Defiance Silver Significantly Increases Silver Grade and Grows Resource at San Acacio

January 15th, 2015

Defiance Silver Corp. (DEF: TSX-V) (“Defiance” ) is pleased to announce that an Inferred Resource Estimate has been completed for the San Acacio deposit by Giroux Consultants Ltd. and Jim Cuttle, B.Sc., P.Geo, updating its initial Indicated and Inferred Mineral Resource (see News Release Dated October 25, 2012).

Defiance has updated its previous Indicated and Inferred Mineral Resource to ensure its consistency with the current mining environment and metals economics. The updated Resource increased the Silver Equivalent Cut-off Grade by 54% resulting in a new Silver Equivalent Grade of 192.50 g/t Ag. Total contained Silver Equivalent ounces increased to 17,961,000.

Bruce Winfield, President and CEO, commented, “We are extremely pleased to have completed a new resource. This estimate is based on our updated geologic analysis of the San Acacio deposit and inclusion of trenching data which has resulted in the identification of three veins, with the Veta Grande (Veta G) being the most significant. By applying a higher cut-off to reflect an underground mining scenario, the silver grade has increased significantly from the previous 43-101 resource while maintaining the integrity of the mineralization.”

This inferred resource is hosted within 1km of the vein system which is over 5.6km long and has vein widths up to 20m. With mineralization open to depth as well as along strike for 4 kilometers, Defiance has initiated its first drill program on the property that commenced in late 2014. The Company believes there is excellent potential to rapidly and cost-effectively increase this resource base through its drill program.

Highlights

Using a silver equivalent (“AgEq”) * cut-off grade of 100 grams tonne (“g/t”), highlights of the estimate include:

San Acacio Inferred Resource

Vein AgEq Cut-off (g/t) Tonnes > Cut-off (tonnes) Grade>Cut-off Contained Metal
Ag(g/t) Au (g/t) AgEq (g/t) Ag (ozs) Au (ozs) AgEq (ozs)
VETA G 100.0 2,150,000 192.43 0.19 204.66 13,302,000 10,000 14,147,000
VETA C 100.0 739,000 153.28 0.08 158.66 3,642,000 1,900 3,770,000
VETA B 100.0 13,000 76.53 0.45 105.98 32,000 190 44,000
TOTAL 100.0 2,902,000 181.94 0.16 192.50 16,976,000 12,090 17,961,000

The Zacatecas Silver District is one of the most prolific silver producing areas in the world, having produced in excess of 681 million ounces of Silver during the period 1546 to 1895 (Geological Mining Monograph of the State of Zacatecas). The San Acacio Mine controls approximately 50% of the historic workings on the Veta Grande system which has estimated past production of in excess of 200 million ounces of silver (Reference R. Burk, July 1994, Summary of Property Evaluation Veta Grande, San Acacio for Minera Teck S.A. de C.V.).

Mineral Resource Estimate

The data consists of diamond drill holes, underground chip samples, underground drill holes and surface trench samples with assays for silver, gold, copper, lead and zinc from three vein structures, Veta G (Main vein), Veta B (Footwall vein or FW) and Veta C (Hanging wall vein or HW). Samples include both mineralized quartz breccia vein and mineralized backfill material in old stopes. Of a total of 203 composites across the three veins 99 had assays for Cu, Pb and Zn. While a few of the Pb and Zn values are approaching economic grades the majority are well below. At this time only Ag and Au were estimated into the resource. All of the resource is categorized as inferred. Results at various silver equivalent cut-off grades are tabulated below.

San Acacio Veta G Inferred Resource

Ag Cut-off (g/t) Tonnes > Cut-off (tonnes) Grade>Cut-off Contained Metal
Ag (g/t) Au (g/t) Ag (ozs) Au (ozs)
40.0 2,810,000 160.12 0.17 14,466,000 20,000
50.0 2,500,000 174.71 0.18 14,043,000 10,000
60.0 2,360,000 182.03 0.18 13,812,000 10,000
65.0 2,280,000 185.99 0.18 13,634,000 10,000
70.0 2,250,000 187.47 0.18 13,562,000 10,000
75.0 2,240,000 187.94 0.18 13,535,000 10,000
80.0 2,230,000 188.78 0.18 13,535,000 10,000
85.0 2,190,000 190.60 0.19 13,420,000 10,000
90.0 2,160,000 191.74 0.19 13,316,000 10,000
95.0 2,150,000 192.49 0.19 13,306,000 10,000
100.0 2,120,000 193.77 0.19 13,207,000 10,000
110.0 2,040,000 197.40 0.19 12,947,000 10,000
120.0 1,980,000 199.56 0.19 12,704,000 10,000

