Kootenay Silver Inc. (TSX-V: KTN) announces that it has closed the first tranche of its previously announced non-brokered private placement of units of the Company, at a price of $0.75 per Unit for aggregate gross proceeds of $3,483,062.  The second tranche is expected to close on February 20, 2024, for aggregate gross proceeds of $237,525.  Upon the second tranche closing, aggregate total gross proceeds from the Offering will be $3,720,587.

Each Unit is comprised of one common share of the Company and one-half of one Common Share purchase warrant. Each Warrant is exercisable to acquire one Common Share at a price of $1.10 per Warrant Share for a period of 24 months and will expire on February 16, 2026.

The net proceeds from the Offering will be used for exploration activities, property commitments on the Company’s projects, working capital and general corporate purposes. The Offering is subject to the final acceptance of the TSX Venture Exchange.

All securities issued in connection with the Offering are subject to a Canadian securities law resale restriction period expiring on June 17, 2024. The securities described herein 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 accordingly, may not be offered or sold within the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This press release does not constitute an offer to sell or a solicitation to buy any securities in any jurisdiction.

A certain related party of the Company participated in the Offering, as set out below. The participation in the Offering by the related party of the Company constitutes a related party transaction pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. The Company is exempt from the requirements to obtain a formal valuation and minority shareholder approval in connection with the participation of the related party in the Offering in reliance on the exemptions contained in sections 5.5(b) and 5.7(1)(a) of MI 61-101, respectively. The Offering was unanimously approved by the board of directors of the Company, with James McDonald declaring and abstaining from voting on the resolutions approving the Offering with respect to his participation in the Offering.

James McDonald, the CEO, President and a director of the Company and a related party to the Company within the meaning of MI 61-101, subscribed for 66,667 Units. There has not been a material change in the percentage of the outstanding securities of the Company that are owned by Mr. McDonald as a result of his participation in the Offering.

In connection with the closing of the first tranche of the Offering, Research Capital Corporation received a cash fee of $50,628 and 77,004 non transferable compensation warrants. Each Compensation Warrant entitles the holder thereof to purchase one Unit at an exercise price of $0.75 per Unit for a period of 24 months following the Closing of the Offering. The Company also paid aggregate cash finders’ fees of $149,627 and issued an aggregate 61,102 non-transferable finder’s warrants to six other arm’s length finders. Each Finder’s Warrant entitles the holder thereof to purchase one Common Share at an exercise price of $0.75 per Common Share for a period of 24 months from the closing of the Offering.

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. Supported by one of the largest junior 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 its priority silver projects located in prolific mining districts in Sonora, State and Chihuahua, State, Mexico, respectively.