Code of Business Conduct and Ethics

I. Purpose and Application

The board of directors (the "Board”) of South American Silver Corp. (the "Company”) has adopted this Code of Business Conduct and Ethics (the "Code”), which is designed to provide guidance on the conduct of the Company’s business in accordance with high ethical standards. As a public company, the Company must not only conduct, but must also be seen to conduct, its business in accordance with such high ethical standards.

The Code constitutes written standards that are reasonably designed to promote integrity and to deter wrongdoing. The provisions of this Code are mandatory.

The Code applies to every director, officer and employee of the Company and its direct or indirect subsidiaries (collectively "Company Personnel”). For the purposes of this Code, the term "employee” includes contractors and consultants who provide services to the Company or who act as the Company’s representative in dealings with third parties.

Company Personnel are expected to:

? Understand the requirements of his or her position, including Company expectations and applicable governmental rules and regulations.

? Comply with this Code and all applicable laws, rules and regulations.

? Report any violation of this Code of which he or she becomes aware.

? Be accountable for complying with this Code.

II. Compliance

The Company expects all Company Personnel to adhere to high standards of personal and professional integrity and to avoid any conduct that might reflect unfavourably upon himself or herself, other Company Personnel or upon the Company. The Company’s business goals are important and demanding, but these goals must be achieved honestly and ethically. Action or failure of action in contravention of the Code may be considered as unauthorized and outside the course of employment, and the Company may not indemnify Company Personnel for their costs that arise out of such conduct.

Company Personnel who have executive or managerial responsibilities are expected to ensure that the provisions of this Code are communicated to Company Personnel reporting to him or her.

Company Personnel are expected to comply with all aspects of this Code and to support others in doing so. In the event that Company Personnel violate this Code, other policies and procedures or any of the laws and regulations that govern the Company’s business, the Company will take immediate and appropriate action up to and including termination of employment or contract, claims for reimbursement of losses or damages, and reference to authorities.

The Board is responsible for monitoring compliance with the Code. A waiver of this Code will be granted only in exceptional circumstances and will be granted by the Board only.

III. Compliance with Laws

The Company and Company Personnel are expected to comply with all legal requirements applicable to the Company’s business. Ignorance of the law is not a defense. Moreover, agreements or arrangements need not necessarily be in writing for contravention to be inferred from the conduct of the parties. If this Code does not cover a particular situation or if the application or interpretation of a local law is uncertain, or in circumstances where the proper course of ethical conduct is unclear, Company Personnel should seek the assistance of their supervisor who, if necessary, should seek competent local legal advice or, if necessary, the advice of the Company’s counsel. If there is insufficient time to obtain such advice, Company Personnel should conduct themselves in a manner they would not hesitate to have fully publicly disclosed. Supervisors, on learning of any contravention of this Code, shall take appropriate corrective action.

IV. Conflicts of Interest

A "conflict of interest” exists whenever an individual’s private interests interfere or conflict in any way (or even appear to interfere or conflict) with the interests of the Company. Company Personnel must act honestly and in good faith, with a view to the best interests of the Company. Company Personnel must avoid all situations in which their personal interests conflict with or might appear to conflict with their duties to the Company.

The Company’s basic policy is that, though Company Personnel are entitled to privacy in their personal affairs, Company Personnel have a duty to be free of those outside interests, activities and influences which might impair the exercise of their independent judgment, fiduciary responsibility, initiative or efficiency in acting for the Company, or expose Company Personnel to legal liability or public criticism.

If a director or officer of the Company has a material interest, either directly or indirectly, in any transaction or agreement that the Company proposes to enter into, such director or officer shall comply with the applicable laws, rules and policies which govern "conflicts of interest” in connection with such transaction or agreement. In addition, such director or officer shall disclose in writing the nature and extent of such interest in advance of any related Board or Committee meeting and shall recuse himself or herself from any meeting at which the matter is discussed.

A director or officer will be deemed to have a material interest in any transaction or agreement which the Company proposes to enter into if such transaction or agreement is with an entity in which the director or officer has a material financial interest (as defined below) or with which the director or officer has a "material relationship”. A material relationship is a relationship which could be reasonably expected to interfere with the exercise of an individual’s independent judgement and will be presumed to exist in the situations described in Section 1.4 of NI 52-110 – Audit Committees as they relate to the other entity, including where the individual is an employee or executive officer of the other entity with which the Company proposes to transact.

