SRK Consulting has been hired to calculate an independent NI 43-101 compliant mineral resource for Promontorio. The compilation of drill results and geologic modelling for the updated resource calculation is well underway, the company said, with completion expected by the end of June 2012.

The updated resource follows the recent completion of what the company called a "highly successful", two staged drill program on the Promontorio project that included 25,000 metres of diamond drilling and 10,000 metres of reverse circulation drilling.

A total of 35,000 metres 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.

G&T Metallurgical Services has also been contracted to conduct additional metallurgical work on Promontorio's 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.

Additionally, acid base accounting of mineralized and wall rock is being conducted along with a gold deportment study to find out 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 positive, the company said, showing 82 percent of the silver reporting to the lead concentrate and a further 7 percent to the zinc concentrate, with 85 percent of the lead recovered to the lead concentrate and 91 percent of the zinc to the zinc concentrate.

With regards to ongoing baseline and scoping studies, Hatch Engineering 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 for prefeasibility level evaluation of mine water supply, Kootenay said, including potential dewatering flow rates needed for potential open-pit and underground mining, and mine water supplies.

Saguaro Geosciences also designed a detailed geotechnical logging program, which 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.

Kootenay Silver said that the recent confirmation 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 the discovery of several deposits.

Examples in Mexico include the Pitarrilla silver-lead-zinc deposits in Durango and the Peñasquito silver-gold-lead-zinc mine 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 said.

Kootenay has also identified a host of new prospective targets within the Diatreme complex that require further drill testing.
Accordingly, the company said plans are underway to conduct a large follow up drill program after the release of the NI 43-101 resource update.

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.

In late April, the company released results from its recently completed drilling program at Promontorio, including 18 metres of 254 grams per tonne (g/t) silver equivalent, within 89 metres of 84 g/t silver equivalent in hole DH-116-12 in the Northeast Zone.

Currently, Promontorio itself hosts an NI 43-101-compliant resource containing 8.9 million indicated ounces of silver plus 1.17 million ounces of inferred silver, 99.3 million indicated pounds of lead plus 13.4 million inferred pounds of lead, and 110.8 million indicated pounds of zinc plus 14.3 million inferred pounds of zinc.

The results today from 10 holes are from the 25,000 metre core drilling program at the project, which forms part of the 35,000 metre infill and resource definition campaign.

The remaining 10,000 metres were dedicated to reverse circulation drilling, with both parts of the program now complete.

Highlights of the latest core drilling results include 18 metres of 254 grams per tonne (g/t) silver equivalent, within 89 metres of 84 g/t silver equivalent in hole DH-116-12 in the Northeast Zone, the eastern most intercept to date.

Other notable results included hole DH-115-12 in the Northeast Pit Extension, which returned 3 metres of 112 g/t silver equivalent within 12 metres of 43 g/t silver equivalent. The company said this hole shows the potential opening of mineralization to the north.

Kootenay said that work for an updated NI 43-101 resource is underway, which will incorporate the results from the recent drilling.

"The high-grade results achieved from step-out drilling in the Northeast Zone is further testimony to the success of our multi-phase drill program," said CEO James McDonald.

"Since confirming our initial NI 43-101 silver resource in 2010, we established one continuous zone of silver mineralization from the Pit (Discovery) Zone through the Southwest Zone. This zone remains open to the east, west and to depth.

"We continue to encounter high-grade silver intercepts over widespread areas of silver mineralization in the Northeast Zone, some 700 meters outside of the current NI 43-101 resource.

"We expect these developments will play a critical factor in sharply boosting the size of our existing silver resource as we prepare for our updated independent NI 43-101 resource study."

The Promontorio silver mineralization is hosted in a large diatreme complex, which has significant geologic implication, the company said, 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 in the northeast of the State of Zacatecas in north-central Mexico.

Silver mineralization at Kootenay's project remains open in both strike directions and down dip, between the Pit, Southwest Extension and Northeast zones, the company said.

Kootenay also said Wednesday it has identified a host of new prospective targets within the Diatreme complex, that require further drill testing, with a large follow-up drill program planned for after the release of the resource update.

Kootenay Silver is developing mineral projects in the Sierra Madre Region of Mexico and in British Columbia, Canada.

Currently, Promontorio itself hosts an NI 43-101-compliant resource containing 8.9 million indicated ounces of silver plus 1.17 million ounces of inferred silver, 99.3 million indicated pounds of lead plus 13.4 million inferred pounds of lead, and 110.8 million indicated pounds of zinc plus 14.3 million inferred pounds of zinc.

These two metals are expected to see a sharp boost in demand, leading to a predicted shortage in materials for electronics like iPads and Kindles starting in 2017, and an anticipated increase in prices.

Demand for both silver and tin is driven by the fact that both metals are key components in solder alloys that meet the Restriction of Hazardous Substances (RoHS) directive implemented in the EU in 2006.

The directive, which took effect in July of 2006, recognizes that a large proportion of electronic waste will never be recycled, and therefore the materials within devices will dissipate into the environment. For example, when lead is used in substances such as the solder that connects components to a circuit board in an electronic device, there is no way the lead can be collected.

As a result, the EU said that substances like solder, at least within devices intended for sale in the region, must not contain any of the hazardous materials the directive is concerned with, including lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls and diphenyl ether.

