Kootenay Announces Progress Update of New NI 43-101 Resource Calculation on Promontorio Silver Project

Kootenay Announces Progress Update of New NI 43-101 Resource Calculation on Promontorio Silver Project. Ongoing Metallurgical, Environmental Baseline and Geotechnical Studies Aimed at Fast-Tracking Development Process

VANCOUVER, May 17, 2012 /CNW/ - Kootenay Silver Inc. (TSX VENTURE: KTN.V) is pleased to provide a summary update with respect to its ongoing development activities at its flagship Promontorio Silver Project in Sonora, Mexico.


Updated NI 43-101 Resource Calculation

Kootenay is pleased to report SRK Consulting (U.S.), Inc. of Lakewood, Colorado has been engaged to calculate an independent NI 43-101 compliant mineral resource on its Promontorio Silver Project. The compilation of drill results and geologic modeling for the updated resource calculation is well underway with completion expected by the end of June 2012.

The updated resource calculation follows the recent completion of a highly successful, two staged drill program on the Promontorio project that included 25,000 meters of diamond drilling (core) and 10,000 meters of reverse circulation drilling (RC).

A total of 35,000 meters of drilling has been conducted since the first resource calculation was reported in 2010. The objective of the recent in-fill drill and resource definition program was to substantially increase the size of Promontorio's current contained silver resource.


Metallurgical Testing

G&T Metallurgical Services Ltd. of Kamloops, B.C. has been contracted to conduct additional metallurgical work on Promontorio mineralization and is working on three additional bulk samples with final results expected in the next few weeks. One sample is from the Southwest Zone, one from shallow in the Pit Resource and one from the Northeast Zone. Work underway includes rougher, cleaner and locked cycle tests. Additionally acid base accounting of mineralized and wall rock is being conducted along with a gold deportment study to determine if the significant gold content of the deposit, which is not yet factored into any of the Company's resource calculations, can be extracted economically.

The first metallurgical testing reported in 2009 was very positive showing 82% of the silver reporting to the lead concentrate and a further 7% to the zinc concentrate with 85% of the lead recovered to the lead concentrate and 91% of the zinc to the zinc concentrate.


Ongoing Baseline and Scoping Studies

Hatch Engineering of Scottsdale, Arizona completed initial hydrologic studies designed to characterize the ground water resources on the project and develop a conceptual hydrogeologic model. This information will form the basis for additional studies going forward in the longer term for prefeasibility level evaluation of mine water supply, including potential dewatering flow rates needed for potential open-pit and underground mining and mine water supplies.

Saguaro Geosciences Inc. of Tucson, Arizona designed a detailed geotechnical logging program that goes beyond the basic specific gravity and RQD data currently being recorded. The geotechnical program will collect all the necessary data appropriate to future geotechnical analysis required for feasibility level work.

In other activities, preliminary environmental baseline studies conducted by independent consulting engineer Patricia Aguayo Hurtado, cataloguing the flora and fauna of the area are now complete.


Silver Hosted in Large Diatreme Complex

The recent definitive recognition by Kootenay's technical team that Promontorio silver mineralization is hosted in a large diatreme complex has significant geologic implication, as these types of systems can typically be very large in size and result in discovery of numerous deposits. Examples in Mexico include the Pitarrilla Silver-Lead-Zinc deposits in Durango and the Peñasquito Silver-Gold-Lead-Zinc mine located in the northeast of the State of Zacatecas in north-central Mexico.

At present, silver mineralization remains open in both strike directions and down dip within Promontorio's Diatreme complex, between the Pit, Southwest Extension and Northeast Zones. The Company reports it has identified a host of new prospective targets within the Diatreme complex, that require further drill testing. Accordingly, the Company reports plans are underway to conduct a large follow up drill program after the release of the NI 43-101 resource update.

The foregoing technical disclosure in this release has been reviewed and verified by Kootenay's CEO, James McDonald, P.Geo (a qualified person for the purpose of National Instrument 43-101, Standards of Disclosure for Mineral Projects). Mr. McDonald is a director of Kootenay.


ABOUT KOOTENAY

Kootenay Silver is actively developing mineral projects in the Sierra Madre Region of Mexico and in British Columbia, Canada. The Company's flagship property is the former producing Promontorio Silver mine in Sonora State, Mexico. The Company's objective is to develop near term discoveries and long-term sustainable growth. Kootenay's management and technical team are 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.


The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release. 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.



For further information:

James McDonald, CEO and President
403-238-6986
Ken Berry, Chairman
604-601-5652; 1-888-601-5650
or visit: www.kootenaysilver.com