Other potential conflicts of interest are so varied that it is impracticable to establish universal criteria in this Code as to what constitutes a prohibited conflict of interest. Set forth below are examples of the types of situations which could indicate a conflict of interest:

? Financial Interest: Company Personnel and their families (including spouse, children or spouse equivalent residing together) shall not own, control or hold a material financial interest in any business entity that does or seeks to do business with, or is in competition with the Company, unless prior written approval has been obtained from the Board of Directors in the case of directors or officers of the Company, or from the President and CEO in the case of all other Company Personnel, which approval shall only be given if it will not result in a detriment to the Company. A material financial interest will be presumed where ownership is in excess of 5% of the entity.

? Outside Activities: Company Personnel must ensure that any outside business or activity does not present a real or perceived conflict with the interests of the Company.

? Outside Directorships: Outside directorships are permitted with the approval of the Board, in the case of officers, and the President and CEO, in the case of other employees. Any officer or employee accepting an approved outside directorship must ensure that such activity does not deprive the Company of the time and attention required of such officer or employee to perform his or her duties properly, and must be aware of any potential for conflicts with the interests of the Company.

V. Fair Dealing

All customers, suppliers and independent contractors purchasing or furnishing goods and services must be dealt with fairly. Decisions to hire a subcontractor or source materials from a particular vendor must be made on the basis of objective criteria such as quality, reliability, technical experience, price, delivery, service and maintenance of adequate sources of supply.

Company Personnel shall not take unfair advantage of anyone, including the Company’s security holders, customers, suppliers, competitors and employees, through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair-dealing practice.

VI. Gifts and Entertainment

Company Personnel must be prudent in offering or accepting gifts (including tickets to sporting, recreational or other events) to or from a person or entity with which the Company does or seeks to do business.

Modest gifts, reasonable entertainment and other courtesies may be extended by appropriate Company Personnel to persons or entities doing business or otherwise having dealings with the Company if such activity can be justified to further the Company’s best interests. No gift or entertainment should be of such value as to constitute a real personal enrichment of the recipient. Public scrutiny of the gift, entertainment or courtesy should not be embarrassing to or reflect unfavourably upon the Company or the recipient.

Company Personnel are prohibited from soliciting or receiving any gift, loan, reward or benefit from a supplier or other individual or entity that does or seeks to do business with, or is a competitor of, the Company. This prohibition does not extend to accepting modest gifts, favours or entertainment provided that no such gift, favour or entertainment is of such nature as might affect, or reasonably be thought by others to affect, the person’s judgment or conduct in matters involving the Company.

VII. Dealings with Officials

All dealings between Company Personnel and public or private officials must be conducted in a manner that will not compromise the integrity, or place in question, the reputation of the Company or such officials. No unlawful or otherwise improper payment or gift is to be made or offered with a view to assisting the Company in obtaining or retaining business, affecting the enactment or enforcement of any laws, or otherwise to obtain favours.

No employee or officer may offer improper payments when acting on behalf of the Company. Company funds must not be used to make payment or provide anything of value, directly or indirectly (through agents or otherwise), in money, property, services or any other form to a government official, political party or candidate for political office in consideration for the recipient agreeing to:

? exert influence to assist the Company in obtaining or retaining business or securing any advantage; or

? commit any act in violation of a lawful duty or otherwise influence an official act.

If Company Personnel are in doubt about the legitimacy of a payment, such situations should be immediately referred to the Chair of the Audit Committee.

VIII. Community and Local Public Relations

Community and local public relations shall always be conducted with integrity and sensitivity to others with the intent to build an image that will facilitate the Company’s ability to achieve its goals while providing cooperation and support to its neighbours and host governments, as appropriate. Within guidelines established by the Corporate Social Responsibility Committee, the Company may provide physical and/or financial assistance, on a local basis, to develop a cooperative relationship with its neighbours by active involvement in public works, education, medical and health services and other non-political matters where the Company’s resources can compliment local operations and activities.

IX. Confidential Information

Confidential information is information that is not known to the general public and includes technical, commercial and financial information and all intellectual property of the Company.

Company Personnel must protect the confidentiality of information concerning the Company and its business activities, as well as that of companies having business dealings with the Company. Confidential information may not be given or released without proper authority and appropriate protection to anyone not employed by the Company or to Company Personnel who have no need for such information.

Company Personnel are prohibited from trading or encouraging others to trade in the securities of the Company where the person trading is in possession of material non-public information.

X. Use of Corporate Assets and Opportunities

All Company Personnel are responsible for protecting the Company’s assets against loss from unauthorized or improper use or disposition:

? Use of Resources: Resources, including Company time, materials, supplies, equipment, information, electronic mail and computer systems, are generally only to be used for Company purposes.