Because of this new law, the search for a new standard solder in the electronics industry began, resulting in a mixture of tin and silver - putting pressure on supplies for both of these metals.

Byron Capital says that from the period of 2004 to 2011, prices for both tin and silver have been appreciating markedly. The firm noted in a recent report that many electronic manufacturers have decided to use lead-free solders on all versions of their products - whether shipping to regions in which RoHS regulations pertain, or not - as it is logistically simpler.

Hykawy says that a shortfall in tin supply is of particular concern, as mining production levels suggest growth rates of tin output are "anemic".

Tin, which is an LME-traded metal, had the lowest warehouse availability of any LME-traded metal at only 10,000 tonnes as of February 22.

Byron predicts that non-investment demand for tin will jump from around 362,000 tonnes last year to more than 544,000 tonnes by 2020. Silver demand, meanwhile, is expected to go up from 844 million ounces in 2011 to over 1 billion ounces by 2020 as demand for silver in the construction of solar modules is also accelerating quickly.

Prices for tin, according to Byron, are projected to more than double to $59,047 per tonne in 2018, while prices for silver are expected to rise to $68.88 per ounce in 2018 - when silver is anticipated to reach critical supply levels - from $35.11 in 2011.

"Global growth is driven by people, energy and materials, and of these materials, more tin and silver is needed or we will have a potentially dangerous supply situation on our hands," says Hykawy.

After an enlightening talk on critical materials used in hybrid, electric and fuel cell vehicles from General Motors' Dr. Yucong Wang, South American Silver's (TSE:SAC) investor relations manager, Robert Gill, spoke on the company's silver and indium assets in Bolivia on Thursday.

Indium's current primary application is to form transparent electrodes from indium tin oxide in liquid crystal displays and touchscreens, and this use largely determines its global mining production.

It is also used for making particularly low melting point alloys, and is a component in some lead-free solders.

South American's Malku Khota project in Bolivia, which is listed by Byton as one of the major new silver projects coming on stream, is one of the world’s largest undeveloped silver and indium resources with an NI 43-101-qualified indicated resource of 230.3 million ounces of silver and 1,481 tonnes of indium, plus an inferred resource of 140 million ounces silver and 935 tonnes indium.

An updated preliminary economic assessment, released last year, showed a net present value of $704 million at a five percent discount rate for a 40,000 tonne per day bulk mineable heap leach operation. Projected silver production is 13.2 million ounces per year, with 80 tonnes of indium per year.

Gill says that the company, with $26.6 million in cash, is due to release a pre-feasibility level update in the second quarter of this year, with feasibility work to start in the second half of 2012.

Other noteworthy companies in the silver sector include Southern Silver (CVE:SSV), SilverCrest Mines (CVE:SVL)(OTCQX:STVZF), Silver Bull Resources (TSE:SVB)(AMEX:SVBL), Great Panther Silver (TSE:GPR)(AMEX:GPL), Orko Silver (CVE:OK), and Arian Silver (CVE:AGQ)(AIM:AGQ).

Southern Silver Exploration

Southern Silver Exploration is a Canadian precious and base metals explorer with mining ventures in Mexico, New Mexico and Arizona.

At its Cerro Las Minitas project in Mexico, Southern Silver has scheduled 20,000 metres of core drilling in 2012, with the aim of completing an NI 43-101 compliant resource on its first set of targets by the fourth quarter.  This will be the initial milestone toward the company's goal of delineating a larger, multi-million tonne, high-grade, silver-enriched polymetallic resource on the project.

Assay results from hole 12CLM-030 returned a 1.1 metre interval averaging 250 grams per tonne (g/t) silver, 10.7% lead and 16.95 zinc (1,007 g/t silver equivalent) at a vertical depth of approximately 270 metres.

SilverCrest Mines

Precious metals producer SilverCrest Mines, meanwhile, is focused on production from its Santa Elena Mine in Sonora, Mexico, which started commercial production in July of last year.

The company recently announced that silver production in the first quarter from its Santa Elena Mine more than doubled while gold production almost tripled year-over-year.

For the first quarter, silver production jumped 108 percent to 134,528 ounces, from 64,712 ounces a year ago, when the mine, which is now in commercial production, was still in the commissioning phase. Silver equivalent ounces sold soared 339 percent to 641,532 ounces from 146,219 in the first quarter one year ago.

The mine is a high-grade, epithermal gold and silver producer, with an estimated life of mine cash cost of US$8 per ounce of silver equivalent.

SilverCrest anticipates that the mine should recover around 4,805,000 ounces of silver and 179,000 ounces of gold over the 6.5 year life of the open pit phase.

Silver Bull Resources

Silver Bull Resources is a silver and zinc-focused explorer, whose flagship project is Sierra Mojada in Mexico. The property is located 150 kilometres north of the city of Torreon in Coahuila, Mexico and is highly prospective for silver and zinc. The explorer said that the third in a series of NI 43-101 resource updates is anticipated in the second quarter of 2012.

Given the drilling results to date for Silver Bull, it is anticipated that the next report for the property will show a substantial increase in the silver resource at Sierra Mojada, as well as including a resource for the significant zinc mineralization seen on the project.

