Impact Silver Corp V.IPT

Defiance update

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Defiance Silver Corp.

TSX VENTURE : DEF

October 25, 2012 08:00 ET

Defiance Silver Announces NI 43-101 Compliant Indicated and Inferred Mineral Resource for San Acacio Silver Project, Mexico

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 25, 2012) -Defiance Silver Corp. (TSX VENTURE:DEF) ("Defiance" or "the Company") is pleased to announce that a National Instrument 43-101 ("NI") compliant indicated and inferred resource estimate has been completed for the San Acacio deposit by AGP Mining Consultants Inc. ("AGP").

Highlights

The base case for reporting the mineral resource estimate used a silver equivalent ("AgEq")* cut -off grade of 65 grams tonne ("g/t"). Highlights of the estimate include:

Resource Category	Tonnage (Mt	)	Ag (g/t	)	Au (g/t	)	Ag Eq. (g/t	)	Ag (Moz	)	Au Oz	Ag Eq. (Moz	)
Total Indicated	1.15		95.8		0.20		108.03		3.55		7,600	4.01
Inferred (drill and chip sample supported)	2.16		100.0		0.16		109.73		6.94		11,300	7.64
Inferred - Mineralized Fill	0.72		236.7		0.21		249.2		5.49		4,800	5.78
Total Inferred	2.89		134.1		0.17		144.6		12.45		16,170	13.4

Bruce Winfield, President and CEO, comments, "We are extremely pleased to have reached this milestone of a 43-101 compliant resource for the San Acacio Mine. The high grade of the mineralized backfill indicates the high grade nature of the ore shoots previously mined within the deposit. We look forward to releasing additional news as Defiance aggressively continues advancing the San Acacio Mine towards production and expanding the resource base."

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. With mineralization open to depth as well as along strike for 4 kilometers with no modern exploration, Defiance believes that excellent potential exists to expand the current resource base.

Mineral Resource Estimate

The mineral resource estimate is based on 41 drill holes completed by Silver Standard and Source Exploration Inc. and 371 drill core assay values contained within the mineralized zones. This data was complemented with 302 underground chip samples sourced from Silver Standard and Sterling Mining level plans. Results at various silver equivalent cut-off grades are tabulated below.

Mineral Resource Class	AgEq Cut-off (g/t	)	Tonnage (Mt	)	Ag Grade (g/t	)	Contained Ag (Moz	)	Au Grade (g/t	)	Contained Au (oz	)	AgEq Grade (g/t	)	Contained AgEq (Moz	)
Indicated	105		0.53		122.1		2.08		0.22		3,700		135.24		2.30
	85		0.86		106.6		2.93		0.22		6,000		119.65		3.29
	65		1.15		95.8		3.55		0.20		7,600		108.03		4.01
	45		1.49		84.9		4.05		0.19		9,000		96.14		4.59
	30		1.66		79.3		4.22		0.18		9,700		90.22		4.81
	15		1.70		77.8		4.25		0.18		9,800		88.53		4.84
Drill and Chip Supported Inferred	105		0.97		133.7		4.15		0.17		5,100		143.61		4.46
	85		1.47		116.8		5.51		0.16		7,700		126.62		5.97
	65		2.16		100.0		6.96		0.16		11,300		109.73		7.64
	45		3.44		80.0		8.84		0.16		17,400		89.49		9.89
	30		5.04		63.8		10.33		0.15		24,600		72.91		11.80
	15		5.80		57.8		10.78		0.15		27,100		66.52		12.41
Mineralize Fill Inferred	105		0.70		241.5		5.43		0.21		4,700		254.16		5.72
	85		0.71		239.2		5.46		0.21		4,800		251.83		5.75
	65		0.72		236.7		5.49		0.21		4,800		249.24		5.78
	45		0.74		232.6		5.51		0.20		4,800		244.82		5.80
	30		0.82		214.4		5.62		0.18		4,800		225.50		5.91
	15		0.82		213.3		5.62		0.18		4,800		224.37		5.91

*Silver equivalent (AgEq) is calculated as the sum of the silver content plus 60 times the gold content, based on prices of US$ 14.75/oz for silver and US$ 885/oz for gold. (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 Pierre Desautels, P.Geo. of AGP Mining Consultants Inc., 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 Resource Estimate database contains 8147 m of diamond drill hole data and supplemented by 457 underground chip samples. Trench data was available but not used in the estimation. Data was sourced from the 1997 Silver Standard exploration program, a 2004-2006 Sterling Mining Company work program, and work performed by Source Exploration in 2009-2010.
  
• All of the 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.
  
• Historical density of 2.55 for the in-situ material and 1.75 for the mineralized fill was used for the resource.
  
• An estimated 10% void space was factored in for the Mineralized fill tonnages.
  
• The development of the 3D mineralized domain models used in the resource estimate were primarily on the lithological contacts and partially on a grade value above 25 g/t silver. Exceptions were made in consideration to lithological controls and zonal continuity.
  
• The mineralized fill 3D wireframe was constructed using the stope and fill intercepts in the drill hole database and supplemented from information provided by the underground level plans. The resultant mineralized fill solid was subsequently cut by a series of polygons of the old stopes digitized from a historical long section and adjusted with known mined out areas deducted from the level plans and surface observation.
  
• The composite intervals selected were 2.0 meters. When present, true gaps in the sampling were composited at zero grade. Voids, stope and fill intervals were ignored in the interpolation of the in-situ resource but used in the interpolation of the fill material.
  
• For the treatment of outliers at San Acacio, the Veta Grande domain was evaluated for both silver and gold mineralization. A combination of high grade capping and search restrictions imposed on a low threshold values was used to restrict their influence. The procedure used allows the deposit to retain the high grade assays while limiting their influence during the interpolation.
  
• A three-dimensional (3D) geological and block model was generated using GEMS© software. The block model matrix size of 5 x 5 x 4 meters was selected with consultation with the engineering team from AGP to allow for better definition of the grade within some of the narrow mineralized domains. It was also based on the size that was suitable for a selective mining unit to mine "ore" versus "waste" for both an open-pit and underground mining scenarios.
  
• Ordinary kriging was used for all domains. The interpolation was carried out in multiple passes with increasing search ellipsoid dimensions. Inverse distance and nearest neighbor models were used for validation.
  
• Classification was based primarily on the pass number and distance to the nearest sample. The area evaluated as indicated resources in the model supported mainly by chip samples was downgraded to inferred resources.

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 near term silver producer engaged in the acquisition, exploration, and development of advanced silver projects in Zacatecas Mexico. The Company's efforts are focused on: 1) the purchase and refurbishment of the 200 tpd Santa Gabriela Mill, 2) the exercising of an option to purchase the San Acacio Mine, and 3) the definition of feed for the Santa Gabriela Mill from surface dumps and the San Acacio Mine with its historical resource (reference Defiance Silver Corp New release dated November 1, 2011).

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 AGP Mining Consultants

AGP Mining Consultants Inc. is a group of experienced geologists and engineers specialized in underground and open pit mining, processing/metallurgy, and project management. The AGP team has a broad range of operations and consulting experience and skills. Further information can be found at AGP Mining's website at www.agpmining.com.

On behalf of Defiance Silver Corp.

Bruce Winfield, President and CEO