? Use of Internet and Email: Company computer resources and networks are provided for Company-related business purposes. Excessive personal use is inappropriate. Use of Company computer resources to view, retrieve or send sexually-related or pornographic messages or material, violent or hate-related messages or material, bigoted, racist or other offensive messages or other messages or material related to illegal activities is strictly prohibited.

? Use of Company Name: Company Personnel must not use their employment status to obtain personal gain from those doing or seeking to do business with the Company. Company Personnel may not use the Company’s name or purchasing power to obtain personal discounts or rebates unless the discounts are made available to all Company Personnel.

? Patents and Inventions: Inventions, discoveries and patented or copyright material, made or developed by Company Personnel in the course of, and relating to, their employment with the Company are the property of the Company unless a written release is obtained or covered by contract.

? Corporate Opportunities: Company Personnel may not appropriate for themselves Company property or a business opportunity that has arisen through the use of Company property, information or by virtue of their position with the Company.

XI. Health, Safety and Environment

The Company is committed to providing a safe and healthy working environment and protecting the public interest with standards and programs that meet or exceed industry standards and applicable government codes, standards and regulations in all jurisdictions in which it does business. All Company operations are to be conducted in a manner that protects the health and safety of Company Personnel and people in the communities where the Company operates. Employees must be aware of the safety issues and policies that affect their job, other employees and the community in general. Managers, upon learning of any circumstance affecting the health and safety of the workplace or the community, must act immediately to address the situation. Employees must immediately advise their managers of any workplace injury or any circumstance presenting a dangerous situation to them, other co-workers or the community in general, so that timely corrective action can be taken.

The Company is committed to sound environmental management. It is the intent of the Company to conduct itself in partnership with the environment and community at large as a responsible and caring corporate citizen. The Company is committed to managing all phases of its business in a manner that minimizes any adverse effects of its operations on the environment.

XII. Employment Practices

The Company is committed to a workplace environment where Company Personnel are treated with dignity, fairness and respect. All Company Personnel have the right to work in an atmosphere that provides equal employment opportunities and is free of discriminatory practices and illegal harassment. The Company is committed to actions and policies to assure fair employment, including equal treatment in hiring, promotion, training, compensation, termination and corrective action and will not tolerate discrimination by its employees and agents.

The Company will not tolerate harassment of its employees, customers or suppliers in any form.

XIII. Books and Records

The Company’s books, records and accounts are to reflect accurately, fairly and in reasonable detail, all transactions in accordance with the highest standards of integrity and applicable accounting standards.

Appropriate records must be kept of all transactions and there are to be no cash funds, bank accounts, investments or other assets, which are either not recorded or inadequately recorded on the books. No payment is to be approved without adequate supporting documentation.

Business documents and records (voice, paper and electronic) are to be retained in accordance with applicable law and the Company’s record retention practices.

Individuals and entities with whom the Company deals may request that commissions, service fees and other amounts be remitted to third persons or bank accounts in third countries. Such payments may only be made if: (i) the amount payable does not arise from artificial additions to normal pricing; (ii) payment is authorized in writing by the individual or entity earning the commission, fee or other amounts; (iii) payment is made to the same individual or entity to which it is owed or to an affiliate under common ownership, and (iv) payment will not violate applicable law.

Frank disclosure is to be made to all reasonable enquiries of the Company’s auditors and legal advisors.

XIV. Reporting Contraventions of the Code

Company Personnel are responsible for being aware of, understanding and complying with this Code. Company Personnel must promptly report any problems or concerns and any actual or potential violation of this Code. To do otherwise, will be viewed as condoning a violation of this Code.

There shall be no reprisal or other action taken against any Company Personnel who, in good faith, bring forward concerns about actual or potential violations of laws or the Code. Anyone engaging in any form of retaliatory conduct will be subject to disciplinary action, which may include termination.

Problems and concerns, including any actual or potential violation of this Code, should be reported immediately in accordance with the Company’s Whistleblower Policy. Reports may be made anonymously.

XV. Consequences of Violating this Code

Failure to comply with this Code will be considered by this Company to be a very serious matter. Depending on the nature and severity of the violation, disciplinary action may be taken by the Company, up to and including termination. In addition, the Company may make claims for reimbursement of losses or damages and may refer this matter to the authorities. Anyone who fails to report a violation upon discovery or otherwise condones the violation of this Code may also be subject to disciplinary action.

Adopted and updated by the Board on August 12, 2011.