Recent drill results from the site include 8.45 metres of massive sulphide grading 16.98% zinc, 5.45% lead, and 57.29 grams per tonne (g/t) silver in a previously untested zone 500 metres to the north of the Shallow Silver Zone.

Overall, Silver Bull has acquired or has options to acquire mineral concessions totaling 15,833 hectares in the Sierra Mojada Mining District. The company has been working on the Sierra Mojada property since 1997 and has completed over 80,000 metres of drilling.

The Vancouver-headquartered miner also owns three mineral exploration licences in Gabon, Africa, two of which are currently under joint venture with AngloGold Ashanti (NYSE:AU).

Great Panther Silver

Vancouver-headquartered Great Panther Silver is a silver miner focused on its two wholly-owned operating mines in Mexico - Guanajuato and Topia.

Since commencing operations at these two mines in 2006, Great Panther has achieved continuous growth in metal production in excess of 20 percent per year until 2010, when the company saw record production of 2.3 million silver equivalent ounces.

In 2012, Great Panther expects to deliver production of 2.5 to 2.75 million silver equivalent ounces, an increase of 14 to 25 percent from 2011.

Orko Silver

Another company with robust assets in the silver sector includes Orko Silver, which earlier this month regained 100 percent ownership in its La Preciosa property in Mexico.

In early April, Pan American Silver (TSE:PAA)(NASDAQ:PAAS) relinquished its right to earn a 55 percent interest in the La Preciosa project, one of the world's largest primary silver deposits, after it decided not to deliver feasibility study before an April 13, 2012 deadline.

Orko Silver's chief executive Gary Cope confirmed that four unnamed mining companies had "expressed an interest" in the project, with Orko signing standstill agreements with two of these parties.

La Preciosa is located in Durango State, which envelops the heart of Mexico’s prolific Sierra Madre Mining Belt, and includes large silver deposits such as Fresnillo and Pitarrilla.

An August 2011 preliminary economic assessment (PEA) gave an estimated mineral resource containing 113 million ounces of silver classified as indicated and a further 46 million ounces of silver classified as inferred. In addition, the deposit contains over 222,000 ounces of indicated gold and 83,000 ounces of gold in the inferred category.

The PEA showed an after-tax net present value of $315 million at a five percent discount rate, and a 24.3 percent internal rate of return. The results assumed prices of $25 per ounce of silver and $1,250 per ounce of gold.

Arian Silver

Mexico-focused Arian Silver, meanwhile, is an emerging producer, that in March unveiled an updated NI 43-101 mineral resource estimate for its 100 percent-owned San José property in Zacatecas State.

Resource tonnage was up 29 percent along the San José Vein (SJV) from a July 2011 estimate, while contained ounces of silver were up 32 percent.

The company said that in the indicated category, the resource contained 8 million tonnes at an average grade of 119 grams per tonne (g/t) silver, 0.38% lead and 0.85% zinc. Contained metal comprised 30.61 million ounces of silver, 67.02 million pounds of lead and 149.91 million pounds of zinc.

In the inferred category, the resource contained 24.5 million tonnes at an average grade of 110 g/t silver, 0.38% lead and 0.76% zinc. Contained metal comprised 86.65 million ounces of silver, 205.25 million pounds of lead and 410.50 million pounds of zinc.

Mineralization remains open along the western and eastern strikes of the main vein, and to depth, with further drilling planned.

Silver Standard

On the tin side, Byron Capital listed Silver Standard Resources' (TSE:SSO) (NASDAQ:SSRI) Pirquitas Mine in northern Argentina as one of the new tin projects globally. The mine is the company's first major mining operation, and commercial production started in December 2009. At full production, it is estimated the mine will produce an average of around eight to ten million ounces of silver and ten to twelve million pounds of zinc annually, ranking Pirquitas among the largest primary silver mines in the world, the company says.

The silver and zinc concentrates produced from the plant are shipped to various smelters around the world.

Other new projects for tin listed are Eurotin's (CVE:TIN) Oropesa project in Spain, Kasbah Resources’ (ASX:KAS) Achmmach property in Morocco, anticipated to come on stream in 2017, and Consolidated Tin Mines' (ASX:CSD) Mount Garnet asset in Australia.

Promontorio itself hosts an NI 43-101-compliant resource containing 8.9 million indicated ounces of silver plus 1.17 million ounces of inferred silver, 99.3 million indicated pounds of lead plus 13.4 million inferred pounds of lead, and 110.8 million indicated pounds of zinc plus 14.3 million inferred pounds of zinc.

Since the 2010 resource estimate, Kootenay said in February it has drilled 31,000 metres and has another 4,000 metres left to drill before publishing an updated estimate within the next few months.

Notable results from the latest program, which is the single largest and most expansive drill program conducted by Kootenay on the property to date, include hole KP-09-07, which intersected 6.7 metres grading 1,008.0 gpt silver equivalent.

The company said the proposed name change, which remains subject to the approval of the TSX-Venture Exchange, will better demonstrate its focus on silver mining.

CEO James McDonald said: "The name change to Kootenay Silver better reflects our core focus on developing our flagship Promontorio Silver project.

"It also coincides with all the high-grade results we have achieved from drilling on Promontorio over the past year. Within this 1st quarter, we will have completed over 35,000 meters of drilling since our initial resource calculation.

