5____ 59____727____265____3.4 ——————————————————————– ——– ________ Includ- ____________ ing ——————————————————————– ——– ____________ 0.0____ 93.5____ 93.5__ 40.9__ 9.4____ 90____847____344____3.1 ——————————————————————– ——– ____________ 0.0____ 31.5____ 31.5__ 49.8__ 4.6____148__1,437____375____4.1 ——————————————————————– ——– (i)__true width approximately 70% of downhole length (ii) true width approximately 20% of downhole length Results from five holes have also been received from drilling in the Wara Wara Zone, approximately 3 km to the north. The silver mineralization is associated with higher gallium assays in this northern portion of the system. ——————————————————————– ——–

______________________________Av____Av____Av____Av____Av____Av____Av Hole______From______ To__ Length____Au____Ag____In____Cu____Pb____Zn____Ga ________(metres) (metres) (metres)__gpt__(gpt) (gpt) (ppm) (ppm) (ppm) (gpt) ——————————————————————– ——– WW021(i) ——————————————————————– ——– -45 degrees incli- nation____56.0____359.7____303.7__0.01__21.2__ 1.3____95__ 246____13__ 4.5 ——————————————————————– ——– ________Includ- ____________ing ——————————————————————– ——– __________ 91.5____103.0____ 11.5__0.01__46.8__ 2.1__ 119 1,161____11__ 5.1 ——————————————————————– ——– __________122.5____138.7____ 16.2__0.01__38.3__ 1.6____90__ 594____11__ 5.0 ——————————————————————– ——– WWD022(i) ——————————————————————– ——– -40 degrees inclin- ation____106.6____120.2____ 13.6__0.01__ 9.8__ 1.1 1,662__ 206____10__13.9 ——————————————————————– ——– __________185.5____213.5____ 28.0__0.01__20.2__ 2.0__ 224__ 459____36__ 6.4 ——————————————————————– ——– __________308.0____352.2____ 44.2__0.01__20.2__ 0.9__ 154__ 213____10__ 5.8 ——————————————————————– ——– __________357.6____361.4______3.8__0.01__31.8__10.7 3,552__ 555__ 137__30.1 ——————————————————————– ——– WWD025(ii) ——————————————————————– ——– -75 degrees inclin- ation______2.0____ 37.2____ 35.2__0.01__15.5__ 4.0____98__ 298__ 107__ 3.9 ——————————————————————– ——– WWD027(i) ——————————————————————– ——– -45 degrees inclin- ation______0.0____297.1____297.1__0.02__26.1__ 1.0__ 149__ 275____25__ 5.8 ——————————————————————– ——– ________Includ- ____________ing ——————————————————————– ——– ____________0.0____ 14.5____ 14.5__0.02__39.3__ 1.3____34__ 211____ 7__ 4.9 ——————————————————————– ——– __________ 74.5____ 95.5____ 21.0__0.01__50.7__ 1.9____92__ 396____58__ 7.7 ——————————————————————– ——– __________163.0____207.0____ 44.0__0.07__53.4__ 1.3__ 157__ 561____16__ 7.5 ——————————————————————– ——– __________163.0____168.2______5.2__0.06 149.8__ 1.7____84__ 873____52__ 6.6 ——————————————————————– ——– WWD028 (ii) ——————————————————————– ——– -75 degrees inclin- ation______0.0____112.0____112.0__0.01__42.3__ 2.8__ 126__ 482____32__ 6.1 ——————————————————————– ——– ________includ- ____________ing ——————————————————————– ——– __________ 41.0____ 85.0____ 44.1__0.01__70.5__ 3.4__ 162__ 596____25__ 7.1 ——————————————————————– ——– __________ 41.0____ 46.0______5.1__0.07 339.7__10.7__ 220 2,709____29__11.2 ——————————————————————– ——– (i)__true width approximately 70% of downhole length (ii) true width approximately 20% of downhole length

A total of 80 holes have now been completed for a total of 27,158 metres. With this press release, results from a total of 70 holes have been released. Mineralized areas now defined include Central Limosna, South Limosna, Wara Wara and Sucre.

Only approximately 11,000 metres of the 25,000 metres of drilling completed at the time were included in the previously reported indicated and inferred resource due to the non-availability of assay results. The reported initial indicated resource is 50,200,000 ounces of silver and 288,000 Kg of indium and additional inferred resource of 74,700,000 ounces of silver and 487,000 Kg of indium (Press Release PR08-07, May 13, 2008).

An NI 43-101 compliant updated resource is planned to be completed by the end of September, 2008 and this information will be used as part of a scoping study which is planned to be completed by the end of December, 2008.

The Company is also continuing with metallurgical testing at the SGS Laboratory in Ontario. The ongoing tests will optimize the recovery of silver and gold by conventional leaching and continue to optimize the acid plus salt leach for silver, indium and other extracted metals. The tests will for the first time include extracting the metals from the leach solutions into saleable products.

A map showing the locations of holes can be found on the Company website at www.soamsilver.com.

Geochemical analysis of the Malku Khota drill core was carried out by ALS Chemex. The samples were prepared in their Oruro, Bolivia laboratory and analyzed in their ISO 9001 2000 laboratory in Lima, Peru. Silver and lead were analyzed by the ICP MS61 method using a four acid digestion. Silver values greater than 100 gpt and lead and zinc values greater than one percent were reanalyzed by AA62 method using a four acid digestion. Silver assays greater than 1,500 gpt were analyzed by the 30g FA-GRAV method. Gallium and indium were assayed by ICP MS61. Ralph Fitch, President of the Company is the Qualified Person for this project and has reviewed the content of this press release.

Certain statements in this press release constitute “forward- looking statements”. Forward-looking statements may include words such as “plans,”"intends,”"anticipates,”"should,”"estimates,”"expects,”"believes,”"indicates,”"targeting,”"suggests,”"potential,”"interpretation” and similar expressions. These forward- looking statements include, but are not limited to, information concerning the interpretation of drill results, statements regarding estimated mineral resources and the potential for delineation of additional resources based on additional drill results from the Malku Khota Project. Forward-looking statements express, as at the date of this press release, the Company’s plans, estimates, forecasts, projections, expectations, or beliefs as to future events or results. Forward-looking statements are based on certain assumptions, including the key assumptions and parameters on which such estimates are based, involve risks and uncertainties and there can be no assurance that such statements will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements. 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, possible variations in mineral resources, grade or recovery rates; changes in project parameters as plans continue to be refined; failure of equipment or processes to operate as anticipated; political, regulatory and other risks of the mining industry; and other risks more fully described in the Company’s Annual Information Form filed and publicly available on SEDAR at www.sedar.com. Readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release. 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.

This press release uses the terms ‘indicated resources’ and ‘inferred resources’ which are terms recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects). Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will be converted into reserves. In addition, ‘inferred resources’ have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that an inferred resource will be upgraded to a higher category. Under Canadian rules, estimates of inferred resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for Preliminary Assessment as defined under NI 43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.

SASC is a mineral exploration company that acquires, explores and develops mineral properties, primarily silver, gold and copper in South America. The Company presently holds interests in three properties: the flagship Malku Khota silver-indium-gold and the Laurani gold-silver properties in Bolivia and the Escalones copper- gold-molybdenum property in Chile.

Please see the South American Silver Corp.’s website, www.soamsilver.com, for maps and sections.

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