Table 28 San Acacio Veta C Inferred Resource

Ag Cut-off (g/t) Tonnes > Cut-off (tonnes) Grade>Cut-off Contained Metal
Ag (g/t) Au (g/t) Ag (ozs) Au (ozs)
40.0 935,000 136.88 0.07 4,115,000 2,100
50.0 931,000 137.33 0.07 4,111,000 2,100
60.0 924,000 137.97 0.07 4,099,000 2,100
65.0 906,000 139.40 0.07 4,061,000 2,000
70.0 853,000 143.88 0.08 3,946,000 2,200
75.0 826,000 146.25 0.08 3,884,000 2,100
80.0 805,000 148.04 0.08 3,832,000 2,100
85.0 785,000 149.72 0.08 3,779,000 2,000
90.0 768,000 151.06 0.08 3,730,000 2,000
95.0 741,000 153.15 0.08 3,649,000 1,900
100.0 729,000 154.05 0.08 3,611,000 1,900
110.0 693,000 156.44 0.08 3,486,000 1,800
120.0 636,000 160.28 0.09 3,277,000 1,800

Table 29 San Acacio Veta B Inferred Resource

Ag Cut-off (g/t) Tonnes > Cut-off (tonnes) Grade>Cut-off Contained Metal
Ag (g/t) Au (g/t) Ag (ozs) Au (ozs)
40.0 598,000 49.49 0.34 952,000 6,500
50.0 235,000 57.44 0.35 434,000 2,600
60.0 76,000 65.69 0.41 161,000 1,000
65.0 25,000 72.37 0.40 58,000 300
70.0 10,000 80.02 0.36 26,000 100
75.0 4,000 94.81 0.20 12,000 30
80.0 4,000 94.81 0.20 12,000 30
85.0 4,000 94.81 0.20 12,000 30
90.0 4,000 94.81 0.20 12,000 30

*2015 - The results can also be presented in terms of a Silver Equivalent. Using a gold price of $1270/ oz Au and silver price of $19.60 the silver equivalent value would be silver content plus 65 times the gold content. (Note: total contained AgEq values may not add exactly because of rounding). Metallurgical recoveries are not taken into account.

The resource estimate was completed by Gary Giroux, MASc., P.Eng. of Giroux Consultants Ltd. using industry standard methods that conform with the CIM Mineral Resource and Mineral Reserve definitions referred to in National Instrument 43-101, Standards of Disclosure for Mineral Projects, and utilizing Gemcom GEMS V.6.2.3.2TM software. The data and methodology utilized for the resource estimate is as follows:


Resource Estimation Process

  • Mineral resources were estimated in conformance with the CIM Mineral Resource and Mineral Reserve definitions referred to in NI 43—101, Standards of Disclosure for Mineral Projects.The data consisted of diamond drill holes, underground chip samples, underground drill holes and surface trench samples. Drill holes were accompanied by down hole surveys. Underground samples and trenches were treated as drill holes and given a start point, azimuth and dip. A total of 1,887 samples were provided with assays for Ag (g/t), Au (g/t), Cu (%), Pb (%) and Zn (%).
  • Silver Standard samples were analyzed by an aqua regia digestion, with fire assay for gold and ICP atomic absorption or AA finish for Ag, As, Bi, Cu, Hg, Mo, Pb, Sb, and Zn. Over limits for Ag were completed by fire assay with gravimetric finish. Sterling Mining samples were analyzed by fire assay with gravimetric finish. Source samples were analyzed using fire assay with AA finish. For samples grading >100 g/t Ag the samples were reanalyzed using fire assay with gravimetric finish.
  • All drill holes are diamond drill core and were sampled mostly at 1.3 m intervals. A comprehensive QA/QC program was in place during the Source drill program, which included the insertion of standards and duplicates at regular intervals. The QA/QC program on the Silver Standard and Sterling Mining Company data is not known.
  • Vein material was assigned a specific gravity of 2.69 g/cm3, the average density of the Quartz Breccia samples from specific gravity determinations made by American Assay Laboratories in 1999. The measurements were completed using wax coating and the Archimedes weight in air-weight in water methodology. Historical density of 1.75 for the mineralized fill was used for the resource.
  • Small unsampled backfill intervals were treated as missing data.
  • Due to the data density on all three veins it was extremely difficult to build 3D solids to constrain each estimate. Thickness in these styles of deposit is clearly a variable with the veins pinching and swelling along strike and down dip. As a result, this global resource estimate was completed in two dimensions with all data points rotated into the plane of the individual structures. This results in a value for true thickness and a grade accumulation (thickness x grade) at each sample point. The grade at any given sample point is based on different sample supports as the samples are composited across a vein of varying thickness. It is therefore necessary to work with grade accumulations for each vein intersection. The final step is to divide the estimate grade accumulation by the estimated thickness to determine the grade for the block.
  • A single composite was made from samples that crossed each vein. The true thickness for the composite was determined from sample length, dip of sample and dip of vein. Backfill that was sampled was included in the composite thickness and grade. The Veta G Main Vein was subdivided into higher grade shoots and lower grade sections and the composites were separated into these two domains.
  • For this resource estimate a two dimensional approach was used and the variables to be estimated were thickness and grade accumulation. All of the composites for each of the veins were rotated into the plane of the structure (strike at azimuth 125o) and then rotated into a vertical plane (dip assumed at -72o). The estimation process was then treated as a two dimensional study. Thickness was considered a variable since the vein will pinch and swell between sample points.
  • The grade distribution for each of the variables within each vein was examined and erratic outliers capped to reduce their influence on the estimate.The cap numbers by vein are: Veta G 810 g/t Ag; Veta B 120 g/t Ag; and Veta C290 g/t Ag.
  • Blocks 20 m along strike by 10 m down dip were created over a rotated long section of each vein. Blocks were coded below surface topography and within 40 m of data points to determine which blocks to try and estimate. Blocks were also compared to a long section view showing underground stopes. Again blocks within stopes were coded and a backfill density was applied to these blocks. A tonnage for each block was then 20 x 10 x Est. Thickness x SG. For estimation purposes the blocks of the Veta G structure were subdivided into higher grade shoots and lower grade sections. The composites were also subdivided so the high grade shoots were estimated using only high grade composites.
  • Ordinary Kriging was used to interpolate values for thickness, silver accumulation and gold accumulation into blocks for each structure using only composites from the structure being estimated. The estimation was completed in each case in a series of passes with the search ellipse for each pass a function of the semivariogram range. In the first pass the dimensions of the search ellipse were set to ¼ of the semivariogram range. A minimum of 4 composites were required to estimate a block. For blocks not estimated in pass 1 the search ellipse was expanded to ½ the semivariogram range and the exercise was repeated. A third pass at the full range and a fourth pass at twice the range followed. A final 5th pass was made with the same search ellipse as pass 4 but with the minimum number of composites required reduced to two. In all cases the maximum number of composites was set to 12. If more than 12 were found the closest 12 composites were used.
  • At this time the sample density is not sufficient to classify any material as measured or indicated. All blocks are classified as inferred.
  • The N.I. 43-101 report notes that there are mined stopes below the limits of estimated blocks on the Main Veta Grande structure. Due to a lack of data, blocks could not be estimated down to these limits at this time. There is certainly potential resource to be determined down to the limits of historic mining and future drill programs should be designed to test these areas. In addition there is an abrupt reduction in grade near the Purisima Level that is explained in part by mapping by Silver Standard which showed that the west part of the Purisima Level is in the vein footwall. Apparently, the entire width of the vein, in this area was not available for sampling. Examination of the Veta Grande vein in the higher levels (Refugio Level) shows that the vein is low grade in the foot wall and higher grade (as indicated by backfilled stopes) in the hanging wall.
  • A NI 43-101 report will be filed on SEDAR with a copy available on the Company’s website.

About Defiance Silver:

Defiance Silver Corp. is a silver explorer and developer advancing the San Acacio Deposit, located in the historic Zacatecas Silver District of central Mexico. Defiance is managed by a team of proven mine developers with a track record of exploring and developing 12 operating mines to date. Our corporate mandate is to expand San Acacio to become one of Mexico’s premier high grade silver deposits. For more information on the property please visit Defiance’s website at www.DefianceSilver.com.

Mr. Bruce Winfield, P.Geo., President of Defiance Silver Corp, is the Qualified Person for information contained in this press release and is a Qualified Person within the meaning of National Instrument 43-101.

About Jim Cuttle B.Sc., P.Geo and Gary H Giroux, P.Eng., MASc

Jim Cuttle is a registered member in good standing of The Association of Professional Engineers and Geoscientists of the Province of British Columbia. He is a geologist with over 34 years of experience in the capacity of exploration and consulting geologist. His work has included project generation, mineral property assessment, project management and data compilation for various public and private mineral exploration companies in Canada and Internationally. He specializes in precious and base metal exploration and have experience in different types of epithermal mineralization similar to the San Acacio silver vein.

Gary H. Giroux is a consulting geological engineer and a graduate of the University of British Columbia in 1970 with a B.A. Sc. and in 1984 with a M.A. Sc., both in Geological Engineering. He is a member in good standing of the Association of Professional Engineers and Geoscientists of the Province of British Columbia. He has over 35 years’ experience calculating mineral resources including a wide variety of vein deposits including the nearby Cozamin deposit.

On behalf of Defiance Silver Corp.

“Bruce Winfield”

President and CEO

For additional information please visit the Company’s website at www.defiancesilver.com .

1610 - 409 Granville Street www.defiancesilver.com
Vancouver, BC V6C 1T2 Tel: 778-729-0333 FAX: 778-734-0333

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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