"We look forward to incorporating these numerous high-grade results into an updated NI 43-101 resource calculation at the conclusion of the current program."

Kootenay said its latest 25,000-metre in-fill and definition drill program at Promontorio is nearing completion.

Results to date have uncovered consistent, widespread silver mineralization with several high-grade silver intercepts throughout the Pit Resource, the Southwest Extension Zone, and the Northeast Zone, which sits about 700 metres outside of the current 43-101 Pit Resource.

Notable results from the program, which is the single largest and most expansive drill program conducted by Kootenay on the property to date, include hole KP-09-07, which intersected 6.7 metres grading 1,008.0 grams per tonne (g/t) silver equivalent.

Hole KP-25-08 hit 7.85 metres of 773.6 g/t silver equivalent, while DH-110-11 intersected 27.0 metres grading 678.6 g/t silver equivalent, including 4.5 metres at 1,145.5 g/t silver equivalent.

The company has also reported wide interval results, including hole DH-052-11, which hit 146.0 g/t silver equivalent over 234.0 metres, including 236.3 g/t silver equivalent over 70.0 metres. Meanwhile, hole KP-22-07 returned 119.5 g/t silver equivalent over 157.65 metres, including 110.7 g/t silver equivalent over 120.0 metres.

Drilling continues to focus on step-out and in-fill drilling at Promontorio, with the intention of updating the NI 43-101 compliant resource estimate at the property.

The current resource for the site includes 5.22 million tonnes grading 52.7 g/t silver, 0.86 percent lead, and 0.96 percent zinc, for 8.9 million ounces of contained silver, 99.3 million pounds of contained lead, and 110.8 million pounds of contained zinc, in the indicated category.

In the inferred category, there is an estimated 650,000 tonnes grading 55.7 g/t silver, 0.94 percent lead, and one percent zinc, for 1.17 million ounces of contained silver, 13.4 million pounds of contained lead, and 14.3 million pounds of contained zinc.

Kootenay is developing mineral projects in the Sierra Madre Region of Mexico and in British Columbia, Canada.

On the TSX-Venture, Kootenay shares rose 5.51 percent to $1.34, as of 11:49 am EDT.

The 25,000 metre, multi-phase, step out drill program is currently ongoing. The company said the multi-rig diamond drilling program continues to yield exceptional results, extending from the pit discovery zone across the central 1 kilometre mineralized corridor.

The strike continuity of silver mineralization in the southwest zone connecting to the NI 43-101 pit resource has now been extended from 140 metres to 300 metres.

In the northeast zone, which sits 700 metres outside of the current NI 43-101 pit resource, mineralization along strike is now 210 metres.

Kootenay CEO James McDonald said: "We continue to consistently hit multiple intercepts of high-grade silver mineralization confirming and extending continuity of the pit resource and southwest zone.

"In the Northeast Zone we also continue to hit multiple high-grade silver zones as demonstrated by the 706 grams per tonne (g/t) silver equivalent in hole 88. These are exciting developments for the future prospects of Promontorio as we move toward an updated NI 43-101 resource estimate."

Among the highlights from the northeast zone, hole DH 88 over 16 metres encountered 706 g/t silver equivalent.

DH 87 returned 104 g/t silver equivalent over 22 metres, including 5 metres of 208 g/t silver equivalent, with three other composited intervals including 32 metres of 70 g/t silver equivalent, 3 metres of 175 g/t silver equivalent and 3 metres of 205 g/t silver equivalent.

At DH 94, the company encountered 74 g/t silver equivalent over 15 metres including 6 metres of 110 g/t silver equivalent.

Highlights from the southwest zone included DH 82, encountering 115 g/t silver equivalent over 109 metres including 15 metres of 189 g/t silver equivalent.

DH 81 returned 120 g/t silver equivalent over 35 metres of silver equivalent while in the pit northeast zone, DH 97 found 107 g/t silver equivalent over 104 metres.

Kootenay Gold is actively developing mineral projects in the Sierra Madre Region of Mexico and in British Columbia, Canada.

Shares were up 2.68 percent to $1.15 Tuesday afternoon.

All five drill holes encountered consistent, widespread silver mineralization and multiple high-grade silver intercepts in Promontorio's southwest extension zone and northeast zone, which sits 700 metres outside of the current 43-101 pit resource, the company said.

Kootenay's chief executive officer, James McDonald, said: "We are very pleased and excited with results from the current five holes of our 25,000 meter drill program.

The current 25,000 meter in-fill drilling and resource definition program represents the single largest and most expansive drilling campaigns conducted by Kootenay on the Promontorio silver project to date.

Kootenay said the upcoming drilling will continue to focus on step out and in-fill drilling off setting the numerous silver intercepts concentrated along a 1.0 kilometre long mineralized corridor.

The company said that DH 79 returned 120 metres grading 164 grams per tonne (g/t) silver equivalent with three high grade intervals of 31 metres of 292 g/t silver equivalent, including 13 metres of 362 g/t silver equivalent and 30 metres of 212 g/t silver equivialent.

"Hole DH 79 underlines the high-grade silver potential that exists within the system," McDonald said.

