DIRECTOR RESIGNATION POLICY

I. Majority Voting For Election to the Board

When a nominee for director of South American Silver Corp. (the "Company”) in an uncontested election of the directors at a meeting of shareholders receives a greater number of votes "withheld” from its election than votes "for” its election to the board of directors of the Company (the "Board”) at a meeting of shareholders, he or she will promptly tender to the Executive Chairman a conditional resignation from the Board. The Corporate Governance and Nominating Committee of the Board (the "Committee”) will then review the circumstances surrounding the conditional resignation and the director's ability to continue to serve effectively as member of the Board, then make a recommendation to the Board as to whether the Board should accept the director's resignation. A director who tenders a conditional resignation shall not participate in the deliberations of the Committee or the Board with respect to such resignation. The Committee and the Board may consider any factors they consider relevant in deciding whether a conditional resignation should be accepted or rejected.

The Executive Chairman shall then advise the subject director of the Board's decision to accept or reject of the conditional resignation, together with the rationale supporting its decision, within 45 days of the conditional resignation being delivered to the Executive Chairman.

This section is intended to promote a balance between providing shareholders with a meaningful and significant role in the process of electing directors and allowing the Board flexibility to exercise its independent judgement on a case-by-base basis.

This section does not apply in respect of any contested shareholders' meeting, which is any meeting of shareholders where the number of nominees for director is greater than the number of directors to be elected to the Board.

II. Directors Who's Circumstances Change

When a director changes his or her principal occupation or business associations, including becoming a director, officer or consultant to another mining or mineral exploration and development company, or any other change occurs in the personal or professional circumstances of the director that might reasonably be perceived as creating a potential conflict of interest or adversely affecting the director's ability to continue to serve effectively as a director of the Company, the Committee shall have an opportunity to review the continued appropriateness of Board membership under such circumstances. For purposes of this policy, becoming or being a director, officer or consultant to another private or public mining or mineral exploration and development company that has a property interest within 50 km of the external boundary of any of the Corporation's property interests will be deemed to be a potential conflict of interest and shall result in the application of this policy.

Each director is required to promptly, and in any event within 30 days, notify the Executive Chairman of the occurrence of any such circumstances listed above and tender a conditional resignation from the Board. The Committee will review the circumstances surrounding the conditional resignation and the director's ability to continue to serve effectively as member of the Board, then make a recommendation to the Board as to whether the Board should accept the director's resignation. A director who tenders a conditional resignation shall not participate in the deliberations of the Committee or the Board with respect to such resignation. The Committee and the Board may consider any factors they consider relevant in deciding whether a resignation should be accepted or rejected.

Approved by the Board on April 23, 2012.