US Silver & Gold Exploration and Corporate Update Lead Zone to Add Substantial Resources

TORONTO, Oct. 11, 2012 /PRNewswire/ - U.S. Silver & Gold Inc. ("U.S. Silver & Gold" or the "Company") (TSX:USA; OTCQX:USGIF) is pleased to provide a comprehensive update on its year-to-date exploration results and exploration plans for the remainder of 2012 and beyond, as well as an update on other corporate developments.  The Company's assets are comprised of two 100% owned operating mines - the high grade gold and silver Drumlummon Mine in Montana and the high grade silver Galena Mine Complex in Idaho.

Galena Mine Complex

The Lead Zone

Drilling by previous owners identified a large area of lead / silver mineralization in the Galena Mine Complex.  Recently, the exploration staff at the mine compiled past results and incorporated recent underground drilling to define a significant potential resource in what is known as the Lead Zone ("LZ" previously referred to as the "Caladay Lead Zone").

The LZ is a semi-continuous mineralized zone that extends from the 2400 level to the 5200 level and potentially into the Caladay Mine at depth.  The zone covers approximately 2,800 vertical feet.  The estimated strike length on the known levels ranges between 1,200 and 3,600 feet and the apparent widths range between 200 and 400 feet.  The LZ occurs as a large lead-silver (Ag-Pb) zone of disseminated and stringer-controlled mineralization containing higher grade linear zones. Figure 1 located - Galena Lead Zone shows the drill indicated extent.

Only a small portion of the LZ has been drilled extensively.  In 2012, a drilling program allowed the development of a resource on the 4000 and 4900 Levels of approximately 600,000 to 700,000 tons where test mining will be carried out in the fourth quarter of 2012.   This drilling indicates potential global grades of 3 to 4 ounces per ton (103 to 137 grams per tonne) silver and 3 to 5 percent lead.  All targeted areas contain 1 to 3 continuous zones of higher grade mineralization, ranging between 5.5 to 10.0 ounces per ton (189 to 343 grams per tonne) silver and 5 to 11 percent lead, surrounded by lower grade material.  High grade zones represent 30 to 40 percent of the total global tonnage with continuous widths ranging between 15 and 30 feet. Between these zones are lower grade areas, 60 to 80 feet wide with grades of approximately 1 to 3 ounces per ton (34 to 103 grams per tonne) silver and 1 to 4 percent lead.

Drilling to date by others (principally ASARCO Incorporated) and recently by U.S. Silver & Gold has led to a global tonnage target for the LZ of between 60 to 70 million tons and a potential global resource of between 150 to 200 million ounces of silver.

"The Galena Mine Complex has been in production for almost 60 years, and ore continues to be found year after year.  Exploration has consistently exceeded annual production and we expect this will be the case in 2012 with resources growing once again extending the life of the Complex," stated Darren Blasutti, President and CEO of U.S. Silver & Gold.  "Recent drilling results in the Lead Zone are particularly noteworthy.  Based on what we've seen, this area has the potential to redefine the Galena Complex as we become more comfortable in our ability to use lower cost bulk mining methods in exploiting this deposit."

The results of some significant intersections in the LZ are presented in Table 1 below. These intersections indicate two zones approximately 25 feet apart averaging 13.4 feet of 8.63 ounces per ton (296 grams per tonne) silver and 3.38 percent lead, and 77.3 feet of 6.76 ounces per ton (232 grams per tonne) silver and 10.92 percent lead.   There are zones of higher grade silver within the broader mineralized zones.

The drill program for 2013 will focus on the area between the 4600 and 5200 levels, which has the potential to add between 10 million and 15 million ounces of silver to the mine's resources next year.

Silver Vein and 350-370 Vein

The majority of expected silver production from the Galena Mine Complex is currently being sourced from the Silver Vein.  Drilling during 2012 has extended several of the known higher grade veins including the prolific Silver Vein. The Silver Vein and the 350-370 Vein have yielded high grade intersections suggesting veins extend at depth and in areas close to existing workings available to develop additional resources in the near term.  Two newly identified veins are thought to be splays off one of the existing veins and could be exploitable in the near future.  Examples of recent drill intersections can be found in Table 2 below.

Coeur Mine

Resource definition drilling resumed late in the third quarter in the Coeur Mine from the 3100 Level.  To date, approximately 3,000 feet of drilling has been completed.  These results will be included in the next exploration release.  The program is targeting to expand the existing 3.3 million ounces of silver resource to a target of 6 million ounces by the end of 2013¹.

Drumlummon Mine

Frankie Vein

The Frankie Vein System was discovered during a surface drilling program in the spring of 2012. In September, an incline was driven from the Drumlummon decline into the Frankie Vein establishing an underground drilling station to explore the veins discovered through surface drilling.   This incline exposed the Frankie Veins in the face of the drift.  Analysis of face samples in Drill Station 22 averaged 0.816 ounces per ton (28 grams per tonne) gold and 75.23 ounces per ton (2,579 grams per tonne) silver. It should be noted that samples were collected along the strike of the vein not perpendicular to the vein. Therefore they do not represent the true width which varies between 1.4 and 8 feet across the exposure. See Figure 2 - Frankie Section.