"The high-grade results that we continue to achieve across Promontorio's 1.0 kilometer long mineralized corridor will play a major factor in building and adding to the overall volume of contained silver ounces in the resource as we move toward a future updated 43-101 resource estimate."

DH 77 returned two intervals, first 97 metres of 76 g/t silver equivalent including 13 metres of 155 g/t silver equivalent and second, 47 metres of 81 g/t silver equivalent, including 7 metres of 161 g/t silver equivalent.

Drill holes DH 79 and 77 are from the southwest and northeast extension areas, respectively.

DH 75 itself returned three intervals including 233 g/t silver equivalent over 9 metres; 55 g/t silver equivalent over 10 metres and 50 g/t silver equivalent over 42 metres that includes 140 g/t silver equivalent over 4 metres.

DH 85 intersected 107 g/t silver equivalent over 24 metres including 5 metres of 221 g/t silver equivalent and 7 metres of 149 silver equivalent. DH 86 returned 2 metres of 79 g/t silver equivalent and 1 metre of 1,520 g/t silver equivalent.

Drill holes DH 75, 85 and 86 are from the northeast zone.

Kootenay Gold 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.

Of the notable highlights from the drilling program, drill hole 80 encountered 166 grams per tonne (g/t) silver equivalent (58.2 g/t silver, 2.52 percent lead and zinc) over 83 metres including 329 g/t silver equivalent over 6 metres (111 g/t silver, 5.11 percent lead and zinc) in step out drilling, extending mineralization 100 metres down dip and along strike in the project's southwest zone.

Investors welcomed the news, sending Kootenay stock up 1.79 percent to $1.14 Wednesday afternoon.

The company said that results to date demonstrate drilling has established continuity of silver mineralization between the southwest expansion zone and the pit resource, extending a further 100 metres westward beyond current resource boundaries down dip and along strike.

These two areas now represent one continuous mineralized zone for a minimum strike length of 240 metres, remaining open on strike and at depth, Kootenay Gold said.

Kootenay president and CEO James McDonald commented: "Results from the 25,000 meter program continue to meet or exceed our expectations. The establishment of continuity of silver mineralization between the southwest zone and the pit resource is a milestone development for Promontorio and will undoubtedly play a critical factor in our future resource expansion.

"Further supporting our resource growth initiatives, we continue to hit high silver grades in wide zones of hydrothermal breccia in the emerging Northeast Zone, which sits a full 700 meters outside of and on strike to the current 43-101 resource."

The company said three diamond drill rigs are currently operating on Promontorio with two stepping out in a systematic manner outside of the pit resource to the southwest and northeast. The third rig is working on stepping out from PC 28 in the northeast zone.

Kootenay Gold said upcoming drilling will continue to focus on step out and in-fill drilling off setting the numerous medium to high grade silver intercepts concentrated along a 1.0 kilometer long mineralized corridor that includes the pit resource, pit NE zone, northeast zone and southwest zone.

Promontorio currently hosts an NI 43-101-compliant resource containing 8.9 million indicated ounces of silver plus 1.17 million ounces of inferred silver, 99.3 million indicated pounds of lead plus 13.4 million inferred pounds of lead and 110.8 million indicated pounds of zinc plus 14.3 million inferred pounds of zinc.

Shares in junior exploration outfit Kootenay Gold (CVE:KTN) moved 5% higher this morning after the company announced that it had contracted Hatch Engineering, Sanguaro Geosciences and G&T Metallurgical Services to undertake a number of studies on the company’s flagship Promontorio Silver Project in Sonora, Mexico.  The Vancouver based company has also brought in independent consulting engineer Patricia Aguayo Hurtado.

Hatch Engineering will conduct initial hydrologic studies, which will form the basis of additional studies assessing

mine water supply for potential open pit and underground mining. Saguaro Geosciences will design a geotechnical logging program “that goes beyond the basic specific gravity and RQD data currently being recorded.”

Meanwhile, G&T Metallurgical Services, will conduct additional metallurgical work on Promontorio mineralization. The company was keen to note that this work will include a gold deportment study to consider if gold content in the deposit can be extracted economically.

Independent Consulting Engineer Patricia Aguayo Hurtado has been contracted to conduct an environmental baseline study.

“An extensive drilling and analysis program is underway to quantify and confirm the scope and size of our silver deposit. Based on the continued success of our current 25,000 meter drill program, combined with results from our previous phases of drilling, we are sufficiently encouraged with results to begin taking the requisite steps to pursue our ultimate goal, which is to advance the Promontorio Silver Project to commercial production,” stated CEO James McDonald.

Under the direction of James McDonald, Kootenay has completed over 35,000 meters of multi-phase drilling on Promontorio, moving the project to its current advanced stage of development. McDonald has been a key driver in the success of the Promontorio project, and brings a strong track record of helping companies, such as Alamos Gold, move from exploration to production.

Three drill rigs are active on the property, with two performing step-out work to the southwest and northeast of the pit resource. The third rig is conducting step-out drilling in the Northeast Zone.

Assays from hole DH-062-11, located in the Southwest and Pit Zone area, showed significant potential for new resources at depth, the company said, and extended mineralization 100 metres further down dip from previously released hole DH-061-11, which returned 96 grams per tonne (g/t) silver equivalent over 182 metres.

