KOOTENAY SILVER INC. EARLY WARRANT EXERCISE INCENTIVE PROGRAM

Kootenay Silver Inc. has completed the warrant exercise incentive program. A total of 2.86 million outstanding unlisted warrants were exercised under the program, raising gross proceeds of $3,317,625.

Pursuant to the program, Kootenay has issued a total of 1.43 million common share purchase warrants to the warrantholders who exercised their warrants under the program. Each incentive warrant entitles the holder to purchase one additional common share of Kootenay at a price of $1.50 per common share until Feb. 28, 2014. The incentive warrants are subject to a four-month hold period which expires on June 30, 2012.

The balance of the warrants not exercised under the program remain outstanding and continue to be exercisable for common shares of the company on their current terms.