The vein at this position is a quartz-calcite-adularia crustiform vein including amethyst and colloform banding with sulfides.  Sulfides are locally abundant.  See Table 3 below for recent Frankie Vein Intersection Drilling Highlights.  The Frankie Vein system is expected transition to production in early 2013.

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¹ Note that potential quantities and grades disclosed in this news release are conceptual in nature and there has been insufficient exploration to define a mineral resource on the all of the targets in the Galena Mine Complex.  It is uncertain if further exploration will result in all of the targets in the Galena Mine Complex being delineated as a mineral resource.

Deep Drumlummon

Drilling on the 400 Level in the old workings continues to identify potential mineralization in the deeper parts of the Drumlummon Mine.  The existing mineralized zones, previously mined in the Jubilee #2 South and Sampson areas, have been extended below the 700 Level.  In the area between the # 1 and # 2 shafts, new mineralized material has been intersected below the 600 level (See Figure 3 - Drumlummon Long Section).

Two narrow potential high grade veins, which are apparent splays off the Charlie and Drumlummon Veins, have also been intersected and are being explored.  These are the New Year Vein (splay off the Charlie Vein) and the St. Louis Vein (splay off the Drumlummon).  Historically, the St Louis Vein was mined further to the south of the existing workings. The New Year and St. Louis Veins, and the Pixley area are sufficiently near existing infrastructure to allow for immediate mining.  However accessing the South Drumlummon area will require additional development.  Parts of the South Drumlumon area could be available for mining in 2013. See Table 4 below for recent drilling highlights from the Drumlummon Mine.

North Star Vein

Previous drilling in the Northstar Vein (See December 11, 2011 RX Gold & Silver press release) indicated there are potential mineralized shoots in this system.  See Figure 4 - North Star Vein Long Section. An underground drilling program is in progress which will seek to define and expand the known mineralization.  Three drill holes have been completed and while all show intersected quartz veins and breccia with varying sulphide content, assays have not yet been completed.

Belmont Mine

The Belmont property, located approximately one mile west of the Drumlummon mine, was purchased in 2012.  The property was mined from the late 1800s through the early 1900s and is reported to have produced 500,000 tons at an average grade close to one ounce per ton (34 grams per tonne) from two main veins:  the Belmont and Bald Mountain.

More recently, it was explored by AMEX and Gulf Titanium ("the previous owners") from 1982 to 1991 and non-NI 43-101 compliant mine reserves of 77,000 tons of 0.59 ounce per ton (20 grams per tonne) silver were reported, along with additional resources of 170,000 tons of similar grade (See Figure 5 - Belmont Long Section). They conducted mining operations using a decline developed to the 750 Level and there is a reported 7,000 tons of broken material remaining within the mine.

The previous owners discovered two new mineralized shoots below the stopes of the Bald Mountain Vein and "blind" splays or parallel veins in the hanging wall of the known structure. Calculations using historical drill-hole results from Gulf Titanium, indicate additional potential for over 50,000 (non-43-101 compliant) tons at an average grade of 0.56 ounces per ton (19 grams per tonne) silver.

Please note that a qualified person has not done sufficient work to classify this historical estimate as current mineral resources or mineral reserves and the Company is not treating the historical estimate as current mineral resources or mineral reserves.

Geological mapping, data compilation and sampling during the past field season confirmed the presence of a minimum of eight veins on the property.  A surface drilling program is planned for the fourth quarter of 2012 to test the more significant veins by "twinning" some of the existing drill holes from locations on the surface to confirm the presence of the known mineralization and test for other veins indicated by previous drilling in the hanging wall of the structure. A second phase of drilling will attempt to expand the known mineralized zones and will be completed in 2013.

QA/QC

US Silver & Gold maintains a QA/QC Program for all assays, whether completed at the Drumlummon laboratory or at a contract laboratory including the use of standards, blanks, duplicates. All QA/QC results are evaluated using a program of QA/QC monitoring. Both the contract laboratory and the internal laboratory maintain programs of QA/QC as well.

Corporate Update

Vice President, Technical Services

Daren Dell has joined U.S. Silver & Gold in the newly-created position of Vice President, Technical Services.  Mr. Dell brings over 20 years of experience to this role gained at Barrick Gold and precursor companies.  While at Barrick he was Director, Corporate Development and prior to that, Director, Technical Evaluations.  Before joining Barrick, Mr. Dell was at Placer Dome for over 15 years where he held various positions of increasing responsibility.