Notable results from DH-062-11 found 92 metres grading 56 g/t silver, 1.03% lead, and 1.08% zinc, including five metres at 174 g/t silver, 3.03% lead, and 1.69% zinc.

Drill hole DH-067-11, also in the Southwest and Pit Zone area, returned 41 metres at 58 g/t silver, 0.89% lead, and 1.52% zinc, including 14 metres at 123 g/t silver, 1.88% lead, and 3.26% zinc. This hole also returned 45 metres grading 28 g/t silver, 0.41% lead, and 0.46% zinc, including five metres at 66 g/t silver, 1.03% lead, and 1.28% zinc, effectively extending the Pit mineralization between 75 and 100 metres further along strike into the Southwest zone.

Also in this area, hole DH-057-11 returned five metres at 486 g/t silver, 2.5% lead, and 1.98% zinc, including 31 metres at 44 g/t silver, 0.69% lead, and 1.05% zinc; and hole DH-064-11, which hit shallow mineralization, returned 39 metres grading 51 g/t silver, 0.7% lead, and 0.87% zinc, including 80 g/t silver, 1.02% lead, and 1.32% zinc over 19 metres.

President and CEO, James McDonald, commented: "We continue to hit excellent intervals and grades of silver mineralization at depth in the Pit Resource, to the southwest and to the northeast.

"Moreover, assays show excellent continuity of silver mineralization between the Pit Resource and the Southwest Zone, further supporting the company's resource expansion model that the SW Zone and Pit Resource form one large and continuous zone."

At the Northeast Zone, highlights included hole DH-065-11, which hit five separate intercepts, including 20 metres at 47 g/t silver, 0.34% lead, and 0.83% zinc, and 10 metres grading 69 g/t silver, 0.39% lead, and 0.84% zinc. Eight metres of 109 g/t silver, 1.25% lead, and 1.82% zinc was also intersected.

Drill hole DH-069-11, also in the Northeast, returned 33 g/t silver, 0.11% lead, and 0.18% zinc over 23 metres, 157 g/t silver, 1.57% lead, and 1.25% zinc over one metre, and seven metres grading 49 g/t silver, 0.99% lead, and 0.85% zinc.

"The first follow up holes to PC 28, Northeast of the Pit Resource, intercepted multiple zones of silver mineralization including medium to high-grades in the Northeast Zone . . . which is double the strike length of Promontorio's established NI 43-101 Pit Resource," McDonald concluded.

Kootenay said future drilling at Promontorio will continue on step-out and in-fill drilling, concentrated along a one-kilometre long corridor, which includes the Pit Resource, the Pit NE zone, the Northeast zone and the Southwest zone.

The drill program is designed to test the Pit resource, the Southwest zone and the continuity between these two zones.

Hole DH 61, which intersected 96 g/t silver equivalent over 182 metres, including 290 g/t silver equivalent over 24 metres, was drilled outside of the Pit zone and continued for approximately 50 metres into the Southwest zone, confirming that mineralization exists between the Southwest and Pit areas.

Other notable results from the seven holes reported included 117 grams per tonne (g/t) silver equivalent over 205 metres, including 169 g/t silver equivalent over 50 metres, and 152 g/t silver equivalent over 48 metres, all in hole DH 58 in the Southwest zone.

Also on the Southwest zone, hole DH 60 found 107 metres grading 71 g/t silver equivalent, including 237 g/t silver equivalent over 12 metres.

Meanwhile, holes DH54 and DH 56, both on the Pit zone, returned 80 g/t silver equivalent over 103 metres, including 105 g/t silver equivalent over 68 metres; and 116 g/t silver equivalent over 251 metres, including 186 g/t silver equivalent over 66 metres.

"We are very pleased with results from the first seven holes of our 25,000 meter drill program," said president and CEO, James McDonald.

"Not only is diamond drilling continuing to hit higher grades of silver at depth where previous drilling bottomed out in silver mineralization within the Pit resource itself, equally important to our resource expansion program, we are seeing continuity of silver mineralization developing in the Southwest Zone from step-out drilling that returned impressive intervals and grades of widespread silver mineralization extending to depth."

Currently, three drill rigs are conducting step-out drilling on the Promontorio site. An additional ten drill holes have been completed and samples have been sent for assay. Three other holes are now in progress at the property.

This 25,000-metre drill program is the most expansive drill campaign that Kootenay has ever conducted on the silver project to date.

The company, whose stock on the TSX-Venture Exchange spiked 6.12% as of 10:35 am EDT to trade at $1.04 per share, said it plans to complete an NI 34-101 compliant resource estimate at the program's end.

The three rigs are drilling a 25,000 metre program - the largest and most expansive drilling campaign the company has performed on the site to date - in order to follow up on its successful 10,000 metre program at the property.

The campaign will focus on step out and in-fill drilling to determine continuity between several medium-to-high grade silver intercepts found along Promontorio's mineralized corridor, which includes the Pit Resource, the Pit NE zone, the Northeast zone and the Southwest zone.

During the prior 10,000 metre drill program, the Pit zone returned 234 metres grading 58 grams per tonne (g/t) silver, including 70 metres of 91.4 g/t silver, in hole DH 53.

