Kootenay Silver Inc. (TSX-V: KTN) and Northair Silver Corp. (TSX-V: INM) is pleased to announce that it has signed an agreement with Coeur Capital, Inc. to acquire its 2.5% net smelter return royalty on future production from Northair Silver Corp.’s La Cigarra project, located in Chihuahua, Mexico.  The Acquisition is subject to the acceptance of the TSX Venture Exchange.

Kootenay Silver President and CEO James McDonald stated “We are very pleased to have the opportunity to consolidate the ownership of the royalty at this time.  Given our belief in La Cigarra’s silver resources and the potential for additional discoveries the opportunity to repurchase the royalty is beneficial to the project.”

Terms of the Agreement:

Under the terms of the agreement, Kootenay will pay to Coeur US$250,000 in cash upon signing followed by a second cash payment of US$250,000 to be made on April 19, 2016.  In addition, Kootenay Silver will issue to Coeur on the Closing Date such number of common shares of Kootenay Silver as is equal to US$2,000,000 at a share price of Cdn$0.275 per share which will result in the issuance of 9,629,091 common shares of Kootenay Silver.  The Shares issued in connection with the Acquisition will be subject to a statutory hold period of four months plus one day from the closing of the Acquisition under applicable Canadian securities laws. Upon issuance of the Shares, Coeur will hold an aggregate of 9,629,091 common shares of Kootenay Silver. The completion of the Acquisition is not subject to the completion of Kootenay Silver’s proposed acquisition of all of the issued and outstanding shares of Northair to be completed by way of a statutory plan of arrangement as announced on January 13.

Support Agreement:

In addition, Coeur has entered into an agreement with Kootenay Silver to vote all of the shares that it holds in Northair in favour of and in support of the Arrangement between Kootenay Silver and Northair.  This represents approximately 13.55 % of the outstanding Northair shares.   

Northair President and CEO Andrea Zaradic stated “We are very pleased that Kootenay Silver and Coeur were able to agree to the terms of the Acquisition and that Coeur supports  our proposed amalgamation with Kootenay Silver.”

This news release does not constitute an offer to sell or a solicitation of an offer of securities in the United States. The securities issuable in the transaction have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered within the United States or to U.S. Persons unless exemptions from such registration requirements are available.

About Kootenay

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. The Company’s top priority is the advancement of precious metals projects contained within its Promontorio Mineral Belt in Sonora, Mexico. This includes its La Negra high-grade silver discovery and its Promontorio Silver Resource. Kootenay’s core objective is to develop near term discoveries and long-term sustainable growth. Management comprises 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.

About Northair

Northair is focused on advancing its flagship La Cigarra silver project located in the state of Chihuahua, Mexico, 26 kilometres from the historic silver mining city of Parral. The property boasts nearby power, good road access, gentle topography, established infrastructure and currently hosts a NI 43-101 Resource estimate of 51.47 million ounces of silver in the Measured & Indicated categories grading 86.3 g/t silver and 11.46 million ounces of silver in the Inferred category grading 80 g/t silver. The mineralized system at La Cigarra has been traced over 6.5 kilometres and is defined at surface as a silver soil anomaly and by numerous historic mine workings. The La Cigarra silver deposit is open along strike and at depth and is approximately 25km north, and along strike of Grupo Mexico’s Santa Barbara mine and Minera Frisco’s San Francisco del Oro mine.