Mr. Mark Ayranto reports

SILVERCO MINING EXECUTES DEFINITIVE AGREEMENT FOR THE ACQUISITION OF NUEVO SILVER

Silverco Mining Ltd. has entered into a definitive share exchange agreement, providing for the previously announced acquisition by the company of Nuevo Silver Inc. Pursuant to the definitive agreement, the company will acquire all of the issued and outstanding common shares of Nuevo by way of issuance of common shares of the company. Following the closing of the transaction, Nuevo will be a wholly owned subsidiary of the company.

Currently, Nuevo holds a 100-per-cent interest in the La Negra mine in Queretaro, Mexico, which is a producing silver mine.

Pursuant to the definitive agreement, among other things:

• Existing shareholders of Nuevo will receive an aggregate of 16,802,316 Silverco shares.
• The company will assume Nuevo's existing indebtedness of approximately $11-million (U.S.) associated with the producing La Negra mine.
• The company will assume $12.5-million (U.S.) in milestone payments and $5-million (U.S.) in contingent payments potentially payable to the former owner of the La Negra mine.

Closing of the transaction is subject to a number of customary conditions, including all necessary consents, approvals and other authorizations of any regulatory authorities or third parties being obtained. The transaction constitutes a fundamental acquisition of the company for purposes of Policy 5.3, Acquisitions and Dispositions of Non-Cash Assets, of the TSX Venture Exchange corporate finance manual. The transaction has been conditionally accepted by the TSX-V and is subject to final TSX-V acceptance, which is pending TSX-V review of final materials that have been submitted by the company. Closing of the transaction will occur as soon as reasonably possible after the satisfaction or waiver of all conditions precedent.

It is anticipated that on completion of the transaction, the former Nuevo shareholders will hold approximately 31 per cent of the outstanding Silverco shares and the existing holders of the Silverco shares will hold approximately 69 per cent of the outstanding Silverco shares.

Related party transaction

Certain insiders of the company are Nuevo shareholders. There are no insiders of the company that are also insiders of Nuevo. The applicable insiders of the company that hold Nuevo shares are: Mark Ayranto (president, chief executive officer and director of the company), Gary Brown (director of the company), Tim Sorensen (director of the company), Sean Fallis (chief financial officer), Nico Harvey (vice-president, project development) and Eric Sprott (shareholder currently holding 10 per cent or more of the Silverco shares). The Silverco insiders' collective ownership in Nuevo is approximately 7.35 per cent, with the company's board of directors and management representing approximately 3.34 per cent.

Consequently, the transaction is considered a related party transaction under Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. However, the company is exempt from the requirements to obtain a formal valuation and minority shareholder approval in connection with such insiders' participation in the transaction in reliance on sections 5.5(b) and 5.7(1)(a) of MI 61-101.

The company will file a material change report in respect of the transaction; however, the material change report may be filed less than 21 days prior to the closing of the transaction, which is consistent with market practice and the company deems reasonable in the circumstances.

Fairness opinion and board approval

The board has received a favourable fairness opinion from ATB Cormark Capital Markets. In addition, the board has approved the transaction, with each of Mr. Ayranto, Mr. Brown and Mr. Sorensen abstaining from the approval of the issuance of Silverco shares to each of them pursuant to the transaction.

The company will make further disclosure in accordance with applicable securities laws and TSX-V policies as may be necessary, and will provide updates as material developments occur.

About Silverco Mining Ltd.

The company owns a 100-per-cent interest in the 11,665-hectare Cusi project, located in Chihuahua state, Mexico. It lies within the prolific Sierra Madre Occidental gold-silver belt. There is an existing 1,200-ton-per-day mill with tailings capacity at the Cusi property.

The Cusi property is a past-producing underground silver-lead-zinc-gold project approximately 135 kilometres west of Chihuahua City. The Cusi property boasts excellent infrastructure, including paved highway access and connection to the national power grid.

The Cusi property hosts multiple historical Ag-Au-Pb-Zn (silver-gold-lead-zinc) producing mines, each developed along multiple vein structures. The Cusi property hosts several significant exploration targets, including the extension of a newly identified downthrown mineralized geological block and additional potential through claim consolidation.

We seek Safe Harbor.