Meanwhile, the Southwest area found 36 g/t silver over 114.5 metres in hole PC 12, while the Northeast zone returned 12 metres of 93.4 g/t silver.

Kootenay said it hopes to provide an updated NI 43-101 compliant resource estimate at the conclusion of the current program.

In late May, the company initiated a 25,000 metre infill drill program, the largest to date on the property, to follow up on the last 10,000 metre campaign at Promontorio.

Highlights from the final holes of the 10,000 metre program included 234 metres of 146 g/t of silver equivalent in hole PC 53, including 70 metres of 236.3 g/t silver equivalent and 27 metres of 338.6 g/t of silver equivalent.

The current drill campaign will concentrate on step out and in-fill drilling off-setting the many drill intercepts found along a 1.0 kilometer long mineralized corridor that includes the Pit Resource, the Pit NE zone, the Northeast zone and the Southwest zone.

An updated NI 43-101 compliant resource report is expected to begin once the 25,000 metre drill program is concluded.

Kootenay Gold has mineral projects in the Sierra Madre Region of Mexico and in British Columbia, Canada.

Since the news, Kootenay's shares rose more than 18%, to trade at $1.09 as of 2:02pm EST.

The company said that a new high priority zone of high grade silver mineralization was discovered in an area between the pit resource and the Northeast Zone, remaining open on strike and at depth. The results form part of a 10,000 metre ongoing drill program at the property.

Highlights from the new zone include 7.5 metres of 145 g/t silver and 0.39 g/t gold in hole PC 20, including 9 metres of 265 g/t silver and 0.13 g/t gold; and 3 metres of 206 g/t silver and 0.28 g/t gold in hole PC 23.

Meanwhile, notable intersections that extended the NorthEast zone include hole PC 28, which intersected 18 metres of 188 g/t silver and 0.89 g/t gold, within 51 metres at 98 g/t silver and 1.28 g/t gold. In addition, hole PC 25 returned 3 metres of 157 g/t silver and 0.99 g/t gold, with 25.5 metres of 38 g/t silver and 0.46 g/t gold.

"We are consistently hitting high and medium grade silver mineralization to the North East of our Pit Resource expanding the North East Zone to over 300 meters, which is double the strike length of our current 43-101 silver resource," said CEO James McDonald.

"Moreover, widely spaced step out holes have encountered multiple, high grade silver intercepts confirming the exciting upside potential of the entire 1.0 kilometer long mineralized corridor at Promontorio."

Based on the results received thus far, Kootenay is planning an aggressive, closely spaced, infill drilling program that will be designed to tie in multiple zones of widespread silver mineralization seen both northeast and southeast of the current pit zone. The company has also added a  diamond drill rig on Promontorio to test the deposit at depth, to focus on expanding the silver resource.

The latest estimate of Promontorio indicates the property hosts 10.1 million ounces of contained silver.

Kootenay is focused on developing its flagship Promontorio silver property in Sonora State, Mexico.

The Espiritu property is made up of two mineral concessions called Tarachi 2 and Tarachi 3, which total approximately 10,000 hectares, located in Sahuaripa, in Sonora.

Two zones of precious and base metal mineralization have been identified on the property so far - the Northeast zone, which is dominated by a copper-gold-molybdenum porphyry setting, and the Southwest area, dominated by veins and stockworks of precious and base metal mineralization.

In exchange for the undivided 50% stake, Pinecrest must issue a total of 750,000 common shares over a period of three years, and spend US$1 million on the property over four years.

Once the earn-in agreement is complete, a joint venture will be formalized, the companies said.

"The numerous showings identified on the property to date, combined with overall size and strength of the mineral system bode well for the discovery polymetallic deposits at Espiritu,” said Kootenay president and CEO James McDonald.

The company said the agreement will allow it to fast track exploration at Espiritu and to focus on the ongoing development of Kootenay's core asset, the Promontorio silver project in Mexico.

Including the Pinecrest joint venture, Kootenay has now joint ventured 19 of its previous metal properties in Canada and Mexico.

The property package, which is prospective for gold and silver mineralization, comprises 3,606 hectares and has numerous historic workings present.  The claims include La Cabana 1 Frac I, La Cabana 1 Frac II, La Cabana 1 Frac III and Cuatas.

Kootenay has assayed more than 120 samples on the properties, of which highlights include 11.40g/t gold and 92g/t silver; 12.2g/t gold, 877g/t silver and 13.4% copper; and 4.49 g/t gold, 504 g/t silver and 2.7% copper.

In exchange for the 60% undivided interest, First Mexican and International Millennium must pay US$25,000 on signing, and issue 1.2 million First Mexican shares to Kootenay over five years. The companies must also spend an additional US$2 million on the property over the same time frame.

Kootenay said it will retain a 1% net smelter royalty, which can be purchased for US$1 million. Once the earn-in period is complete, the companies will enter into a joint venture agreement.

"The First Mexican Gold joint venture provides our shareholders with multiple opportunities for new drill discoveries," said Kootenay chairman Ken Berry.

"As we continue to prioritize the aggressive ongoing development of our core asset the Promontorio Silver Project in Sonora, Mexico, we have now successfully joint ventured 18 of our 100% owned precious metals properties in Canada and Mexico."