"I am extremely pleased to have Daren join our team," said U.S. Silver & Gold President and CEO Darren Blasutti.  "The extensive knowledge that Daren has gained from evaluating mining assets around the globe will be of significant benefit to our operational and strategic plans moving forward.   He not only brings solid technical skills to this role, he is also very strong at building and nurturing the kinds of relationships that will help successfully complete organic growth projects and acquisitions.  With growth as our focus, he will be a tremendous asset."

Mr. Dell will work with the CEO on external opportunities and with the Chief Operating Officer at the Drumlummon and Galena Mines assisting with operations and organic projects while also providing support as the Company expands mine operations.

About U.S. Silver & Gold Inc.

U.S. Silver & Gold Inc. is a newly formed silver and gold mining company focused on growth from its existing asset base and the execution of targeted accretive acquisitions. U.S. Silver & Gold owns and operates the Galena Mine Complex in the heart of the Silver Valley/Coeur d'Alene Mining District, Shoshone County, Idaho and the Drumlummon Mine Complex in Lewis and Clark County, Montana. Within the Galena Mine Complex, the Galena mine produces high-grade silver and is the second most prolific silver mine in U.S. history, delivering over 200 million ounces to date, the Coeur mine is under re-development with production expected in late 2012 and the Lead Zone is being evaluated for bulk mining development. The Drumlummon mine currently produces high-grade gold and silver with historical production of 1 million ounces of gold and 12 million ounces of silver and has never been fully exploited or explored. Visit www.us-silver.com.

Mr. Jim Atkinson, Vice President, Exploration and a Qualified Person under Canadian Securities Administrators guidelines has approved the contents of this news release.

Some of the potential quantities and grades disclosed in this news release are conceptual in nature. At the current stage of exploration, there is insufficient drilling to determine the extent of continuity of the mineralization required to define a mineral resource for all mineralization at the Galena Mine Complex and Drumlummon Mine. It is uncertain if further exploration will result in certain exploration targets being delineated as a mineral resource.

Please see SEDAR or www.us-silver.com for the 43-101 compliant Technical Report and Resource Estimate on the Drumlummon Mine Project dated April 9, 2012 and the Galena Project dated March 19, 2012.

Cautionary Statement Regarding Forward Looking Information:

This news release contains "forward‐looking information" within the meaning of applicable securities laws. Forward‐looking information includes, but is not limited to, the Company's expectations intentions, plans, and beliefs with respect to, among other things, the Galena Mine Complex and the Drumlummon Mine. Often, but not always, forward‐looking information can be identified by forward‐looking words such as "anticipate", "believe", "expect", "goal", "plan", "intend", "estimate", "may", and "will" or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions, or statements about future events or performance. Forward‐looking information is based on the opinions and estimates of the Company as of the date such information is provided and is subject to known and unknown risks, uncertainties, and other factors that may cause the actual results, level of activity, performance, or achievements of the Company to be materially different from those expressed or implied by such forward looking information. This includes the ability to develop and operate the Galena and Drumlummon properties, risks associated with the mining industry such as economic factors (including future commodity prices, currency fluctuations and energy prices), failure of plant, equipment, processes and transportation services to operate as anticipated, environmental risks, government regulation, actual results of current exploration activities, possible variations in ore grade or recovery rates, permitting timelines, capital expenditures, reclamation activities, social and political developments and other risks of the mining industry. Although U.S. Silver and Gold has attempted to identify important factors that could cause actual results to differ materially from those contained in forward‐looking information, there may be other factors that cause results not to be as anticipated, estimated, or intended. Readers are cautioned not to place undue reliance on such information. By its nature, forward‐looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, and projections of various future events will not occur. The Company undertakes no obligation to update publicly or otherwise revise any forward‐looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

SOURCE U.S. Silver & Gold Inc.

Image with caption: "Figure 1 - Galena Lead Zone (CNW Group/U.S. Silver & Gold Inc.)". Image available at: http://photos.newswire.ca/images/download/20121011_C6031_PHOTO_EN_19123.jpg

Image with caption: "Figure 2 - Frankie Section (CNW Group/U.S. Silver & Gold Inc.)". Image available at: http://photos.newswire.ca/images/download/20121011_C6031_PHOTO_EN_19124.jpg

Image with caption: "Figure 3 - Drumlummon Vein Long Section (Looking Northwest) (CNW Group/U.S. Silver & Gold Inc.)". Image available at: http://photos.newswire.ca/images/download/20121011_C6031_PHOTO_EN_19125.jpg

Image with caption: " Figure 4 - North Star Vein Long Section (Looking North) (CNW Group/U.S. Silver & Gold Inc.)". Image available at: http://photos.newswire.ca/images/download/20121011_C6031_PHOTO_EN_19126.jpg

Image with caption: "Figure 5 - Belmont Long Section (CNW Group/U.S. Silver & Gold Inc.)". Image available at: http://photos.newswire.ca/images/download/20121011_C6031_PHOTO_EN_19127.jpg