Vancouver, B.C. – Amid a recent surge in merger and acquisition activity in the resource sector, the timing for a major new silver discovery could not be better for junior explorers such as Vancouver-based Kootenay Silver Inc. (KTN:CA)

Late last year, a Phase I drill program on Kootenay’s Diatreme-hosted, La Negra silver prospect in Sonora, Mexico returned a series of high-grade silver intercepts confirming a substantial new silver discovery. Highlights from the program includedhole 21, which returned 156 gpt silver over 200 meters from surface – bottoming in 50 meters grading 420 gpt silver, which included an interval grading 1337 gpt silver over 6 meters. A host of other drill assays returned equally impressive results.

Kootenay recently commenced a follow up Phase II drill campaign on La Negra with the first assay results expected in early April. If the current drill phase is successful and further confirms previous results established on surface and at depth, it is believed La Negra has potential to emerge as one of the most important, new high-grade silver discoveries witnessed in the region in recent years.

In the backdrop of the recent spate of M&A transactions in the resource sector this past year, it is reasonable to expect that a number of opportunistic majors, looking for a potential new high-grade silver resource, will be watching La Negra’s current Phase II drill program closely.

As shown in recent takeovers, the stakes can be high and in the end the outcome can prove to be a lucrative development for a targeted company and its shareholders.

Case in point. In Sept 2014 global miner Agnico Eagle Mines Limited (AEM) (AEM:CA) bought out Vancouver based Cayden Resources Inc. ($CYD:CA)and its El Bargueno gold-copper property in Jalisco State, Mexicoin a transaction that totaled $209 million. The purchase price put a 50% premium on Cayden’s issued and outstanding stock.

Other transactions paid out similar premiums. In January of this year, Goldcorp Inc. (G:CA) (GG) completed a major deal to acquire Probe Mines Ltd. (PRB:CA) in $526-million, all-stock transaction to gain control of the Probe’s emerging Borden Gold project in Timmons, Ontario. The deal valued each Probe share at $5.00, representing a 49-per-cent premium to its trading price.

Kootenay President and CEO James McDonald is very familiar with the M&A process. McDonald is a former founder and developer of National Gold and its Mulatos deposit in Sonora, Mexico. In 2003, under the tutelage of McDonald, National Gold merged to form Alamos Gold (AGI:CA) . As a former technical Advisor and Board member of Alamos, McDonald played a key role in its transition from the early exploration stage to full-scale commercial production.

Today, Alamos’s Mulatos is one of the lowest cost producing gold mines in the world, boasting over 140,000 ounces of annual gold production. McDonald has vast knowledge and expertise in Sonora, Mexico. Since 2006 he has focused his efforts on Kootenay Silver and its evolving Promontorio Mineral Belt in Sonora that hosts the La Negra silver discovery.

As mining strategists continue to predict a sharp rise in M&A transactions this year, Kootenay with its La Negra discovery, remains in an enviable position. As a near surface, high-grade, pure silver play, La Negra offers many attractive advantages.

Importantly, surface exploration and drilling conducted to date on La Negra has indicated the silver mineralization extends from surface to depth, offering potential for open-pit mining. Among their benefits, open-pit deposits typically require much lower capitalization costs and narrower time frames to advance to production.

Irrespective of any potential M&A scenarios, Kootenay’s management team has demonstrated the ability and know-how to effectively raise capital and advance a project from the early exploration stage through to fruition. These and other factors undoubtedly put Kootenay and La Negra in a position of strength going forward.

Without question, it is going to be very interesting to follow Kootenay’s progress over the coming weeks and months as Phase II drill results come in on La Negra and M&A transactions continue to heat up in the sector.

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