Kootenay's newly optioned properties are on trend with identified targets from First Mexican's existing claims known as the Bailey zone. Kootenay rallied 4% on Thursday to trade at $1.04 as of 1:52pm EST.

The properties, which include Chenier, Sweet Spot, Enigma and Ruby Steel, comprise a total of 8,664 hectares.

Sweet Spot, a large-tonnage base metal (Pb-Zn) prospect, is located in close proximity to the recent Iron Range discovery made by Eagle Plains Resources and Providence Capital. Historical drilling on Sweet Spot returned one hole that intersected approximately 200 m of anomalous lead and zinc, said Kootenay.

Under the terms of the option agreement, SG Spirit can earn a 60% interest in the properties by spending a total of $4.5 million on exploration expenditures within four years. The company must also issue 4.8 million shares to Kootenay during the period.

After the earn-in period, SG Spirit and Kootenay will form a 60/40 joint venture for the properties.

"The newly formed J/V provides SG Spirit Gold the opportunity to participate in the exciting gold-base metal play underway in the Purcell Mountains by drilling the Sweet Spot property and at the same time drill three additional properties in the west Kootenay region, all of which possess large-scale potential," said Kootenay consulting geologist Dr Bob Thompson.

"Kootenay's interest in four prospective upcoming drill programs is a very positive development that will allow the company to maximize the potential of its ongoing generative programs in the region."

SG Spirit owns slightly over 50,000 hectares in southeastern British Columbia.  In recent years, the company has concentrated its efforts on the Kimberley Gold Trend, which blankets a large portion of its properties. The trend is a metal-rich region roughly 30 km wide and 100 km long, extending from the Purcell Mountains in the west, across the Rocky Mountain Trench.

Kootenay Gold, on the other hand, is focused on its flagship property, the Promontorio Silver mine in Sonora State, Mexico.

The option agreement remains subject to regulatory approval.

The initial exploration will consist of trenching, sampling and detailed geological mapping with a focus on the La Fortuna zone, where high grade gold and silver samples were taken from surface outcrop. 

Following the sampling exploration, a 2200m 10-hole drill program at the La Fortuna zone will test the zone at depth, the company said.

The drilling will also penetrate untested resistivity anomalies along the zone's 4km strike length.

In late November 2010, six grab samples collected by Copper Creek at the Santa Lucia North area confirmed the existence of a gold-silver mineralization.  The samples had gold values ranging from 31 parts per billion (ppb) to 1670 ppb and silver values ranging from less than 5 parts per million (ppm) to 64.9 ppm.

Under their option agreement, Copper Creek may earn a 60% interest in the Santa Lucia Property from Kootenay Gold by spending $2 million for exploration and paying $0.8 million cash and 0.8 million Copper Creek shares over a four year period.

The new funds will be used to finance additional work on the company's Promontorio silver property in Sonora, Mexico, as well as its other projects. Kootenay is currently conducting a 10,000 metre drill phase at Promontorio, as part of a program to expand the known resource at the site.

The first four holes have been drilled along a single fence across the western side of the Pit Zone, establishing mineralization another 100 metres outside the current 43-101 resource, which includes the high grade intercept of 262.4 g/t Ag and 1.1 % Pb+Zn over 13.5 metres, including 819 g/t Ag and 2.57% Pb+Zn over 3 metres in hole PC 004.

Aside from its properties in Mexico, the company is also developing projects in British Columbia, Canada.

Hole PC 004 boosted mineralization southward by up to 100 metres from the NI 43-101 Pit Resource, the company said. The hole saw a shallow intercept of 262.4g/t Ag and 1.1% Pb+Zn over 13.5 metres, including a whopping 819 g/t Ag and 2.57% Pb+Zn over three metres.

Kootenay said the interval is the extension of a high grade area in Zone 1 of the Pit Resource, extending it about 40 metres southwest and increasing its strike extent by 65%.

A deeper intercept, it added, which could also be a possible extension of the Pit Resource, graded 31.6 g/t Ag and 1.82% Pb+Zn over 7.5 metres within 15 metres of 25.6 g/t Ag and 1.08% Pb + Zn.

Hole PC 003, which expanded the mineralization southward by more than 50 metres from the  Pit Resource, returned 12 metres of 80.38 g/t silver and 2.36% lead + zinc at the top of an 82 metre intercept.

The 82 metre intercept intersected 34.45g/t Ag and 1.1% Pb + Zn, with 10.5 metres of 56.86g/t Ag and 2.3% Pb + Zn near the bottom of the interval. A second interval higher in the hole returned 38.55 g/t AG and 0.37% Pb + Zn over 16.5 metres.

"We are pleased and excited with results from holes PC 003 and 004 of our Promontorio drill program. We continue to encounter widespread silver/lead/zinc mineralization that includes multiple, high-grade intercepts," said president and CEO James McDonald.

The 10,000-metre drill program is designed to substantially expand the known 43-101 mineral resource at Promontorio. The first four holes have been drilled along a single fence across the western side of the Pit Zone, said Kootenay.

Kootenay is actively developing mineral projects in the Sierra Madre Region of Mexico and in British Columbia, Canada. The company was up more than 7.5% on Tuesday, trading at $0.85 as of 9:47am EST.