October 25, 2012 at 08:00 AM EDT
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")(i) cut -off grade of 65 grams tonne ("g/t"). Highlights of the estimate include:

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Tonnage Ag Au Ag Eq. Ag Au Ag Eq.

Resource Category (Mt) (g/t) (g/t) (g/t) (Moz) Oz (Moz)

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Total Indicated 1.15 95.8 0.20 108.03 3.55 7,600 4.01

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Inferred (drill and chip

sample supported) 2.16 100.0 0.16 109.73 6.94 11,300 7.64

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Inferred - Mineralized

Fill 0.72 236.7 0.21 249.2 5.49 4,800 5.78

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Total Inferred 2.89 134.1 0.17 144.6 12.45 16,170 13.4

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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.

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AgEq Contained

Cut-off Tonnage Ag Grade Ag

Mineral Resource Class (g/t) (Mt) (g/t) (Moz)

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Indicated 105 0.53 122.1 2.08

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85 0.86 106.6 2.93

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65 1.15 95.8 3.55

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45 1.49 84.9 4.05

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30 1.66 79.3 4.22

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15 1.70 77.8 4.25

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Drill and Chip Supported Inferred 105 0.97 133.7 4.15

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85 1.47 116.8 5.51

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65 2.16 100.0 6.96

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45 3.44 80.0 8.84

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30 5.04 63.8 10.33

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15 5.80 57.8 10.78

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Mineralize Fill Inferred 105 0.70 241.5 5.43

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85 0.71 239.2 5.46

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65 0.72 236.7 5.49

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45 0.74 232.6 5.51

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30 0.82 214.4 5.62

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15 0.82 213.3 5.62

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Contained AgEq Contained

Au Grade Au Grade AgEq

Mineral Resource Class (g/t) (oz) (g/t) (Moz)

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Indicated 0.22 3,700 135.24 2.30

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0.22 6,000 119.65 3.29

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0.20 7,600 108.03 4.01

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0.19 9,000 96.14 4.59

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0.18 9,700 90.22 4.81

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0.18 9,800 88.53 4.84

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Drill and Chip Supported Inferred 0.17 5,100 143.61 4.46

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0.16 7,700 126.62 5.97

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0.16 11,300 109.73 7.64

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0.16 17,400 89.49 9.89

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0.15 24,600 72.91 11.80

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0.15 27,100 66.52 12.41

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Mineralize Fill Inferred 0.21 4,700 254.16 5.72

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0.21 4,800 251.83 5.75

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0.21 4,800 249.24 5.78

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0.20 4,800 244.82 5.80

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0.18 4,800 225.50 5.91

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0.18 4,800 224.37 5.91

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(i)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

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-- 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 greater than 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(c) 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.

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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

Forward-Looking Statements. This Defiance News Release may contain certain "forward-looking" statements and information relating to Defiance that are based on the beliefs of Defiance management, as well as assumptions made by and information currently available to Defiance management. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including but not limited to, exploration and development risks, expenditure and financing requirements, title matters, operating hazards, metal prices, political and economic factors, competitive factors, general economic conditions, relationships with vendors and strategic partners, governmental regulation and supervision, seasonality, technological change, industry practices, and one-time events. Should any one or more risks or uncertainties materialize or change, or should any underlying assumptions prove incorrect, actual results and forward-looking statements may vary materially from those described herein. There is no assurance the estimates of indicated or inferred resources will ultimately prove to be correct or will at any time in the future become or be classified as reserves. Defiance does not assume the obligation to update any forward-looking statement.

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.

Contact:

Defiance Silver Corp.

Bruce Winfield

President and CEO

778-729-0333

Defiance Silver Corp.

1500 - 409 Granville Street

Vancouver, BC V6C 1T2

www.defiancesilver.com

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